Disciplined in Sophisticated Defense and Insurance Litigation

August 11, 2016 | Publication| In Hot Pursuit: Strategies for Pursuing Subrogation Against Wildfire Damages

This article originally appeared in "Claims Management - Special eReport", a publication of the Claims & Litigation Management Alliance (CLM). Legal opinions may vary when based on subtle factual differences. All rights reserved.

Each year, wildland fires scorch millions of acres of brush and timber, damage tens of thousands of homes and commercial properties, cost federal and local governments billions of dollars in suppression efforts, and cost insurance companies hundreds of millions in property insurance proceeds. Unfortunately, as has occurred already this fire season, wildfires also take many lives and injure many people each year.

According to the Insurance Information Institute, there were 63,312 wildland fires in 2014 alone that burned over 3.6 million acres in the United States. Over the 20 years from 1995 through 2014, fires, including wildfires, accounted for 1.5 percent of insured catastrophic losses, totaling about $6 billion in damages. Although wildfires in 2013 and 2014 burned less than the average amount of land (approximately 4.3 million acres and 3.6 million acres, respectively), wildland fires consumed over 10 million acres in 2015, according to the National Interagency Fire Center.

Accordingly, with the western U.S.’s primary fire season in full force throughout the summer months, it is imperative that insurance professionals and attorneys vigilantly investigate and evaluate property losses caused by wildland fires for potential avenues to subrogation recovery. Through quick mobilization of subrogation personnel to a wildland fire-related property loss; effective collaboration with other insurers and their subrogation representatives; the joint use of experts and consultants; and the joint pursuit of any subrogation claims, insurance professionals can investigate, evaluate, and even pursue recovery in subrogation effectively and efficiently while sharing and saving significant costs.

Causes of Wildland Fires

There are many causes of wildland fires, both natural and human. Natural causes of wildland fires include, but are not limited to, lightning that strikes trees or natural features, such as rocky peaks, sparking a smoldering fire that eventually transitions into a flaming fire; lightning that strikes power lines or other electricity transmission equipment; spontaneous ignition of combustible vegetation; and volcanic activity emitting superheated ash and lava that contacts combustible vegetation. Of these, lightning is by far the most common cause.

As to human-caused fires, wildland fires can be ignited by incendiarisms; campfires being left unattended, improperly extinguished, or unsafely contained; discarded smoking materials; fireworks; controlled burns that escape the planned burn area; and outdoor debris burning.

Additional ignition sources for wildland fires are related to events concerning electricity transmission equipment, including transformers, that fail and drop flaming, sparking, or hot material into combustible vegetation; overhead power lines contacting and igniting trees; arcing between adjacent power lines brought into accidental contact with one another; and fallen wires. Construction equipment, machinery, and motor vehicles also present viable ignition sources, as hot combustion engine components can contact fine surface fuels and superheated exhaust particles can be accidentally ejected from an engine and deposited into surface fuels, causing them to catch fire.

Subrogation Opportunities

Some of the aforementioned sequences in which a fire ignites or spreads may present viable avenues for subrogation. For instance, there have been cases pursued against electric utility companies (and their contractors) for failing to maintain adequate clearance between trees or other vegetation and their power lines, causing the power lines to arc. In those cases, molten arc material fell into the underbrush below and ignited it. Other instances that may present a viable avenue for subrogation include negligent operation of combustion engines or construction equipment in or near dry vegetation or workers improperly discarding smoldering smoking materials into dry, combustible vegetation.

Another theory of liability for damages caused by wildfires is that the fire intensified and spread due to the defendant’s negligence. In Dealers Service & Supply Co. v. St. Louis National Stockyards Co., the defendant failed to, among other things, prevent the dumping of combustible materials and the growth of weeds on its property despite being aware of open fires on its property. In Dealers, the defendant “had not assigned anyone to supervise the vacant land…had no system of maintenance for the property…and had never cut the weeds on its land.”

Although the cause of the fire was never established in Dealers, firemen indicated the fire started in the weeds and spread to the plaintiff’s building, aided by a wind from the west. In concluding that the evidence supported holding the defendant liable, the court reasoned that there was sufficient evidence of nonfeasance in that the defendant “having authorized the dumping of inflammable material failed (1) to take the precautions necessary to prevent damage to plaintiff’s property; (2) to inspect the premises…; and (3) also failed to cut the weeds or otherwise make a fire break between its premises and that of the plaintiff.” The court ultimately held that the trial court had improperly granted summary judgment in the defendant’s favor.

