Opinion ID: 72908
Heading Depth: 3
Heading Rank: 1

Heading: The Directed Verdict on Millers’ Arson Defense

Text: To determine if a directed verdict was authorized on the issue of arson, we must look first to see whether Millers has presented a prima facie case of arson under Florida law.16 Under Florida law, in order for an insurer to establish a prima facie case of arson for purposes of denying coverage 16 A court which sits in diversity jurisdiction, as we do here, is required to apply the rules of law for the state in which it sits. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941). 11 under an insurance policy, the insurer must put forth either direct or circumstantial evidence of motive, opportunity, and an incendiary cause of fire which would allow reasonable people to conclude that the insured was guilty of the burning. See Ins. Co. of North America v. Valente, 933 F.2d 921, 923 (11th Cir. 1991). At trial, evidence was introduced that Mrs. Benfield was having trouble selling her home and that she was having difficulty getting her husband to agree to transfer the marital home to her. Additionally, evidence was introduced indicating that Mrs. Benfield stood to walk away with a substantial sum of money (over $92,000) should her claim filed with Millers be paid in full. From such evidence, a reasonable jury could conclude that she had ample motive to set fire to her home. On the issue of opportunity, the evidence showed that the house was locked only at the door knobs and not at the dead bolts when Mrs. Benfield left the house on Saturday. The evidence also shows that Mrs. Benfield and her daughter were the only ones with keys the dead bolt locks and that her daughter was away on vacation when the blaze broke out. Additionally, the evidence shows that when Mrs. Benfield “discovered” the fire on Monday, the house was different from when she had left it, with the windows closed, the shades drawn and the dead bolts locked. From such evidence a reasonable jury could conclude that Mrs. Benfield had the opportunity to set the fire. The final element for a prima facie case of arson is that the fire was incendiary, or intentionally set. There was evidence apart from Buckley’s testimony from which a reasonable jury could conclude that there was an incendiary cause of the fire. There was complete agreement that the fire began on top of the dining room table, an unusual place for a fire to ignite. Further, Mrs. Benfield’s testimony indicates that the home had been entered after her visit on Saturday, and that whoever had entered the home had closed the windows, drawn the shades, and locked the doors at 12 the dead bolts. There was evidence that a capped, half-full lamp oil bottle had been on the table before the fire, and after the fire the bottle was found on the floor in the debris, with the cap off and the bottle empty. The condition of the bottle and cap indicated that it had not been damaged in the fire and that the screw-cap may have been removed and had not been blown off by the exploding or expanding contents of the lamp oil bottle. Such circumstantial evidence could lead a reasonable jury to conclude that the fire had been set by a person, and was not naturally occurring. Finally, and most compelling, there was the testimony of Lt. Kehoe of the Sarasota Fire Department, who testified that in his personal opinion, the fire was intentionally set and that the only reason he did not officially report the fire as incendiary was because he had been unable to find a match or some other ignition source. After a thorough review of the record, we are persuaded that Millers had established a prima facie case of arson from which a reasonable jury could conclude that Mrs. Benfield burned or caused her property to be burned. Accordingly, it was reversible error for the trial court to take this issue from the jury and grant a directed verdict on her behalf. 2. The Directed Verdict on the Concealment or Fraud Issue In order for Mrs. Benfield to recover for her fire loss under the insurance policy, she was obligated to comply with the conditions of the policy. One such condition that Millers contends Mrs. Benfield violated is the concealment or fraud provision of the contract.17 Millers contends Mrs. Benfield violated this provision by making false statements in the course of the insurance company’s investigation, by misrepresenting material facts, and by acting to conceal important or damaging facts. At trial, Millers offered evidence of possible misrepresentations by Mrs. Benfield in the 17 The text of this provision is quoted in note 2 of this opinion. 13 filing and investigation of her claim for her loss due to the July 6 fire. Millers elicited testimony from Mrs. Benfield, from Mrs. Benfield’s husband Marion Sommers, and from other witnesses which brought out inconsistencies in Mrs. Benfield’s recollection of the circumstances surrounding the fire, and revealed questionable conduct by Mrs. Benfield in responding to Millers’ requests for cooperation and information in the investigation of her claim. Reviewing the evidence in the light most favorable to Millers, and drawing all reasonable inferences from the evidence in Millers’ favor, we find there was ample evidence to warrant an inference by the jury that Mrs. Benfield knowingly and wilfully made false statements and representations to Millers on material matters in connection with the fire, thereby violating her contractual obligations to her insurer.18 The trial court based its decision to direct a verdict against Millers on its understanding that for a misrepresentation or concealment by Mrs. Benfield to be material, Millers must have 18 The evidence of fraud adduced at trial included, but was not limited to: (a) the claim, including the proof of loss valuing the total damage to Mrs. Benfield’s personal property to be excess of $90,000, when Mr. Benfield testified at trial that he could estimate the value of the contents of the home to be roughly $25,000.00; (b) the misrepresentation by Mrs. Benfield to Millers during their investigation of the fire that she had asked her now-husband Sommers, an alibi witness and an eyewitness regarding the discovery of the fire, to give his statement to Millers and that he had refused when in fact Sommers testimony at trial revealed Benfield had never approached Sommers to have him give a statement to Millers and he would have been glad to do so if asked; (c) evidence that Mrs. Benfield was evasive about her whereabouts on the morning of the fire, giving various accounts regarding her whereabouts and her schedule to Millers during the investigation of her claim; (d) Mrs. Benfield testified at trial that when she discovered the fire that her house was a mess and that framed pictures had been broken, and in her opinion this was evidence that someone had been in the home prior to the fire and vandalized it, while Sommers’ testimony revealed the house had been in much the same condition the day before the fire occurred; (e) Lt. Kehoe testified that he did not recall seeing any indication that water was sprayed on the scene contradicts the testimony of Mrs. Benfield and her husband Sommers that he put out the fire with a garden hose. 14 discovered the fraud and relied on such incidents of fraud in its denial of her claim on March 8, 1993. According to the trial court, the discovery by Millers of fraud or deceit after March 8, 1993, could not be a material misrepresentation, but only went to the Mrs. Benfield’s credibility.19 Such an understanding by the trial court is at odds with the law of this Circuit. That an insured should not be allowed to profit from his or her own fraud is a fundamental rule of law that requires little explanation. See Chaachou v. American Central Ins. Co., 241 F.2d 889, 892 (5th Cir. 1957). Moreover, the law of this Circuit is clear that this court will not require that an insurer demonstrate that it relied on the insured’s misrepresentations when asserting a policy defense based on fraud; that a material fraud was perpetrated by an insured in pursuing an insurance claim is sufficient. Id. Accordingly, we hold that given the evidence presented at trial, it was error for the district court to direct a verdict against Millers on its fraud defense. 19 An illuminating exchange at trial: COURT: “I’m trying to get to the point of what were the false and material statements that were made by the . . . insured which justified their termination of the policy or denial of liability . . . . [T]here could be fifty brand new alleged material misstatements developed here at trial, but those were not the basis for the rejection of the liability under the policy. That’s what I’m focusing on. MR. FREEMON (Benfield’s counsel): And that’s our point, too. Anything post-March 8, 1993 goes to her credibility. Any misrepresentation before that date goes to the policy.” In directing a verdict against Millers on the fraud issue, the trial court stated: The listing [of misrepresentations submitted by Miller] appears to be more consistent with a credibility argument than it is for a material misrepresentation. .... There are differences between so-called credibility issues and material misrepresentations, frauds, and concealments. And the Court will, after having considered it all, grant the motion of the defendant . . . . 15