Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 1 of 34
ATTORNEYS FOR APPELLANTS
William E. Winingham Jonathon B. Noyes
Wilson Kehoe Winingham, LLC Indianapolis, Indiana
Ned Miltenberg
Washington, D.C.
ATTORNEYS FOR AMICUS
CURIAE INDIANA TRIAL
LAWYERS ASSOCIATION
Tyler J. Zipes Nicholas C. Deets Hovde Dassow & Deets, LLC
Indianapolis, Indiana
ATTORNEYS FOR APPELLEE
INDIANAPOLIS POWER & LIGHT
Joshua B. Fleming Lucy R. Dollens
Quarles & Brady LLP Indianapolis, Indiana
T. Joseph Wendt Alejandra Reichard
Barnes & Thornburg LLP Indianapolis, Indiana
ATTORNEYS FOR APPELLEE
WRIGHT TREE SERVICE INC.
Kevin C. Schiferl
Amy Stewart Johnson Darren A. Craig
Frost Brown Todd LLC Indianapolis, Indiana
ATTORNEYS FOR AMICUS
CURIAE INDIANA
ENERGY ASSOCIATION
Wayne C. Turner Patrick A. Ziepolt
Hoover Hull Turner LLP Indianapolis, Indiana
ATTORNEYS FOR AMICUS
CURIAE INDIANA
LEGAL FOUNDATION
Jane Dall Wilson
Emily Kile-Maxwell Faegre Baker Daniels LLP
Indianapolis, Indiana
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 2 of 34
I N T H E
COURT OF APPEALS OF INDIANA
Kenyon Tyus, Jr., Kyrie Tyus,
Keyon Tyus, Amber Tyus, and
Kenyon Tyus,
Appellants/Cross-Appellees-Plaintiffs,
v.
Indianapolis Power & Light
Company, The City of
Indianapolis, Indianapolis Department of Public Works,
and Wright Tree Service Inc.
d/b/a Wright Tree Service,1
Appellee/Cross-Appellant-Defendant.
September 16, 2019
Court of Appeals Case No.
18A-CT-828
Appeal from the Marion Superior Court
The Honorable Patrick J. Dietrick, Judge
Trial Court Cause No. 49D12-1612-CT-43871
Kirsch, Judge.
[1] In the underlying action, Amber Tyus (“Amber”), her husband, Kenyon Tyus
(“Kenyon”), and their three children, Kenyon Tyus, Jr. (“Kenyon, Jr.”), Keyon
Tyus (“Keyon”), and Kyrie Tyus (“Kyrie”) (collectively, “the Tyuses”) sued
Indianapolis Power & Light Company (“IPL”), among others, for various acts
of common law negligence and gross negligence. The Tyuses, who were not
1 The City of Indianapolis, Indianapolis Department of Public Works, and Wright Tree Service Inc. d/b/a
Wright Tree Service did not join IPL’s motion for judgment on the pleadings and, therefore, are not parties to
this discretionary interlocutory appeal. It appears that the trial court stayed the proceedings as to those
defendants pending the outcome of this appeal.
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 3 of 34
IPL customers, sought recovery for injuries sustained when Amber and her
three children were involved in an automobile accident at a busy Indianapolis
intersection where IPL-operated traffic signals remained dark for more than
eight hours after they were disabled by a storm. IPL moved for judgment on
the pleadings based largely on the defense that IPL’s schedule of rates, rules,
and regulations for supplying electricity to customers (“the 2016 Tariff”), which
had been filed with and approved by the Indiana Utility Regulatory
Commission (“IURC”) on March 16, 2016, provided a release from liability.
Specifically, IPL argued that Rule 24.2, in part, released IPL from liability for
injuries to third persons resulting from an interruption of service or supply of
electricity, “unless due to willful default or neglect on the part of [IPL]” (“the
Release Clause”). Appellee’s App. Vol. 4 at 91. The trial court granted IPL’s
motion for judgment on the pleadings as to the Tyuses’ negligence claim but
allowed their claim of gross negligence to proceed to trial.
[2] The Tyuses bring this discretionary interlocutory appeal raising five
constitutional issues,2 of which we find the following issue to be dispositive:
I. Whether the trial court erred in granting IPL’s motion for
judgment on the pleadings, after finding that the Release
2 On appeal, the Tyuses claimed that the IURC’s approval of the Release Clause of the 2016 Tariff: (1)
violated due process because customers and noncustomers were not notified of the change in the immunity
language, and the trial court made no findings and heard no evidence; (2) violated separation of powers by
encroaching on powers entrusted to the legislature and to the judiciary; (3) violated separation of powers by
exceeding the power delegated to the IURC by the legislature; (4) violated the equal privileges and immunity
clause by granting IPL, as an investor-owned utility, a special immunity; and (5) violated the one-subject rule
by grouping together the IPL’s immunity from tort law with customer contractual issues.
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 4 of 34
Clause precluded IPL from being liable to the Tyuses for
damages resulting from IPL’s negligent interruption in the
supply of electricity, when, the Tyuses argue, the IURC’s
act of approving the Release Clause exceeded the IURC’s
delegated powers.
IPL cross appeals raising three issues,3 which we restate as:
II. Whether the Tyuses are barred from raising a
constitutional issue for the first time on appeal;
III. Whether the trial court and our court lack subject matter
jurisdiction because the Tyuses’ suit is an improper
collateral attack on the 2016 Tariff; and the Release Clause
is inextricably connected to rate making and, thus falls
within the IURC’s expertise and jurisdiction; and
IV. Whether, even without the Release Clause, judgment on
the pleadings for the Tyuses’ negligence claim is
appropriate because IPL owes the Tyuses no duty of care.
[3] We affirm in part, reverse in part, and remand for further proceedings.
3 IPL contends that: (1) it did not owe the Tyuses a duty of care to protect them from a car accident; (2) the
Release Clause was inextricably connected to rate making and, therefore, fell within the IURC’s expertise
and jurisdiction; and (3) Indiana does not recognize degrees of negligence and, therefore, the Tyuses’ claim
for gross negligence cannot survive as a freestanding claim. Because we find that the Tyuses’ claim for
negligence may proceed, we need not address IPL’s issue regarding degrees of negligence.
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 5 of 34
Facts and Procedural History4
The Accident
[4] During a storm on the afternoon of April 2, 2016, a tree branch fell, downing
power lines near the intersection of Binford Boulevard and Kessler Boulevard
(“the Intersection”) in the City of Indianapolis, Indiana (“the City”). The
resulting power outage caused IPL-operated traffic signals at the Intersection to
go dark at 3:14 p.m. that day. Appellants’ App. Vol. 2 at 66. An hour later, at
4:14 p.m., IPL “was notified that the entire electrical circuit” at the Intersection
had lost power. Id. at 67. About twenty-five minutes later, at 4:39 p.m., IPL
was notified that the traffic signals and surrounding lights at the Intersection
were out in every direction. Id. At 8:26 p.m., about five hours after the traffic
signals had lost power, IPL “was again notified in an emergency call” that the
traffic signals and lighting at and surrounding the Intersection had no power.
