Opinion
C. A. PC-2019-10140
06-27-2022
MICHAEL MARSOCCI, Appellant, v. NATIONAL GRID-ELECTRIC and DIVISION OF PUBLIC UTILITIES CARRIERS, Appellees.
For Plaintiff: Richard A. Pacia, Esq. For Plaintiff: Richard A. Pacia, Esq.
For Plaintiff: Richard A. Pacia, Esq.
For Plaintiff: Richard A. Pacia, Esq.
DECISION
KEOUGH, J.
In this administrative appeal, Appellant Michael Marsocci (Mr. Marsocci or Appellant) seeks judicial review of a Final Report and Order of the Rhode Island Division of Public Utilities and Carriers (DPUC, Division, or Appellee). The decision affirmed charges assessed by the Narragansett Electric Company d/b/a National Grid-Electric (National Grid or Appellee) for unbilled electrical usage at two properties owned by Appellant. This Court exercises jurisdiction pursuant to the Administrative Procedures Act (APA), G.L. 1956 chapter 35 of title 42.
I
Facts and Travel
This matter concerns properties located at 50 Andy Street, Apartment 2, Providence, Rhode Island 02904 (account number 14720-67030) and 135 Hillcrest Avenue, Apartment A, Providence, Rhode Island 02908 (account number 51516-91114). (Ex. 3, Division Report and Order number 23658, Sept. 17, 2019 (Report and Order) at 2.) Both properties are owned by Appellant. Id. National Grid maintains that Mr. Marsocci was involved in the theft of electricity through the bypass of the electric meters located at these two locations and sought to recover an amount equaling the sum of the unbilled electricity. Id. at 3. According to National Grid, the total amount due and owing is $38,870.13; $15,426.00 for the Andy Street Account and $23,444.13 for the Hillcrest Avenue Account. Id. at 2-3. Mr. Marsocci has consistently denied any involvement with the bypass of the meters at either location. See generally Appellant's Memorandum of Law in Support of Appeal of Report and Order (Appellant's Mem.). He also disputes the amount assessed by National Grid. Id. at 3.
As a result, Appellant requested an evidentiary hearing before the DPUC to contest the charges. The hearing was scheduled for December 5, 2018 and notice was sent to all parties. (Ex. 5, Notice of Hearing, Nov. 1, 2018.) Specifically, the notice indicated that due to the nature of the dispute, the hearing would be conducted pursuant to the DPUC's Rules Prescribing Standards for Electric Utilities (Electric Rules), National Grid's Commission-approved tariff (Tariff), and Rhode Island General Laws, with a particular emphasis on chapters 2-4 of title 39 and chapter 35 of title 11. Id. Counsel for National Grid and Mr. Marsocci filed prehearing memoranda wherein they provided a statement of the case. At no point did either party object to the rules and/or standards to be applied. (Ex. 3, Report and Order at 15-17.)
See also Ex. 9, Pre-Hr'g Mem. of National Grid, Oct. 26, 2018 and Ex. 13, Pre-Hr'g Mem. of Michael Marsocci, Jr., Dec. 4, 2018.
At the hearing, National Grid presented testimony of three witnesses: Chris Lincoln, Senior Analyst in the Regulatory Assurance Department; John Jackson, Manager of Corporate Security for Rhode Island and parts of Massachusetts; and Kenneth Wood, Senior Analyst in the Revenue Protection Department. Id. at 18. Their testimony related to the billing records for the two electric accounts, the discovery of the theft of service at the two properties, and the means employed by National Grid to determine theft and loss calculations. Id. at 18-22. Mr. Marsocci did not testify nor did he present any witnesses/evidence. Id. at 31. The testimony elicited and documents produced at the hearing revealed the following:
50 Andy Street
The Andy Street property, which included 48-50 Andy Street, was purchased by Mr. Marsocci on June 12, 2014. (Ex. 47, Hr'g Tr. 41, Dec. 5, 2018.) The electric service for the 50 Andy Street address, which had been in the name of the prior property owner/tenant, was shut off by National Grid for nonpayment on October 20, 2014. Id. at 35-36. From October 14, 2014 to June 6, 2016 there was no customer of record at that location and neither Mr. Marsocci nor any other tenant applied for electric service after it was shut off. Id. at 33-34. During the year prior to the shut off, the metered use at the 50 Andy Street location was minimal, indicating the apartment was vacant. Id. at 35. The electric use increased dramatically, however, immediately after Mr. Marsocci bought the property. Id. At 35. On June 6, 2016, Providence police executed a court authorized search warrant at the 50 Andy Street address in conjunction with an investigation of an alleged illegal marijuana grow operation. Id. at 23, 28. Accompanied by National Grid personnel, the police discovered several marijuana plants, various pieces of equipment used for growing marijuana, as well as evidence that the electric meter had been bypassed so that there was no record of any usage on the meter, even though electricity was still available to the property. Id. at 24-25. As a result, the meter for the second floor was removed. Id. at 27. National Grid performed loss estimates and calculated unbilled hours from October 20, 2014 through June 6, 2016 to be 85,308 kilowatt hours. Id. at 11. The loss calculations were based upon use prior to the shut off and totaled $15,426.20. Id.
According to Appellant, there was a tenant at the 48 Andy Street address who was responsible for his own electric usage. (Ex. 13, Pre-Hr'g Mem. of Appellant at 1, ¶ 2.)
See also Ex. 22, National Grid Electric Usage History and Estimated Unbilled Usage calculations pertaining to the electric account of Michael J. Marsocci, Jr., 50 Andy Street, Apt. 2, Providence, Rhode Island 02904, and Ex. 24, National Grid Account History for 50 Andy Street, Apt. 2, Providence, Rhode Island 02904 and 135 Hillcrest Avenue, Apt. A, Providence, Rhode Island 02909.
See also Ex. 22, National Grid Electric Usage History and Estimated Unbilled Usage calculations pertaining to the electric account of Michael J. Marsocci, Jr., 50 Andy Street, Apt. 2, Providence, Rhode Island 02904.
Id.
While the Division Report and Order indicates that the Rhode Island State Police conducted the raid, testimony provided at the hearing as well as the reports submitted reveal that it was members of the Providence Police Department. See Ex. 25, Providence Police Incident Report, Case Number 2016-00053379.
The meter associated with 48 Andy Street was not removed as there were tenants living in that apartment. (Ex. 47, Hr'g Tr. at 24, 27, Dec. 5, 2018.)
