Recordkeeping helps exonerate propane marketer in house-fire lawsuit

August 24, 2015 By and    
Photo credit: Kelly DeLay/ Foter/CC BY

A house that was hit by lightning and destroyed created legal trouble for one propane retailer. Photo credit: Kelly DeLay/ Foter/CC BY

new home was built in South Carolina in early 1999. As part of an installation, a propane marketer there was asked to install an underground propane tank and run gas lines to an outdoor gas grill and to a stub out at the inlet to the home.

The homeowner was provided with a gas fireplace and logs that ran on propane, but the general contractor claimed he did not perform that installation. The gas fireplace and logs were connected to the gas system with a Corona Corrugated Gas Connector (CCGC). The marketer did not install the CCGC but confirmed the system was leak free.

In 2011, the home was sold to a family. The marketer’s policy required it to perform a safety check of the gas system, which it did in June of that year. No issues with the system were noted.

Not long after the family moved in, the house was hit by lightning and destroyed. The insurer for the family paid for the loss and subsequently sued for its payments of almost $400,000. It sued the general contractor, the CCGC manufacturer and the marketer in 2013 – 14-plus years after the house was built and the CCGC, fireplace and gas logs were permanently installed.

During the investigation, a perforation was found in the CCGC, below the protective sleeve that passed through the fireplace wall. When the manufacturer sold the CCGC, it had attached a label that instructed not to install the connector through an appliance wall. However, a sleeve protected it. The label on the CCGC was not found attached at the time of the inspection following the fire.

All three defendants sought dismissal from the case. While those motions were pending, the general contractor and CCGC manufacturer reached a private settlement with the plaintiff. The marketer did not settle with the plaintiff.

The marketer argued successfully to the court that it was entitled to dismissal because the case was brought more than 13 years after the CCGC, fireplace and logs were permanently installed. In South Carolina, at the time of this home being built, a statute of repose barred any claim brought more than 13 years after construction of the home. The marketer did not breach any codes or industry standards when it installed the tank and gas lines in 1999 or when it did its safety check in 2011.

As for the statute-of-repose argument, the plaintiff suggested that a CCGC, fireplace and logs are not improvements to real property as required by the law because a homeowner could remove them.

The court concluded that these items typically go with a home when it is sold. The question is not whether these items could, under some conceivable set of facts, be removed. Under this analysis, the court concluded that these items were improvements to real property and the statute of repose applied.

The court next looked at whether anything the marketer did or did not do could be seen as reckless or grossly negligent conduct. Such conduct would allow a case to proceed, even if a court determined that the statute of repose applied, as it did here.

The court concluded that there was no evidence of the label being affixed to the CCGC; no code prevented a CCGC from going through an appliance wall provided it was through a protective sleeve, as it was here; and the plaintiff had no expert to say that anything the marketer did was in violation of industry custom and practice. The court concluded that the exceptions to the application of the statute of repose did not apply.

Finally, the court looked at the marketer’s safety check of 2011 and again found no violations of code or industry custom and practice. The court concluded that there was no legal basis to keep the case alive.

This case was buttressed by excellent recordkeeping by the marketer. Both the law and facts supported the successful result for the marketer in this case. 

John V. McCoy is with McCoy Leavitt Laskey LLC, and his firm represents industry members nationally. He can be reached at 262-522-7007 or jmccoy@MLLlaw.com.

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