Exact Property and Casualty Co. v. Union Pacific Railroad Co. ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 EXACT PROPERTY AND CASUALTY No. 2:21-cv-00928 WBS JDP COMPANY, 13 Plaintiff, 14 ORDER RE: DEFENDANT’S MOTION v. TO DISMISS 15 UNION PACIFIC RAILROAD COMPANY, 16 and DOES 1-10, inclusive, 17 Defendant. 18 19 ----oo0oo---- 20 This is a subrogation lawsuit brought by a real 21 property insurer regarding a fire that spread from a right-of-way 22 controlled by defendant Union Pacific Railroad Company (“Union 23 Pacific”) on July 5, 2020, in Stockton, California. Plaintiff 24 Exact Property and Casualty Company (“Exact”) claims that 25 Pacific’s negligence contributed to the ignition of the fire, and 26 that Union Pacific’s conduct violated California Health & Safety 27 Code §§ 13007 and 13008 and constituted a trespass. (See Def.’s 28 Notice of Removal, Ex. A (“Compl.”) (Docket No. 1).) Union 1 Pacific now moves to dismiss Exact’s claims in their entirety. 2 (Mot. to Dismiss (Docket No. 6).) 3 I. Factual Background 4 Union Pacific owns a railroad easement which runs 5 adjacent to plaintiff’s insured’s property, located at 1743 North 6 Stanford Avenue, Stockton, California. (Compl. ¶ 18.) Plaintiff 7 alleges that Union Pacific ordinarily exercised control over the 8 easement by, among other things, intermittently cutting 9 combustible vegetation, including dry grass, brush, weeds, 10 litter, and waste. (Compl. ¶¶ 14-15.) 11 Prior to the fire, plaintiff alleges that Union Pacific 12 neglected to remove combustible vegetation from the easement. 13 (Compl. ¶ 15.) Plaintiff further alleges that Union Pacific 14 knew, or should have known, that homeless persons routinely 15 camped on the easement, and failed to take steps to remove them. 16 (Compl. ¶ 16.) According to plaintiff, both of these actions 17 exacerbated the risk of a fire starting and spreading from Union 18 Pacific’s easement. (Compl. ¶ 16.) 19 On July 5, 2020, a fire ignited on the Union Pacific 20 easement. (Compl. ¶ 18.) Plaintiff alleges that the fire spread 21 unabated to neighboring residences, severely damaging them. 22 (Compl. ¶¶ 19, 20.) Plaintiff does not allege how the fire 23 ignited. (See Compl. ¶ 18.) Plaintiff indemnified its insured 24 for the damages caused by the fire, causing plaintiff to incur 25 damages exceeding $500,000. (Compl. ¶¶ 21, 22.) 26 II. Discussion 27 Federal Rule of Civil Procedure 12(b)(6) allows for 28 dismissal when the plaintiff’s complaint fails to state a claim 1 upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6). 2 The inquiry before the court is whether, accepting the 3 allegations in the complaint as true and drawing all reasonable 4 inferences in the plaintiff’s favor, the complaint has stated “a 5 claim to relief that is plausible on its face.” Bell Atl. Corp. 6 v. Twombly, 550 U.S. 544, 570 (2007). “The plausibility standard 7 is not akin to a ‘probability requirement,’ but it asks for more 8 than a sheer possibility that a defendant has acted unlawfully.” 9 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “Threadbare 10 recitals of the elements of a cause of action, supported by mere 11 conclusory statements, do not suffice.” Id. Although legal 12 conclusions “can provide the framework of a complaint, they must 13 be supported by factual allegations.” Id. at 679. 14 A. Negligence 15 Plaintiff first claims that Union Pacific acted 16 negligently by failing to remove combustible vegetation and 17 homeless persons from the easement. (See Compl. ¶¶ 23-31.) 18 Under California common law, a negligence claim contains four 19 basic elements: (1) a legal duty to use care, (2) a breach of 20 such legal duty, which (3) causes (4) a resulting injury. Kesner 21 v. Superior Ct., 1 Cal. 5th 1132, 1142 (Cal. 2016) (citing Beacon 22 Residential Community Ass’n v. Skidmore, Owings & Merrill LLP, 59 23 Cal. 4th 568, 573 (Cal. 2014)). Union Pacific argues that 24 plaintiff’s claim must fail because it did not owe plaintiff a 25 duty to act with due care. (Mot. to Dismiss at 2-10). 