135 Hillcrest Avenue
Appellant has owned the Hillcrest Avenue property since 1985 and was the account holder for the electric service until May 20, 2013. (Ex. 17, National Grid's Post Hr'g Mem. at 3.) Yolanda Andujar, a prior tenant at the Hillcrest Avenue location, was the customer of record from May 2013 until November 8, 2014. (Ex. 24, National Grid Electric Account history for 50 Andy Street, Apt. 2, Providence Rhode Island 02904 and 135 Hillcrest Avenue, Apt. A, Providence, Rhode Island 02909.) When Ms. Andujar moved out of her apartment, a "soft off" of the electric account was done by National Grid until it was shut off completely on March 27, 2015. (Hr'g Tr. at 7077, Dec. 5, 2018.) The shut off occurred due to use on an inactive meter or account. Id. On July 10, 2015, Mr. Marsocci requested that the electric service be reconnected. Id. at 71. On July 14, 2015, National Grid representatives responded to the property to turn on the meter and at that time discovered that jumper cables had been used to bypass the meter. Id. at 81. As a result, the existing meter was removed and a new one was installed. Id. at 83. Use was recorded from July 14, 2015 to June 6, 2016, but it appears to have been only a fraction of the actual use because a second set of jumper cables was discovered behind the new meter on June 6, 2016, when the Providence police, accompanied by National Grid personnel, executed a court authorized search warrant in conjunction with an investigation of an alleged illegal marijuana grow operation. Id. at 26. Similar to the 50 Andy Street address, the police discovered several marijuana plants as well as equipment used for growing marijuana. Id. At this time, it was determined that Mr. Marsocci was the "customer of record" for the electric account and the meter was removed. Id. National Grid performed loss calculations and determined the number of unbilled hours from November 8, 2014 through June 6, 2016 to be 129,891 kilowatt hours. Id. at 14-15. The loss calculations were based upon use prior to the shut off and totaled $23,444.13. Id. at 9. National Grid asserted that the calculations for both this property and the Andy Street location were consistent with DPUC's Electric Standards. Id. at 63-64.
A "soft off" is defined as a situation wherein the account is closed but the power is left on. Id. at 21.
See also Ex. 23, National Grid Electric Usage History and Estimated Unbilled Usage calculations pertaining to the electric account of Michael J. Marsocci, Jr., 135 Hillcrest Avenue, Apt. A, Providence, Rhode Island 02909 and Ex. 24, National Grid Account History for 50 Andy Street, Apt. 2, Providence, Rhode Island 02904 and 135 Hillcrest Avenue, Apt. A, Providence, Rhode Island 02909.
At the conclusion of the hearing and after the parties submitted post hearing memoranda, the DPUC hearing officer issued a final Report and Order, in which she detailed her findings of fact and legal conclusions. (Ex. 3, Report and Order.) Specifically, the hearing officer found that National Grid had established by a preponderance of the evidence that the meters at both properties had been tampered with, causing the meters to create false consumption information. Id. at 36. She also determined that because Mr. Marsocci was the utility customer or person in control of the Andy Street and Hillcrest Avenue properties at the time the tampering had occurred, the law established a presumption that he was responsible for the tampering and/or the person who benefited from it; a presumption he failed to rebut. Id. at 35-38 (citations omitted). The hearing officer also indicated that even without relying on the statutory presumption, there was substantial testimony and documentary evidence to support the conclusion that there was an unauthorized interference with the meters at both of Appellant's properties, which allowed Mr. Marsocci to reap the benefit of free electricity. Id. at 36-38.
The hearing officer also determined that National Grid had established by a preponderance of "credible evidence" the period of time in which the theft occurred for each meter, specifically from October 20, 2014 to June 6, 2016 at the Andy Street property and from November 8, 2014 to June 6, 2016 at the Hillcrest Avenue property. Id. at 37-38. In so doing, she noted that there was no evidence in the record before her to suggest that anyone other than the Appellant had "a legal tenancy or ownership of the properties at issue." Id. at 38.
Regarding the issue of the calculation of losses, the hearing officer found that the method employed by National Grid to calculate the unmetered electricity services for both properties was supported by the substantial evidence in the record and was consistent with the applicable Electric Rules, which allow National Grid to "charge the customer for all unbilled kilowatt hours supplied since the estimated date of the tampering." Id. at 42 (citing Electric Rules, 815 RICR 30-001, §1.7.5.B.2). The rules further provide that "the bill for the period of nonregistration shall be based on information recorded prior or subsequent to the period of nonregistration" and/or by any other pertinent information known to National Grid. Id. (citing Electric Rules, 815 RICR 30-001, §1.7.5.B.3).
As it related to the Andy Street account, she determined that National Grid had established that power had been shut off due to nonpayment on October 20, 2014. Id. at 43. She found that the evidence supported a conclusion that it was tampered with immediately after the shut off and that the consumption just prior to the shutoff was consistent with a marijuana grow operation. Id. at 43-44. Because of this, she determined that the short period of prior use for the five weeks preceding the shutoff, "when the grow facility was in full operation," was the only period National Grid had that reflected the incremental usage and was therefore an appropriate basis to use in arriving at the loss calculations. Id. This resulted in an average of 143.4 kilowatt hours per day from October 20, 2014 to June 6, 2016, resulting in a total due of $15,426.20. Id.
With respect to the Hillcrest Avenue account, the hearing officer found that National Grid had established that at the time the meter was shut off on March 27, 2015 and then again on June 6, 2016, the meter had been tampered with in a manner similar to the Andy Street location. Id. at 44. Likewise, at the time Providence police and National Grid personnel responded to this location in conjunction with a court authorized search warrant, they discovered evidence consistent with a marijuana grow operation. Id. As a result, she once again found that the short period of prior use for the six weeks preceding the June 6, 2016 shutoff, when the grow facility was in full operation, was the only period National Grid had that reflected the incremental usage and was therefore an appropriate basis to use in arriving at the loss calculations. Id. This resulted in a baseline calculation of 257.3 kilowatt hours a day from March 27, 2015 to June 6, 2016.
The record reveals that during this period there was minimal electric activity recorded at this location. The number of hours that appellant was billed during this period was subtracted from the final calculations. (Ex. 3, Report and Order at 44.)
The Hillcrest Avenue account also included metered but unbilled electric use after the November 8, 2014 "soft off" to March 27, 2015. The usage during this period totaled 22,368 kilowatt hours. Id. at 44-45. When combined with the unmetered usage, and after taking into account all necessary adjustments, it was concluded that the total due on the Hillcrest Avenue account was $23,444.13. Id. at 45. As a result, the hearing officer concluded that before restoring electric service, Mr. Marsocci must first pay off his unauthorized use of electric services in the amount of $38,870.33. Id. at 46.
Regarding the issue of whether National Grid lawfully terminated Mr. Marsocci's electric services at the two properties, the hearing officer found that National Grid's actions were consistent with the terms and conditions of service in effect through the almost eighteen month period of unauthorized use at both locations. Id. at 42. Specifically, section 21, No. 2130 of the Tariff, entitled "Discontinuance of Service," provides in pertinent part that "the Company shall have the right to discontinue its service . . . in case the Customer fails . . . to perform any of its obligation[s]." Id. at 41-42. One such obligation is to refrain from interfering with meters that are installed. Id. Having discovered on June 6, 2016 that the meters at both properties had been tampered with by using jumper cables that allowed electricity to bypass the meters, the hearing officer concluded that National Grid had the right to discontinue service to Mr. Marsocci without notice. Id. at 42.
See also Ex. 30(c), National Grid's Public Utilities Commission-approved Electric Tariff, Terms and Conditions for Distribution Services, No. 2130, Sheet 6, ¶ 21, "Discontinuance of Service."
