Wildfire Prompts Change to Colorado Governmental Immunity Act

On Thursday, March 22, 2012, the Colorado State Forest Service initiated a controlled burn on property owned by the Denver Water Board and located in Jefferson County, Colorado. This 50 acre prescribed burn was part of an ongoing fuel management program in the Lower North Fork area pursuant to a service agreement between the Colorado State Forest Service and the Denver Water Board. On Monday, March 26, the fourth day after the burn, a Colorado State Forest Service mop-up crew reported windy conditions but no smoke or fire activity along the fire perimeter as they circled the burned area several times. The crew then reported a sudden and significant increase in wind, after which embers carried across the containment line, over a road and into unburned areas. The Lower North Fork Fire ultimately claimed the lives of three people, destroyed 27 homes and burned over 4,100 acres of land.

The Colorado Governmental Immunity Act (“CGIA”) has served to shield public entities from claims for damages based in tort (negligence, strict liability, et al.) except where immunity was specifically waived. The Colorado State Forest Service is considered a “public entity” under the statute and had been able to avail itself of the protection provided therein. Additionally, in situations where sovereign immunity had been waived, the damages against the State were capped at $600,000 per occurrence. Colo. R. Stat. § 24-10-114.

As a result of this fire, the Colorado legislature proposed a bill retroactively amending the CGIA to allow claims against public entities for damages or injuries resulting from any prescribed fire started or maintained by the State or any of its employees on or after January 1, 2012. HB 12-1361. This Bill was signed into law on June 4, 2012.

The Bill amended the CGIA in four significant ways: (1) it expanded the definition of “dangerous condition” to include a prescribed fire started or maintained by the State; (2) it waived sovereign immunity in connection with claims against the State for injuries resulting from a dangerous condition caused by a prescribed burn; (3) it clarified the requirements under which an amount in excess of the $600,000 cap may be recovered; and (4) it set up an alternative procedure under which the state claims board, after settling a claim for the maximum liability limits under the CGIA, may recommend to the general assembly an additional payment.

It should be noted that the amendment specifically excludes any subrogating insurer from receiving damages in excess of the $600,000 cap. Further, any additional damages recommended by the claims board shall not include payment for non-economic loss or injury and no insurer shall have a right of subrogation against the claimant for any additional amount approved by the general assembly.

California Fire Fighting Immunity Remains Strong but Not Without Exception

How far does California's grant of immunity for the tortious acts of firefighters extend, and specifically, when can a fire department be liable for the negligent operation of its fire engine? The California Court of Appeal in Varshock v. Cal. Dept. of Forestry and Fire Protection (2011) D057709 attempted to answer these questions in a case arising out of the 2007 San Diego County wildfires. Thomas Varshock lived with his wife, Dianne, and their son, Richard, within an area consumed by one of the 2007 wildfires. As the fire approached and burned the Varshock's property, the family evacuated and found a group of firefighters in the nearby area to whom they pled with to save their home. The firefighters agreed, drove to the Varshock's property with Thomas and Richard aboard, and attempted without success to put out the blaze, which at this point consumed the Varshock's residence. Realizing that the fire was uncontrollable, the fire captain told his crew, along with Thomas and Richard, to retreat into the fire engine. Tragically, when attempting to drive the fire engine away from the blaze, winds blew flames across the fire engine causing its engine to die and subjecting the vehicle to intense heat and smoke. Thomas died as a result, and Richard along with the other firefighters suffered severe burns.

The Varshock family sued the California Department of Forestry and Fire Protection ("CAL-FIRE") based primarily upon the alleged negligence of the fire captain in his decisions to (1) drive the fire engine to the Varshock's property with Thomas and Richard aboard without first verifying if there was an adequate escape route; (2) drive the fire engine into a location that had poor access and inadequate space to turn around; and (3) park the fire engine too close to the fire itself. CAL-FIRE moved for summary judgment on the ground that it was entitled to immunity under Government Code section 850.4, which the Varshocks argued did not apply to the case due to a particular exception established under Vehicle Code section 17001.

Government Code § 850.4 provides the following grant of immunity: "Neither a public entity, nor a public employee acting in the scope of his employment, is liable for any injury resulting from the condition of fire protection or firefighting equipment or facilities or, except as provided in Article I (commencing with Section 17000) of Chapter 1 of Division 9 of the Vehicle Code, for any injury caused in fighting fires." Among the statutory exceptions referred to in section 850.4 is Vehicle Code section 17001: "A public entity is liable for death or injury to person or property proximately caused by a negligent or wrongful act or omission in the operation of any motor vehicle by an employee of the public entity acting within the scope of his employment."

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Inverse Condemnation: The People's Champion

Article I, Section 19 of The California Constitution provides that just compensation be paid when private property is taken or damaged for public use.  *STOP*  Take a deep breath.  It is not as tough as it sounds.  In fact, after reading this blog you'll likely find yourself asking "Why haven't I used inverse condemnation as a cause of action in fire cases before?".

Knight on a horseInsurance carriers have incurred more than a billion dollars in damages arising from the California wildfires over the past few years.  The causes of these fires include arson, discarded cigarettes and failed utility equipment owned or operated by government entities or privately owned public utility companies.  When the latter are to blame, rest assured that inverse condemnation is the preferred cause of action to champion your fire subrogation case.  It's both a shield and a sword against government entities and public utilities.

The Shield:      In California, government entities require an injured party to file a claim within six (6) months of an incident to preserve a cause of action for Dangerous Condition of Public Property.  Inverse condemnation does not require the filing of any claim form and has a three (3) years statute of limitations.  Even assuming you win the race to file a timely notice, you will still need to prove the public entity or utility had notice of the dangerous condition in order to prevail under a Dangerous Condition of Public Property cause of action.  Inverse Condemnation has no requirement to prove notice of the dangerous condition.

Helmet, sword and shield leaning against a treeThe Sword:  A plaintiff need only prove the necessary elements of the cause of action to prevail  - (1) a public entity or privately owned utility company (2) took/damaged (3) private property for (4) public use (5) without just compensation.  [Note: Flood/levee cases have some different requirements.].  A plaintiff does not need to prove (1) negligent conduct; (2) fault on the part of the government entity or public utility; (3) that the loss was foreseeable; or (4) how or why the loss even occurred.   Moreover, liability and causation are issues to be determined by a judge, not a jury, which eliminates potential bias against insurance companies.  As if this is not enough incentive, a plaintiff that prevails under an inverse condemnation cause of action is also entitled to recover attorneys'  fees and costs.

Inverse condemnation is a recognized cause of action in many jurisdictions, though its application varies from state to state.  Still, the next time you receive a fire loss in which a government entity or privately owned public utility company is a potential defendant, look to see if the elements of inverse condemnation are met.  If so, don't be afraid to wield the sword and reap the benefits.