Georgia Court Affirms Dismissal of Red Tag Case

In a recent decision, the Georgia Court of Appeals dismissed a lawsuit against gas supplier Atlanta Gas Light (AGL) arising from a natural gas explosion that killed two people and injured a third. AGL had previously red-tagged the appliance that caused the explosion. While the case — Henry v. Atlanta Gas Light — involves natural gas, it’s still of interest since courts often apply the same standards of care to propane suppliers.

Turning on the Gas

In 2015, Andrea Wood was the owner of a rental home. There were new tenants moving into the home, and as part of the process of preparing it for occupancy, she called AGL to have the gas turned on. Wood arranged for the AGL technician to have access since no one was at home.

On Sept. 15, 2015, the AGL technician visited the home to turn on the gas. AGL policy required that he conduct a fuel line and appliance inspection inside the house to identify any safety concerns before the gas supply was turned on. He did this, first unlocking the meter supply valve and checking for leaks downstream of the meter.

While propane suppliers generally test for leaks using a water manometer or pressure gauge, the technician here used a different method — spotting the meter. This involves pressurizing the interior gas lines and then monitoring a test dial on the meter for movement. So, the AGL technician spotted the meter and confirmed that the interior gas piping was leak-free.

No Grommet

The technician then turned his attention to the appliances, and here he found some problems. The gas water heater required an additional combustion air vent in the utility room in which it was installed.

The gas furnace presented multiple issues. There was no grommet or protective ring in the furnace cabinet opening, where the gas line entered the appliance. The purpose of the grommet is to protect the gas line — which was a thin-walled, corrugated flexible connector — from damage due to vibrations of the appliance when it was in operation.

In addition, There was no sediment trap on the line leading to the appliance, and the thermostat was not operable. Because of the latter problem, the technician could not operate the appliance to complete his inspection procedure.

Red Tag

Accordingly, the AGL technician did not attempt to light the furnace. Instead, he shut off the in-line valve for the appliance and red-tagged it. He wrapped warning tape around the appliance valve and attached a warning card to the appliance. The warning card stated:

The following gas appliance/equipment has been turned/left off due to the below reasons: … Furnace … Explanation: thermostat not displaying, no sediment trap, flex line thru [sic] top of furnace, left off.

… DO NOT CONNECT OR USE THE TAGGED APPLIANCE(S) OR CUSTOMER PIPING UNTIL YOU HAVE A PROPERLY LICENSED AND QUALIFIED AGENCY/PERSON PERFORM THE NECESSARY REPAIRS.

The card apparently also noted the venting problem with the hot water heater. The technician left a copy of this card on the kitchen counter. He then left. The gas supply to the house remained on, but the supply to the furnace was off, with the warning tape and red tag warning card in place. The supply to the hot water heater was apparently also off.

Not long after this, Wood’s stepson Scott was at the house getting it ready for the new tenants. He noted that there was no hot water, and he found the warning card in the kitchen.

He called Wood to tell her that the furnace gas supply could not be turned on until the furnace was serviced. Wood called AGL and was told to “get somebody out there” to fix the appliances. She called a plumber to deal with the water heater and Houser Heating and Air Conditioner to repair the furnace.

A Houser technician visited the house on Sept. 24, 2015. He saw the warning card on the furnace, and he made his own examination of the appliance.

He decided that the furnace needed a hard inlet pipe, instead of a flexible line, connecting into the furnace cabinet. He installed a short section of hard pipe that stubbed out of the cabinet. However, he left the flexible connector in place, attaching it to the stubbed-out section of hard pipe.

Coiled Connector

The flexible connector was now somewhat long for the situation, due to space limitations behind the furnace. Sadly, the connector was now curved and coiled in such a way that it was in contact with the exterior of the furnace cabinet. The Houser technician also apparently installed a sediment trap and fixed the thermostat.

The house was rented to Constance Henry and her parents, Patricia and Samuel Henry. They were able to operate the furnace without incident for nine months.

However, over that time, vibrations resulted from operation of the furnace as the blower motor ran and took their toll on the flexible connector. The friction between the furnace cabinet and the connector wore a hole in the connector, and there was a gas leak.

On June 12, 2016, the leaking gas ignited. Data from the Gas meter indicated that the leak started June 5. The connector catastrophically ruptured June 12. The explosion caused injuries to Henry and the deaths of Patricia and Samuel.

Suit was filed against AGL and Houser. Houser settled, and AGL filed a motion for summary judgment, which was granted by the trial court. Then the plaintiffs appealed to the Georgia Court of Appeals.

On appeal, the plaintiffs argued that the lower court erred in finding that the explosion did not result from the breach of any legal duty by AGL. The appellate court began its analysis by reviewing the legal duty of a gas supplier for failures of equipment owned by a customer:

“[A]bsent actual knowledge of a dangerous condition, a gas supplier is not generally liable beyond the meter and service pipes. Where … gas appliances on private property, [are] owned or controlled by the owner or occupant of the premises, a company which merely furnishes … gas for such respective appliances is not responsible for the … condition of the … gas appliances, … and is not liable to the owner or occupant or to third persons on the premises for injuries, … caused by such defective condition. The rule is subject to the exception that whenever such … gas is supplied with actual knowledge on the part of the one supplying it of the defective and dangerous condition of the customer’s appliances[,] he is liable for injuries caused by the … gas thus supplied for use on such defective and dangerous appliances, but no duty of inspection rests on the one supplying the electricity or the gas from the mere fact of rendering such service to the customer owning or controlling the equipment.”

No Notice and No Duty

The court noted that the leak resulted from a negligent repair by Houser. AGL, it said, had no knowledge or notice of the improper work done by Houser after the AGL technician had left. Indeed, the Houser technician remedied the specific hazard that the AGL technician had found, but also created a new hazard of which AGL had no knowledge. No one ever informed AGL of the repair work or even called AGL back to inspect the repair work. The court stated:

“Based on this record, Henry cannot meet her burden to identify a duty breached by AGL. Consistent with AGL policy, after discovering the initial hazard, West [the AGL technician] placed warning cards on the appliance and on the kitchen counter, he turned off the gas to the furnace, and he wrapped the valve in warning tape so that it could not be turned on without removing the tape. The fact that Houser performed a negligent repair cannot be attributed to AGL because ‘[a] gas company is not an insurer of the safety of its customers and their agents and invitees but is liable only for [its] acts of negligence.’ AGL left the furnace in a safe condition (with the gas supply valve turned off and taped) and warned the property owner of the hazard it discovered. No one notified AGL of any repair or requested it to reinspect the gas appliances; AGL simply had no knowledge of the hazard that caused the injuries in this case. Absent such knowledge, AGL had no duty to further inspect its customer’s gas lines after warning the customer to repair the hazards known to it. Accordingly, the trial court correctly granted summary judgment to AGL.”

The appellate court affirmed the lower court ruling, but the case is not over. The plaintiffs have filed a petition asking the Georgia Supreme Court to review the case, and Georgia Watch, a consumer group, has filed a brief in support of review, contending that gas suppliers, such as AGL, that have found hazards in customer owned appliances should not turn the gas on to the house until all problems noted during its inspection have been corrected and then reinspected by the gas supplier.

This would greatly expand the duty of the gas supplier. The case bears watching as it proceeds in the Georgia Supreme Court.