Safeco Insurance Co. v. Mobile Power and Light Co.

Audrey and Brenda Loyd (plaintiffs) owned a home that was destroyed by a fire in 1996. There had been two previous fires in that home, one in 1994 and one earlier in 1996. After the 1994 fire, the Loyds hired Mobile Power and Light Company, Inc. (defendant) to repair the electrical system. After the repair, an inspector from the Mobile County Building Inspection Department examined the electrical system. The inspector had previously approved the overall plans, the type and size of the wire to be used, and the installation methods proposed. After the repair, the inspector tested the circuits and approved the activation of power to the Loyds’ home. The final inspection occurred in December of 1994. The Loyds hired a different company to perform the repair after the first fire in 1996, which involved replacing a fused disconnect. After the second fire in 1996, Safeco Insurance Company (plaintiff) paid out a claim under the Loyd’s homeowner’s insurance policy. Safeco hired an expert technical consultant to determine the cause of the fire. The expert testified that the fire was likely caused by one of three possible defects: (1) improper lug torque during installation, (2) mechanical failure of the screwed lug, or (3) thermal shrinkage of the conductor inside the lug. Safeco and the Loyds sued Mobile Power and Light. The inspector from the Mobile County Building Inspection Department testified that Mobile Power and Light’s work conformed to the National Electrical Code and did not breach any applicable standard of care. Mobile Power and Light filed a motion for summary judgment, which was granted. The court of appeals reversed, and Mobile Power and Light appealed to the Alabama Supreme Court.