While the typical case for recovery relating to a wildfire would pertain to the fire’s ignition, a fire’s spread may also present an opportunity for the subrogating insurer.

Wildland Fire Investigation

Wildland fire investigation is quite different from the investigation of structure fires. Structure fire investigators typically begin a scene examination from the area of least damage and work to the area of most damage. In contrast, skilled wildland fire investigators typically conduct their examinations in the opposite manner, beginning with the area of the most damage and working to the area of the least damage. This allows the investigator to examine fire progression indicators to arrive at a general area of origin and, eventually, a specific area of origin.

A typical specific area of origin is no larger than five feet by five feet, although it may be larger, depending on the fire progression indicators found in the general area of origin. The specific area of origin is the area in which the ignition source ignited the first materials involved in the fire.

After a wildland fire origin-and-cause expert has identified the fire’s specific area of origin, the investigation may then involve the employment of such specialized consultants as electrical engineers, fire behavior and spread experts, experts in combustion, arborists, metallurgists, and experts in the fields that may be involved in the fire’s specific ignition sequence—for example, experts in the field of utility distribution and transmission, vegetation management, construction, or heavy machinery operation. The investigation may also involve the use of technology-based forensic tools (such as LIDAR and other imaging instruments), fire modeling programs, meteorological data, and sophisticated GPS tools to identify potential ignition sources and modes of failure and to determine the fire’s ignition sequence.

Efficient Investigation and Pursuit of Subrogation

The first key to an efficient investigation and the pursuit of subrogation recovery is to determine whether a subject loss was the result of a wildland fire and to quickly mobilize wildland fire origin-and-cause investigation resources. Just as with structure fires, the faster an investigation can commence, the better.

Evidence and scene conditions can quickly change in any fire case where the fire itself physically destroys evidence, but this is particularly true in the case of catastrophic wildland fires. In these cases, many agencies and hordes of personnel respond to support suppression and recovery efforts; additionally, extreme weather may occur, and efforts to repair and restore utilities are even more expedited. Thus, it is imperative that wildland fire origin-and-cause investigators and subrogation representatives become involved at the outset to document the scene of the fire’s origin, tag and extract evidence, interview witnesses, and undertake various other investigative activities.

The next key is to collaborate, to the extent possible, with other insurers and representatives of individuals who were injured by the fire and whose interests may be aligned with the subrogating carrier. As discussed above, the disciplines of consultants that may be involved are many, as are available investigative tools, and the costs associated with employing these resources can be very significant. In addition, if litigation were to ensue, the costs associated with wildland fire litigation can be quite substantial. Accordingly, quickly identifying other similarly situated potential claimants and coordinating a joint investigation and recovery effort where these expenses can be shared can save many thousands of dollars in expenses in any given case.

After identifying other similarly situated claimants, it is important to determine the extent to which the law protects communications between claimants who are jointly investigating and prosecuting a claim. The contours of such protection, if any, offered by each jurisdiction will likely differ. It is thus imperative that each member of the group of potential claimants enter into a joint prosecution agreement that not only sets forth each claimant’s share of the costs associated with the subrogation pursuit, but also entitles communications between the claimants to the maximum amount of protection the law allows in the jurisdiction in which the litigation will take place.

Finally, once the investigation identifies parties to which the fire’s ignition may be attributed (or other circumstance that could support a subrogation claim, such as the fire’s spread), it is imperative that the subrogation professionals involved in the investigation quickly place such parties on notice of the investigation and involve them. To the extent possible, joint scene and evidence examinations should be coordinated with all interested parties, including potential subrogation targets, just as with structure fire investigations. Attention should be paid to the same types of spoliation issues that arise in all fire cases.

A skilled subrogation attorney with experience in wildland fires can assist with each of these aspects of a claim. Having investigated many prior wildland fires, established prior relationships with other attorneys and subrogation professionals to aid in a collaborative effort, and gained the legal expertise to guide an investigation and the subrogating carriers’ recovery efforts, skilled counsel will be standing by with a database of consultants with specialties and experience to aid with the investigation from beginning to end.

September 08, 2020 PublicationCoverage Corner

Here is a collection of our blogs and publications related to Third-Party Coverage claims.

Read More »
June 26, 2020 PublicationThe Days of the "Scintilla" of Evidence Summary Judgment Standard in Florida are Numbered

Florida Rule of Civil Procedure 1.510, addressing summary judgment proceedings, is modeled after its federal counterpart, Federal Rule of Civil Procedure 56...

