Carriers that insure fire departments may receive property damage claims for equipment that becomes damaged while responding to a fire. This is not at all unusual and is the very reason fire departments carry insurance.
After payment is made to the fire department, does the carrier have any recourse? Despite allowing the fire department to seek recovery from a third party for damages to their equipment seeming contrary to public policy, some insurers may attempt to assert a third-party liability subrogation claim against a property owner who dialed 9-1-1 and prompted an emergency response.
This presents two related issues. First, can the department’s carrier assert the subrogation claim? Second, how should the property owner’s carrier respond? The answer to both questions is not entirely clear under the law, and the issue has not been explored in significant detail by the courts.
Following the Rule
In many states, it is likely that the property owner’s carrier may reasonably deny such subrogation claims based on the “firefighter’s rule.” Generally, the rule precludes firefighters from recovering for personal injuries sustained while performing their duties. The rule was originally based on the reasoning that a firefighter who enters a premise to fight fires is a licensee to whom the owners of those premises owe no duty except to refrain from willful or wanton injury.
While the common law distinction between invitees and licensees has been abolished in the majority of jurisdictions, some states, such as Wisconsin, still retain the firefighter’s rule on public policy grounds. Even when negligent conduct is a substantial factor in causing an injury, public policy considerations may preclude recovery in Wisconsin, where recovery may be denied when:
[T]he injury is too remote from the negligence; or the injury is too wholly out of proportion to the culpability of the negligent tortfeasor; or in retrospect it appears too highly extraordinary that the negligence should have brought about the harm; or because allowance of recovery would place too unreasonable a burden upon the negligent tortfeasor; or because allowance would be too likely to open the way to fraudulent claims; or allowance of recovery would enter a field that has no sensible or just stopping point.
In Hass v. Chicago, the Wisconsin Supreme Court concluded that these public policy considerations precluded a firefighter’s claim for personal injuries sustained while fighting a fire.
The firefighter in Hass was injured in a fire caused by a railroad’s negligence. The court noted that nearly all fires are caused by negligence; therefore, requiring a person who negligently starts a fire to pay damages to a firefighter places too great of a burden on property owners and occupiers. Subsequent cases, however, noted that the Hass holding is somewhat limited.
In Clark v. Corby, the Wisconsin Supreme Court determined that firefighters may pursue causes of action based on acts other than the initial negligence that caused the fire. In Clark, a fire started when a homeowner’s son drained cans of gasoline into a basement sewer. The owner built a bedroom in the home without a permit, and the room did not conform to codes. The basement also contained several highly flammable items, such as paint thinner, which caused an extremely hot fire and thick, black smoke. An injured firefighter sued the owner on three separate grounds: negligence in starting a fire; negligence in failing to warn about hidden hazards in the basement; and negligence for violating building codes.
The court barred the firefighter’s cause of action against the homeowner for negligence in starting a fire, but allowed the case to proceed on a claim that the owner failed to warn of hidden hazards in the basement. The court also allowed a negligence claim for violating the building code if the plaintiff proved the codes were enacted to protect firefighters performing their duties.
Similarly, in Wright v. Coleman, the Wisconsin Supreme Court reiterated that the firefighter’s rule precludes a negligence action by a firefighter only when it is based on the initial act of negligence that caused the fire and necessitated a response by the firefighter.
In Wright, a firefighter slipped and fell on an icy driveway while attempting to bring a hose to the garage to fight a fire. The trial court allowed the claim because the firefighter produced evidence establishing that the defendant’s son created the ice by using a garden hose to wash his car. The trial court instructed the jury that the firefighter could not recover unless the owner failed to warn of a “hidden hazard.” The appellate court held that this jury instruction was erroneous.
Notably, the Supreme Court stated that Hass was a narrow holding and that “[i]t is only in the unusual or very clear case that a court can conclude…that, despite negligent conduct…there shall be no recovery.” The court determined that liability might exist if under the circumstances a reasonable person would have warned the firefighter about the ice.
In addition, firefighters may be able to sue manufacturers of defective products. In Hauboldt v. Union Carbide Corp., a wood-burning furnace started a fire, which ignited spilled gasoline and spread to nearby containers of hazardous substances, causing them to explode. A responding firefighter was injured when one of the tanks exploded. He sued the tank manufacturer, alleging that it was negligently manufactured and inherently dangerous. The manufacturer claimed that the firefighter’s rule barred recovery. The state’s highest court, however, refused to extend the rule to bar liability against manufacturers when the danger caused by the defective product would not be a risk reasonably apparent or anticipated by firefighters.
As these cases demonstrate, application of the firefighter’s rule will bar a claim only where the allegations are based solely on the negligent act that necessitates a response by the firefighter. If any part of the claim is based on another negligent act, e.g., a failure to warn or an ordinance violation, the firefighter’s personal injury claim might be able to proceed.