Id. By 11:00 p.m., IPL “had received at least thirteen separate notifications that
the [I]ntersection’s circuit had lost power.” Id. At 11:17 p.m., about eight
hours after the traffic signals initially went black, the Intersection and its
surrounding street lights were still completely without power and there was no
traffic control at the Intersection. Id.
4 Oral argument was held on June 27, 2019 at Purdue University’s Krannert Graduate School of
Management. We extend many thanks. First, we thank counsel for the quality of the oral and written
arguments, for participating in post-argument discussions with the audience, and for commuting to West
Lafayette, Indiana. We especially thank the Executive Education Program at the Krannert Graduate School
of Management for their accommodations and the students in the audience for their thoughtful post-
argument questions.
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 6 of 34
[5] That night, around 11:20 p.m., Amber was driving westbound on Kessler
Boulevard with her three sons—ten-year-old Kenyon, Jr., seven-year-old
Keyon, and two-year-old Kyrie. Id. at 68. As Amber entered the Intersection,
her vehicle was t-boned by a vehicle operated by Brian Ruark who, with
passenger Jonell Carrier, was traveling northbound on Binford Boulevard.5 The
crash caused catastrophic injuries to members of the Tyus family. Id. Amber
suffered severe fractures and other orthopedic injuries. Id. Kenyon, Jr. suffered
a severe traumatic brain injury and is now confined to a hospital bed without
the ability to walk, talk, or feed himself. Id. Kyrie suffered a severe traumatic
brain injury, rendering him unable to form sentences or have normal control
over the left side of his body. Id. Keyon suffered bodily injuries and severe
emotional damage after witnessing the crash and his family’s condition. Id.
[6] IPL is a domestic, investor-owned, electric utility.6 In 2016, pursuant to a
“Public Lighting Contract” between the City, as customer, and IPL (“the IPL
Contract”), IPL supplied equipment and electricity to the City’s traffic signals,
5 Jonell Carrier was also injured in the accident and sued the same defendants that the Tyuses had sued. On
July 3, 2018, the trial court consolidated the case of Carrier v. Indianapolis Power & Light Company; The City of
Indianapolis; Indianapolis Department of Public Works; and Wright Tree Service Inc. d/b/a Wright Tree Service,
Cause No. 49D13-1803-CT-12557, into the underlying Cause Number 49D12-1612-CT-43871. Appellants’
App. Vol. 2 at 28-29. The consolidation was deemed appropriate because Carrier: (1) was a passenger in the
vehicle that hit the Tyuses’ vehicle; (2) was injured as a result of that collision; and (3) sued the same
defendants named in the instant case. Carrier does not participate in this interlocutory appeal.
6 The Indiana Administrative Code provides, “‘Investor-owned utility” means any utility that is financed by
the sale of securities and whose business operations are overseen by a board representing their shareholders.”
170 Ind. Admin. Code 4-1-23(a)(6).
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 7 of 34
including those at the Intersection.7 The IURC is an administrative agency of
the State and “has legislative authority to set rates or charges for regulated
public utilities, including electric utilities.” Ind. Energy Ass’n Amicus Br. at 9.
IPL is subject to regulation by the IURC.
Procedural History
[7] On December 9, 2016, the Tyuses filed their initial complaint against IPL
seeking damages for injuries sustained.8 Thereafter, the Tyuses filed an
amended complaint and, thereafter, a second amended complaint on May 17,
2017 (“the Amended Complaint”). Appellants’ App. Vol. 2 at 43-53, 54-64, 65-
77. In the Amended Complaint, the Tyuses alleged that IPL “knew or should
have known of the power outage at the intersection of Binford Boulevard and
Kessler Boulevard in Indianapolis, Indiana for over eight hours prior to the
Tyus[es]’ collision.” Id. at 69. The Tyuses further alleged that IPL uses a
system to locate outages that became outdated decades ago. Specifically, the
Tyuses alleged:
[IPL] was negligent and careless in one or more of the following
respects:
7 The IPL Contract covered a period from July 15, 2011 to December 31, 2017. Appellants’ App. Vol. 5 at 172-
88.
8 In its original complaint, the Tyuses also named as a defendant Eric Wasson, who had been at the
Intersection soon after the accident; the Tyuses later dismissed Wasson from the suit and added Wright Tree
Service Inc. as a defendant. Appellants’ App. Vol. 2 at 65.
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 8 of 34
a. Failing to properly monitor and maintain the power to the
[I]ntersection.
b. Failing to timely and properly restore power to the
[I]ntersection after power to the [I]ntersection was lost.
c. Failing to properly maintain power lines and trees in order to
prevent power outages.
d. Failing to use a reasonable system for diagnosing and
correcting power outages in [the City].
e. Failing to act as a reasonable utility in regard to maintenance,
monitoring, and upkeep of traffic signals in [the City].
Id. at 69-70. The Tyuses further alleged that IPL’s “conduct constitute[d] gross
negligence and reckless misconduct in view of its failure to restore power to the
traffic [signals] and street lights at a high[-]volume intersection for a period in
excess of [thirteen] hours.” Id. at 70. IPL filed its answer on June 6, 2017.
[8] On September 12, 2017, IPL moved for judgment on the pleadings because the
IURC-approved 2016 Tariff “preclude[d] IPL’s liability for damages resulting
from interruptions in the supply of electricity,” and the matter should be
referred to the IURC for its interpretation of the meaning of the 2016 Tariff. Id.
at 81. IPL also moved to dismiss the Tyuses’ claims, arguing that IPL did not
owe the Tyuses a duty of care and, as such, the Tyuses’ “[Amended C]omplaint
fail[ed] to state a claim upon which relief can be granted against IPL as a matter
of law.” Id. In its motion for judgment on the pleadings, IPL relied in large
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 9 of 34
part on its belief that the IURC-approved 2016 Tariff provided a complete
defense to the Tyuses’ claims. Specifically, IPL focused on the following
italicized language of the Release Clause:
24 Release of Company from Liability.
. . . .
24.2 [IPL] shall not be liable for damages resulting to the Customer,
or to third persons, from the use of electricity, interruption of service or
supply, or the presence of the [IPL]’s property on the Customer’s
premises, unless due to willful default or neglect on the part of [IPL].
Appellee’s App. Vol. 4 at 91. Based upon this limitation of liability in the 2016
Tariff, IPL argued that it was shielded from the liability asserted against it in the
Tyuses’ Amended Complaint, and, therefore, the Tyuses’ claims against IPL
failed as a matter of law. Appellants’ App. Vol. 2 at 36. IPL alleged that the
Release Clause “preclude[d] IPL’s liability for damages resulting [to the Tyuses]
from interruptions in the supply of electricity . . . .” Id. at 81.
