Utility owes no duty to property owner in fire sprinkler flood dispute

A utility company is not responsible for extensive flooding damage to a property management company building after its fire sprinkler pipes burst after winter, the Indiana Court of Appeals ruled Wednesday.

While in the process of winterizing its vacant building, KMC LLC requested that the water supplier for the building, Eastern Heights Utilities, shut off the water supply to avoid frozen pipes.

Eastern Heights turned off the main water valve as requested but didn’t do anything with the separate water supply for the building’s fire sprinkler system because KMC did not specifically request those be turned off.

The fire suppression pipes ultimately froze and burst after thawing after the winter months, causing extensive flooding in the building that cost more than $300,000 to repair. KMC failed to pay Five Star Complete Restoration for the repairs, and the latter sued. In response, KMC filed a third-party complaint bringing Eastern Heights in the mix, asserting that it was negligent for failing to turn off the fire sprinklers’ water supply and its negligence was the proximate cause of the flood damage.

The Green Superior Court, however, entered summary judgment for Eastern Heights after finding the utility company had no duty regarding the fire suppression system, did not cause the damage, and was entitled to common law governmental immunity from liability for its fire protection services.

Members of an Indiana Court of Appeals panel agreed, noting that there was no evidence in the record that KMC explicitly asked that the sprinkler system water be shut off, pointing out that “Eastern Heights is not required to read the mind of its customer.”

It similarly found that Eastern Heights had no duty to shut off the water supply to the fire suppression system because it was prohibited by law from doing so without authorization from Division of Fire and Building Safety, the fire department, and the alarm-receiving facility.

“Because we find as a matter of law that Eastern Heights did not have a duty to shut off the water supply to the fire suppression system, we necessarily also find that the trial court did not err by entering summary judgment in favor of Eastern Heights,” Judge John Baker wrote for the appellate court in KMC, LLC v. Eastern Heights Utilities, Inc., 19A-CC-2665.

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