MADISON — Years after a 2013 fire burned 8,100 acres in Douglas and Bayfield counties, lawsuits blaze on between insurers as to who covers the losses.
The District III Court of Appeals ruled Wednesday that a $2 million general liability policy Secura Mutual Insurance issued to a logging company at the center of the Germann Road Fire would apply if the logger is found liable for the fire-related damages.
The court also found that Secura Mutual was not obligated to cover damage to standing timber or timberlands under the umbrella policy it issued to Ray Duerr Logging, LLC, of Rib Lake. Finally, the court returned the lawsuit to Douglas County Circuit Judge Kelly Thimm to determine if the insurer's umbrella policy covers a small charred area where the fire began that is not considered timberland.
The three-day fire in May 2013 was Wisconsin's largest in 33 years. It burned a swath 9 miles long and 1½ miles wide in the Douglas County towns of Highland and Gordon, and the town of Barnes in Bayfield County. The fire consumed standing timber and destroyed more than 100 buildings, including 22 primary residences, according to a Department of Natural Resources report issued in May 2014.
At the time of the fire, the DNR issued news releases in which it confirmed that the fire was started by logging equipment. A Ray Duerr crew was harvesting timber in an industrial forest owned by Lyme St. Croix Forest Co. on lands managed by Steigerwaldt Land Services Inc.
A Duerr equipment operator noticed smoke underneath the head of a cutting device. Grasses, felled timber and low-hanging branches from a dense stand of jack pine provided adequate surface fuel for the fire. The fire quickly moved to the tree tops and a crown fire "was off and running," Gary Bibow, a DNR Forest Fire Law Enforcement Specialist, said in May 2013.
Although the logging crew quickly phoned 911 and stayed on the scene fighting the fire; winds blew it north from its origin near Germann Rd. and Doetsch Ln., toward several lakes where residences were evacuated and structures were lost.
The DNR ruled out faulty equipment or that a cutting device contacted a rock caused the fire. The DNR recommended that no criminal charges be brought based on conclusions that the fire was not intentionally set or negligence was involved.
The DNR did assess Ray Duerr Logging $630,000, the cost to fight the fire. On Wednesday, the DNR and the Department of Justice could not locate a record of Duerr or Secura paying the assessment.
The fire damaged the personal property of about 100 individuals, who received payments from 22 insurance companies.
Before any court or jury could determine if Duerr and Secura were liable for damages, Secura asked Thimm to determine what Secura was obligated to cover as Duerr's insurer. Secura claimed its general liability policy was limited to a $500,000-per-occurrence provision and not the policy's $2 million aggregate limitation.
After Thimm ruled the $2 million aggregate applied to the case, Secure appealed as did other insurers representing Lyme St. Croix Forest Co. and other parties.
The District III Court found that the each property damaged by the fire was a separate occurrence, triggering the $2 million aggregate coverage provision. It wrote:
"The fire at issue lasted for approximately three days and spread to over 7,000 acres of land. In any event, Secura eventually acknowledges that, here, the 'occurrence' was 'the damage to the properties caused by fire, not Duerr's operation' of its equipment," according to the 14-page unsigned opinion.
Thimm did find that Secura's umbrella policy exclusion contained within the Logging and Lumbering Limitation Endorsement barred coverage for all "property damage" to standing timber and timberland after the fire became a "running crown fire." That effectively closes off one policy other insurers could use to successfully sue Secura.
No dollar amount was assigned in court documents to the property damage the fire cause, but the District III Court noted that it exceeded Secura's $2 million aggregate limit.
Patryk Silver, an attorney for Secura, had no comment Wednesday on the opinion. Efforts to contact attorneys for Lyme St. Croix were unsuccessful.
The suit is returned to Thimm for trial on parties liable for the fire and assess economic damages.