Read More »

States, counties and municipalities have issued “stay at home”, “shelter-in-place”, and other orders relating to COVID-19.  Many orders require the suspension of non-essential construction projects. The orders typically have exemptions, for projects like critical or essential infrastructure, public works, and housing. In light of these orders, construction projects around the country will be delayed...

Read More »
April 17, 2020 PublicationInsights on COVID-19: Butler Blogs, Publications and More

Click here to view all of our COVID-19 related publications...

Read More »
April 03, 2020 PublicationCOVID-19—When Civil Authorities Take over, Are You Covered?

The novel coronavirus (COVID-19) is a respiratory disease that can result in serious illness or death. It is caused by a new strain of coronavirus not previously identified in humans and easily spreads from person to person. There is currently no approved vaccine or antiviral treatment for this disease...

Read More »
March 12, 2020 PublicationNew Appleman Florida Insurance Law (2020 Edition)

The New Appleman Florida Insurance Law details a beginner's guide to insurance law all the way to rehabilitation and liquidation of funds...

Read More »
January 01, 2020 PublicationCommunity Service Spotlight on F. Bryant Blevins, Esq.
Read More »
December 04, 2019 PublicationButler Quarterly Fall 2019
Read More »
October 28, 2019 PublicationHow Amazon disrupted product liability

Amazon is the quintessential example of a modern-day “disrupter.” From books to electronics to groceries and media, the trillion-dollar behemoth has significantly impacted almost every sector of the economy. Perhaps less noteworthy to the general public...

Read More »
September 24, 2018 PublicationFla. High Court Bolsters Policyholders in Bad Faith Cases

Partner Kathy Maus was featured in a Law360 article titled "Fla. High Court Bolsters Policyholders in Bad Faith Cases".

Read More »
August 21, 2018 PublicationJohn Garaffa "Business Interruption and Damage Claims"

Partner John Garaffa wrote a chapter titled "Business Interruption and Damage Claims" for the 5th Edition of The Complete Guide to Economic Damages.

Read More »
July 10, 2018 PublicationButler Quarterly - Summer 2018
Read More »
September 20, 2017 PublicationFlorida Insurance Litigation (2017 Edition)

LexisNexis Practice Guide: Florida Insurance Litigation provides the practitioner with immediate access to knowledge and strategy on every aspect of insurance practice in Florida. The publication concisely presents the terms, conditions and exclusions that govern coverage offered against the risks under each line of insurance. This approach provides a comprehensive exploration of key concepts, policy language and insight for litigation of common and esoteric disputes under those policies. Each chapter also provides task-oriented checklists, examples, strategic points, and cross-references to governing statutory and case law.

Read More »

Sun-Tzu is a well-recognized and oft-quoted Chinese general, military strategist and philosopher. He is also credited as the author of The Art of War.1 While the title clearly identifies that book as having much to do with actual war, Sun-Tzu’s philosophy translates to many different fields of application. One such field of application is the preparation for and litigation involved with a jury trial. Most specifically applicable is the Sun-Tzu quote that “every battle is won or lost before it’s ever fought.” Before your jury trial even begins, the actions that most impact the results obtained are the preparation of the jury instructions, the preparation of the pretrial stipulation, the preparation of motions in limine, and the intricacies involved in the jury selection process.

Read More »
July 14, 2017 PublicationFlorida Water Loss Claims: What's Owed, And When?

Water loss lawsuits have spiked dramatically in Florida during the past few years. Insurers simply cannot resolve the unusually large differences in water damage estimates. Scope of estimated matching work usually explains the disparity. And litigation ensues over this hypothetical question: Can the water-damaged or tear out items be replaced and then matched to undamaged adjoining items; and if not, what is the proper scope of the matching work?

Read More »
June 27, 2017 PublicationButler Quarterly - Spring
Read More »
June 16, 2017 PublicationLiterature for Life

What does reading literature have to do with the mission of DRI for Life? Some might suggest reading that we read mostly as pleasurable respite or for entertainment. That certainly is true in the cases of, say, mystery stories or romance novels. But I say reading real literature is more, and more essential to life, than that.

Read More »
April 21, 2017 PublicationTort Trial & Insurance Practice Law Journal, Winter 2017

View Bill Lewis, John Garaffa, and Sarah Burke's newest contributions to the ABA's Tort Trial & Insurance Practice Law Journal. This comprehensive PDF explains recent developments in property insurance law.