26 “[D]uty differs from the other elements of a tort.” 27 Shipp v. Western Eng’g, Inc., 55 Cal. App. 5th 476, 490 (3d Dist. 28 2020). “Breach, injury, and causation must be demonstrated on 1 the basis of facts adduced at trial, and a jury’s determination 2 of each must take into account the particular context in which 3 any act or injury occurred. Analysis of duty occurs at a higher 4 level of generality.” Id. 5 Union Pacific contends that it could not have owed 6 plaintiff a legal duty to act because plaintiff’s complaint does 7 not allege that Union Pacific started the fire at issue. (Compl. 8 ¶¶ 13-18.) If Union Pacific did not start the fire, it argues, 9 the fire must have been started by a third party, and as “a 10 general matter, there is no duty to protect others from the 11 conduct of third parties.” Morris v. De La Torre, 36 Cal. 4th 12 260, 269 (Cal. 2005). 13 While plaintiff’s complaint does not allege that Union 14 Pacific ignited the fire at issue, it does allege that Union 15 Pacific’s failure to clear land under its control of combustible 16 vegetation and homeless persons was a substantial factor in 17 causing the fire. Union Pac. R.R. Co. v. Ameron Pole Prods. LLC, 18 43 Cal. App. 5th 974, 981-83 (holding that defendant may be 19 liable, even if some other person or condition was also a cause 20 of the event, as long as defendant was a substantial factor in 21 causing the harm). The California Supreme Court has clearly held 22 that, where a plaintiff’s negligence claim rests on allegations 23 that a landowner has mismanaged property under his possession, 24 “mere possession with its attendant right to control conditions 25 on the premises is a sufficient basis for the imposition of an 26 affirmative duty to act.” Kesner, 1 Cal. 5th at 1158 (quoting 27 Preston v. Goldman, 42 Cal. 3d 108, 118 (Cal. 1986) (internal 28 quotation marks omitted)). 1 This duty requires landowners to “maintain land in 2 their possession and control in a reasonably safe condition,” 3 Ann. M. v. Pacific Plaza Shopping Center, 6 Cal. 4th 666, 674 4 (Cal. 1993) (superseded by statute on another ground as reflected 5 in Saelzler v. Advanced Group 400, 25 Cal. 4th 763, 767-68 (Cal. 6 2001)), and even “encompasses a duty to avoid exposing persons to 7 risks of injury that occur off site if the landowner's property 8 is maintained in such a manner as to expose persons to an 9 unreasonable risk of injury offsite.” Kesner, 1 Cal. 5th at 1158 10 (quoting Barnes v. Black, 71 Cal. App. 4th 1473, 1478 (4th Dist. 11 1999)). The California Supreme Court has “found that landowners 12 have a duty to prevent hazardous natural conditions arising on 13 their property from escaping and causing injury to adjacent 14 property.” Id. (citing Sprecher v. Adamson Cos., 30 Cal. 3d 358, 15 368 (Cal. 1981)). The court therefore finds that, based on the 16 facts alleged in plaintiff’s complaint, Union Pacific had a duty 17 to manage its property so as to avoid exposing plaintiff to an 18 unreasonable risk of fire danger. See id. 19 Union Pacific next cites Rowland v. Christian to argue 20 that the court should carve out an exception to this duty based 21 on the facts of this case. See 69 Cal. 2d 108, 112 (Cal. 1968). 22 In Rowland, the California Supreme Court set forth a multi-factor 23 test “as a means for deciding whether to limit a duty derived 24 from other sources.” Brown v. USA Taekwondo, 11 Cal. 5th 204, 25 217 (Cal. 2021). These factors are: (1) foreseeability of harm 26 to the plaintiff, (2) the degree of certainty that the plaintiff 27 suffered injury, (3) the closeness of the connection between the 28 defendant's conduct and the injury suffered, (4) the moral blame 1 attached to the defendant's conduct, (5) the policy of preventing 2 future harm, (6) the extent of the burden to the defendant and 3 consequences to the community of imposing a duty to exercise care 4 with resulting liability for breach, and (7) the availability, 5 cost, and prevalence of insurance for the risk involved. 