Id. at Sheet 3, ¶ 9, "Up-Keep of Customer Equipment" and Sheet 4, ¶ 11, "Unauthorized and Unmetered Use."
Despite the foregoing findings and conclusions, the hearing officer nevertheless addressed an alternative form of liability-unjust enrichment. Id. at 46-47. The hearing officer indicated that in order to recover under a theory of unjust enrichment, National Grid needed to demonstrate that a benefit had been conferred on Mr. Marsocci, that he appreciated the benefit, and that there was an acceptance of the benefit by him under circumstances where it would be inequitable for him to retain it without paying the value thereof. Id. at 46 (citations omitted). She determined that a benefit had been conferred upon Mr. Marsocci in the form of unbilled electric service delivered to his two properties; a fact Mr. Marsocci did not dispute. Id. at 46-47. Further, she found that Mr. Marsocci appreciated and accepted the benefit of unbilled use on an inactive meter by receiving electricity; the lights were left on, the grow facilities remained in operation, and the properties were able to be rented. Id. Therefore, because unbilled electricity flowed to both properties through a tampered or inactive meter that allowed Mr. Marsocci to receive free electricity, and because National Grid had the ability to show the reasonable value of that stolen electric service, the hearing officer concluded that it would be inequitable to deny National Grid the opportunity to be paid for the unbilled service. Id. at 47.
The hearing officer ultimately concluded that based upon the evidence presented, National Grid had established that Mr. Marsocci was liable for all unbilled electricity for both properties during the established time periods. Id. at 47-48. She also approved National Grid's calculation of the amount of unbilled services for both properties and indicated that Mr. Marsocci must reimburse National Grid in the amount of $38,870.33 as a precondition to restoration of electricity service by National Grid. Id. at 47-48.
The hearing officer also addressed what she characterized as a failure on the part of National Grid to prevent, detect, investigate, or prosecute theft in a timely manner. As a result, she ordered National Grid to complete a five-year audit of all electric account records of Mr. Marsocci's properties as well as a physical inspection of all inactive meters and any meter where the records suggest theft of service. Id. at 54. She further indicated that failure to comply with the order may cause the DPUC to open an investigatory docket to determine whether corrective action is required. Id. She concluded ultimately, however, that National Grid's failure to properly monitor its meters and to timely detect theft allowing the stolen services to escalate did not absolve Mr. Marsocci from liability for the unbilled services. Id. at 49.
Thereafter, Mr. Marsocci filed an appeal of the September 17, 2019 Report and Order with this Court. (Ex. 1.) In support thereof, Mr. Marsocci asserts that he cannot be held responsible for charges assessed by National Grid because there is no evidence that he was involved in the tampering of the meters or theft of the utility, or that he appreciated any benefit from the stolen electricity. (Appellant's Mem. at 1-2.) He further argues that National Grid failed to produce sufficient, reliable, and specific evidence regarding the amount of electricity that was allegedly stolen and argues that the DPUC regulation for calculating electrical charges must "give way" to the Rhode Island Rules of Evidence. Id. at 2. Finally, Mr. Marsocci suggests that National Grid should be equitably estopped from assessing any charges because it had notice of the tampering and failed to prevent, monitor, or detect it, nor did it take action to mitigate its damages. Id. at 23.
The DPUC and National Grid have objected and maintain that the Report and Order is supported by legally competent evidence and is based on permissible interpretations of applicable rules, regulations, and statutes. (Appellee National Grid's Resp. Br. at 3-4; Appellee DPUC's Resp. Br. at 8-10, 12-14.) The Appellees insist that the evidence presented demonstrates that Mr. Marsocci, as the owner of the properties, was unjustly enriched by the theft of electricity and that no evidence was presented to rebut this presumption. Both entities also argue that any alleged failure by National Grid to mitigate damages does not absolve Mr. Marsocci of liability. (Appellee National Grid's Resp. Br. at 14-15; Appellee DPUC's Resp. Br. at 15-19.)
II
Standard of Review
Section 42-35-15 of the APA governs this Court's review of an agency decision and provides:
"The court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings, or it may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
"(1) In violation of constitutional or statutory provisions;
"(2) In excess of the statutory authority of the agency;
"(3) Made upon unlawful procedure;
"(4) Affected by other error of law;
"(5) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or
"(6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion." Section 42-35-15(g).
In conducting its review, the Court is limited to '"an examination of the certified record to determine if there is any legally competent evidence therein to support the agency's decision."' Johnston Ambulatory Surgical Associates, Ltd. v. Nolan, 755 A.2d 799, 804-05 (R.I. 2000) (quoting Barrington School Committee v. Rhode Island State Labor Relations Board, 608 A.2d 1126, 1138 (R.I. 1992)). In so doing, the Court may not substitute its judgment for that of the administrative agency "concerning the weight of the evidence on questions of fact," Environmental Scientific Corp. v. Durfee, 621 A.2d 200, 208 (R.I. 1993), but instead must give deference to an agency's factual findings even if the court "'might be inclined to view the evidence differently and draw inferences different from those of the agency.'" Johnston Ambulatory Surgical Associates., Ltd., 755 A.2d at 805 (quoting Barrington School Committee, 608 A.2d at 1138). In contrast to an agency's findings of fact, an agency's determinations of law, including issues of statutory interpretation, "are not binding on the reviewing court." Pawtucket Transfer Operations, LLC v. City of Pawtucket, 944 A.2d 855, 859 (R.I. 2008) (internal quotations omitted). Instead, this Court reviews the record de novo in order "to determine what the law is and its applicability to the facts." Id. (internal quotations omitted).
III
Analysis
A. Applicable Law
1. Electric Rules v. Rules of Evidence
As a threshold issue, Mr. Marsocci assigns error to the hearing officer's reliance on and interpretation of various statutory provisions and regulations. Specifically, Appellant maintains that the use of certain provisions of the Electric Rules by the hearing officer resulted in the application of diminished evidentiary standards and impermissible burden shifting. (Appellant's Mem. at 2-11.) Mr. Marsocci asserts that the DPUC regulations relied upon in the instant dispute must "give way" to the Rhode Island Rules of Evidence. (Appellant's Reply Br. at 2.) Conversely, National Grid and DPUC maintain that the Electric Rules applied by the hearing officer were promulgated pursuant to DPUC's statutory authority and National Grid's duty to collect for services provided. (Appellee National Grid's Resp. Br. at 12; Appellee DPUC's Resp. Br. at 8.) Both parties insist that this matter is controlled by these rules, specifically 815 RICR 30-00-1 et seq. (Appellee National Grid's Resp. Br. at 12; Appellee DPUC's Resp. Br. at 7-8.)
