March 27, 2009 - Following a devastating 2003 wildfire in the Wautoma area, the Wisconsin Supreme Court gave an expansive reading of a statute doubling compensatory damages for negligently starting the fire.

The court held on March 26 in Heritage Farms v. Markel Insurance, 2009 WI 27, that the lower courts had incorrectly restricted the damages enhancement provision of Wis. Stat. § 26.21(1) to just railroad corporations. The increased awards can be recovered from any type of defendant.

In this case, Jeffrey Knaack started a fire at the Lake of the Woods Campground. The fire escaped the campground property and ultimately consumed over 570 acres in Marquette and Waushara counties. Affected property owners sued J.J.J. Recreation Corp., the operator of Lake of the Woods Campground, and Knaack in cases that were eventually consolidated. The complaints alleged negligence, trespass, and nuisance. A jury found in favor of the individual plaintiffs in amounts that totaled $568,422.

Not just railroads liable

Defendants in this case argued that the doubled damages of § 26.21(1) apply only upon finding a violation of § 26.20, a statute directing railroad corporations to guard against fires caused by engine sparks. Because no railroad is involved in this case, § 26.21(1) has no bearing, the defense argued.

The court remarked that the text of § 26.21(1) does not limit application to railroad corporations and to do so would require inserting words the Legislature chose not to include.

Defendants argued that § 26.21(1) is linked to § 26.20 by the phrase “in addition to the penalties in § 26.20.” But Justice Annette Kingsland Ziegler, writing for the court majority, defined “in addition to” as meaning “over and above; besides” so that the enhanced penalties of § 26.21(1) may be applicable besides those of § 26.20. The court found that “in addition to” acts to prevent a tortfeasor from arguing that the only applicable damages are found in § 26.20.

Justice Patience D. Roggensack, joined by Justice Michael J. Gableman, dissented from this analysis, arguing that “in addition to” plainly establishes a prerequisite finding of damages under § 26.20. “[W]ere it not that the damages that a property owner seeks to double under Wis. State § 26.21(1) arose from the same conduct that could support a penalty under Wis. Stat. § 26.20(9), the phrase ‘in addition to the penalties provided in s. 26.20’ would have no meaning,” Roggensack wrote.

“In addition to” is a phrase used elsewhere in Chapter 26 “and in each instance, the relief that is ‘in addition to’ that previously provided is based on the same conduct for which a previous penalty could have been assessed,” Roggensack added.

Roggensack’s clash with the majority carried over into a review of statutory history. The majority observed that the 1905 version of § 26.21(1) was tethered to the 1905 version of § 26.20 by the use of the term “such fires,” a reference to fires discussed in the preceding section. But in 1977, the majority noted, the Legislature replaced “such fires” with the broader term “forest fires,” eliminating the qualification that the fires at issue in § 26.21(1) first be a violation of § 26.20.

Arguing in dissent, Roggensack said the connection between the two sections was not severed by the change to “forest fires.” The term “forest fires” was used in the title of the 1905 law and it remains in the title of the modern statute, she noted. Also, Roggensack reported that “forest fires” had a statutory definition in 1977 – something lacking in 1905. “[I]t is just as logical that ‘such fires’ was replaced with ‘forest fires’ because the legislature wanted to clarify that runaway fires that were started by sparking engines, but burned prairie grasslands rather than forests, came within the ambit of § 26.21(1),” Roggensack wrote.

The court majority held that if the Legislature meant to limit § 26.21(1) to just violations of § 26.20, then it would have folded the one into the other. Roggensack remained unpersuaded, attributing the separation of the sections to the form the Legislature used in 1905 for writing statutes.

Roggensack and the majority also disagreed over the significance of the text of a burning permit issued by the Department of Natural Resources. The court majority argued that the permit’s warning of doubled damages for an escaped fire shows the DNR has determined § 26.21(1) applies to all tortfeasors and this interpretation deserves some deference. Roggensack contested whether the language of the burn permit is the agency’s interpretation of § 26.21(1) and, even if it is, whether it is relevant to this case.

Beyond statutory interpretations, the court majority made a policy argument in favor of extending the reach of § 26.21(1). “As a practical matter, it makes sense that the legislature would choose to severely punish all forest fire starting tortfeasors rather than just railroads, given the importance of forests and ecology in this state,” the court found. “Our forests are important not only to those who enjoy recreational activities and hunting, but they are also important to our ecology and our economy.”

Negligence is proper standard for fault

The defendants also contested the requisite mental state to trigger § 26.21(1). The section specifies “willfulness, malice or negligence.” The defendants referred to the 1914 case Bonnell v. Chicago, St.Paul, Minneapolis & Omaha Railway Co., 158 Wis. 153, which interpreted § 26.21(1) to find that “negligence” must be “gross.”

Plaintiffs countered that “gross negligence” was abolished in Wisconsin following the 1962 decision, Bielski v. Schulze, 16 Wis. 2d 1, 14-19.

The court presumed that the Legislature was aware of Bielski when it revised § 26.21(1) in 1977. Because the Legislature did not remove “negligence” from the statute or insert “gross negligence” when it made other substantive changes, the court held that “negligence” is an appropriate standard.