6 Rowland, 69 Cal. 2d at 113. 7 Applying these factors at this stage in the 8 proceedings, the court sees no reason to depart from the well- 9 established rule that landowners owe a duty to avoid exposing 10 those off-site to hazardous natural conditions that arise on 11 property under their control. Plaintiff’s complaint adequately 12 alleges that its injury was a foreseeable result of Union 13 Pacific’s conduct (see Compl. ¶¶ 12-31), and the facts alleged 14 “allow reasonable inferences as to satisfying the other Rowland 15 factors.” See Heston v. City of Salinas, No. C 05-03658 JW, 2006 16 WL 8431034, at *5 (N.D. Cal. Jul. 11, 2006). The court therefore 17 finds that plaintiff has adequately alleged a duty of care for 18 the purposes of evaluating the sufficiency of its negligence 19 claim on a motion to dismiss. See id. 20 Finally, Union Pacific argues that, because plaintiff’s 21 complaint does not specifically allege how the fire at issue was 22 ignited, plaintiff has not adequately alleged a causal link 23 between Union Pacific’s conduct and the resulting fire sufficient 24 to state a claim for negligence. See Kesner, 1 Cal. 5th at 1142 25 (reciting the elements of a common law negligence claim). Though 26 plaintiff’s complaint could be clearer in this regard, plaintiff 27 does allege that (1) Union Pacific failed to remove combustible 28 vegetation and homeless persons from the easement prior to July 1 5th (Compl. ¶¶ 15-16); (2) Union Pacific knew or should have 2 known of these conditions (Compl. ¶¶ 14-16); (3) Union Pacific’s 3 failure to take steps to remove the homeless persons “exacerbated 4 the fire risk already caused by Union Pacific’s failure to remove 5 combustible vegetation” (Compl. ¶ 16); and (4) that a fire 6 ignited on the easement on July 5th (Compl. ¶ 18). These 7 allegations readily give rise to the inference that Union 8 Pacific’s failure to manage its property in a reasonable manner 9 was a substantial factor in causing the fire which harmed 10 plaintiff, and are therefore sufficient to state a negligence 11 claim against Union Pacific at the motion to dismiss stage. See 12 Iqbal, 556 U.S. at 663 (“A claim has facial plausibility when the 13 pleaded factual content allows the court to draw the reasonable 14 inference that the defendant is liable for the misconduct 15 alleged.”); Ameron, 43 Cal. App. 5th at 981-83 (holding that 16 defendant may be liable as long as it was a substantial factor in 17 causing the harm). 18 Accordingly, the court will not dismiss plaintiff’s 19 first claim for negligence. 20 B. Health & Safety Code §§ 13007, 13008 21 Plaintiff next claims that Union Pacific violated 22 California Health & Safety Code §§ 13007 and 13008. (Compl. 23 ¶¶ 32-37.) Section 13007 states that any “person who personally 24 or through another wilfully, negligently, or in violation of law, 25 sets fire to, allows fire to be set to, or allows a fire kindled 26 or attended by him to escape to, the property of another . . .” 27 shall be liable. Cal. Health & Safety Code § 13007. Section 28 13008 similarly imputes liability onto any “person who allows any 1 fire burning upon his property to escape to the property of 2 another, whether privately or publicly owned, without exercising 3 due diligence to control such fire . . . .” Id. at § 13008. 4 California courts have indicated that these provisions 5 do “not establish a standard of care, but merely codify the basis 6 of fire liability.” Southern Pacific, 139 Cal. App. 3d at 633. 