[9] In the alternative, IPL argued that the instant case be referred to the IURC. It
was IPL’s position that “both of [the Tyuses’] negligence claims against IPL, at
root, challenge the reasonableness of IPL’s service,” and that “[t]hat claim
cannot be adequately resolved without the IURC’s knowledge, perspective and
expertise regarding reasonable utility practices, viewed as part of the larger
electrical and regulatory systems.” Id. IPL argued that, “[a]t a minimum,
pursuant to the doctrine of primary jurisdiction, [the Tyuses’] claims against
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 10 of 34
IPL should be stayed and referred to the IURC before those claims proceed
further, so this Court can have the benefit of IURC’s expertise on the
reasonableness of IPL’s service.” Id.
[10] The trial court held a hearing on December 13, 2017, during which IPL argued
that the Tyuses’ claims should be dismissed or referred to the IURC pursuant to
the doctrine of primary jurisdiction. Tr. Vol. II at 8-9. IPL maintained that
there was an “absence of the [trial] court’s subject matter jurisdiction” and an
“absence of common law duty from IPL to [the Tyuses].” Id. at 10.
Furthermore, IPL cited the “wisdom and utility” of referring the Tyuses’ case to
the IURC “to utilize its expertise in determining the reasonableness of IPL’s
actions.” Id. While recognizing that a trial court has the general power to
resolve negligence claims, IPL asserted that such resolution is only appropriate
where “that claim doesn’t require consideration and regulation of an IURC
order.” Id. at 21. IPL argued that, here, the trial court lacked subject matter
jurisdiction over the Tyuses’ claims because “resolution of the viability, scope,
and substance of the plaintiffs’ claims depend[s] upon the interpretation,
application of two IURC orders.”9 Focusing on the Release Clause, IPL
asserted that the IURC-approved limitation to IPL’s liability precluded the
Tyuses, as third parties, from recovering for any injuries arising as the result of
9 IPL referred to the following two orders: (1) the 2016 Tariff; and (2) an order applicable to the standards of
tree trimming. Tr. Vol. II at 13. However, our resolution of the issues before us requires consideration of
only the 2016 Tariff.
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 11 of 34
any negligent actions IPL may have committed in connection with interrupting
the supply of electricity to the traffic signals.
[11] On February 9, 2018, the trial court issued an Order granting in part and
denying in part IPL’s motion for judgment on the pleadings (“2018 Order”).
The trial court determined that our court’s decision in Prior v. GTE North, 681
N.E.2d 768 (Ind. Ct. App. 1997), trans. denied, stood “for the proposition that
the Indiana legislature, through the IURC, had the power to restrict the Tyuses’
common law right to bring an ordinary negligence action against IPL as a
rational means of keeping IPL’s costs to a minimum so that IPL is able to
operate without charging its customers an unreasonable rate.” Appellants’ App.
Vol. 2 at 38. Applying the Prior reasoning, the trial court dismissed the Tyuses’
negligence claim against IPL. However, the trial court concluded that the 2016
Tariff did not foreclose the Tyuses’ claims of gross negligence and reckless
conduct.
[12] On February 20, 2018, the Tyuses filed their motion to certify the 2018 Order
for interlocutory appeal. Id. at 179-84. IPL filed a motion to reconsider the
2018 Order, claiming that Indiana law “recognizes only negligence, not gross
negligence.” Appellee’s App. Vol. 2 at 2. Following a hearing, the trial court
denied IPL’s motion to reconsider on March 19, 2018 and, that same day,
granted the Tyuses’ motion to certify the 2018 Order for interlocutory appeal.
Id. at 26, 185. On April 17, 2018, the Tyuses filed with our court a motion to
accept jurisdiction over interlocutory appeal, and IPL responded to that motion
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 12 of 34
on May 2, 2018. On May 25, 2018, our court accepted jurisdiction over the
Tyuses’ interlocutory appeal.
Discussion and Decision10
[13] The Tyuses appeal from that part of the trial court’s 2018 Order granting IPL
judgment on the pleadings as to the Tyuses’ claim of negligence. A Trial Rule
12(C) motion for judgment on the pleadings tests the sufficiency of a claim
presented in the pleadings. KS&E Sports v. Runnels, 72 N.E.3d 892, 898 (Ind.
2017). In considering a Rule 12(C) motion, courts must rule solely on the
pleadings and “accept as true the material facts alleged in the complaint.” Id.
“All reasonable inferences are drawn in favor of the nonmoving party and
against the movant.” HealthPort Techs., LLC v. Garrison Law Firm, LLC, 51
N.E.3d 1236, 1238 (Ind. Ct. App. 2016), trans. denied. “A judgment on the
pleadings is proper only where there are no genuine issues of material fact and
the nonmoving party cannot in any way succeed under the facts and allegations
therein.” Id. We review a trial court’s decision on a motion for judgment on
the pleadings de novo. Id.
10 We note that each the following organizations has filed an amicus brief: (1) Indiana Trial Lawyers
Association (“ITLA”), which “regularly represent[s] Indiana citizens in personal injury and wrongful death
actions” and has interests aligned with those of the Tyuses, ITLA Br. at 4; (2) Indiana Energy Association
(“IEA”), which has interests “in fair rate making” and “avoiding legal rulings that would frustrate the intent
or effectiveness of utility regulation,” and counts IPL among its members, IEA Br. at 8; and (3) Indiana Legal
Foundation, Inc. (“ILF”), which represents the interests of the business community where a “broad-based
policy matter is at risk” and has interests aligned with those of IPL, ILF Br. at 5. We thank those
organizations for their contribution to our consideration of the issues before us.
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 13 of 34
[14] The Tyuses contend that the issues for review in this case concern: (1) the
constitutionality of the IURC’s approval of IPL’s Release Clause; (2) the
IURC’s jurisdiction to approve that Release Clause; and (3) whether the IURC
acted contrary to law. Whether a statute, ordinance, or agency order is
constitutional on its face is a question of law which this Court reviews de novo.
Paul Stieler Enter., Inc. v. City of Evansville, 2 N.E.3d 1269, 1272 (Ind. 2014). Any
issue regarding “[t]he [IURC]’s jurisdiction . . . is a legal question that
[appellate courts] review de novo.” Ind. Bell Tel. Co. v. IURC, 715 N.E.2d 351,
354 (Ind. 1999). “[A]n agency action is always subject to review as contrary to
law, but this constitutionally preserved review is limited to whether the [IURC]
stayed within its jurisdiction and conformed to the statutory standards and legal
principles involved in producing its decision, ruling, or order.” N. Indiana Pub.
Serv. Co. v. U.S. Steel Corp., 907 N.E.2d 1012, 1016 (Ind. 2009).
