I enjoy these legal questions and how everyone has an opinion, many of which are quite good while others may not be based on sound legal theory. The people here are great and so willing to help is one reason I enjoy these boards so much and glad to help when I can.
NOTE in my semi retired practice I work mostly now in areas of probate and eststes while negligence and personal injury is NOT my cup o tea so this is worth what Im charging NOTHING. I believe Dean and Mike would be more recent and knowledgeable in thise area then myself
I can provide you with the common law legal theory which determines if you are liable or not, but thats, of course, subject to any statutes in your particular state. Also, while the Courts job is to apply the law as stated above to the facts, its a fact question regarding the trees condition and whats reasonable under the circumstances. This question cant be answered until the law in your state is known and then its the fact finder (Judge or Jury) who has to make certain findings as instructed by the Court. ONLY THEN CAN YOUR GUILT BE ADJUDICATED so anything said here, professional or lay, doesnt amount to a hill of beans.
So, heres what the common law says. The Defendant (you) has a duty NOT to expose the Plaintiff (neighbor) to a "reasonably forseeable" risk of injury. Now the fact finder (Judge in a bench trial or jury in a jury trial) is the one who determines whats reasonable under the circumstances. If the evidence shows and the jury agrees the tree was rotten or diseased and its fairly evident a reasonable person knew or should have known the first strong wind that comes along could well cause it to fall on your neighbor and cause damage THEN YOU COULD BE LIABLE.
However, if the evidence shows the tree was in good condition and perhaps you had kept it topped etc and did all that was reasonably prudent such that it wasnt reasonably forseeable it may fall and harm your neighbor THEN YOU WOULDNT BE LIABLE.
Moral of story, use due diligence to maintain the tree (like topping or tree doctors etc) and keep good evidence of such and then if it should fall youre probably not gonna be liable HOWEVER if you dont take care of it and especially if say it leans toward your neighbor then a jury may find it was reasonably forseeable a wind is gonna bring it crashinf down on your neighbor and you could be liable
Hope this helps, this is a question for a good professional personal injury and negligence attorney in your area NOT ME OR LAY PERSONS on here
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