Class Action by Homeowners Regarding a Ruptured Pipeline and Oil Spill

Sun Pipe Line Co. v. Tri-State Telecomm., Inc., 440 Pa. Super. 47, 655 A.2d 112 (Pa. Super. 1994) involved a consolidated civil action bringing together a class action by homeowners affected by a ruptured pipeline and oil spill and a separate action by the pipeline owners to recover for the cost of lost gasoline, repairing the ruptured line, and cleaning up the spill. 655 A.2d at 115. The construction accident occurred in 1982. In 1986, after the issue of liability had been considered, a jury apportioned liability between and among Tri-State Telecommunications, Inc., which performed the underground cable installation and ruptured the pipeline; Sun Pipe Line; the township engineer; E.A. Design, Ltd. (Design), which was hired to prepare the construction maps for the cable network; and Davis Enterprises, Inc., the owner of the cable franchise. See id. After certain settlements were negotiated and after the class action case was settled, a jury awarded compensatory damages to Sun Pipe Line in December 1992. See id. at 116. Sun Pipe Line appealed, arguing that its total damage award was inadequate. See id. at 117. On the issue of delay damages, Sun Pipe Line argued that the trial court erred in stopping the accrual of delay damages prior to the date when a verdict was entered. See id. at 120. It further contended that an evidentiary hearing should have been performed to determine the defendants' insolvency and that stopping the accrual of delay damages was improper in the absence of an indication that neither defendant could have offered more. See id. In Sun Pipe Line, the Court recognized that one of the defendants had transferred to the plaintiff a bad faith claim against the defendant's insurer, and in exchange, the plaintiff had agreed not to execute any judgment it obtained against that defendant's personal assets. Id. The Court also pointed out that the bankrupt status of the other defendant was well documented. See id. The Court concluded "it would be an exercise in futility to remand for an evidentiary hearing on one of the defendant's bankrupt status or ability to tender money." Id.