United States v. Marble Mountain Ranch, Inc.

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UNITED STATES OF AMERICA, Plaintiff, v. MARBLE MOUNTAIN RANCH, INC.; DOUGLAS T. COLE; HEIDI A. COLE; NORMAN D. COLE; and CAROLYN T. COLE, Defendants.

No. 2:21-cv-02391 WBS DMC

United States District Court, E.D. California

June 28, 2023

MEMORANDUM AND ORDER RE: DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

WILLIAM B. SHUBB, UNITED STATES DISTRICT JUDGE

Plaintiff United States of America brought this action against defendants Marble Mountain Ranch, Inc., Douglas Cole, Heidi Cole, Norman Cole, and Carolyn Cole, alleging common law negligence and trespass by fire and seeking damages interest, and penalties. (Compl. (Docket No. 1).) Individual defendants Norman Cole and Carolyn Cole now move for summary judgment on the negligence claim. (Docket No 21.)^[1]

I. Factual Background

Marble Mountain Ranch, Inc. operates a guest ranch in Somes Bar Siskiyou County, California. (Defs.' Statement of Undisputed Facts (“SUF”) (Docket No. 21-2) ¶ 3.) Douglas and Heidi Cole are the sole shareholders of Marble Mountain Ranch, Inc. (Id. ¶ 4.) The ranch operates on a parcel of land owned in joint tenancy by the four individual defendants: Douglas Cole and Heidi Cole (the owners of Marble Mountain Ranch, Inc.), and Norman Cole and Carolyn Cole (Douglas Cole's parents). (Id. ¶ 5.) Norman and Carolyn Cole entered into an agreement with Douglas and Heidi Cole, allowing them to live and operate the ranch on the property. (Pl.'s Statement of Disputed Facts (“SDF”) ¶¶ 6, 11.) Norman and Carolyn Cole have never collected any rent or income from the business, nor do they have involvement in the day-to-day operations of the ranch. (See SUF ¶¶ 6, 8, 10-11; SDF ¶¶ 3, 6, 8, 10.) They have not visited the property since years prior to the Marble Fire, which allegedly ignited due to negligent burning of a debris pile on the property and burned land belonging to the United States. (SUF ¶¶ 1, 2, 11.)

II. Discussion

The United States argues that Norman and Carolyn Cole can be held directly liable for negligence because they were “aware of their son and daughter-in-law's stewardship of the property and operation of a guest ranch on the property,” and received mortgages on the property, the proceeds of which were given to Douglas and Heidi Cole for improvements to the property. (See Opp'n at 6; SDF ¶¶ 8, 10.)

The United States also points to an alleged telephone call between the Assistant United States Attorney handling this case and Carolyn Cole (which occurred prior to Carolyn Cole obtaining representation) in which Carolyn Cole allegedly “described defensive burning at the Marble Mountain Ranch and denied that the Marble Fire was caused by an escaped burn pile.” (Decl. of Emilia P. E. Morris (Docket No. 22-1) ¶ 2.)^[2] At deposition, Carolyn Cole stated that she did not remember this conversation. (Excerpt of Dep. of Carolyn Cole (Docket No. 24-3) at 5-6.) In briefing and at oral argument, plaintiff's counsel argued that this alleged call provides evidence of Carolyn Cole's general knowledge of burning practices at the ranch.

The evidence presented by the United States in opposition to defendants' motion fails to establish that Norman and Carolyn Cole had sufficient knowledge of or control over the allegedly negligent burning activities at issue to be held directly liable for the damages caused by the fire. Mere ownership of the land, co-signing for mortgages, and general knowledge of the ranch's burning practices are not enough. See Thompson v. United States, 592 F.2d 1104, 1109 (9th Cir. 1979) (California state law does not “extend[] liability or potential liability to a landowner for dangerous conditions on his land created by the lessee after the lessee took possession, unless the landowner had knowledge of the danger or participated in some way in creating it”); Alcaraz v. Vece, 14 Cal. 4Th 1149, 1160 (Cal. 1997) (“Whoever controls the land is responsible for its safety. That is why it is normally the tenant rather than the landlord who is liable to anyone injured as a result of a dangerous condition on leased land and why this field of tort law is more accurately described as land occupiers' and possessors' liability than as landowners' liability.”).

The United States alternatively argues that Norman and Carolyn Cole, as landlords, can be held vicariously liable for the negligence of their tenant based on violation of California Health and Safety Code § 13007, which provides that any “person who personally or through another wilfully, negligently, or in violation of law, sets fire to, allows fire to be set to, or allows a fire kindled or attended by him to escape to, the property of another” shall be liable. The plain language of the statute does not provide for strict liability for the actions of another, but rather requires that to be held liable an individual must have acted negligently. See id.; Presbyterian Camp & Conf. Centers, Inc. v. Superior Ct., 12 Cal. 5th 493, 506-07 (Cal. 2021) (phrase “through another” as used in § 13007 refers to “situations in which a person will be held liable because they directed another person to act,” and does not “impose liability on otherwise blameless parties because of the actions of another person”).

Neither Exact Property & Casualty Company v. Union Pacific Railroad Company, No. 2:21-cv-00928 WBS JDP, 2021 WL 2711188 (E.D. Cal. July 1, 2021), nor United States v Sierra Pacific Industries, 879 F.Supp.2d 1117 (E.D. Cal. 2012), support the United States' argument that...