[15] On appeal, the Tyuses argue that the trial court erred in granting IPL’s motion
for judgment on the pleadings as to the Tyuses’ negligence action. The Tyuses
argue that, regardless of how the IURC would interpret the Release Clause, any
approval by the IURC of language purporting to relieve IPL of liability for
common law tort injuries to a noncustomer, when that injury occurs during
IPL’s interruption in the supply of electricity, would exceed the power granted
to the IURC by the Indiana General Assembly. On cross appeal, IPL claims
that the trial court’s grant of IPL’s motion for judgment on the pleadings as to
the negligence claim should be affirmed because: (1) the Tyuses are barred
from raising a constitutional issue for the first time on appeal; (2) our court
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 14 of 34
lacks subject matter jurisdiction to consider the Tyuses’ improper collateral
attack on the 2016 Tariff; and (3) IPL owes the Tyuses no common law duty
and, therefore, cannot be negligent as a matter of law.11 Because IPL’s issues
could be dispositive, we reorder the issues and address IPL’s arguments first.
I. Waiver of Constitutional Issues
[16] The Tyuses contend that, by approving the Release Clause, the IURC
wandered far beyond its delegated powers, far beyond its ‘ministerial’ function,
and far beyond its recognized ‘factfinding’ expertise”; specifically, they argue
that “in approving the Release [Clause], the IURC violated six separate
provisions of the Indiana Constitution and several provisions of its own
regulations.” Appellants’ Br. at 24. IPL, in turn, argues that the Tyuses waived
consideration of their constitutional arguments because, they raised most of
them for the first time on appeal. Appellee’s Br. at 32. Because the dispositive
issue before us is whether the IURC exceeded its delegated legislative powers
when it approved the Release Clause, we need only address whether that
constitutional issue was preserved.
[17] IPL admits that the trial court heard argument on the question of whether the
IURC exceeded the powers delegated to it by the legislature. Even so, IPL
questions whether the Tyuses’ argument was enough to preserve that issue for
11 In the alternative, IPL argues that the resolution of this matter requires the interpretation and application
of an IURC order, the 2016 Tariff, which is best addressed by the technical expertise of the IURC. That is
not a jurisdictional issue.
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 15 of 34
appeal. Appellee’s Br. at 32. We find the following statements, made by the
Tyuses’ counsel during the trial court’s hearing on the motion for judgment on
the pleadings, adequately preserved this constitutional issue for appeal.
There is no indication at all that the legislature intended to
modify the Tyuses’ constitutional right to bring a bodily injury
claim against a public utility, and that has to be either an
unmistakable implication or a clear statement. You’re not going
to find anything in the statute that says that and IPL hasn’t
pointed to one statutory provision that shows that, nor has it
pointed to even one statutory provision that gives the [] IURC
the power to limit the Tyus family’s constitutional rights. It
doesn’t exist.
Tr. Vol. II at 40. The Tyuses did not waive the constitutional issue regarding
whether the IURC’s act of approving the Release Clause exceeded the powers
delegated to it by the legislature.
II. Jurisdiction
A. Standing
[18] IPL contends there is a jurisdictional bar to either the trial court or our court
addressing or reviewing the IURC’s approval of the 2016 Tariff and its included
Release Clause. Indiana Code section 8-1-3-1, in part, provides:
Any person, firm, association, corporation, limited liability
company, city, town, or public utility adversely affected by any final
decision, ruling, or order of the [IURC] may, within thirty (30) days
from the date of entry of such decision, ruling, or order, appeal to the
court of appeals of Indiana for errors of law under the same terms
and conditions as govern appeals in ordinary civil actions . . . .
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 16 of 34
[19] IPL first argues that the trial court did not have jurisdiction because, under
Indiana Code section 8-1-3-1, the Tyuses could only appeal the IURC-approved
2016 Tariff directly to the court of appeals. See Schenkel Enters., Inc. v. Ind. &
Mich. Elec. Co., 182 Ind. App. 48, 51, 393 N.E.2d 268, 270-71 (1979) (Indiana
Code section 8-1-3-1 “provides the exclusive remedy for parties aggrieved by the
[IURC]’s orders, and trial courts have no subject-matter jurisdiction over
disputes arising from such orders.”). IPL, however, has mischaracterized the
Tyuses’ claims. The suit the Tyuses filed with the trial court was not an appeal
of the 2016 Tariff’s Release Clause; in fact, it is likely that the Tyuses knew
nothing about the Release Clause until IPL raised it as an affirmative defense.
The Tyuses’ Amended Complaint was filed as a common-law tort claim to
recover for injuries the family sustained from the accident at the Intersection.
Our Supreme Court has said, “If at least one of the issues involved in the case is
within the jurisdiction of the trial court, the entire case falls within its
jurisdiction, even if one or more of the issues are clearly matters for exclusive
administrative or regulatory agency determination.” Austin Lakes Joint Venture
v. Avon Utils., 648 N.E.2d 641, 646 (Ind. 1995). “Where at least one of the
issues or claims is a matter for judicial determination or resolution, the court is
not ousted of subject matter jurisdiction by the presence in the case of one or
more issues which arguably are within the jurisdiction of an administrative or
regulatory agency.” Id. The trial court had jurisdiction to consider the Tyuses’
Amended Complaint.
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 17 of 34
[20] IPL next argues that our court does not have jurisdiction because the Tyuses
failed to follow the procedures required under Indiana Code section 8-1-3-1 to
appeal. That is, IPL contends that the Tyuses have no standing to proceed with
this action because they failed to show they sustained any direct injury as a
result of the 2016 Tariff and, even if the Tyuses had sustained an injury arising
from the 2016 Tariff, they did not initiate judicial review within the requisite
thirty days after the IURC-approved that tariff. Appellee’s Br. at 25-26 (citing
Ind. Code § 8-1-3-1). Again, characterizing the Tyuses’ appeal as a challenge to
the 2016 Tariff, and noting that the Tyuses did not comply with Indiana Code
section 8-1-3-1, IPL argues that our court lacks jurisdiction to hear this appeal
because the Tyuses’ arguments “are simply impermissible collateral attacks on
an IURC-approved [2016] Tariff and rate order, in violation of the “doctrine of
primary jurisdiction.” Appellee’s Br. at 13. We disagree.
[21] Contrary to IPL’s assertions, our court’s jurisdiction in this matter does not rest
on the Tyuses’ compliance with Indiana Code section 8-1-3-1. IPL correctly
notes that the Tyuses showed no injuries arising from the IURC’s approval of
the 2016 Tariff’s Release Clause. However, when IPL raised the Release
Clause as a bar to the Tyuses’ claims for negligence, IPL opened the door for
the Tyuses to challenge that part of the 2016 Tariff as being invalid and
unconstitutional.
[A] court may always properly inquire . . . whether or not the
order is contrary to law. . . . In other words, did the
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 18 of 34
Commission12 stay within its jurisdiction and conform to the
statutory standards and legal principles involved in producing its
order? This is purely a legal question and a proper one for the
courts to determine in any judicial review regardless of any
statutory provision. These issues include questions of legality of
the administrative procedure and violations of fixed legal
principles as distinguished from questions of fact or expert
judgment or discretion.
