On June 1, 2018, a fire ignited, burning over 54,000 acres of southwest Colorado’s San Juan National Forest. Later known as the 416 Fire, it was the sixth-largest wildfire in Colorado’s history. It delivered a hard blow to a recreation-based economy and several months later, when heavy rains fell on the scorched grounds, mudslides damaged surrounding property. These effects and substantial firefighting costs prompted several lawsuits against the Durango & Silvertown Narrow Gauge Railroad and its parent company, American Heritage Railways Inc.

American Heritage Railways Inc. v. Steadfast Insurance Co.

American Heritage Railways Inc.  v. Steadfast Insurance Co. was filed in Colorado’s Denver District court in April of 2023. Keating Wagner attorneys, Zachary Warzel and Deirdre E. Ostrowski, proudly represent American Heritage.

When numerous lawsuits alleged that a spark from a Durango & Silverton Narrow Gauge Railroad train caused the 416 Fire and subsequent flooding and mudslides, American Heritage Railways’ insurer, Steadfast Insurance Co., limited American Heritage’s liability insurance to the per-occurrence limit of $25 million, rather than the aggregate limit of $50 million available for multiple occurrences. This limitation prompted American Heritage to file suit against Steadfast.

American Heritage asks the court to determine that the underlying suits from the June 2018 wildfire and the subsequent flooding and mudslides should be considered multiple occurrences and covered under their $50 million aggregate policy limit with Steadfast.

The Background

On June 2, 2018, American Heritage gave notice of a potential claim to Steadfast, which then confirmed coverage and started investigating. Approximately 90 days later, Steadfast provided a damage estimate of $50 million, which included federal costs of fighting the fire and private property owner claims but not any damages arising from flooding or mudslides.

In mid-September 2018, American Heritage notified Steadfast of additional claims they had received stemming from the flooding and subsequent mudslides. Five months later, the insurer told them that all fire, flooding, and mudslide damages arose from a single occurrence which would fall under their $25 million per-occurrence limit.

On behalf of American Heritage, Keating Wagner is asking the court to find that the $50 million aggregate limit should apply and award compensatory damages, noneconomic damages, and double the amount of delayed insurance benefit plus attorney fees to American Heritage.