Read More »
February 23, 2017 PublicationIs It Hot in Here? Significant Recovery Opportunities with Boiler Failures

Water boiler failures provide significant recovery opportunities. By understanding how these relatively simple systems work, one can realize that recovery potential and identify the probable failures modes, skillfully directing the recovery investigation, and asserting the proper legal theories that afford recovery.

Read More »
February 22, 2017 PublicationPennsylvania – VOIDED Terms and Conditions: Unlawful and Unconscionable Exculpatory Clauses

How many of your subrogation claims have been closed because of the subrogation killing terms and conditions of a contract? A recent decision in the Eastern District of Pennsylvania, United States District Court found in favor of a subrogating insurance carrier and held that the terms and conditions barring recovery were both unlawfully drafted and unconscionable, thus allowing the subrogating carrier to move forward with its subrogation claim. State Farm Fire & Cas. Co., a/s/o Sara Rivera v. Petroleum Heat & Power Co., Inc., 2016 WL 5816182 (E.D. Penn. October 5, 2016).

Read More »
February 06, 2017 PublicationThe Confession-of-Judgment Doctrine: No Good Deed Goes Unpunished

Virtually every jurisdiction in the United States has a statute on the books that provides for prevailing-party attorney fees in favor of insureds when they are successful in coverage suits against insurers.

Read More »
January 27, 2017 PublicationWhen Pipes Go Pop

Although we may not see the historic low temperatures associated with the polar vortex of 2014, the winter season always brings with it an influx of freeze-related claims. Notably, the involvement of Mother Nature does not automatically preclude a subrogation recovery, and these types of claims should be triaged promptly and efficiently in order to avoid overlooking subrogation potential.

Read More »
January 26, 2017 PublicationDamages Proof in Subrogation Cases

In the past few years, savvy defense lawyers have taken a more inquisitive approach on the valuation of subrogation damages across all lines of insurance. Gone are the days of assuming the damages must be right because no carrier wants to pay more than they should.

Read More »
January 03, 2017 PublicationIf you invade someone's privacy with a drone, your insurance might not cover it

Drones, also known as unmanned aerial vehicles or unmanned aerial systems, can be equipped with cameras, thermal scanners, license plate readers and facial-recognition software.

Read More »
November 21, 2016 PublicationBoom! Maximizing Recoveries in Catastrophic Explosions

An explosion is an extraordinary event that forever changes the psyche of those affected. The bigger the scale of the explosion, the bigger the challenges are to move forward and to develop viable recovery claims. It is a dilemma that requires sophisticated leadership and seasoned subrogation counsel, forensic consultants, and loss adjusters.

Read More »
October 18, 2016 PublicationFollow Up on Assignment of Benefits Litigation in Florida

In the summer of 2016, SLA published an article titled "Assignment of Benefit Litigation in Florida." The article was an introduction to the topic of assignments of benefits ("AOB") in Florida and how they are being used in insurance claims and litigation. Many readers asked for a follow up article that would provide some additional information and analysis on certain AOB topics. This article will spotlight four of those topics and give the reader some additional information and analysis on each of them.

Read More »
October 10, 2016 PublicationWho, What, When, and How Much? Key Questions to Ask When Faced With a Potential Sovereign Immunity Defense

With each new claim we navigate a myriad of potential obstacles to recovery.  As subrogation professionals, we work to quickly identity these issues and evaluate the best recovery strategy.  In doing so, some obstacles may first appear insurmountable, but later give way to the ever diligent subrogation professional.  One such obstacle is the concept of sovereign immunity.

Read More »
September 08, 2016 PublicationAdjuster Tools for Water Losses

Hmm, a water loss claim. Lots of those lately. She looked further and saw it was actually two claims. Two water loss claims within one week of each other. One, a loss in the bathroom when a pipe underneath the sink burst and the other was a kitchen loss from a broken p-trap.

Read More »
June 27, 2016 PublicationHistoric Hotel, Restaurant & Nightclub Fires Provide Common Threads for Developing Significant Subrogation Recoveries

Countless fires occur every year. They cause billions of dollars in property losses, and sometimes result in bodily injuries and deaths. Public assembly fires arising out of hotels, restaurants and nightclubs are prone to significant calamities, given the fire risks, types of use, occupancy, and human factors. While fires are frequently avoidable, the fires themselves would oft be smaller in scope “but for” the failures of fire suppression, detection and alarm systems; lack of effective containment; material flammability; and other failures. This article discusses the common thread of historic hotel, restaurant and nightclub fires—many of which are iconic.