7 In other words, a plaintiff must still establish that a fire was 8 “negligently” set in order to prevail under these statutes. See 9 id.; Sampson v. Hughes, 147 Cal. 62, 64 (Cal. 1905). 10 Union Pacific first argues that plaintiff’s §§ 13007 11 and 13008 claims fail because Union Pacific had no duty to 12 protect plaintiff’s insureds from the actions of third parties, 13 and thus could not be found to have acted negligently. For the 14 reasons discussed in the section above, the court rejects this 15 argument. 16 Second, Union Pacific argues that it cannot be found 17 liable under either § 13007 or § 13008 because each statute 18 requires the defendant to have taken some affirmative action in 19 setting the fire. (Mot. to Dismiss at 10.) Section 13007 20 requires that a person have “set[] fire to,” “allow[] fire to be 21 set to,” or “allow[] a fire kindled or attended by him to escape 22 to” the property of another. Cal. Health & Safety Code § 13007. 23 Similarly, § 13008 requires that a person “allow[] any fire 24 burning upon his property to escape to the property of another.” 25 Id. at § 13008. Union Pacific contends that this language 26 requires that it have had some “knowledge of the operative 27 facts,” such as knowing the fire is burning and allowing it to 28 leave the property, in order to be held liable. (Mot. to Dismiss 1 at 10; Def.’s Reply at 3-4.) 2 This interpretation of §§ 13007 and 13008 has been 3 rejected by California courts. In Ventura County v. Southern 4 California Edison Company, the defendant argued that it could not 5 be found liable under a prior version of § 13007 (which contained 6 the same relevant statutory language) because, while the statute 7 “require[ed] a finding that the fire was caused by defendant’s 8 direct and affirmative act of setting it,” the evidence “show[ed] 9 only negligent construction and maintenance which indirectly 10 caused the fire.” Ventura Cnty. v. S. Cal. Edison Co., 85 Cal. 11 App. 2d 529, 514-15 (2d Dist. 1948). The court rejected this 12 argument because it failed “to give due consideration to the 13 second classification contained in [§ 13007]: ‘Any person who . . 14 . negligently . . . allows fire to be set,’ etc.” Id. at 515. 15 While the court noted that the word “‘allow’ has been found to 16 import knowledge of the operative facts,” as Union Pacific 17 contends, the court specified that knowledge of the “conditions, 18 circumstances, or conduct which might reasonably be expected to 19 result in the starting of a fire” could suffice. Id. 20 Similarly, the California Court of Appeal, Second 21 District, noted in City of Los Angeles v. Shpegel-Dimsey, Inc. 22 that a plaintiff could recover damages for injury to its property 23 under § 13008 where the defendant had not personally ignited the 24 fire or knowingly allowed it to spread from its property. See 25 198 Cal. App. 3d 1009, 1019-20 (2d Dist. 1988). There, evidence 26 submitted at trial showed that a fire ignited at the defendant’s 27 plastics factory but, notably, did not show that the defendant 28 itself had ignited the fire or even that the defendant was aware 1 of it as it burned. See id. at 1016. On appeal, the court 2 rejected plaintiff’s argument that it was entitled to collect the 3 costs of fire suppression under § 13008, but stated that, “to the 4 extent plaintiff could prove defendant failed to exercise due 5 diligence to prevent the spread of the fire beyond the confines 6 of defendant's premises, section 13008 provides a basis for the 7 recovery of damages for injury caused to the property . . . .” 8 Id. at 1019. 9 Defendant argues that the court should depart from the 10 holdings of Ventura County and City of Los Angeles and instead 11 follow Department of Forestry & Fire Protection v. Howell, 18 12 Cal. App. 5th 154 (3d Dist. 2017). In Howell, the Court of 13 Appeal held that the owner of property used for timber cutting 14 could not be liable under California Health & Safety Code § 13009 15 for a fire negligently set when a bulldozer struck a rock on the 16 property, because the landowner itself had not been involved in 17 setting the fire. See Howell, 18 Cal. App. 5th at 164, 175-82. 