Depending on the given facts, it is quite possible that the third-party insurer can reasonably deny a claim for damages to fire department property based on the public policy factors underlying the firefighter’s rule. Wisconsin courts, for example, note that nearly all fires are caused by negligence. Accordingly, permitting firefighters to sue based on the negligent act of starting a fire places an unreasonable burden on property owners. Recovery for such damages enters a field with no sensible stopping point. A firefighter or fire department should be prohibited from making a claim for negligence “that creates the very need for his or her employment.”
Property Damages and the Firefighter’s Rule
Generally, cases examining the rule deal with personal injury claims by firefighters. There is a strong argument, however, that the rule should apply with equal force to claims by a fire department for property damage. It would not appear to make any sense to say that the rule bars liability for injuries to a firefighter but it does not similarly bar liability for damages to a fire department’s property that has been destroyed in the course of a firefighter’s duties.
In fact, Virginia’s case law on the rule squarely encompasses and bars claims for property damage made by firefighters. We see in Goodwin v. Hare that “[t]he fireman’s rule is a common-law doctrine that limits a defendant’s liability for otherwise culpable conduct resulting in injuries and property damage to firefighters….” (emphasis added.)
Volunteer Fire Departments
Whether or not the claim was brought by a volunteer fire department raises several issues regarding the formation of the departments, how firefighters are compensated, and how they interact with—and potentially bill for services in—the communities they serve.
With respect to personal injury and property damage claims, the distinction between volunteer and paid departments may very well be moot. Moreno v. Marrs involved personal injuries to volunteer firefighters in New Mexico. The plaintiff firemen argued that a distinction should be made between paid and volunteer firefighters because an injured, paid fireman receives workers’ compensation for on-the-job injuries, while the volunteer will not.
Citing a decision by the Nebraska Supreme Court, Buchanan v. Prickett & Son, Inc., the New Mexico Appellate Court reasoned that both volunteer and paid firemen undertake the same duties and therefore any claim by a firefighter for his injuries would be barred if its facts fell within the rule.
Hazmat Reimbursement Statutes
If the fire department’s property is damaged during a hazardous materials response, it is important to note that many states allow counties and municipalities to pass laws allowing for reimbursement to local emergency response agencies. Typically, the statute’s application is limited to circumstances following the release of hazardous material. The carriers for both the fire department and third party must examine whether these statutes apply to the particular facts involved in such claims. In all likelihood, the fire department must follow strict administrative steps in order to qualify for reimbursement. Furthermore, even if applicable, the statutes very likely do not allow for third-party liability subrogation claims.
Under Wisconsin Stats. § 323.71, for example, a person in possession or control of hazardous substances must take steps to protect public health and safety and prevent property damage. If such steps are not taken, a local agency may take action in response to a hazardous materials release. If the person in possession or control of the material is identified and that material was involved in an emergency or the person caused the emergency, they must reimburse the local agency “for actual, reasonable, and necessary expenses incurred” while responding.
In order to be reimbursed, however, the local agency must submit a claim stating its expenses to the “reviewing entity” designated by the local county board. The reviewing entity determines the amount of reasonable and necessary expenses incurred by the local agency. The entity must then provide the person deemed liable with a notice of the amount allegedly owed. The person liable for reimbursement may then object to the amount and ask the reviewing entity to reevaluate its determination of expenses. Any payment for reimbursement is then made directly to the local agency.
The third-party carrier facing a subrogation claim should examine whether the proper procedural steps were taken by the fire department and its insurer. Aside from the fact that such statutes may not allow subrogation by a fire department’s insurer, if such steps are not followed, the third-party carrier has an additional reasonable basis to deny the claim. Of course, the third-party carrier may not want to bring these statutes and ordinances to the attention of the fire department or its insurer—after all, it is the fire department’s obligation to follow the procedures set forth by state law.
If an insured property owner requires the assistance of a local fire department, claims professionals may think only about paying for the insured’s property loss or seeking subrogation from a potentially liable third party. Rarely is the property owner’s insurer faced with the odd circumstance of a fire department’s insurer seeking subrogation for property damage incurred while responding to a fire. Indeed, this is a venue for subrogation recovery that many insurers have never encountered.
The property owner’s insurer should examine whether a claim made by a fire department’s insurer falls within the scope of the public policy concerns raised by the common law “firefighter’s rule.” The carrier faced with such a claim should consult the current case law in its jurisdiction as many states no longer recognize the rule. In those states that still embrace the rule, however, the property owner’s carrier may have a reasonable basis to deny this clever subrogation claim.
Nicholas K. Rudman, Esq., is with McCoy Law Group, S.C., and has been a CLM Member since 2011.
Kendall Woodward, AIC, is claims manager for Austin Mutual Insurance Company and has been a CLM Fellow since 2011.