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By Bill Warne, Partner/Chairman, Downey Brand – On February 20, 2020, the California Supreme Court published its eagerly anticipated decision in the matter of Scholes v. Lambirth Trucking Company. As recently discussed at Calforests’ annual meeting by one of the panelists, this case was being closely watched because it would resolve a split in authority between two appellate courts on whether plaintiffs could use California Civil Code Section 3346 to enhance their actual damages in situations where their trees were damaged by the negligent intrusion of a fire onto their land. In Kelly v. CB&I Constructors, Inc, the Second District had held that Section 3346 could be used to double or triple damages when a plaintiff’s trees were damaged by fire. But in Scholes and another case called Gould v. Madonna, the Third District Court of Appeal had held that the ability to double or triple damages under section 3346 did not apply to damages caused by fire.

After thoroughly assessing the language, historical context, and legislative history of section 3346, the Supreme Court found that courts can only apply section 3346 in situations where timber owners are damaged by theft. In this regard, the Supreme Court agreed with the Third District Court’s determination in Gould that enhancing damages through doubling or tripling is “an expression of the policy of increasing the risks of timber appropriation to the point of making it unprofitable.” More specifically, the Supreme Court held, “Section 3346 addresses situations where a person intentionally enters the land in question, either personally or through some agent or instrumentality, to cause direct, intentional injury to timber, trees, or underwood. It then varies damages depending on the culpability of the defendant’s entry.” Thus, the Supreme Court ruled that those whose timber is damaged by negligent fires escaping onto their land cannot obtain double or treble damages through section 3346. Prior to this decision, plaintiffs, and especially the United States, were using Section 3346 to dramatically increase their damage claims for wildland fire matters. In light of the clear decision in Scholes, those efforts will cease immediately.