It has long been established that title 39 of the Rhode Island General Laws, entitled "Public Utilities and Carriers," governs the field of utilities regulation. See Town of East Greenwich v. O'Neil, 617 A.2d 104, 109 (R.I. 1992); South County Gas Co. v. Burke, 551 A.2d 22, 24-25 (R.I. 1988); Narragansett Electric Co. v. Harsch, 117 R.I. 395, 400, 368 A.2d 1194, 1198 (1977). Specifically, § 39-1-1 states that in effectuating "the policy of the state to provide fair regulation of public utilities and carriers in the interest of the public," the Legislature "vested in the public utilities commission and the division of public utilities and carriers the exclusive power and authority to supervise, regulate, and make orders governing the conduct of companies" providing utilities within the state. Section 39-1-1 (emphasis added). See also Town of East Greenwich, 617 A.2d at 110; South County Gas Co., 551 A.2d at 24-25; In re Woonsocket Water Department, 538 A.2d 1011, 1014 (R.I. 1988). "It is apparent from an examination of the enabling act that the Legislature intended to establish a qualified administrative body to evaluate technical evidence, address the myriad of complex problems associated with regulatory proceedings, and render intelligent decisions." South County Gas Co., 551 A.2d at 25.
In furtherance of this objective, the General Assembly established the Rhode Island Public Utilities Commission (PUC) and the DPUC or Division, "designating the PUC as a quasi-judicial tribunal and the [D]ivision, which exercises powers not specifically assigned to the PUC." In re Kent County Water Authority Change Rate Schedules, 996 A.2d 123, 125-26 (R.I. 2010) (citing Providence Gas Co. v. Burke, 419 A.2d 263, 269 (R.I. 1980)). Specifically, the DPUC is authorized to implement "policies of the state in regulating the public utilities to achieve the 'ultimate policy goals of providing for adequate, efficient, and economical energy, communication, and transportation services and water supplies at just and reasonable rates.'" Id. at 126. (internal quotations omitted). Accordingly, it is the Division who is charged with making "such reasonable rules as will aid in the administration and enforcement of" the applicable statutory provisions. G.L 1956 § 39-3-33; see also G.L. 1956 chapter 35 of title 42.
The DPUC Standards for Electrical Utilities are located at title 815 chapter 30 of the Rhode Island Code of Regulations (RICR), Division of Public Utilities and Carriers. Specifically, 815 RICR 30-00-1 states in pertinent part that "[t]hese rules shall apply to every public utility as hereinafter defined doing business as such, or authorized to do so, within the State of Rhode Island." 815 RICR 30-00-1.1 (emphasis added).
The rules further provide that "[p]ublic utility means and appl[ies] to every corporation, company, person, association of persons, their lessees, trustees, or receivers
appointed to any court whatsoever, that now or hereafter may own, lease, operate, manage or control any electric plant or equipment or any part of any electric plant or equipment, within this State, for the production, transmission, delivery or furnishing of electricity, light, heat or power, either directly or indirectly, to or for the public." 815 RICR 30-00-1.2(C).
A "customer" is defined as "every corporation, company, person, association of persons, their lessees, trustees or receivers appointed by any court whatsoever, that now or hereafter, may be supplied with electric service by any public utility as herein defined." 815 RICR 30-00-1.2(E). "Service" is defined, in its broadest and most inclusive sense, as "the furnishing of electricity to a customer by a public utility." 815 RICR 30-00-1.2(F).
With respect to contested cases in which the customer has lodged a complaint and a hearing is necessary, chapter 00 of title 815, "General Administration," provides the rules of practice and procedure. 815 RICR 00-00-1.1. Specifically, the rules provide that the hearing officer "shall make all decisions regarding the admission or exclusion of evidence or any other procedural matters which may arise in the course of the hearing." 815 RICR 00-00-1.23(C). The rules further provide that while "the rules of evidence as applied in civil cases in the Superior Court of this state shall be followed to the extent practicable, the Division shall not be bound by technical evidentiary rules." 815 RICR 00-00-1.25(A). See also Berberian v. Public Utility Hearing Board, 83 R.I. 28, 112 A.2d 876 (1955) (in proceedings before DPUC, rules of evidence may be applied liberally).
In this case, the record is clear. The DPUC has been authorized by the Legislature to implement policies and draft rules that allow it to enforce all applicable statutory provisions. These rules apply to every public utility doing business in the state. National Grid is the sole electric distribution company in Rhode Island, and therefore, is clearly a public utility. Appellant, as the owner and landlord of the two subject properties, received electric service at both locations and was a customer of National Grid; he is therefore subject to these regulatory provisions. Moreover, despite having notice that the Electric Rules would apply to the proceedings prior to the start of the hearing, Appellant did not object until after the hearing had been concluded. Based upon this, as well as a plain reading of the DPUC Standards for Electrical Utilities and applicable statutory provisions, this Court can discern no error in the hearing officer's decision to apply the Electric Rules and basic evidentiary standards.
National Grid's Tariff - Terms & Conditions for Basic Residential Service also apply, but Mr. Marsocci does not seem to dispute this.
2. Statutory Presumptions
Mr. Marsocci also insists that the hearing officer erroneously relied on certain statutory presumptions, which he claims were inapplicable to the instant dispute. Specifically, Mr. Marsocci maintains that it was "patently unfair and prejudicial" for the hearing officer to apply the statutory presumption contained in criminal statutes, G.L. 1956 §§ 11-35-7 and 11-35-9, "to a civil, administrative or quasi-judicial proceeding." (Appellant's Reply Br. at 3-4.) He further argues that in so doing, the hearing officer misplaced "the responsibility for establishing the burden of proof," thereby "relax[ing] National Grid's obligation to present competent evidence that demonstrated clearly and convincingly that [he] did indeed engage in theft of electricity." Id. at 2, 4. In any case, Appellant maintains that because there was no evidence that he lived at either property, the statutory presumption was inapplicable as occupancy and ownership are not synonymous. Id. at 2-3. Appellant maintains that the burden to prove occupancy and theft of electricity is placed on National Grid, and it failed to meet that burden. Id. at 8.
The DPUC and National Grid acknowledge that §§ 11-35-7 and 11-35-9 are criminal statutes that require proof beyond a reasonable doubt to establish a prima facie case of bypassing electric meters against the occupant of the premises. (Appellee National Grid's Resp. Br. at 3, 13; Appellee DPUC's Resp. Br. at 8.) Nevertheless, they assert that the statutes are instructive in determining what constitutes bypassing a meter and how such action presumptively occurs. Id. DPUC further maintains that the hearing officer's reference to and application of these statutes should be accorded deference. (Appellee DPUC's Resp. Br. at 8.) Finally, both DPUC and National Grid insist that because National Grid presented credible evidence that the meters located at the two properties had been tampered with in a similar fashion and that Mr. Marsocci owned the properties during the periods in question, the rebuttable presumption of Mr. Marsocci's liability was established. (Appellee National Grid's Resp. Br. at 13; Appellee DPUC's Resp. Br. at 9-10.) Both stress that Mr. Marsocci was present at the hearing and had an opportunity to present evidence that would rebut this presumption, but he failed to do so. Id.
