In a 6-1 decision authored by Justice Annette Ziegler, the Wisconsin Supreme Court held that if an owner’s property is destroyed by a forest fire that is caused by negligence of another person, then the property owner automatically is entitled to double damages. Chief Justice Abrahamson, along with Justices Crooks, Prosser, Roggensack, and Gableman joined the majority. Justice Bradley dissented from the majority decision. The case is Heritage Farms v. Markel Ins. Co., 2012 WI 26.

Facts

The case involved a forest fire that extensively damaged nearby property owned by Heritage Farms, Inc. The fire started by the defendant was extinguished, but weeks later flared up and escaped the defendant’s property and entered onto Heritage Farms’ property.

Heritage Farms’ owners were awarded $568,422 in compensatory damages in a previous decision after it was determined that the defendant’s negligence led to the forest fire.  Heritage Farms then brought a separate motion against the defendant seeking double damages, along with costs for legal representation.

Decisions by the Trial Court and Court of Appeals

The issue before the trial court was whether Heritage Farms was automatically entitled to double damages, or whether the statute grants the court discretion when deciding whether to award double damages.

The statute states that an owner “whose property is injured or destroyed by forest fires, may recover, in a civil action, double the amount of damages suffered, if the fires occurred through willfulness, malice or negligence.” (Wis. Stat. § 26.21(1)).

The trial court held that the statute allowed the court to exercise discretion in deciding whether to award double damages. The trial court decided that the defendant’s conduct did not warrant punishment, and therefore did not grant Heritage Farms double damages.

The court of appeals upheld the lower court, ruling that the decision to award double damages under the statute is subject to the circuit court’s discretion. The court noted that the legislature used the permissive word “may” in the statute in describing the property owner’s right to recover double damages in the event that a forest fire result from willfulness, malice, or negligence.

Wisconsin Supreme Court Decision – Statute Mandates Double Damages

The Wisconsin Supreme Court reversed, holding that property owners are entitled to double damages. The court reasoned that, “once it is determined that the forest fire occurred through willfulness, malice, or negligence, the property owner is entitled to double damages as a matter of course.”

The court further held that their ruling should apply retroactively, not prospectively, thereby ensuring that Heritage Farms received the full double damages.

Interest on Judgments

The court further held that the plaintiff was entitled to interest on the double damages from the date of the jury’s verdict (October 13, 2006). At the time the lawsuit was brought, the interest on judgments was 12 percent.

The defendant argued that the 12 percent interest was unconstitutional because the high interest rate is so severe and so far removed from the national prime lending rate that it tends to “chill” defendants from properly defending their claims on appeal.

The court rejected this claim and said that the legislature was the proper branch of government to determine the proper interest rate. The court noted that the legislature this session in fact changed the interest on judgments from 12 percent to the federal reserve prime rate, plus one percent. This law, 2011 Wisconsin Act 69, was championed by the Wisconsin Civil Justice Council and was introduced by Gov. Walker as part of his numerous civil justice reforms.

Dissent

Justice Bradley dissented, arguing that the legislature did not intend that the award of double damages in these types of cases be mandatory. Instead, the legislature’s use of the word “may” signaled its intent that the courts are to exercise discretion when deciding whether to award double damages.