Pub. Serv. Comm’n v. City of Indianapolis, 235 Ind. 70, 82, 131 N.E.2d 308, 312-13
(1956); see Citizens Action Coal. of Ind., Inc. v. Pub. Serv. Co. of Ind., 582 N.E.2d
330, 333 (Ind. 1991) (court may properly inquire whether commission ruling is
contrary to law); Ind.-Am. Water Co. v. Ind. Office of Util. Consumer Counselor, 844
N.E.2d 106, 110 (Ind. Ct. App. 2006) (quoting Lincoln Utils., Inc. v. Office of Util.
Consumer Counselor, 661 N.E.2d 562, 564 (Ind. Ct. App. 1996) (court may
inquire whether Commission remained within its jurisdiction and conformed to
all relevant statutes, standards, and legal principles), trans. denied). Because this
appeal challenges whether the IURC stayed within statutory standards and
legal principles in approving the Release Clause, our court has jurisdiction.
B. Primary Jurisdiction
[22] In the alternative, IPL argues that, because the matters before us pertain to the
validity of the Release Clause, the resolution of which IPL argues requires an
12 The Public Service Commission was the predecessor to the IURC. Hamilton Se. Utils., Inc. v. Ind. Util.
Regulatory Comm’n, 101 N.E.3d 229, 231 (Ind. 2018).
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 19 of 34
interpretation and application of the 2016 Tariff, the Release Clause is best
interpreted by the IURC using its knowledge and technical expertise. Appellee’s
Br. at 33-35. Thus, IPL argues that the Tyuses’ claims should be referred to the
IURC pursuant to the doctrine of primary jurisdiction. We disagree.
[23] “The doctrine [of primary jurisdiction] comes into play when a claim is
cognizable in a court but adjudication of the claim “requires the resolution of
issues which, under a regulatory scheme, have been placed within the special
competence of [an] administrative body; in such a case, the judicial process is
suspended pending referral of such issues to the administrative body for its
views.” Moran Elec. Serv., Inc. v. Comm’r, Ind. Dep’t of Envtl. Mgmt., 8 N.E.3d
698, 702-03 (Ind. Ct. App.), aff’d on reh’g, 13 N.E.3d 906 (Ind. Ct. App. 2014),
trans. denied. Here, there is no need for the “special competence” of the IURC
because the issue raised by the Tyuses does not involve a complicated
regulatory issue. Instead, the question is whether IPL had a duty to the Tyuses,
whether IPL breached that duty, and whether that breach proximately caused
the Tyuses’ injuries. Furthermore, we need not refrain from deciding this case
because, as our Supreme Court has found, “[t]he doctrine of primary
jurisdiction is not, in our view, jurisdictional but prudential . . . .” Id. at 703.
More importantly, the Tyuses are not challenging the rates or charges set by the
IURC. Instead, they are challenging the legality and constitutionality of the
IURC’s approval of the Release Clause; a provision that bars noncustomers
from recovering damages from IPL for personal injuries arising from IPL’s
negligence.
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 20 of 34
[24] The Tyuses originally brought a common-law tort action against IPL, not an
appeal of the IURC-approved 2016 Tariff, and, as such, the trial court had
jurisdiction to hear their negligence claims. See S.E. Ind. Nat. Gas Co. v. Ingram,
617 N.E.2d 943, 949 (Ind. Ct. App. 1993) (“a plaintiff raising a common law
negligence claim need not exhaust administrative remedies”). Moreover, the
Tyuses were not customers of IPL; therefore, the rules and regulations
contained in the 2016 Tariff, including the Release Clause, did not apply to
them. See Ind. Code § 8-1-2-34.5(a) (“The [IURC] shall establish reasonable
rules and regulations to govern the relations between public utilities and any or
all classes of their customers.”); 170 Ind. Admin. Code 4-1-29 (“all rules and
regulations covering the relationship between the customer and the public
utility shall be filed by each public utility in the office of the [IURC]”). The
IURC’s rules, regulations, knowledge, and expertise were irrelevant to the
outcome of the Tyuses’ negligence claim. Jurisdiction was properly in our
courts of general jurisdiction.
III. Negligence
[25] Our Supreme Court has said, “we generally avoid addressing constitutional
questions if a case can be resolved on other grounds.” Girl Scouts of S. Ill. v.
Vincennes Ind. Girls, Inc., 988 N.E.2d 250, 254 (Ind. 2013) (citing Ind. Wholesale
Wine & Liquor Co. v. State ex rel. Ind. Alcoholic Beverage Comm’n, 695 N.E.2d 99,
106 (Ind. 1998)). Accordingly, we first address IPL’s claim that the trial court
properly granted its motion for judgment on the pleadings because IPL did not
commit negligence as a matter of law. “‘[T]o prevail on a claim of negligence
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 21 of 34
the plaintiff must show: (1) duty owed to plaintiff by defendant; (2) breach of
duty by allowing conduct to fall below the applicable standard of care; and (3)
compensable injury proximately caused by defendant’s breach of duty.’”
Goodwin v. Yeakle’s Sports Bar & Grill, Inc., 62 N.E.3d 384, 386 (Ind. 2016)
(quoting King v. Ne. Sec., Inc., 790 N.E.2d 474, 484 (Ind. 2003)). “Absent a duty
there can be no negligence or liability based upon the breach.” Id. “Whether a
duty exists is a question of law for the court to decide.” Id. at 386-87.
[26] IPL argues that to determine whether a duty exists between IPL and the
Tyuses, this court must consider our Supreme Court’s decision in Webb v. Jarvis,
575 N.E.2d 992, 995 (Ind. 1991). Under Webb, the trial court must evaluate (1)
the relationship between the parties, (2) the reasonable foreseeability of the
harm to the person injured, and (3) public policy concerns. Id. at 995. “Duties
[that] may be the basis of a negligence action may [also] arise by statute or by
operation of law.” Ingram, 617 N.E.2d at 951. While the trial court made no
specific finding in the 2018 Order regarding the source of IPL’s duty to the
Tyuses, we agree with the Tyuses that, by allowing the gross negligence action
to proceed, the trial court recognized that a duty existed.13
13 IPL acknowledges that “[a] finding of no duty to [the Tyuses] would also require reversal of the trial
court’s order allowing [the Tyuses]’ gross negligence claim to proceed.” Appellee’s Br. at 52 n.6. The Tyuses
characterize this statement as a concession by IPL that “the trial court’s decision to allow [the Tyuses] to
proceed on their gross negligence claim is predicated on the lower court’s finding that IPL owed a duty to
[the Tyuses] . . . .” Appellants’ Reply Br. at 14. We agree.
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 22 of 34
[27] In Goodwin, our Supreme Court, citing Northern Indiana Public Service Co. v.
