Lawsuits by fire victims swept up in PG&E bankruptcy
SAN FRANCISCO — Lon Walker blames Pacific Gas & Electric Co. for starting a wildfire that killed his wife Ellen and destroyed their home near Paradise.
Butte County cites PG&E for the same Nov. 8 fire that destroyed parks, schools and myriad other public property and amenities. And State Farm insurance company also blames the utility for the fire that compelled it to pay millions of dollars to policyholders who lost homes and businesses in the blaze.
They are among the people, companies, cities and counties that have filed roughly 1,000 lawsuits since late 2017 demanding PG&E pay for damages caused by wildfires.
PG&E lawyers have filed denials of responsibility in the courts, but when the company sought bankruptcy protection on Tuesday, it cited at least $30 billion in potential liability from those and other lawsuits.
State investigators have yet to determine the cause of the Nov. 8 fire that killed 86 people and destroyed 15,000 homes in the Paradise area, but PG&E equipment is suspected in the most destructive wildfire in the U.S. in at least a century. Some $8.4 billion in insurance claims have been filed involving that fire.
State investigators blame PG&E equipment for 17 major fires since late 2017. Under California law, utilities are required to pay for wildfire damage caused by their equipment even if the companies weren’t negligent.
Those fires killed a combined 18 people and destroyed more than 2,000 homes and businesses.
State investigators recently said PG&E was not responsible for a 2017 fire in Northern California wine country that killed 22 people and destroyed more than 5,000 homes. Lawyers for dozens of plaintiffs in lawsuits blaming the utility for that blaze say they will challenge that finding.
Plaintiffs in lawsuits involving fires range from Oroville rancher David Martin’s $3,000 small claims complaint to insurance companies’ demands for billions of dollars in reimbursements for payments to policyholders.
Many of the lawsuits seek to bridge the gap between what insurance companies paid out for destroyed homes and what policyholders argue the houses were actually worth in the region’s pricey real estate market.
David Rabbit, chairman of the Sonoma County Board of Supervisors, said an estimated 70 percent of policyholders were “underinsured,” meaning their insurance did not cover the full cost of replacing their property. He said that leaves them struggling to rebuild what they lost.
Jeffrey Hammond’s family home in Napa County was destroyed in a 2017 fire that state investigators say started when an oak tree broke and fell onto a PG&E power line.
Hammond, 76, said he believes the house could have sold for $500,000 but his insurance company paid him only $100,000, which he said was the property’s most-recent assessed value. He sued PG&E hoping to recoup the additional $400,000. The utility’s bankruptcy filing made him pessimistic about his chances of collecting.
“I’m 76, going on 77,” he said. “And this will take years to sort out.”
PG&E said the bankruptcy will allow for an “orderly, fair and expeditious resolution” of wildfire claims.
“Throughout this process, we are fully committed to enhancing our wildfire safety efforts, as well as helping restoration and rebuilding efforts across the communities impacted by the devastating Northern California wildfires,” interim CEO John R. Simon said in a statement.