California Wildfires, Economic Damages for Fire Victims

Claims for Compensation

Providing compensation to multiple individual wildfire victims, including families and businesses, and certain other parties with wildfire-related claims is a lengthy process.

Fire victims may have claims arising from both economic and non-economic damages caused by destruction or damage to real estate and personal property, additional living expenses, lost wages, business losses, personal injury or death and related medical expenses, and emotional distress. 

What an Economist can and cannot do.

What an economist cannot do is the following: Quantify emotional distress. Emotional Distress claims include claims for mental anguish that you experienced fearing for your safety or the safety of your family while evacuating or sheltering-in-place during the Fire or from the loss of use or substantial interference with the use of or enjoyment of your property as a result of the Fire.

On the other hand, damages caused by destruction or damage to real estate and personal property, additional living expenses, lost wages, business losses, personal injury or death and related medical expenses can be quantified by a qualified expert economist. 

California Law

Legal guidelines are mapped out under 3903F. for Damage to Real Property. 3903G.  for Loss of Use of Real Property. 3903K.  for Loss or Destruction of Personal Property and 3903N. for Lost Profits.

Business Income Loss

The followings are examples of business income loss.

Lost revenues, inventory, commercial vehicles and other contents on behalf of a business affected by the Fire. These losses may also include increased business expenses stemming from those losses. For purposes of classifying a claim.  If you are a sole owner, best documents that can assist an expert are taxes on a Form 1040 with a Schedule C, E or F that lists expenses.

What expert economist needs to know or have

  1. Whether the business permanently ceased operations and/or declared bankruptcy since the Fire.
  2. Data for Each Loss Location Associated with the Business Loss.
  3. Whether victims resumed business at the Loss Location or intend to.
  4. Whether the business is affected by seasonality.
  5. Documentation supporting the lost inventory.
  6. Documentation supporting the lost vehicles.

Personal Income Loss (Lost Wages)

Personal Income Loss claims are those that relate to lost wages affected by the Fire. You will need to provide the following information for a job you held as of the date of the Fire, for which you are seeking compensation for lost wages related to the Fire.

Here are questions an expert economist will want to be answered.

Employer Information. For each Job, the following information about the employer: (1) Employer Name; (2) Employment Start Date; (3) Employment End Date; (3) Length of time out of work

Example: A Vineyard

An example is a burned vineyard. In such cases, CACI 3903I specifies how damages to perennial crops should be calculated. The harm to the crop is determined as follows.

For the time period from the destruction of the crop until the crop can be restored one must:
1. Determine the rental value of the land with the crop; and
2. Subtract from this amount the rental value of the land without
the crop.

Damages for the destruction of the perennial crop, which can be harvested and sold, are determined as follows:
1. Determine the expected market value of the crop before the harm occurred;

2. Subtract from this amount the estimated costs of producing and marketing the crop, excluding costs that have already been paid.

In the plants, seeds or roots responsible for producing the crop are destroyed, the measure of damages may also include the costs of reseeding or replanting.

Perennial Crops v Annually Planted

The distinction drawn between the wrongful destruction of perennial crops, such as volunteer grass for grazing purposes, and annually planted crops is most important. In the former case, the proper measure of damages is the difference in the rental value of the property with and without the crops, while in the latter case the proper measure of damages is the market value of the estimated product at the time of destruction, less the cost of producing and marketing the same.

Also, if the roots of the grass in a pasture have been destroyed by fire so as to prevent the matured stocks from automatically reseeding the field, the measure of damages includes not only the rental value of the pasture, but also the additional cost of reseeding the field.

Baker v. Ramirez

The measure of damages for the destruction of or injury to fruit, nut, or other productive trees is generally the difference in the value of the land before and after the destruction or injury. Damages may be additionally measured by the value of the trees on the premises in their growing state. Some courts have also awarded damages for the resulting crop loss.

A grower may recover for loss of the crops during year(s) of losss, the increased labor in the care of the land, and damages for injury to the trees themselves. More recently, the measure of damages for the destruction of fruit trees has included the costs of replacing the trees or restoring the property to its condition prior to the injury. In Baker v. Ramirez, the court held that the cost of restoring an orange grove was the most appropriate measure of damages, where there was no impediment to replacing the orange trees and it was reasonable to replace the trees because only a small portion of the grove was damaged. The court noted that the difference between the value of the property before and after the injury was only one possible measure of damages.” (Santa Barbara Pistachio Ranch v. Chowchilla Water Dist. (2001) 88 Cal.App.4th 439, 447 [105 Cal.Rptr.2d 856, 861]

Supplementary Information

Here is a list of the 20 most destructive wildfires, according to the California Department of Forestry and Fire Protection.

NameAcres Burned
Atlas Fire              51,624
Butte Fire              70,868
Camp Fire            153,336
Carr Fire            229,651
Cedar Fire            273,246
Creek Fire            311,703
CZU Lightning Complex Fire              86,509
Fountain Fire              63,960
Jones Fire              26,200
LNU Lightning Complex Fire            363,220
North Complex Fire            316,685
Nuns Fire              54,382
Old Fire              91,281
Painted Cave Fire                4,900
Thomas Fire            281,893
Tubbs Fire              36,807
Tunnel Fire                1,600
Valley Fire              76,067
Witch Fire            197,900
Woolsey Fire              96,949
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