Sharp, 790 N.E.2d 462 (Ind. 2003), clarified that “‘[a]lthough the Webb three-
part balancing test is a useful tool in determining whether a duty exists, this is
so ‘only in those instances where the element of duty has not already been
declared or otherwise articulated.’” Goodwin, 62 N.E.3d at 387 (quoting Sharp,
790 N.E.2d at 465). The Tyuses contend that IPL’s duty arises from three
strands of Indiana law, which reflect and reinforce each other: (1) a common
law duty; (2) a statutory duty; and (3) our Supreme Court’s adoption of the
Restatement of Torts. Appellants’ Reply Br. at 14. Regarding a common law
duty, Indiana courts have long recognized that “[p]ublic utilities that have
received from public authorities franchises which provide for the
accommodation of the general public in return owe a duty to the public . . . .”
Ingram, 617 N.E.2d at 951 (citing Coy v. Indianapolis Gas Co., 146 Ind. 655, 659,
46 N.E. 17, 19 (1897)). This duty to the public extends to “third persons” who
are “affected” by the utility’s actions or non-actions; i.e., a utility’s duties extend
to individuals who are strangers to the utility’s contracts with its “customers.”
Bamberger & Feibleman v. IPL Co., 665 N.E.2d 933, 938 (Ind. Ct. App. 1996); see
Heritage Operating, L.P. v. Mauck, 37 N.E.3d 514, 521 (Ind. Ct. App. 2015) (gas
company’s duty extends to public generally, its customers, and third persons
who might reasonably be foreseen to be affected by utility’s provision of
service), trans. denied. “Embodied within this duty of care is ‘the so-called duty
to warn.’” Mauck, 37 N.E.3d at 522 (Ingram, 617 N.E.2d at 953).
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 23 of 34
[28] The existence of a duty owed by IPL to public motorists like the Tyuses is
reinforced by Indiana’s statutes and the IURC’s regulations. The Indiana
General Assembly enacted Indiana Code section 8-1-2-4, which mandates that
“[e]very public utility is required to furnish reasonably adequate service and
facilities.” The IURC, relying in part on the authority of that Code section,
promulgated 170 Indiana Administrative Code 4-1-23, which addresses the
duties owed by a utility to the public in the event of an “interruption of service.”
That regulation, in pertinent part, provides, “(d) Utilities shall first attempt to
restore service that affects public health and safety. Each utility shall have
written procedures for designated employees to follow in emergencies.” 170
I.A.C. 4-1-23. Those procedures must include “at least the following”: (1)
notification procedures for emergency response personnel; (2) general location
or locations of equipment, tools, and materials normally needed to restore
service; and (3) procedures for notifying fire, police, medical, and other public
officials. Id. As part of its regulations, the IURC defined the term “customer”14
and could have restricted IPL’s responsibility to restoring service that affects
just the health and safety of its customers. However, the IURC chose the words,
“restore service that affects public health and safety.” 170 I.A.C. 4-1-23(d).
This language contemplates the IURC’s intent to impose a duty on public
14 For the purposes of electric utilities, the IURC defined the term “customer” to mean any person, firm,
corporation, municipality, or other government agency that has agreed to pay for electric services received
from a utility. 170 I.A.C. 4-1-1(c).
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 24 of 34
utilities like IPL, in the event of an interruption of service, to act to protect the
health and safety of the public.
[29] A finding of duty is also supported by Section 43 of the Restatement (Third) of
Torts,15 which provides:
An actor who undertakes to render services to another and who
knows or should know that the services will reduce the risk of
physical harm to which a third person is exposed has a duty of
reasonable care to the third person in conducting the undertaking
if:
(a) the failure to exercise reasonable care increases the risk of
harm beyond that which existed without the undertaking,
(b) the actor has undertaken to perform a duty owed by the other
to the third person, or
(c) the person to whom the services are rendered, the third party,
or another relies on the actor’s exercising reasonable care in the
undertaking.
15 In their Reply Brief, the Tyuses cite to Section 324A of the Restatement (Second) of Torts as support for
their claim that IPL owes them a duty. Appellants’ Reply Br. at 15-18. Section 43 of the Restatement (Third)
of Torts, titled “Duty to Third Parties Based on Undertaking to Another,” replaced, without substantive
change, Section 324A of the Restatement (Second) of Torts. Section 324A, in part, stated that the duty to
third parties applied regardless of whether the undertaking to provide services was done gratuitously or for
consideration. Restatement (Second) of Torts § 324(A) (1965). As explained in the Section 43 comments,
that language, while not included in Section 43 of the Third Restatement, is still applicable. Restatement
(Third) of Torts § 43 cmt. a (Am. Law Inst. 2012) (“[O]mission of language contained in the Second
Restatement specifically identifying gratuitous and contractual undertakings is for felicity of expression, not
for substantive change.”). Accordingly, IPL, who, for consideration, undertook to render traffic signal
services—a duty owed to the general public by the City—owes the Tyuses the duty of reasonable care in
conducting that undertaking.
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 25 of 34
Restatement (Third) of Torts § 43 (Am. Law Inst. 2012). See Collip v. Ratts ex rel.
Ratts, 49 N.E.3d 607, 616 (Ind. Ct. App. 2015) (citing Light v. NIPSCO Indus.,
Inc., 747 N.E.2d 73, 75 (Ind. Ct. App. 2001) (observing that “our decisions have
equated Indiana law with the provisions of Restatement (Second) of Torts, §
324A,” the predecessor to Section 43 of Restatement (Third) of Torts), trans.
denied). Restatement (Third) of Torts section 43 “applies to any undertaking to
render services resulting in physical harm to third persons where there is
negligence in the manner of performance . . . .” Collip, 49 N.E.3d at 616
(citation omitted). “The assumption of such a duty creates a special
relationship between the parties and a corresponding duty to act [as] a
reasonably prudent person. Failure to act ‘reasonably’ will ‘give rise to an
action for negligence.’” Medtronic, Inc. v. Malander, 996 N.E.2d 412, 420 (Ind.
Ct. App. 2013) (citations omitted).
[30] Through the IPL Contract, IPL undertook, for consideration, the City’s duty to
operate the traffic signals, traffic signals that were erected for the benefit of the
City’s motoring public. The Tyuses were part of that motoring public. As such,
IPL owed them a duty of reasonable care. Because the remaining two elements
of negligence—breach of duty and injury proximately caused—are questions for
a finder of fact, we cannot dismiss the Tyuses’ negligence claim as a matter of
law. See Mauck, 37 N.E.3d at 522 (breach of duty and proximate cause are best-
suited for jury or fact finder to decide), trans. denied. Accordingly, we must
address the question of whether the trial court erred in using the Release Clause
as a basis for granting IPL immunity on the Tyuses’ claim of negligence.
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 26 of 34
IV. The IURC’s Delegated Power
[31] The Tyuses contend that the IURC’s act of approving the 2016 Tariff’s Release
Clause was unconstitutional because it exceeded the powers delegated to it by
the Indiana General Assembly. Specifically, they characterize the question
before us as “whether the IURC’s ‘lawful jurisdiction[],’ includes the power to
rewrite the common law of torts and to immunize a public utility from claims
by noncustomer third-persons that the utility’s negligent interruption of service
caused them to suffer personal injuries.” Appellants’ Br. at 44.
