Purgatory Resort’s insurance company has filed a lawsuit against the Durango & Silverton Narrow Gauge Railroad for costs associated with the 416 Fire.
Granite State Insurance Co., based in New York, filed the lawsuit May 29, just before the two-year statute of limitation to submit a claim related to the fire, which sparked June 1, 2018, expired.
Calls to Granite State’s attorneys were not immediately returned Wednesday morning. A spokeswoman with Purgatory Resort also did not return a request seeking comment.
According to the lawsuit, Purgatory Resort sustained financial losses after it was forced to shut down as the 416 Fire burned nearby for nearly two months, consuming 54,000 acres mostly in the adjacent Hermosa Creek watershed.
“Purgatory’s property and business were damaged as a result of the 416 Fire, including but not limited to, smoke and ash flows, loss of business revenue, diminished property values and economic harm,” the lawsuit says.
During the fire, Purgatory Resort was forced to operate on a limited basis, and ultimately close, according to previous reports in The Durango Herald. Tourism was significantly affected throughout summer 2018 as a result of the blaze.
In July of that year, the 416 Fire started advancing toward Purgatory Resort, though the ski mountain did not burn after firefighting crews shifted ground crews and aerial attacks to the area.
The lawsuit says Purgatory Resort made a claim with its insurance company to recoup some of the lost costs, receiving $100,000. But the insurance company claims the resort has lost more than that amount, prompting the lawsuit.
“Purgatory has assigned its rights to pursue and recover those damages to Granite,” the lawsuit says.
The 416 Fire broke out June 1, 2018, about 10 miles north of Durango, just off the D&SNG railroad tracks.
A year later, the U.S. government officially determined and announced the D&SNG was the cause of the fire, saying a cinder emitted from a coal-burning locomotive, which was running during an extreme drought, sparked the blaze.
A request for comment to the D&SNG was not returned.
Granite State Insurance Co.’s lawsuit is one of three active claims against the D&SNG seeking to cover financial losses.
The U.S. government in July 2019 filed its own lawsuit seeking $25 million to recover firefighting costs. And a separate lawsuit on behalf of 50-plus residents and businesses also seeks to recover losses from property damage and lost business.
In its lawsuit, Granite State Insurance Co. said several factors led to the 416 Fire that the D&SNG is directly responsible for.
The insurance company claims the D&SNG, just before the blaze started, had fired a “significant portion” of its pop car crew, which follows the train and puts out fires, replacing them with “less experienced” personnel.
The lawsuit further claims the D&SNG should have taken heightened precautions given the extreme drought conditions and better mitigated for fire along the length of its tracks.
“(The D&SNG) breached their duty to exercise reasonable care and diligence in operating their coal-fired steam train,” the lawsuit says.
It does not appear a court date has been set for the case.
In the other cases, a federal court judge this week threw out D&SNG’s motion to dismiss the U.S. government’s lawsuit. That case is still working its way through the court process.
And the lawsuit on behalf of residents and businesses has been disrupted and delayed by the COVID-19 pandemic. A trial that was scheduled for September was reset for March 2021.
jromeo@durangoherald.com
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