Can I get compensation for a business closure due to a broken gas line?

UPDATED: Sep 30, 2022

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Can I get compensation for a business closure due to a broken gas line?

The cable company was working down the street of where our business is located and damaged the main gas line. Surrounding businesses were told to evacuate by the fire department because of the gas leak. We are a restaurant and due to the incident we were not able to open for lunch. Can I file a suit for the loss of not being able to open for business? Should I file the claim against the cable company, the contractor hired by the cable company or the gas company? I only included the gas company because the contractor said the gas line was not properly marked. Would I refer this case to an attorney or should I file it though small claims court?

Asked on September 12, 2016 under Business Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

You may be able to recover compensation for lost profit due to the negligence, or carelessness, in damaging the gas line, since it is  a reasonably foreseeable or predictable consequence of damaging a gas line that businesses would have to close. You should sue the gas company (for not marking the line properly), the contractor for cutting it, and should probably name the cable company, too, since they could be liable, depending the amount of oversight or control they exercised--if they were not at fault in any way, and therefore not liable, let them prove that. 
As stated, you can sue for profit, not gross receipts, because if you were closed, you did not spend certain expenses and thus are "credited" with the savings. For example, say your lunch crowd brings in $2,000 gross, but after taking out hourly wages (which you don't have to pay if you are closed) and the cost of food (which you did not have to serve), your actual profit on the $2,000 would be $800, that's what you could sue for: $800.
As a good rule of thumb, since  you *can't* recover your lawyer fees, and thus they are an offset vs what you can win--and since small claims court is specifically designed to be usable by non-lawyers--if the amount at stake is less than the limit for small claims, then you sue in small claims as your own attorney, so long as your restuarant is not an LLC or corporation; this lets you save on legal fees. If you need to sue in "regular" court because of the amount of money, or if you are an LLC or corporation (LLCs and corporations must be represented by attorneys; non-lawyers, even their own owners, cannot represent them in court), you have to get an attorney--but if that's the case, make sure the amount of money will justify the lawyer's fees.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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