Understanding Who Can Be Held Liable for Excavation Damage Claims

Regardless of how many times a utility provider has impressed upon first responders in the field the importance of documenting the cause of the damage at a site, inevitably the claims department will contact a listed damager who claims not to have caused the damage. In other cases, despite what is listed on the first responder’s report, the claims department will not be able to locate a company with the name that is listed on the investigation report.  Other times, the company listed on the investigation seems to have gone out of business since the incident.  In these situations, it is tough for a utility provider to proceed to enforce its rights, let alone recover damages.

Obviously, the first responders should document who they talk to about the damage on site, and request a business card if possible.  Generally, they will have the best chance to document who caused the damage and how it was caused.  Rightly so however, the first responders are focused on safety, rather than liability.  Many times, once safety has been restored, and the focus can shift to investigation, the person who caused the damage has moved to another project, or is otherwise no longer at the site.  Also, at times the first responders face someone who is uncooperative, who is clearly aware that they are seeking information that may later be used to impose liability. Rarer is the situation where the damage is not discovered until well after the incident.  For electric utilities, the damage may not cause an immediate fault requiring a response, and all utilities have seen individuals and their employers who have caused damage, attempt to repair the damage that is not uncovered until the next time that line is unearthed. 

When speaking to who is believed to have caused the damage, it is important to clearly define where and when the damage occurred.  First responders in the field may have picked up an address on a house or building nearby that is not the actual address of the damage.  Compare maps of the lines with other maps showing property lines and addresses.  For example, a first responder may list an address of the damage as the house address that the service line at issues services on the west side of the road.  The service line actually attaches on the east side of the road and the property on which the damage occurred on the east side of the road, and the one call ticket was for damage on the east side of the road.  All the parties standing in the field can clearly see that the damage happened and its location, but claims personnel looking at these written reports possibly months after the incident may have a harder time connecting the dots.  When person or company who caused the damage is contacted about damage to the “west side of road”, they may quickly deny liability, knowing they were only working on the east side of the road.

Likewise, the date and time of the damage is important.  If an electric utility is responding to a fault, evidence may exist that the damage occurred earlier, and the line only now faulted.  A cable or telecommunications provider may want to look for evidence that an outage occurred earlier but was not reported until a day or two later.  A clear sign that this might be the case is where there is evidence of recent excavation, but no excavator present on site. 

The first place to look is  a one call ticket, for that location.  The one call ticket should identify the person who called in the ticket, and the company that employs that person.  With certain software, a search can be conducted for all tickets at a certain location for several years, to get an idea of who may have been digging in that space.  Keep in mind though; there may be a situation where an excavator works off another’s ticket, even though prohibited by law.  A local municipality might also have records that show who was working in that area if they required a permit or bond, or if the work was performed for the municipality itself.  On private property, the homeowner may know who was digging on their property, either hired by the homeowner, the municipality, or at times, if the homeowner himself was digging and did not know how to respond when striking the line. 

Check all of the pictures of the scene and the locate.  Determine if there were any trucks with logos or people wearing shirts with a company logos.  Talk to the personnel who performed the locate.  Find out whether the locator talked to anyone on site who was performing the excavation and whether he or she documented names. Locators often see the same people on multiple locates and know who works for what company. 

Like any other collection claim the “name” of the liable party becomes an issue.  A company may be known as “Joe’s Excavating”, however its formal corporate name is altogether different.  When filing a lawsuit to recover the damages sustained it is important to have the right entity liable for the acts of “Joe’s Excavating” named as a party.  If “Joe’s Excavating” is merely a trade name or sole proprietorship of an individual, that individual may be liable for the acts of its employees or agents.  The first place to start is the secretary of state.  All trade names and entities doing business in each state should be registered with the secretary of state.  If “Joe’s Excavating” is properly registered as a trade name of another entity, the full legal name can be identified prior to filing suit.   If the business name is not registered, a quick google search or search of other public records online may reveal the real identity of the entity.  Don’t forget to look on area county court sites.  If the company was sued before, likely the lawsuit was brought in the proper formal name of the entity. 

Where the company seems to have gone out of business after the incident, all is not lost.  Like a traditional collection on an account for service, there are avenues to collect the debt.  However, it is important to consider the overall balance and the costs that maybe associated with proceeding, before taking additional steps.  Note, the state’s secretary of state site should also show all UCC filings against the company.  If the company had multiple secured creditors against all of its assets, it will be less likely that any assets remain to pay unsecured creditors.  Also, the local court clerk’s sites will show what other debt the company amassed before its closure.   It is important to quickly turn these types of accounts over for legal or collection action to get a recommendation of whether it would be cost effective to pursue further action.  Other indications that there might still be remedies available after the company closes down is if shortly after closing, the company has reopened under a new name, with the same principals.  While successor liability is difficult to pursue, it provides a potential remedy if the succession was not completed properly by the owners of the entity.  Of course if a notice of bankruptcy for any account is received, be aware that all efforts to collect any balance due must stop immediately.

Weltman is available to assist you in the research behind a damage claim, both into the cause of the claim itself, and the collectability of the responsible parties.  Please contact us at WWR-Utilities@weltman.com.