Read More »
June 24, 2016 PublicationAssignment of Benefits Litigation in Florida

Over the past five years, first-party property insurers in Florida have been experiencing a wave of claims and lawsuits by contractors who obtain insurance rights from insureds through document called an assignment of benefits ("AOB"). This article is intended to introduce the reader to this topic and explain some of the challenges facing insurers in dealing with AOBs in Florida. The reader is welcome to contact the author to learn more.

Read More »
June 21, 2016 PublicationThe Inadequacies of the Diminution of Value Approach to Damages to Real Property in Tort Claims

Generally speaking, the purpose of tort damages is to make an injured party whole and restore the injured party, as nearly as reasonably possible, to the position in which he or she would have held absent the injury. When dealing with damages sustained to real property, most jurisdictions provide that the cost to repair the property is the proper measure of damage so long as the cost to repair does not exceed the diminution in value, which is the difference between the fair market value immediately before and immediately after the damages are sustained.

Read More »

As one of the nation’s most preeminent jurists put it, domestication of horses did not give rise to a “law of the horse,” and the rise of the Internet era did not give rise to a “law of cyberspace.”1 Likewise, the proliferation of drones will not give rise to a new area of law called “drone law.” What will happen instead is much more complex.

Read More »
March 07, 2016 PublicationGood Faith, Bad Faith: A Legal View

The purpose of Good Faith/Bad Faith is to serve as a compendium of general information insurers may wish to use as part of the development of their own individual claims-handling procedures; however, Good Faith/Bad Faith neither sets forth any particular practice or policy as a recommendation or best practice nor does it represent a compilation of widely followed procedures.

Read More »
September 28, 2015 PublicationKeep The Faith: Whether The Attorney-Client Privilege Applies In Third-Party Bad Faith Actions

One of the most rapidly developing issues in Florida and in courts around the country is whether the attorney-client privilege can be relied on by an insurer in a third-party bad faith action. The attorney-client privilege is one of the oldest confidential communication privileges in Florida.

Read More »
July 07, 2013 PublicationLow Liability vs. High Demand: Overcoming the Aggressive Plaintiff Attorney's Delusions of Grandeur for Policy Limits" Primerus Corporate Client e-Newsletter,

For a copy of the publication please contact Josh Golembe.

Read More »
July 01, 2013 PublicationCorporate Tort Liability under the Alien Tort Statute Post-Kiobel, 21 U. Miami Bus. L. Rev. 281

ATS cases.' The court entered into uncharted and controversial territory' though, as it attempted to deal with a claim made by a group of Nigerian plaintiffs who alleged that "Dutch, British, and Nigerian corporations engaged in oil exploration and production aided and abetted the Nigerian government in committing violations of the law of nations"' so as to promote their exploratory efforts.' In ultimately determining that corporate liability does not exist under the ATS,' the Second Circuit majority misconstrued its own precedent and that of other circuits, the Supreme Court's interpretation of the ATS in Sosa v. Alvarez-Machain,o the principles and goals of international law, scholarly commentary, and the earliest available interpretations of the ATS. The plaintiffs sought review in the Supreme Court of the United States.

Read More »
January 01, 2010 Publication"Alien Smuggling: Do Not Be an Alien to the Law!" Florida Defender, Volume 23, No. 3, Fall 2010

For a copy of the publication please contact Josh Golembe.

Read More »
September 01, 2006 PublicationMost Favored Nation Clauses – "The Ultimate Double Edged Sword"

Until a few years ago, the term “Most Favored Nation” was a phrase restricted primarily to the world of international trade. However, with the upsurge in both class action and mass tort lawsuits, Most Favored Nation clauses (MFN), are increasingly used as a tool to encourage settlement.

Read More »
November 01, 2002 PublicationThe Contagion of Example: Attacking the Root of the Problem in Lawyer Professionalism

Now is the time to stop talking and start acting! In the legal professionalism debate, many scholars hope, through their own unique contributions, to spark some universal epiphany that will initiate pervasive change. But a workable solution remains amorphous; the context of the problem is in constant flux and scholars feel the need to continually approach it in a “modernized” framework. Admittedly, unique perspective is an important tool for learning the intricacies of any problem, but incessantly approaching an old problem with fresh insight becomes tiresome and counterproductive . . . especially when there is no evidence of change. If we continue to merely discuss professionalism, then we will remain mired in tautology disguised as intellectual insight.

Read More »

Key Points