Rule 301 of the Rhode Island Rules of Evidence, "Presumption and Inference Defined," states in pertinent part that "[a] presumption is an assumption of fact that in a civil case the law requires . . . the trier of fact to make from another fact or group of facts found or otherwise established in the action." R.I. R. Evid. 301(a). The Rule further provides that "[a] statute providing that a fact or group of facts is prima facie evidence or proof of another fact establishes a rebuttable presumption unless the statute expressly provides that such prima facie evidence is conclusive." Id. at subsection (c). Presumptions may be legislatively authorized or by virtue of court decisions. See, State ex rel. Thompson v. DeNardo, 448 A.2d 739, 741 (R.I. 1982); In re Vincent, 122 R.I. 848, 849-53, 413 A.2d 78, 79-81 (1980).
In the Thompson case, our Supreme Court considered a consolidated appeal from multiple judgments of conviction for parking violations that had been entered in the Superior Court. Thompson, 448 A.2d at 740. The violations were committed allegedly by the defendant on different dates and under varying circumstances. Id. In pressing his appeal of those convictions, defendant presented several arguments concerning the validity of the specific regulation that was applied. Id. Specifically, Traffic Regulation No. 57 § 20B provided that "[n]o person shall allow, permit, or suffer any vehicle registered in his name to stand or park in any street or highway in violation of any of the provisions of this Traffic Regulation, or any amendment thereof." Id. at 740-41. The defendant maintained that the regulation was not valid because the court was not allowed to infer from the mere fact of ownership "that such owner suffered, permitted, or allowed his motor vehicle to be parked in violation of traffic regulations." Id. at 741.
In upholding the convictions and denying defendant's appeal, the Thompson Court observed that "[inferences based upon probability have long been recognized as a part of the rules of evidence. Inferences frequently drawn from similar fact groupings are referred to as presumptions." Id. (citations omitted). "[S]tatutory inferences or presumptions are permissive and . . . do not shift the burden of persuasion but may place upon a defendant the burden of going forward with the evidence or raising an issue of fact." Id. (citations omitted). Citing a case from the New York Court of Appeals, the Court observed that
"' [t]o rule that this inference may not be drawn from the established facts would be to deny to the trier of the facts the right to use a common process of reasoning. . . . Ownership of a vehicle in civil cases has long been recognized as prima facie proof that it was being operated by or for the owner. . . . Here, ownership has been held a sufficient basis for an inference of personal conduct. If he was not in control he could easily have produced a witness or witnesses to show it.'" Id. (quoting People v. Rubin, 31 N.E.2d 501, 502-03 (N.Y. 1940).
As a result, the Court ultimately concluded that with respect to the multiple parking violations, it was reasonable for the trier of fact, in the absence of any factual issue raised by the defendant, to infer that the parking or standing of these vehicles had occurred with the knowing participation of the registered owner. Id. at 741. "Such an inference bears a rational relation between the facts proved and the ultimate fact inferred." Id. (citations omitted).
In the instant case, the presumptions that are arguably implicated can be found at §§ 11 35-7 and 11-35-9 of Rhode Island General Laws.
Section 11-35-7 provides that
"[e]very person who, with intent to injure or defraud any gaslight company or any electric company, or corporation supplying water in this state at a stipulated rate of payment, shall make or cause to be made any wire, pipe, tube, or other instrument or contrivance, and connect it or cause it to be connected with any main, service pipe, or other pipe, appliance, or appurtenance used for or in connection with the works or apparatus employed for conducting or supplying electricity, illuminating gas, or water, in any manner that is calculated to supply electricity, gas, or water to any burner, orifice, faucet, or other outlet whatsoever, without the electricity, gas, or water passing through a meter provided or used for measuring or registering its quantity so passing through, or without the consent of the company or corporation to the connections, or who shall otherwise use any electricity, gas, or water with the intent to defraud the company or corporation of payment, shall be deemed guilty of a misdemeanor and shall be imprisoned not exceeding one year or be fined not exceeding one thousand dollars ($1,000). In any prosecution under this section, proof that any of the acts specified in this section were done on or about the premises occupied by the defendant, or proof of the presence on or about the premises, of any device which affects the diversion of electricity, gas, or water without it being measured or registered by the meter provided, shall be prima facie evidence that the defendant committed the acts, or aided or abetted in their commission, maliciously and with intent to injure or defraud." Section 11-35-7 (emphasis added).
Section 11-35-9 further provides that
"[e]very person who, with intent to injure or defraud any person, persons, association, or corporation generating, conducting, using, or supplying the electric current, either for the purposes of his, her, its or their own business or for the purpose of selling the electric current at a stipulated rate of payment, shall make or cause to be made any wire or other instrument or contrivance and connect it or cause it to be connected with any electric wire, appliance, apparatus or appurtenance used for or in connection with the wires or
apparatus employed for generating, conducting, using, or supplying electric current, in any manner that is calculated either to waste and dissipate the electric current or to supply the electric current to any lamp, burner, heater, machine, motor or other apparatus or appliance whatsoever, without the electric current passing through a meter provided by the person, persons, association, or corporation and used for registering the quantity so passing through, or without the consent of the person, persons, association, or corporation to the connections, or who shall otherwise use any electric current with the intent to defraud the person, persons, association or corporation of payment, shall be deemed guilty of a misdemeanor and shall be imprisoned not exceeding thirty (30) days or be fined not exceeding five hundred dollars ($500). In any prosecution under this section proof that any of the acts specified in this section was done on or about the premises occupied by the defendant, or proof of the presence on or about the premises of any wire or other instrument or contrivance which effects the waste or dissipation or the diversion of electric current without the electric current being measured or registered by a meter provided for it or without the consent of the person, persons, association, or corporation, shall be prima facie evidence that the defendant committed the acts, or aided or abetted in their commission, maliciously and with intent to injure or defraud." Section 11-35-9 (emphasis added).
Having determined that the case required her to "apply basic evidentiary rules regarding presumptions and inferences which can be drawn from the evidence[,]" the hearing officer reviewed the two statutes and acknowledged that they applied to criminal cases, which would require proof beyond a reasonable doubt to establish a prima facie case of bypassing an electric meter against the occupant of the premises. (Ex. 3, Report and Order at 9-11 (citing R.I. R. Evid. 301)). Nevertheless, she found the statutes "instructive in determining what constitutes bypassing of a meter and how those conditions actually or presumptively occur." Id. She ultimately concluded that because the standard of proof in an administrative proceeding is much lower than in a criminal case, she would apply the statutory presumptions to the instant case. Id. At 11-12.
Once again, the Court can discern no error in the decision to do so.
Similar to facts in Thompson, the hearing officer in this case was reasonable in relying on the specific statutory presumptions for guidance and in doing so did not impermissibly shift the burden of proof or persuasion. Her conclusion that the Appellant, as owner of the two properties where meters had been bypassed in a similar fashion, was either directly or indirectly responsible for the meter tampering was entirely reasonable and reflected a common process of reasoning. It was also reasonable to conclude that Mr. Marsocci was the beneficiary of this unbilled electricity, especially in light of the fact that he failed to raise any defense or assert any factual issues that would suggest otherwise. Such an inference bears a rational relation between the facts proved and the ultimate fact and is entirely appropriate.
It bears repeating that in a separate part of the Report and Order the hearing officer clearly articulates that the weight of evidence in the record supported the finding that there was unauthorized interference with the meter which caused Mr. Marsocci to reap the benefit of free electricity even without relying on the legal presumptions established in §§ 11-35-7 and 11-35-9 . Ex. 3, Report and Order at 38 (emphasis added).