[32] Our court has described the powers of an administrative agency as follows:
“It is elementary that the authority of the State to engage in
administrative action is limited to that which is granted it by
statute[.]” Ind. State Bd. of Pub. Welfare v. Tioga Pines Living Ctr.,
Inc., 622 N.E.2d 935, 939 (Ind. 1993), cert. denied (1994); see also
Vehslage v. Rose Acre Farms, Inc., 474 N.E.2d 1029, 1033 (Ind. Ct.
App. 1985) (“It is black-letter law that generally, administrative
agencies are creatures of statute, and only the legislature has the
broad power to provide for their creation. Administrative
boards, agencies, and officers have no common law or inherent
powers, but only such authority as is conferred upon them by
statutory enactment.”). “Any act of an agency in excess of its
power is ultra vires and void.” Howell v. Ind.-Am. Water Co., 668
N.E.2d 1272, 1276 (Ind. Ct. App. 1996), trans. denied (1997). “To
maintain the proper balance between the departments of
government, the courts have power to confine administrative
agencies to their lawful jurisdictions.” Wilmont v. City of S. Bend,
221 Ind. 538, 541-42, 48 N.E.2d 649, 650 (1943).
Planned Parenthood of Ind. v. Carter, 854 N.E.2d 853, 864 (Ind. Ct. App. 2006);
see Adkins v. City of Tell City, 625 N.E.2d 1298, 1302 (Ind. Ct. App. 1993)
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 27 of 34
(“Administrative entities are creatures of statute. As such, they cannot exercise
power beyond that given in their creation.”).
[33] Indiana Code section 8-1-1-2 provides for the creation of the IURC, whose
purpose is to insure that public utilities provide constant, reliable and efficient
service to its customers. Office of Util. Consumer Counselor v. Pub. Serv. Co. of
Indiana, 463 N.E.2d 499, 503 (Ind. Ct. App. 1984). The Indiana General
Assembly created the IURC “‘primarily as a fact-finding body with the
technical expertise to administer the regulatory scheme devised by the
legislature.’” Citizens Action Coal. of Ind., Inc. v. N. Ind. Pub. Serv. Co., 76 N.E.3d
144, 151 (Ind. Ct. App. 2017) (quoting Ind. Gas Co. v. Ind. Fin. Auth., 999
N.E.2d 63, 65 (Ind. 2013) (internal quotation removed)). Part of the
legislature’s charge is the requirement that the IURC periodically review and set
each utility’s rates for service. See Ind. Code § 8-1-2-42.5 (by rule or order, the
IURC must require that basic rates and charges of all public utilities be subject
to a regularly scheduled periodic review and revision by the IURC). General
ratemaking is a “comprehensive” process, requiring the [IURC] to “examine
every aspect of the utility’s operations and the economic environment in which
the utility functions to ensure that the data [the IURC] has received are
representative of operating conditions that will, or should, prevail in future
years.” NIPSCO Indus. Grp. v. N. Ind. Pub. Serv. Co., 100 N.E.3d 234, 238 (Ind.
2018), modified on reh’g (internal citation omitted). That examination results in
the IURC setting a tariff and approving rules and regulations for the operation
of that utility.
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 28 of 34
[34] To enable the IURC to carry out its responsibilities, the legislature conferred
upon that agency the power to “formulate rules necessary or appropriate to
carry out the provisions of [this] chapter.” Ind. Code § 8-1-1-3(g). However,
the legislature was limited in the power it could confer because the “legislature
cannot delegate the power to make a law.” Gunderson v. State, Ind. Dep’t of Nat.
Res., 90 N.E.3d 1171, 1186 (Ind. 2018), cert. denied, 139 S. Ct. 1167, 203 L. Ed.
2d 256 (2019). “Utility regulation is premised on a ‘regulatory compact’ in
which the State sanctions a utility’s monopoly within a defined service area and
subjects the utility to various regulatory restrictions and responsibilities.”
NIPSCO Indus. Grp., 100 N.E.3d at 238.
As a quid pro quo for being granted a monopoly in a
geographical area for the provision of a particular good or
service, the utility is subject to regulation by the [S]tate to ensure
that it is prudently investing its revenues in order to provide the
best and most efficient service possible to the consumer.
Id. (quoting U.S Gypsum, Inc. v. Ind. Gas Co., 735 N.E.2d 790, 797 (Ind. 2000)
(quotation and citations omitted)). In other words, IPL ceded to the State some
of its autonomy in exchange for the State’s grant that IPL would be the
exclusive provider of electricity in a designated area.
[35] The State’s regulation of IPL is through the IURC, “which is authorized by
statute to act with ‘technical expertise to administer the regulatory scheme
designed by the legislature . . . to insure that public utilities provide constant,
reliable, and efficient service to the citizens of Indiana.’” Id. (quoting U.S. Steel
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 29 of 34
Corp., 907 N.E.2d at 1015 (citation omitted)). See Ind. Code §§ 8-1-1-1 to 8-1-1-
15.
When exercising this authority, the [IURC] balances the public’s
need for adequate, efficient, and reasonable service with the
public utility’s need for sufficient revenue to meet the cost of
furnishing service and to earn a reasonable profit. “Proper rates
are those which produce a fair and nonconfiscatory return, and
such as will enable the company, under efficient management, to
maintain its utility property and service to the public, and provide a
reasonable return upon the fair value of its used and useful
property.”
NIPSCO Indus. Grp., 100 N.E.3d at 238 (emphasis added) (internal citations
omitted).
[36] Our Supreme Court has held that “the legislature may only delegate rule-
making powers to an administrative agency if that delegation is accompanied
by sufficient standards to guide the agency in the exercise of its statutory
authority.” Gunderson, 90 N.E.3d at 1186. The IURC “derives its power and
authority solely from statute, and unless a grant of power and authority can be
found in the statute it must be concluded that there is none.” Citizens Action
Coal. of Ind., Inc. v. N. Ind. Pub. Serv. Co., 485 N.E.2d 610, 612 (Ind. 1985). The
legislature conferred upon the IURC the power to “formulate rules necessary or
appropriate to carry out the provisions of [this] chapter.” Ind. Code § 8-1-1-
3(g). However, without additional specificity, we find no evidence that the
legislature gave, or intended to give, the IURC power to shield IPL from
liability for injuries caused by IPL’s negligence to noncustomers. “[A]ny doubt
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 30 of 34
about the existence of [IURC’s] authority must be resolved against a finding of
authority.” Knox Cty. Rural Elec. Membership Corp. v. PSI Energy, Inc., 663
N.E.2d 182, 189 (Ind. Ct. App. 1996) (citing Ingram, 617 N.E.2d at 947).
