A state appeals court has ruled that insurers cannot hold an electric company’s vegetation-management contractor liable for an estimated $45 million in claims by homeowners and businesses resulting from two wildfires in Tennessee’s Great Smoky Mountains.
A three-judge panel of the Tennessee Court of Appeals upheld Wolf Tree Inc’s failure to inspect or remove allegedly diseased trees that fell on power lines in Sevierville and Gatlinburg on Nov. 28, 2016, as the larger Chimney Tops 2 fire raged for a sixth day in the nearby Great Smoky Mountains National Park.
Judge Thomas Frierson, joined by Judges John McClarty and Kristi Davis, wrote that the fallen trees in Sevierville and Gatlinburg were outside the rights-of-way that Wolf kept clear for the Sevier County Electric System, and nothing required it to go beyond those boundaries.
In an email, Wolf’s lead attorney, Jessalyn Zeigler of Bass, Berry & Sims, expressed gratitude to the court for recognizing that “the causes of these unfortunate fires fell well-outside of our client’s purview or duty under Tennessee statutory and common law, as well as its contractual responsibilities or expectations.”
The insurers, which included Allstate, American Family Insurance, Cincinnati Insurance, Farmers Insurance Exchange, Liberty Mutual, MetLife, Safeco, State Farm, and USAA affiliates, were represented by Matthew Evans of Kay|Griffin in Knoxville, Mark Grotefeld and Jonathan Tofilon of Grotefeld Hoffmann in Austin, Texas, and several other lawyers. On Wednesday, Evans, Grotefeld, and Tofilon did not immediately respond to requests for comment.
In 2017, the insurers filed a lawsuit against Wolf and the utility for the two fires, known as the Little Cove Fire in Sevierville and the Cobbly Nob Fire in Gatlinburg. The ruling on Tuesday only addresses Wolf’s claims.
The fallen trees were located outside the literal boundaries of Wolf’s contract, according to their lawsuits. They argued, however, that the contract incorporated broader industry guidelines as well as Tennessee code, which instructs utilities to prune or remove trees “posing a danger to utility facilities.”
Even if the utility could have delegated that duty to Wolf, Frierson wrote that the contract gave Wolf “sole discretion” to decide whether to remove vegetation outside the specified boundaries.
Evans and Grotefeld also represent a number of insurers in separate litigation against the National Park Service in connection with the Chimney Tops 2 fire, which resulted in an estimated $1 billion in insurance claims. This case is currently pending in federal court in Knoxville.