B. Liability and Damages
1. Contract Liability
Turning to the merits of the case, Appellant first argues that National Grid has the burden to prove the existence of a contract, the breach of a contract, and that Mr. Marsocci's breach of that contract proximately caused the damages National Grid seeks to recover. (Appellant's Mem. at 3-10.) Mr. Marsocci alleges that there is no existing contract, implied or otherwise, between him and National Grid and therefore no legal basis to assert a breach of contract or liability for damages resulting therefrom. Id. at 7. Without any binding agreement, it is his contention that National Grid can only establish liability based on an alternate theory, such as unjust enrichment. Id. at 4.
Both National Grid and DPUC insist that this is not a traditional billing dispute, but a theft of service case. (Appellee National Grid's Resp. Br. at 11-12; Appellee DPUC's Resp. Br. at 7.) They further maintain that because the issue in this case is about who the responsible party is to pay for the stolen electric service, the contract principles that Mr. Marsocci sets forth are irrelevant and should be disregarded. Id. This Court agrees.
In the instant case, Appellant does not dispute that the electric meters at both properties had been bypassed. Pursuant to 815 RICR 30-00-1.7.5(B)(2) and (3), a public utility may charge for all unmetered and unbilled electricity where a meter has been tampered with or a meter is not registering usage. Moreover, the rules allow the utility to formulate an appropriate charge based upon any information known by the public utility, including estimates from the date of tampering and information supplied by the customer. Id. This, coupled with the fact that there is absolutely nothing to suggest that National Grid's basis for charging Mr. Marsocci was predicated on a contract theory, leads to the inescapable conclusion that the Electric Rules rather than common law principles of contract law apply. Accordingly, this Court will not unnecessarily expand the length of this Decision further by addressing issues relative to breach of contract.
2. Sufficiency of the Evidence
Appellant next argues that the evidence presented was insufficient to support the finding that he was responsible for the meter tampering, that he stole electrical services, or that he appreciated any benefit from the unbilled electricity. (Appellant's Mem. at 1.) He maintains that the evidence presented failed to establish that he had any knowledge of the meter tampering and his status as property owner is an insufficient basis to establish liability. Id. at 2. Finally, Appellant maintains that any findings by the hearing officer were made upon impermissible inference building that simply do not "add up." Id. at 1.
The Appellees contend Mr. Marsocci was a "customer" who received "service" as those terms are defined in the Electric Rules and that it was therefore permissible to infer that, as the person in control of the property where the meters had been tampered with, he was responsible and ultimately liable for the unmetered electricity use. (Appellee National Grid's Resp. Br. at 1214; Appellee DPUC's Resp. Br. at 9.) The parties further maintain that despite having been given the chance to offer evidence to rebut any inferences that may have been drawn against him or support his assertion that he had no knowledge of or involvement with the meter tampering, Mr. Marsocci failed to do so. (Appellee National Grid's Resp. Br. at 13; Appellee DPUC's Resp. Br. at 10.)
"Legally competent evidence is 'relevant evidence that a reasonable mind might accept as adequate to support a conclusion, and means an amount more than a scintilla but less than a preponderance.'" Arnold v. R.I. Department of Labor and Training Board of Review, 822 A.2d 164, 167 (R.I. 2003) (citations omitted). To be credible and reliable, evidence need not necessarily be direct. See Michalic v. Cleveland Tankers, Inc., 364 U.S. 325, 330 (1960) ("[circumstantial evidence is not only sufficient, but may also be more certain, satisfying and persuasive than direct evidence"); Narragansett Electric Co. v. Carbone, 898 A.2d 87, 100 (R.I. 2006) ("even when there is no direct evidence on a particular issue, a fair preponderance of the evidence may be supported by circumstantial evidence"). "[A] reasonable inference from established facts is evidence and . . . such an inference should be considered and given effect by the trier of facts." Oury v. Greany, 107 R.I. 427, 431, 267 A.2d 700, 702 (1970); see also Waldman v. Shipyard Marina, 102 R.I. 366, 371, 230 A.2d 841, 844 (1967) ("trier of fact may draw reasonable inferences from established evidentiary facts that become facts upon which reliance may be placed in the factfinding process"). With respect to cases involving alleged theft of electrical services, other courts have determined that circumstantial evidence of investigations done by electric companies, comparing the ratio of metered electricity to total energy usage during specified time frames to ascertain the amount of unbilled usage, was enough to support the inference that the unbilled electricity reached a consumer's property and that such consumer therefore should pay for that unbilled service. See Carbone, 898 A.2d at 100 (citing Illinois Power Co. v. Champaign Asphalt Co., 310 N.E.2d 463, 469-70 (Ill. 1974); New Orleans Public Service, Inc. v. Delaney, 379 So.2d 842, 842-43 (La.Ct.App.1980); Northern States Power Co. v. Lyon Food Products, Inc., 229 N.W.2d 521, 525-26 (Minn. 1975).
In this case, the record reveals that electrical meters at the Andy Street and Hillcrest Avenue properties, both of which are owned by Appellant, had been tampered with after their installation. The method used was similar in that jumper cables were used to bypass the electric meters at each location. With respect to the Hillcrest Avenue property, the account in question was in the name of Mr. Marsocci for several months during the period in which the theft of electrical services occurred. At all relevant times, no one else applied for electric service at either location despite there being a significant increase in use. Based upon these facts, which were not contested by the Appellant, it was entirely permissible for the hearing officer to infer that Mr. Marsocci was responsible for the tampering and/or theft of electrical services.
Ex.3, Report and Order at 23-24, 28-29.
Nevertheless, Mr. Marsocci insists that it was the tenants at these two properties, some of whom were ultimately arrested in conjunction with the marijuana grow operation investigations, who were responsible for the unmetered electrical service. However, he offered no evidence at the hearing to support this contention, despite having been given the opportunity to do so. Specifically, the hearing officer found that Mr. Marsocci "was offered an opportunity to put the leases into the record, but objected, thus there is no evidence in the record that would tend to establish the existence of a tenancy relationship. . . [T]he only evidence of record with respect to these properties [relative to] the legal responsibility for the electric service is the undisputed fact that Mr. Marsocci is the owner of both properties." (Ex. 3, Report and Order at 39.) Affording the proper deference to the hearing officer's inferences and factual findings, this Court finds that the hearing officer's decision was supported by the reliable, probative, and substantial evidence on the whole record and was not clearly erroneous.
Information contained in the report from Providence police indicates that five individuals were charged in conjunction with raids conducted at six properties, four of which were owned by Appellant. See Ex. 25, Providence Police Incident Report Case Number 2016-00053379 and Ex. 15, Aff. of Michael Marsocci, Dec. 21, 2018.
