A Texas House Committee confirmed last week that a rotting and decayed utility pole that broke, causing power wires to fall on dry grass in the Texas Panhandle on February 26, sparked the Smokehouse Creek Fire, the largest and costliest wildfire in Texas history, and the largest U.S. wildfire in 2024. This confirms our initial reporting on March 8, 2024 (See article HERE). Additionally, the committee announced that a paucity of air support, ineffective communication from faulty equipment and coordination among agencies exacerbated the on-the-ground efforts to contain the Smokehouse Creek Fire and others that ravaged the Panhandle earlier this year.
The Smokehouse Creek Fire ravaged more than one million acres, countless livestock, and over 500 structures. Although many homes in the region were not insured, the mammoth amount of the damages that will be borne by the insurance industry and is currently topping the scales at over $123 million, although estimates are that even this amount will grow. And it was only one of multiple wildfires during a flurry of such wildfires in the Great Plains earlier this year that were fueled by high winds and dry conditions. All totaled,
The House committee—made up of three House members and two landowners—appear to unmasked the culprit: Xcel Energy, a Minnesota-based company that has provided electricity in that portion of the state, and which has previously acknowledged a role in causing the Smokehouse Creek fire. They are an obvious subrogation target for insurers interested in recouping these mammoth claim losses. So is Osmose Utility Services, a Georgia-based company which Xcel had contracted to manage its power lines and maintain its utility poles.
In fact, fifteen lawsuits have already been filed by landowners against Xcel Energy Services, Southwestern Public Service Company (a wholly-owned subsidiary of Xcel), and Osmose Utilities Services. Xcel alone carries liability policies with combined limits of $500 million. Xcel has taken a new look at its pole inspection and replacement policies, while disputing any negligence with regard to the Smokehouse Creek Fire.
MWL is actively preparing its subrogation efforts for a large number of our clients. Drawing parallels from recent subrogation successes, such as the Marshall, Colorado wildfire case (link HERE)(Xcel is also the responsible party in that fire), the Northern California wildfires (link HERE), and the Maui wildfires (link HERE), it is evident that a thorough and timely investigation is paramount to successful subrogation of wildfire claims. But early action on the part of the insurer is also required. Remember, a subrogating carrier has the burden of proof in any claim brought against a responsible tortfeasor. Subrogation investigation and litigation is complex, requiring a timely and meticulous approach to gather evidence to build a sufficient case against the responsible parties and meet this burden of proof.
Preparing for Subrogation
Insurance companies are urged to act promptly, initiating the subrogation process to recover losses and assist their policyholders in recovering their out-of-pocket deductibles. An important and necessary first step is to place potentially liable parties on notice of your subrogation interests. But this must be followed up with prompt and aggressive investigation for any wildfire subrogation effort.
As a leading subrogation law firm, Matthiesen, Wickert & Lehrer, S.C. is ready to guide insurance companies through this process of investigation and preparation for litigating these wildfire claims. Our experienced team of subrogation professionals are familiar with the nuances of such cases and are ready to provide the legal support necessary to navigate insurance carriers through the complexities of subrogation litigation.
The following zip codes are involved with regard to the six main Panhandle wildfires currently being subrogated:
Smokehouse Creek: 79083, 79007, 79059, 79014, 79046, 73832
Magenta: 79092, 79010
Windy Deuce: 79036, 79068, 79108
687 Reamer: 79083
Grape Vine Creek: 79065, 79057
Juliet Pass: 79019
Xcel Energy has already earmarked $215 million to cover the losses they’re likely to incur as a result of the Smokehouse Creek Fire, although they acknowledge that this is simply a “floor” and that the upper end of their liability cannot currently be calculated.
If you have any questions about the Texas wildfire litigation, or wish to discuss possible subrogation of these losses, please contact Lee Wickert at leewickert@mwl-law.com.
