Opinion ID: 1190835
Heading Depth: 1
Heading Rank: 5

Heading: The Standard of Proof Required for an Affirmative Defense on Refusal to Insure

Text: Pacheco claims the trial court erred in instructing the jury that Safeco had to prove its affirmative defense (that Pacheco committed fraud) by a preponderance of the evidence rather than by clear and convincing evidence. Pacheco submitted appropriate instructions to the court for the application of the clear and convincing test, and asserts they were wrongly rejected. Pacheco cites Smith v. King, 100 Idaho 331, 334, 597 P.2d 217, 220 (1979) and Carpenter v. Union Ins. Co., 284 F.2d 155, 162 (4th Cir.1960) in support of this contention. The majority rule is that an insurance company must prove its affirmative defense for refusal to pay a fire claim by a preponderance of the evidence. Godwin v. Farmers Ins. Co. of America, 129 Ariz. 416, 418-19, 631 P.2d 571, 573-74 (1981). The trial court chose to follow the majority rule; it did not err. It should also be noted that although the original complaint alleged fraud, and fraud must be proven by clear and convincing evidence, the amended complaint (upon which the case was tried) did not allege fraud. The case was actually tried on a breach of contract theory, and breach of contract is proven by a preponderance of the evidence, not by clear and convincing evidence. The terms of the policy stated that the insurance company would not pay if someone burned his own property; the policy language clearly includes the defenses of dishonest and criminal acts in addition to the defense of fraud. Finally, public policy would not allow recovery under a contract of insurance where the insured started his own fire. In this case, the jury determined that Pacheco set the fire.