Arson And Insurance

Anyone living in Weatherford, Mineral Wells, Aledo, Azle, Hudson Oaks, Willow Park, Millsap, Brock, Cool, Springtown, or other areas in Parker County, or the State of Texas know what arson means. The question to be wondered about is, what happens if your home burns as the result of an arson fire?
The Waco Court of Appeals issued an opinion in 1998, in the case styled, State Farm Fire and Casualty Insurance Company v. Sandra Sue Vandiver.
In this case Vandiver had sued State Farm seeking to recover damages which resulted from the destruction of her home by a fire. The trial court made many ruling in favor of Vandiver, the result of which, she won her case. One of these ruling was a directed verdict against State Farm on its arson defense. State Farm appealed and this court reversed the verdict and set the case for a new trial. Here is some relevant information.
To establish the affirmative defense of arson, State Farm had the burden of proving by a preponderance of the evidence that Vandiver set the fire or caused it to be set. Generally, an insurer must rely on circumstantial evidence in arson cases.
The crime of arson, being in defiance of law, is ordinarily conceived in secrecy and executed in such a manner as to avoid detection and exposure; and proof of such an unlawful enterprise must, in the very nature of things, be made by circumstances, and every circumstance which tends to cast light upon the incident is legitimate and proper.
Citing another court this court said as follows:
In order to establish the affirmative defense, the insurer must offer evidence:
1) the fire had an incendiary origin;
2) the insured had a motive to set the fire or cause it to be set; and 3) the insured had an opportunity to set the fire or other circumstances linking the insured to the fire.
This courts’ job was to review the trial court record for probative circumstantial evidence of the elements above rather than viewing each piece of evidence in isolation. That so long as the inferences arising from the circumstantial evidence are not equally consistent with the nonexistence of the ultimate fact, some probative evidence exists in the record to support the ultimate fact. To sustain a finding of fact based upon circumstantial evidence, it is not necessary to exclude beyond suspicion every other possible inference that could be drawn from the facts shown. It is necessary to show only that one conclusion or inference is more probable than any other.
The court had these facts to look at in making its decision.
The parties did not dispute that the fire which consumed Vandiver’s home had an incendiary origin. As a result the court looked to only the latter two elements that are listed above.
Motive – The record revealed that Vandiver was experiencing financial stress at the time of the fire. She had a horse-raising business which was not making a profit. She had used this business to write off expenses from her IRS taxes for a number of years and the year of the fire loss was the last year she would have been able to deduct her expenses due to business losses. (26 U.S.C.A., Section 183(d)).
The record contained evidence that her monthly expenses exceeded her income. State Farm’s analysis of her bank records revealed that she had a negative cash flow of almost $3,000 in the eight months prior to the fire with additional bank charges assessed for checks which were returned because of insufficient funds. He account contained less than $500 at the time of the fire.
She lived with a man that the records revealed she was supporting.
Vandiver’s sister had almost $5,000 in unauthorized charges on one of Vandiver’s credit cards.
The court said that the above constituted some evidence of motive thus satisfying the second prong set out above.
Opportunity or Other Connecting Circumstances – One of Vandiver’s neighbors reported the fire around 10 P.M. Vandiver testified she was at her sister’s condo, about forty-five minutes away until 10:30 or 11:00 that night. Her sister testified she though Vandiver left about 10:00. There were other discrepancies between the times Vandiver testified to and the times to which her sister testified.
Vandiver and her sister and the man she lived with had the only keys to the house. The man was out of town the day of the fire. Vandiver testified that she locked the house and had seven dogs on her property. Two neighbors testified that the dogs typically barked at strangers who came around but neither of the neighbors heard dogs barking the night of the fire, although both were outside that evening. One neighbor found the house secure when he came over to investigate the fire.
State Farm had paid a previous claim for a fire loss on Vandiver’s property, the cause of which remained undetermined. Vandiver also had a pending theft loss of $1,500.
Neighbors and fire officials testified that there had been no other incidences of vandalism, burglary or arson in the area.
Vandiver admitted that she was on the premises a few hours before the fire. The house was locked at the time of the fire, and Vandiver and her sister were the only persons in the area with keys. The failure of the dogs to bark creates a reasonable inference that no one else came on Vandiver’s property that evening. The other circumstances all combined to justify a conclusion that Vandiver was possibly the person who set the fire.
Based on this evidence the court concluded there was some evidence of the third element set out above.
The reasons the court reversed the ruling against State Farm are hard to argue with. One thing that is certain is that a person who has suffered an arson fire loss is going to be investigated by the insurance company for the possibility of being the person who set the fire. For that reason, an experienced Insurance Law Attorney should be consulted immediately.