18 Section 13009 allows entities or persons who incur fire 19 suppression costs to recover those costs from “any person who 20 negligently, or in violation of the law, sets a fire, allows a 21 fire to be set, or allows a fire kindled or attended by him or 22 her to escape onto any public or private property . . . .” Cal. 23 Health & Safety Code § 13009. Though this language is similar to 24 that of § 13007, Howell itself explained that § 13007 contains 25 additional language not contained in § 13009: “any person who 26 personally or through another . . . negligently . . . sets fire 27 to, allows fire to be set to, or allows a fire kindled or 28 attended by him to escape to, the property of another.” See 1 Howell, 18 Cal. App. 5th at 178-79 (emphasis in original); Cal. 2 Health & Safety Code § 13007. 3 Howell expressly relied on this difference in the 4 statutory language to distinguish its holding from that of 5 Ventura County: the court explained that, while Ventura County 6 had permitted a landowner who had “failed to properly maintain 7 its own equipment” to be liable under the language of § 13007, 8 the Howell court would not permit liability to attach to a 9 landowner who had not affirmatively participated in the setting 10 of the fire under § 13009 precisely because § 13009 does not 11 allow recovery “against a person who acted ‘personally or through 12 another.’” See id. at 180 (citing Ventura Cnty., 85 Cal. App. 2d 13 at 531-32). The court noted that it did not find this difference 14 in outcomes to be “incongruous,” because the California 15 Legislature may have intended to “afford[] a longer reach in 16 recovery efforts to an owner whose property was damaged than it 17 afforded those who expended funds fighting or investigating the 18 fire.” Id. at 179. 19 Because plaintiff’s claims here involve application of 20 § 13007 rather than § 13009, the court finds that Howell is 21 inapplicable to this case, and will instead follow the holding of 22 Ventura County. Though several decades have passed since Ventura 23 County was decided, Union Pacific does not cite to, and the court 24 is not aware of, any subsequent case law disapproving of its 25 holding that a defendant may be liable based on its knowledge of 26 the “conditions, circumstances, or conduct which might reasonably 27 be expected to result in the starting of a fire.” Ventura Cnty., 28 85 Cal. App. 2d at 515. 1 Applying this holding to the allegations in plaintiff’s 2 complaint, the court finds that plaintiff has adequately pled a 3 claim under California Health & Safety Code § 13007. Plaintiff 4 alleges that, though Union Pacific had, at times, cleared its 5 easement of combustible vegetation, it failed to remove such 6 vegetation and homeless persons from its easement prior to the 7 July 5, 2020 fire. (Compl. ¶¶ 13-30.) As a result of Union 8 Pacific’s failure to mitigate these fire risks, plaintiff alleges 9 that the fire was allowed to ignite and spread to neighboring 10 properties. (Id.) These allegations are sufficient to plausibly 11 claim that Union Pacific had knowledge of the conditions or 12 circumstances which might reasonably be expected to result in the 13 starting of a fire, and thus negligently allowed the fire to be 14 set and to spread from plaintiff’s property. See Ventura Cnty., 15 85 Cal. App. 5th at 515. These allegations also sufficiently 16 state a claim that defendant “failed to exercise due diligence to 17 prevent the spread of the fire beyond the confines of defendant's 18 premises” in violation of California Health and Safety Code 19 § 13008. See City of Los Angeles, 198 Cal. App. 3d at 1019-20. 