Tennessee court rules against insurers in huge wildfire liability lawsuit


Tennessee court rules against insurers in huge wildfire liability lawsuit

A three-judge panel of the Tennessee Court of Appeals has ruled in favor of Wolf Tree Inc (Wolf), an electric company’s vegetation-management contractor taken to court by insurers over an estimated $45 million in claims by homeowners and businesses from two wildfires in the state’s Great Smoky Mountains.

According to Reuters, the 20 insurers involved in the case – including various affiliates of Allstate, American Family Insurance, Cincinnati Insurance, Farmers Insurance Exchange, Liberty Mutual, MetLife, Safeco, State Farm, and USAA – were represented by Matthew Evans of Kay|Griffin in Knoxville, Mark Grotefeld and Jonathan Tofilon of Grotefeld Hoffmann in Austin, Texas, and other lawyers.

They sued Wolf and the utility in 2017 over the two fires. However, the ruling on Tuesday resolved only the claims against Wolf.

At the end of the hearing, Judges Thomas Frierson, John McClarty, and Kristi Davis decided that Wolf had no duty to inspect or remove the allegedly diseased trees that fell on power lines in Sevierville and Gatlinburg on November 28, 2016, when the larger Chimney Tops 2 fire raged for a sixth day in the nearby Great Smoky Mountains National Park. They further explained that the fallen trees in both areas were outside the rights-of-way that Wolf kept clear for the Sevier County Electric System, and it did not need to go beyond those boundaries.

Wolf’s lead lawyer Jessalyn Zeigler of Bass, Berry & Sims, told Reuters in an email that they were grateful to the court for stating that “the causes of these unfortunate fires fell well outside of our client’s purview or duty under Tennessee statutory and common law and its contractual responsibilities or expectations”.

The lawsuits noted that the fallen trees were outside the literal boundaries of Wolf’s contract. However, they argued that the contract incorporated broader industry guidelines and the Tennessee code, which advises utilities to prune or remove trees “posing a danger to utility facilities”.

Judge Frierson argued that even if the utility could have delegated that duty to the company, the contract gave the company “full discretion” to determine whether to remove vegetation outside the specified boundaries.