How most — but not all — fire victims gave up the right to challenge their compensation in court

Here’s why that’s significant as the Fire Victim Trust has started to negotiate and payout claims

The horizon was glowing with flames as Lisa Yoshida and Jim Hunt drove away from their Foothills property the night of the Tubbs Fire. They only had time to grab their two dogs as they fled the home they’d lived in for 30 years, a home Hunt helped build when he was in high school. When they returned, there was nothing left.

They’ve been trying to rebuild for five years, but they had to stop construction while waiting to be paid from the fund established in 2020 from Pacific Gas & Electric’s bankruptcy to compensate wildfire victims.

“It’s been pretty difficult to be in such a long, torturous process,” Yoshida said.

They’ve gone back and forth with the Fire Victim Trust since the first offer they received. That offer essentially would have given them nothing for the house after insurance. It was far from what they thought was fair for their other losses, which included most everything they’d owned.

Whether the trust would cover the steep public adjuster fees for itemizing all that the couple lost became a particular point of contention.

“We weren’t even able to rebuild our house with what they offered us,” Hunt said.

The couple is limited in how much they can push back against the trust’s offer.

That’s because victims collectively gave up their right to challenge the trust’s offers in court when they voted to accept the $13.5 billion half-cash, half-stock bankruptcy court plan to fund the trust, which was created to compensate victims of the 2015 Butte Fire, the 2017 North Bay wildfires and the 2018 Camp Fire.

PG&E equipment was found to be the cause of most of those fires, with the exception of the Tubbs Fire, which led the firm to file for bankruptcy in 2019.

The bankruptcy deal was sold to many victims as their only real shot at compensation, and so they approved it even as elements of the agreement were still being debated.

At the time, many didn’t realize that a handful of agencies, businesses and victims were able to preserve their right to pursue remedies in court.

For everyone else who is unhappy with their compensation, their only recourse is to ask the trust for a second offer. After that, the only pathway available under the bankruptcy deal is to appeal the trust’s determination to an assigned arbitrator. The trust administrator, however, has the last word on whether to overrule the arbitrator’s findings.

Cathy Yanni, the Fire Victim Trust’s trustee, said she takes the third-party recommendation very seriously.

According to an Oct. 3 court filing by the trust, there have been 166 appeals so far, accounting for a paltry 0.7% of the trust’s settlement offers.

Whether a person goes through the process, though, depends in part on whether they can afford to wait.

Hunt and Yoshida went through every step of the reconsideration and appeal process. The arbitrator found they “suffered enormous loss and have been substantially undercompensated.”

In the end, the trust deemed public adjuster fees unrecoverable but did roughly double their second offer.

To get there, however, Hunt and Yoshida had to sacrifice a lot of extra effort and time, gathering evidence and crafting their arguments and hounding their lawyer during long periods without word from the trust.

The couple rejected the trust’s first offer in August 2021, nearly four years after being burned out of their home.They got their second offer two-and-a-half months after that. After pushing back again, they got connected with an arbitrator at the end of January and didn’t receive the trust’s final decision until June — a full 10 months later.

“There’s a lot of people who had to accept the offer and couldn’t push,” Yoshida said. “We struggled with that mightily, but we felt it was important to get a fair settlement. But, that pressure is there to accept it.”

Five years after the fire, as their Foothill Ranch home sits partly rebuilt, they’re still racking up rental costs that they hope, but aren’t sure, the trust will cover.

“Time is not on your side in this whole process,” Yoshida said.

While the trust’s final decision was the end of the road for Hunt and Yoshida, it’s not the last word for others.

Nine companies and public entity districts and five individual fire victims, including two couples, fought in court to preserve their right to sue.

This possibility was largely unknown to victims. In the days and weeks leading up to, and even after the vote to approve the bankruptcy settlement, details of the Fire Victim Trust structure were still being litigated, leaving many victims unaware of exactly what they could gain and give up under the agreement.

Though Bankruptcy Judge Dennis Montali provided a window for anyone to petition for judicial review, the opportunity was lost on most victims who weren’t monitoring hearings and court filings at the time. Discussion of the option appeared only in a few docket entries among the thousands that had accumulated.

The ability to litigate was ultimately reserved mainly for victims with the legal resources or knowledge to navigate the system. They included a top bankruptcy lawyer and a financial adviser well-versed and established enough to host or speak at bankruptcy law events where Montali also appeared as a guest or panelist.

Preserving the right to sue provided certain leverage.

“The trust has to reserve 100% of their claim until it’s adjudicated,” said Tim Jorstad, the trust’s chief financial officer. “That's a problem for the trust because we have to set 100% of the claim aside even though they may not get but a fraction of that.”

Some victims tried to retroactively secure the right to sue, especially those who had voted against the deal.

“PG&E victims were never told of this lack of judicial review before their vote or informed by their attorneys after the vote regarding an option to ‘opt in’ to judicial review,” Tubbs Fire victim and advocate Will Abrams wrote in a July 2020 court filing.

“There are no distinguishing characteristics of these prospective claims that are deserving of this special treatment above and beyond those afforded to other victims.”

Two years later, Abrams is actively pressing the trust for greater transparency in court.

“Judicial review provides a handful of victims with a huge financial bargaining chip,” Abrams told The Press Democrat. “All other victims are subjected to the whim of the Trustee.”

You can reach “In Your Corner” Columnist Marisa Endicott at 707-521-5470 or marisa.endicott@pressdemocrat.com. On Twitter @InYourCornerTPD and Facebook @InYourCornerTPD.

You can reach Staff Writer Andrew Graham at 707-526-8667 or andrew.graham@pressdemocrat.com. On Twitter @AndrewGraham88