20 To the extent plaintiff can prove it was Union Pacific’s lack of 21 due diligence which permitted the fire to spread to neighboring 22 properties, §§ 13007 and 13008 may provide a basis for plaintiff 23 to collect damages for injuries to the property of its insured. 24 See id.; City of Los Angeles, 198 Cal. App. 3d at 1019-20. 25 Accordingly, the court will not dismiss plaintiff’s 26 second claim for violations of California Health & Safety Code 27 §§ 13007 and 13008. 28 C. Trespass 1 Finally, plaintiff claims that the fire at issue, which 2 spread from Union Pacific’s easement onto its insured’s property, 3 constituted a trespass under California common law. “Trespass is 4 an unlawful interference with possession of property.” Staples 5 v. Hoefke, 189 Cal. App. 3d 1397, 1406 (2d Dist. 1987). “The 6 interference need not take the form of a personal entry onto the 7 property by the wrongdoer.” Smith v. Lockheed Propulsion Co., 8 247 Cal. App. 2d 774, 784 (4th Dist. 1967). “Instead, it may be 9 accomplished by the casting of substances or objects upon the 10 plaintiff's property from without its boundaries.” Id. “There 11 is no liability for a trespass unless the trespass is 12 intentional, the result of recklessness or negligence, or the 13 result of injuries in an extra-hazardous activity.” Id. 14 Plaintiff argues that, because California law allows 15 for trespass claims where the underlying conduct constitutes mere 16 negligence, its allegations that Union Pacific negligently 17 contributed to the conditions which led to the fire suffice to 18 state a claim. Plaintiff cites to only one case in which a 19 California court has held that a fire may constitute a trespass. 20 See Elton v. Anheuser-Busch Beverage Group, Inc., 50 Cal. App. 21 4th 1301 (4th Dist. 1996) (holding that, like “intangible 22 intrusions such as noise or vibrations,” a fire may constitute a 23 trespass if it causes physical damage to another’s property). 24 Plaintiff is correct that, under Elton, a defendant may 25 be liable for trespass if he negligently permits the fire to 26 escape from his property. See id. at 1305-08. However, Elton 27 was careful to note that defendant had intentionally set the fire 28 on its property before negligently permitting it to escape and 1 damage the plaintiff’s property. Id. (noting that, when “a 2 defendant intentionally starts a fire on its property, and 3 negligently allows that fire to escape onto and to damage the 4 adjoining plaintiff’s property,” the plaintiff may state a claim 5 for trespass under California common law). The only other case 6 cited by plaintiff in support of its trespass claim, Robinson v. 7 United States, 175 F. Supp. 2d 1215 (E.D. Cal. 2001) (Damrell, 8 J.), also involved a case in which the defendant had 9 intentionally set a fire and negligently permitted it to escape 10 from its property. 11 The court therefore concludes that, unlike for 12 | plaintiff’s negligence claim and California Health and Safety 13 Code §§ 13007 & 13008 claims, in order for plaintiff to state a 14 claim for trespass, plaintiff must plead facts that plausibly 15 show Union Pacific took some affirmative action to set the fire 16 at issue. See Elton, 50 Cal. App. 4th at 1308; Robinson, 175 F. 17 Supp. 2d at 1215. Because plaintiff’s complaint does not allege 18 that Union Pacific affirmatively participated in the fire’s 19 ignition in any manner, plaintiff’s trespass claim fails. The 20 court will therefore dismiss plaintiff’s third claim for trespass 21 under California common law. 22 IT IS THEREFORE ORDERED that defendant’s motion to 23 dismiss (Docket No. 6) be, and the same hereby is, GRANTED in 24 part. Plaintiff’s third claim for trespass under California 25 common law is hereby DISMISSED. In all other respects, 26 | defendant’s motion to dismiss is DENIED. 27 | Dated: June 30, 2021 bition th AZ. bt— 28 WILLIAM B. SHUBB UNITED STATES DISTRICT JUDGE