Southern California Edison announced a $1.16 billion settlement on Wednesday with insurance companies suing over the Thomas Fire and Montecito debris flow disasters.
In the announcement, the power company said that “no admission of wrongdoing or liability was made” in reaching the agreement. Southern California Edison said it continues to make progress in reaching settlements with individual plaintiffs in litigation from these events, as well as the 2017 Koenigstein and 2018 Woosley fires.
“We are making significant progress toward resolving wildfire-related litigation,” Pedro J. Pizarro, president and CEO of Edison International, the parent company of Southern California Edison, said in a statement. “The settlement announced today resolves all the subrogation claims in the pending 2017 Thomas and Koenigstein fires and January 2018 Montecito Mudslides litigation. In addition, while other claims and potential claims related to the 2017/2018 Wildfire/Mudslide Events remain, SCE has reached settlements with several hundred individual plaintiffs in litigation arising from these events. The company continues to explore reasonable settlement opportunities with other parties.”
Last November, Southern California Edison and Edison International reached separate settlements with 23 public entities impacted by the fire and flood events.
“With this current subrogation claims settlement, increased settlement activity with individual plaintiffs and currently available information, SCE is now establishing a best estimate of total expected losses for the 2017/2018 Wildfire/Mudslide Events litigation of $6.2 billion (an increase of $1.3 billion from the prior estimate) and will record an incremental net charge to earnings of $878 million after tax,” officials said in a news release. “SCE’s best estimate of expected remaining losses is $4.6 billion.”
Southern California Edison intends to seek reimbursement for a “large portion” of the settlement announced Wednesday from the $843 million of its remaining wildfire insurance for the Thomas and Koenigstein fires and debris flow.
More than 100 plaintiffs, including insurance carrier families and financial institutions, sued the utility alleging its negligence caused the devastating fire and resulting mudslides, according to officials.
The Thomas Fire, which erupted on Dec. 4, 2017, charred more than 280,000 acres between Ventura and Santa Barbra counties. More than 1,060 structures were destroyed, most of which were located in Ventura, Santa Paula, Ojai, Fillmore and other areas in the western portion of Ventura County.
The fire claimed the lives of 70-year-old Santa Paula resident Virginia Pesola, as she fled during an evacuation, as well as Cal Fire engineer Corey Iverson, 32, of San Diego.
On the morning of Jan. 9, 2018, more than 100 homes were destroyed and 21 people were killed following heavy rains in the hills above Montecito. The mudslide lawsuits alleged the disaster would not have occurred if the Thomas Fire hadn’t stripped the vegetation on the hillside.
The fire was initially reported on a cattle ranch near Santa Paula. According to a report by the Ventura County Fire Department, Southern California Edison equipment retrieved from the fire’s origin determined that power lines owned by the utility company arced and made contact with each other in high winds. The contact caused particles to fall to the ground and spark the fire, officials said.
Wednesday’s settlement does not extend to any individuals suing Southern California Edison or any claims from the Rye Fire, which burned at the same time as the Thomas Fire. Edison will also pay for future claim payments made by policyholders up until July 15, 2023, up to a certain cap.
Southern California Edison is also facing multiple lawsuits in Los Angeles Superior Court stemming from damage caused by the 2018 Woolsey Fire, which burned nearly 97,000 acres. In October 2019, the company said its equipment likely sparked that fire, but the cause remains under investigation.
Edison officials did not disclose the class size of the settlement.
email: mwhite@newspress.com