Furthermore, although agencies may promulgate rules and regulations to
implement the legislature’s regulatory scheme, they are prohibited from
adopting rules or regulations that are outside the scope of the power conferred
by the legislature.” Charles A. Beard Classroom Teachers Ass’n v. Bd. of Trs., 668
N.E.2d 1222, 1224 (Ind. 1996).
[37] Our Supreme Court recently reiterated:
“[T]he legislature cannot delegate the power to make a law.”
City of Carmel v. Martin Marietta Materials, Inc., 883 N.E.2d 781,
788 (Ind. 2008) (construing article IV, section 1 of the Indiana
Constitution). It can only “make a law delegating power to an
agency to determine the existence of some fact or situation upon
which the law is intended to operate.” Id. (internal quotations
omitted).
Gunderson, 90 N.E.3d at 1186. The legislature understands that it has the power
to grant immunity and has done so on various occasions, including, under the
Indiana Tort Claims Act (“ITCA”). See Ind Code § 34-13-3-3. However, even
under the ITCA, immunity is the exception and not the rule. See Jacks by Jacks
v. Tipton Cmty. Sch. Corp., 94 N.E.3d 712, 716-17 (Ind. Ct. App.), trans. denied
(“The party seeking immunity has the burden of establishing that its conduct
falls within one of the exceptions provided by the ITCA.”). Here the
legislature provided no specific language from which we can find that the
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 31 of 34
legislature gave, or intended to give, the IURC the authority to shield IPL from
liability for injuries caused to noncustomers by IPL’s negligence.
[38] Public policy also supports our determination that the IURC had no authority
to approve the Release Clause, which granted IPL immunity for its future
negligent actions. IPL’s position suggests that it deserves greater immunity
than governmental entities enjoy for the same undertaking. “[P]rivatization of
a governmental service is not ‘a farce in which the privatized entity enjoys the
benefits both of not being the state and so being freed from the regulations that
constrain state agencies, and of being the state and so being immune from
suit.’” Veolia Water Indianapolis, LLC v. Nat’l Trust Ins. Co., 3 N.E.3d 1, 11 (Ind.
2014) (citation omitted)).
[39] The City and IPL share responsibility for the City’s traffic signals. The City’s
responsibility arises from being a governmental entity; IPL’s arises from a
contract. The City’s purpose is to serve the public; IPL must be responsive to
its shareholders. Despite limited statutory protections under the Tort Claims
Act, the City is responsible for maintaining traffic signals with reasonable care.
Conversely, IPL asserts that it is not liable for its own acts of negligence.
Traffic signals should be operational whenever reasonably possible because they
are indispensable to public safety. Failing to enforce IPL’s duty to energize
traffic signals disincentivizes it from using reasonable care and shields it from
negligence. Because IPL has the monopoly power over the City, the Release
Clause constrains the City in its ability to incentivize IPL to act with reasonable
care.
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 32 of 34
[40] The arrangement between the State and a utility is not a guarantee that a utility
will suffer no unexpected expenses. The State grants the utility the benefit of a
monopoly and enables “the company, under efficient management, to maintain
its utility property and service to the public, and provide a reasonable return
upon the fair value of its used and useful property.” NIPSCO Indus. Grp., 100
N.E.3d at 238. In Citizens Action Coalition of Indiana, Inc. v. Public Service Co. of
Indiana, ratepayers complained that its rates were increased when the “IURC
improperly adjusted its measurement of PSI’s cost of equity based upon
speculation that acid rain legislation would be enacted in the future, thereby
damaging PSI’s investment potential. 612 N.E.2d 199, 201 (Ind. Ct. App.
1993). Our court said that the IURC was correct in noting that PSI would be
most heavily impacted should such legislation be enacted; however, the fact
was that “no such legislation existed at the time of the order.” Id. Reversing
the IURC’s order, our court said
IURC’s discretion lies in the area of assessing the impact of
known circumstances. Forcing ratepayers to bear the weight of a
calculation based upon speculation is not within the purview of
the IURC’s authority. The possibility of such legislation and its
consequences demand the policy-making attention of the utility’s
management prior to its enactment, not the rate-making
authority of the IURC. The adjustment for potential harm
flowing from an uncertain event was error.
Id. at 201-02.
[41] The trial court erred in granting IPL judgment on the pleadings because the
2016 Tariff is unlawful and unreasonable to the extent it allowed IPL to grant
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 33 of 34
IPL immunity from liability for personal injury or property damage caused to
noncustomers, by IPL’s own negligence, and in connection with IPL’s
interruption of service. Such grant of immunity was beyond the IURC’s
delegated authority and, therefore, that part of the Release Clause is ultra vires
and void.
V. Prior
[42] The trial court decided this case with the understanding that our court’s
reasoning in Prior v. GTE North is controlling. In Prior, a customer of the
telephone utility GTE, paid to have his business advertisement included in
various GTE publications. 681 N.E.2d at 771. Prior timely paid for the ads;
however, his business name was omitted from four separate publications for
two years. Id. Prior contacted GTE regarding the omission, and it refunded
the monthly charge for the omitted ads, but GTE, pursuant to the limited
liability provision set forth in GTE’s IURC-approved tariff, refused to
reimburse Prior for his lost business revenues. Id. Prior sued GTE to recover
those damages, claiming GTE had breached its contract and was negligent and
reckless for not including his name in the telephone directories. Id. GTE filed a
motion for summary judgment arguing that Prior’s claims for damages were
precluded by the limited liability provision of GTEs tariff. Id. The trial court
granted GTE’s motion for summary judgment, and we affirmed on appeal. Id.
at 775.
Court of Appeals of Indiana | Opinion 18A-CT-828 | September 16, 2019 Page 34 of 34
[43] While we agree that the facts in Prior are similar, we find that case
distinguishable. The injured party in Prior was a GTE customer. That
difference is significant because, by the IURC’s own administrative rules, the
rate schedules, rules, and regulations cover the relationship between the
customer and the public utility. 170 I.A.C. 4-1-29. The Tyuses were not
customers of IPL and, therefore, were not bound by the provisions of the
Release Clause. Prior is not controlling.
Summary
[44] The Tyuses brought this interlocutory appeal, claiming that the Release Clause
was unconstitutional under various articles of the Indiana Constitution. IPL
countered that our court does not have jurisdiction to hear this action, that it
owes no duty to the Tyuses as a matter of law, and the Tyuses’ claims of
unconstitutionality are waived. As we discuss above, we find this court does
have jurisdiction, IPL does owe the Tyuses a duty of reasonable care, and the
dispositive constitutional claim that the IURC exceeded its delegated authority
was not waived. We affirm the trial court’s determination that the Tyuses’
gross negligence action may proceed and reverse the trial court’s grant of
judgment on the pleadings as to the negligence action. We remand this case to
the trial court for further proceedings not inconsistent with this opinion.
[45] Affirmed in part, reversed in part, and remanded for further proceedings.
Riley, J., and Robb, J., concur.