3. Loss calculations
Mr. Marsocci next argues that the method utilized by National Grid to calculate the amount of electricity delivered to the Andy Street and Hillcrest Avenue properties was skewed and resulted in an artificially inflated bill. He maintains that the loss calculations were based on nothing more than conjecture and speculation and therefore lacked the requisite reliability. (Appellant's Mem. at 14.) He further insists that the process "by which an electric bill may be determined . . . is beyond the ken of a layperson and requires expert testimony." Id. at 21. He insists that none of the National Grid employees were ever qualified as expert witnesses nor was there any "foundation to support the basis for the opinions which were rendered." Id. at 21-22.
The Appellees respond that the loss calculations were performed by an experienced employee in a manner that was consistent with the methodology provided by the Electric Rules. (Appellee National Grid's Resp. Br. at 10; Appellee DPUC's Resp. Br. at 13.) The parties maintain that the calculations were detailed and methodical, and based upon actual readings rather than estimates. (Appellee National Grid's Resp. Br. at 11; Appellee DPUC's Resp. Br. at 13.) With respect to loss calculations, the Electric Rules provide that
"[w]henever a polyphase meter is found to be slow in excess of 2%, the Company may make a charge to the customer for the unbilled kilowatt hours supplied for the previous twelve (12) months or since the last test, whichever is the shorter period. However, where there is evidence that the meter has been tampered with, the Company may charge the customer for all unbilled kilowatt-hours supplied since the estimated data of the tampering." 815 RICR 30-00-1.7.5.B.2.
The Electric Rules also provide that
"[i]f a meter is found which does not register, the bill for the period of non-registration shall be based upon information recorded prior or subsequent to the period of non-registration and by any other pertinent information supplied by the customer or known to the public utility." 815 RICR 30-00-1.7.5.B.3.
In the Carbone case, our Supreme Court reviewed a judgment against defendants in which they were found liable for unbilled electric services after an "unmetered" electrical panel was found on their property. Carbone, 898 A.2d at 90. Among several arguments raised on appeal, defendants maintained that the trial justice impermissibly relied on the testimony of National Grid employees relative to loss calculations for the unbilled electricity. Id. at 94. The defendants argued that this qualified as "expert testimony" and that National Grid had not previously disclosed any experts it intended to utilize. Id.
In rejecting defendants' argument, the Court held that "the question of whether a witness is qualified to express an expert opinion is a matter that is committed to the sound discretion of the trial justice, and the exercise of such discretion will not be disturbed on appeal absent a showing of abuse." Id. at 95 (internal quotation omitted). The Court concluded that while plaintiff did not attempt to qualify any of its witnesses as experts, the trial justice nonetheless may have treated the witness(es) as such and thus utilized the standard normally applied to the admission of expert testimony. Id. The Court then indicated that it had historically characterized expert testimony as that "of a mechanical, scientific, professional or like nature, none of which is within the understanding of laymen of ordinary intelligence, and where the witness seeking to testify possesses special knowledge, skill or information about the subject matter acquired by study, observation, practice or experience." Id. (citations omitted). It held that even if it agreed that some of the employee's testimony could be characterized as expert testimony, the trial justice did not err in admitting it. Id.
"Mr. Dalbec was an experienced employee of Narragansett Electric, testifying about matters within his areas of responsibility for plaintiff before a trial justice sitting without a jury. We are well satisfied that under these circumstances the trial justice was acting within his discretion in admitting the challenged testimony." Id. at 96.
In the instant matter, the loss revenue calculations were performed by Mr. Kenneth Wood from National Grid's Revenue Assurance Department. In his "over 20 years" with the department, he has performed loss calculations "hundreds of times." (Ex.3, Report and Order at 22.) In conjunction therewith, he has developed knowledge of calculating the value of unmetered electricity and the effects of marijuana grow operations on electricity usage. Id. at 43. Mr. Wood discussed the methodology he employed and introduced the corresponding documentation that would support his calculations. He indicated that the method was consistent with the Electric Rules and National Grid's Terms and Conditions and was the same methodology he had utilized in numerous other unbilled usage cases for National Grid. Id. at 44. According to this testimony, the calculations were based on actual meter reads for approximately two months preceding the meter tampering. Id. at 45.
See generally Ex. 47, Hr'g Tr. at 31-98, Dec. 5, 2018.
Conversely, Mr. Marsocci presented no testimony or witnesses who were able to challenge these loss calculations. Id. at 31. Instead, through counsel, he extensively cross-examined Mr. Wood concerning his basis of knowledge and the methodology he used in an attempt to demonstrate that the calculations were nothing more than assumptions that lacked the proper foundation. This was considered by the hearing officer but she nevertheless found Mr. Wood to be credible and gave "weight to his testimony," ultimately concluding that the calculations were based on actual meter reads in a manner that was consistent with the applicable rules. Id. at 44-47. Considering this, and after an examination of the whole record, it is apparent that there is legally competent evidence to support this conclusion. Accordingly, this Court will not substitute its judgment for that of the hearing officer but instead will afford it the deference to which it is entitled.
See Ex. 47, Hr'g Tr. at 44-63, 78-98.
See Ex. 3, Report and Order at 26-28.
4. Unjust Enrichment
Separate and apart from the Electric Rules and the applicable statutory inferences, the hearing officer determined that the Appellant was liable for the unmetered electric service under the alternate theory of unjust enrichment. Mr. Marsocci suggests that, in doing so, she misapplied the rule of unjust enrichment as he was the owner not the occupant of the properties and therefore did not reap the benefit of the unbilled electricity. (Appellant's Mem. at 28-32; Appellant's Reply Br. at 8-9.) Mr. Marsocci suggests that if National Grid has a claim for unjust enrichment against anyone, it is the tenants who used the electricity. (Appellant's Mem. at 28-31; Appellant's Reply Br. at 11.) The DPUC and National Grid maintain that the Hearing Officer's determination regarding Mr. Marsocci's unjust enrichment was supported by legally competent evidence and should be affirmed. (Appellee National Grid's Resp. Br. at 13; Appellee DPUC's Resp. Br. at 11.)
"Recovery for unjust enrichment is predicated upon the equitable principle that one shall not be permitted to enrich himself at the expense of another by receiving property or benefits without making compensation for them." Carbone, 898 A.2d at 99 (citing R &B Electric Co. v. Amco Construction Co., 471 A.2d 1351, 1355 (R.I. 1984). The prima facie elements of a claim for unjust enrichment are "'(1) a benefit must be conferred upon the defendant by the plaintiff, (2) there must be appreciation by the defendant of such benefit, and (3) there must be an acceptance of such benefit in such circumstances that it would be inequitable for a defendant to retain the benefit without paying the value thereof.'" Bouchard v. Price, 694 A.2d 670, 673 (R.I. 1997) (quoting Anthony Corrado, Inc. v. Menard &Co. Building Contractors, 589 A.2d 1201, 1201-02 (R.I. 1991)). The Rhode Island Supreme Court "has held that a benefit is conferred when improvements are made to property, materials are furnished, or services are rendered without payment." See Carbone, 898 A.2d at 99.
