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Breaking Legal Developments

05-14-2001

Published by:
Peter A. Lynch, Esq.
of Cozen O'Connor
palynch@cozen.com
http://www.cozen.com

 

EXECUTIVE SUMMARY:      This weekly newsletter covers:

  1. South Carolina Court Affirms Finding Non-Prosecution for Arson Not Admissible in a Civil Action


(1) SOUTH CAROLINA COURT AFFIRMS FINDING NON-PROSECUTION FOR ARSON NOT ADMISSIBLE IN A CIVIL ACTION

In Brown v. Allstate Insurance Company, No. 25233, the South Carolina Supreme Court reviewed a trial court's finding the insured should have been paid for his car being burned. The insured had left his car on the side of a road and it was found burned the next day. He made a claim for the damage but his insurer denied the claim finding he was guilty of misrepresentation and asserting a false claim. In his civil action for breach of contract, he testified he had not been criminally prosecuted for arson related to the crime. The trial court found the car should have been paid for by the insurer because it failed to establish a sufficient motive for the fire. But the trial court dismissed the cause of action for bad faith finding several factors justified the initial refusal to pay: (1) traces of gasoline on the carpet's padding; (2) the stereo and alloy wheels had not been stolen; (3) there were inconsistencies in his testimony and (4) a statement by his ex-wife to establish a motive for the fire.

The Court of Appeals of South Carolina reversed finding evidence the insured was not prosecuted for arson in a civil trial was inadmissible. Hence, it reversed the verdict for the insured. The South Carolina Supreme Court agreed that evidence of the insured's non-prosecution for arson was irrelevant and inadmissible. That issue is the principal issue before the court in the civil case and is highly prejudicial. Moreover, a prosecutor's decision not to prosecute and a jury's decision to acquit in a criminal trial are based on different criteria than those that apply in a civil case. Nevertheless, the Supreme Court held the admission of that evidence was harmless because the insurer failed to prove motive and essential element of its defense. To prove arson, the insurer had to demonstrate by a preponderance of the evidence the fire was incendiary in origin and the insured caused the fire. The trial court noted the fire was incendiary and the insured had the opportunity to set it. However, the trial judge ruled there was not a sufficient motive for burning the vehicle. No evidence was introduced concerning Brown's stressed financial condition or the value of the car warranted burning it. The trial court's finding there was coverage for the vehicle but no bad faith liability was affirmed.

Mr. Lynch can be reached at Cozen and O'Connor, 501 West Broadway, Suite 1610, San Diego, California 92101, 800-782-3366 (voice), 619-234-7831 (fax), palynch@cozen.com (e-mail), http://www.cozen.com. Follow us on Twitter at @firesandrain.

Please direct comments, suggestions, stories, and other items to the author by e-mail at palynch@cozen.com

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