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U.S. Airways, Inc. v. Qwest Corp.

Court of Appeals of Arizona, First Division

October 1, 2015

US AIRWAYS, INC., Plaintiff/Appellant-Cross Appellee,
QWEST CORPORATION, a Colorado corporation, Defendant/Appellee-Cross Appellant, SKYLINE STEEL, INC., an Arizona corporation; ONE CALL LOCATORS, LTD., d/b/a ELM LOCATING & UTILITY SERVICES, a Montana corporation, Defendants-Appellees

Appeal from the Superior Court in Maricopa County. No. CV2011-001859. The Honorable Arthur T. Anderson, Judge.

Page 943

Gallagher & Kennedy, P.A., Phoenix, By Kevin D. Neal, Jennifer A. Cranston, Liana J. Garcia, Counsel for Plaintiff/Appellant-Cross Appellee.

Ryley Carlock & Applewhite, PA, Phoenix, By Rodolfo Parga, Jr., Andrea G. Lovell, Counsel for Defendant/Appellee-Cross Appellant Qwest Corporation.

Audilett Kastner, PC, Tucson, By John J. Kastner, Jr., Counsel for Defendant/Appellee One Call Locators, Ltd.

Presiding Judge Maurice Portley delivered the Opinion of the Court, in which Judge John C. Gemmill and Judge Michael J. Brown joined.


Page 944


[¶1] In this case we address whether a provision in a public utility's tariff,[1] which limits the utility's liability for negligence, may limit a non-customer's damages for negligent telecommunication service interruption. U.S. Airways, Inc. (" U.S. Airways" ) claims that the superior court erred by granting Qwest Corporation's (" Qwest" ) motion for summary judgment to limit the amount of damages U.S. Airways could recover for a four-hour telecommunication service interruption. U.S. Airways also appeals the summary judgment granted to One Call Locators, Ltd. dba ELM Locating & Utility Services (" ELM" ), the contractor that failed to properly find and mark underground cables. Finally, Qwest cross-appeals the determination that it owed a duty of care to U.S. Airways. For the following reasons, we affirm the judgments.


[¶2] U.S. Airways operates a data center in Tempe. In January 2009, the owner of a nearby building entered into a contract with Skyline Steel, Inc. (" Skyline" ) to build carports in the parking lot adjacent to the data center. Skyline hired Arizona Blue Stake to locate and mark underground cables and power sources. Blue Stake notified Qwest, the owner of underground cable in the construction area, and Qwest hired ELM to search for and locate the cable.

[¶3] ELM, however, was unable to locate Qwest's cable because Qwest's maps were inaccurate. Under its contract with Qwest, ELM was supposed to contact Qwest for further instructions, but did not. Instead, ELM marked the ground with a " no conflict" mark, which inaccurately indicated that the Qwest cable had been located and was outside the excavation site. Skyline saw the marking, began construction and promptly severed the cable serving the U.S. Airways data center, causing a four-hour telecommunication service interruption at the center. The interruption was not to any services Qwest provided to the data center, but only from the telecommunication services of AT& T and Electronic Data Systems.

[¶4] U.S. Airways sued ELM, then added Qwest and Skyline as defendants. U.S. Airways alleged the defendants were negligent by failing to use reasonable care to locate, identify, mark, or supervise the excavation around its underground cable; claimed Qwest was vicariously liable for ELM's work; and sought nearly two million dollars in damages resulting from the service interruption. Skyline subsequently settled with U.S. Airways.

[¶5] Qwest moved to dismiss for failure to state a claim pursuant to Arizona Rules of Civil Procedure (" Rule" ) 12(b)(6), arguing that Section 2.1.3(B) of its Federal Communications Commission (" FCC" ) tariff and Section 2.4.1(A) of its Arizona Corporation Commission (" ACC" ) tariff barred or significantly limited any liability to U.S. Airways. After briefing and argument, the court granted Qwest's motion in part, finding that the FCC tariff applied and limited Qwest's liability for its negligence to the proportionate service charge as defined in the federal tariff. U.S. Airways filed an unsuccessful motion for reconsideration.

[¶6] ELM subsequently filed a motion for summary judgment arguing it owed no duty to U.S. Airways and that it was entitled to

Page 945

protection under Qwest's tariffs. U.S. Airways responded by filing a cross-motion for partial summary judgment against Qwest and ELM on the issue of negligence. After briefing, the court found that ELM did not owe U.S. Airways a duty, granted ELM's motion for summary judgment, and denied U.S. Airways' partial cross-motion as to ELM. The court also denied the partial cross-motion as to Qwest, but found that as a matter of law Qwest owed a duty to U.S. Airways.

[¶7] At the request of U.S. Airways and Qwest, the court entered a judgment in favor of U.S. Airways against Qwest for $586.40, which represented the limited damages U.S. Airways could receive under the federal tariff. The court entered a judgment in favor of ELM. U.S. Airways appealed both judgments and Qwest filed a cross-appeal.



[¶8] U.S. Airways challenges the rulings leading to both judgments. U.S. Airways argues that the court erred by finding that Qwest's FCC tariff limited its liability to the $586.40. Specifically, U.S. Airways contends that the tariff provision does not govern claims by non-customers, and its enforcement in this case is unconstitutional and violates public policy. U.S. Airways also claims that the court erred in granting ELM's motion for summary judgment and finding that ELM's contractual duty to Qwest did not extend to U.S. Airways because ELM voluntarily assumed Qwest's duty to identify and properly mark the underground facilities.

A. Motion to Dismiss

[¶9] We independently review the grant of a motion to dismiss pursuant to Rule 12(b)(6). Coleman v. City of Mesa, 230 Ariz. 352, 355, ¶ 7, 284 P.3d 863, 866 (2012); N. Peak Constr., LLC v. Architecture Plus, Ltd., 227 Ariz. 165, 167, ¶ 13, 254 P.3d 404, 406 (App. 2011). " [W]e assume the truth of the allegations set forth in the complaint and uphold dismissal only if the plaintiff[ ] would not be entitled to relief under any facts susceptible of proof in the statement of the claim." ELM Ret. Ctr., LP v. Callaway, 226 Ariz. 287, 289, ¶ 5, 246 ...

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