Returning to the Carbone case, on appeal the defendants also challenged the finding of the trial justice that they were liable under a theory of unjust enrichment. Specifically, they argued that plaintiffs had not proven that a measurable benefit was conferred on them because defendant had failed to trace the unmetered electricity from the illegal bypass into the specific appliances allegedly powered by the unbilled electricity in the home. Id. Moreover, defendants maintained that Mrs. Carbone had not appreciated the benefit of the illegal bypass because she had no knowledge of its existence. Id.
In rejecting this argument, the Court held that it was clear a benefit had been conferred on defendants insomuch as the electricity that flowed into the Carbones' home was "analogous to other services for which this Court has upheld awards of payment . . .under an unjust enrichment theory." Id. The Court noted that circumstantial evidence of an investigation done by electric companies was enough to support the inference that the unbilled electricity reached a consumer's property and that such consumer therefore should pay for that unbilled service. Id. at 100 (citations omitted). Specifically, the Court stated that
"in this case, plaintiff presented enough circumstantial evidence for the trial justice to determine that a benefit was conferred on defendants by a fair preponderance of the evidence. The plaintiff presented extensive testimony concerning the electrical current that registered on the check meters, but did not register on the billing meter assigned to the Carbones' home. The evidence further revealed that the unmetered panel connecting to the illegal bypass was labeled with certain appliances, and that there were electrical devices inventoried in the Carbone home that did not connect to the metered panel for which electricity the Carbones were billed. Based on this circumstantial evidence, the trial justice properly could infer that a benefit was conferred on defendants through their use of the illegal bypass to divert electricity." Id.
With respect to the second element of unjust enrichment, the Court held that there was sufficient evidence that Mrs. Carbone "'appreciated' the benefit of the electricity" even though she claimed to be unaware of the bypass' existence. "Mrs. Carbone . . . was a homemaker who paid some of the electric bills during the relevant time, and from that fact an inference properly could be made that she used the home's many appliances, some of which were powered by the unbilled electricity." Id. Finally, with respect to the third element, the Court concluded that it would be "inherently unjust to allow defendants to have bypassed the billing meter" and thereafter deny the electric company compensation. Id. "'The most significant requirement . . . is that the enrichment to the defendant be unjust.'" Id. (quoting R &B Electric Co., 471 A.2d at 1356).
In this case, the evidence presented that unmetered electricity had been supplied to both the 50 Andy Street and 135 Hillcrest Avenue properties in a similar manner, i.e., the use of jumper cables to bypass the meter. This unmetered use began almost immediately after Mr. Marsocci purchased the properties and continued for an extended period. At both properties, Providence police and National Grid personnel discovered various pieces of electronic equipment necessary for a marijuana grow operation. With respect to the Hillcrest Avenue property, there is no question that Mr. Marsocci benefited for the eleven-month period he was the registered account holder. As to the nine months prior and the Andy Street property, there was a benefit conferred on Mr. Marsocci via the electricity that flowed to his properties, and that benefit was appreciated by him because it allowed him to keep the properties occupied.
It is of no import that Mr. Marsocci did not specifically request the service for the Andy Street property or that his account relative to the Hillcrest Avenue property was not activated until July 14, 2015. As the sole person legally connected to the properties, and without any evidence to suggest someone other than himself benefited from the illegal bypass of the meters, it was reasonable to conclude that he was liable for the unbilled electricity. Likewise, the distinction in his status as owner versus occupier of the property provides little or no assistance. As the hearing officer concluded, Appellant "appreciated . . . [a] benefit . . . by [being able to] 'keep the lights on, the grow facilities in operation, and his properties rented.'" (Ex. 3, Report and Order at 47.) To allow Mr. Marsocci to benefit from the tampered or inactive meters and thereafter deny National Grid compensation would be inherently unjust.
5. Equitable Estoppel &Mitigation of Damages
Finally, Mr. Marsocci asserts that National Grid should be equitably estopped from claiming the amounts it has billed on both the Andy Street account and Hillcrest Avenue accounts because National Grid failed to properly monitor the accounts and failed to prevent the spiking of electrical usage. (Appellant's Mem. at 38-39.) Additionally, Mr. Marsocci argues that the doctrine of mitigation of damages applies here to prevent National Grid from collecting the full amount of the outstanding electric bills. Id. at 39. Mr. Marsocci maintains that National Grid failed to exercise reasonable diligence and ordinary care in attempting to minimize its damages and that the consequences could have been avoided by properly monitoring the electric accounts in question. Id.
Conversely, National Grid insists Appellant's focus on its alleged failure to inform him of the theft at the two properties is nothing more than a diversionary tactic. (Appellee National Grid's Resp. Br. at 14.) According to National Grid, it was Mr. Marsocci, as the owner of both properties with access to the meters at all relevant times, who should have been the one to alert someone of the tampering that occurred at the two locations. Id. The DPUC adds that the Electric Rules provide the mechanism to recover unmetered electric service and that it would be unrealistic to expect a public utility to physically inspect individual meters for tampering. (Appellee DPUC's Resp. Br. at 15.)
In order to establish a claim of equitable estoppel, a party must prove
"'an affirmative representation or equivalent conduct on the part of the person against whom the estoppel is claimed which is directed to another for the purpose of inducing the other to act or fail to act in reliance thereon; and . . . that such representation or conduct in fact did induce the other to act or fail to act to his injury.'" Providence Teachers Union v. Providence School Board, 689 A.2d 388, 391-92 (R.I. 1997) (quoting Lichtenstein v. Parness, 81 R.I. 135, 138, 99 A.2d 3, 5 (1953)).
Significantly, "[t]he key element of an estoppel is intentionally induced prejudicial reliance." El Marocco Club, Inc. v. Richardson, 746 A.2d 1228, 1234 (R.I. 2000) (internal quotations omitted). In terms of mitigation of damages, the Rhode Island Supreme Court has stated that
"[t]he affirmative defense of mitigation of damages is often referred to as the doctrine of avoidable consequences. The law in Rhode Island is well settled that a party claiming injury has a duty to
exercise reasonable diligence and ordinary care in attempting to minimize its damages. The law requires reasonable efforts and ordinary care under the circumstances, not 'Herculean exertion.' When mitigation of damages is at issue the defendant has the burden of proving by affirmative evidence, that the plaintiff failed to adequately mitigate his or her damages." McFarland v. Brier, 769 A.2d 605, 610 (R.I. 2001) (internal citations and quotation marks omitted).
There is no evidence in the record that National Grid ever made any affirmative representation to Appellant regarding the unmetered electricity or that he was induced to act or fail to act in reliance thereon. While the hearing officer acknowledged her concern with what she characterized as National Grid's subpar supervision and inability to detect theft of services, she also concluded that any such failure did not absolve Mr. Marsocci of his financial responsibilities. This Court agrees. While National Grid clearly has an obligation to its customers to prevent, detect, and investigate theft of its services in a timely matter, as owner of the Andy Street and Hillcrest Avenue properties, Mr. Marsocci was in the best position to inspect these locations for any criminal activity that may be occurring; he failed to do so. Accordingly, these arguments provide an insufficient basis upon which to grant Mr. Marsocci the requested relief.
IV
Conclusion
For the foregoing reasons this Court DENIES Appellant Marsocci's appeal. Counsel shall submit the appropriate judgment for entry.