 Coordinating Civil and Criminal
Arson Investigations
by Guy E. Burnette, Jr., Esquire
Contents
Introduction
Arson is an absolute defense to an insurance claim
where the claimant has caused the fire. Arson is also a crime. The investigation
of a criminal arson case is subject to a set of rules which differs greatly
from the rules governing a civil arson investigation. The two investigations
proceed along parallel lines. While the lines may be closely parallel, they
do not intersect. The fundamental objectives are different: a criminal investigation
seeks to solve a crime and bring the responsible party to justice, whoever
it may be; a civil investigation seeks to determine whether a specific individual
- the claimant - was responsible for the fire and to refuse payment if he
was. A criminal investigation of arson is subject to a set of rules determined
by the criminal code and constitutional law. A civil investigation of arson
is controlled by the insurance code and contract law. A criminal investigator
can do things which a civil investigator cannot do, and vice versa. A criminal
investigator can gain access to information which a civil investigator cannot
obtain, and vice versa. A criminal investigator has resources available
to his investigation which are not available to the civil investigator,
and vice versa. Between the two investigations, virtually all of the resources
and information an investigator could ever want are available. Coordinating
the criminal and civil investigations and promoting cooperation between
the two investigations will enable each side to carry out its own investigative
function while maximizing the benefit of the resources and information available
from all sources. Where cooperation cannot be developed, conflicts can arise
between the criminal and civil investigations of an arson case. When that
happens, the investigative efforts of both sides are frustrated and the
investigative product will suffer. Only the arsonist stands to gain in that
situation.
Understanding the Framework
of Civil and Criminal Arson Investigations
A criminal arson investigation works within the
framework of the criminal justice system. The investigation is conducted
on behalf of the state and the investigator acts under the authority of
the state. The criminal investigator exercises the police powers of the
state in carrying out his investigation. There are limits on his ability
to question and compel cooperation from the focus of the investigation.
Other witnesses can be compelled to appear and produce the records and evidence
necessary to complete the investigation. The investigative subpoena is a
powerful tool in carrying out these activities. However, the criminal investigator
will be subject to statutory and constitutional limitations on the scope
of the investigation and the methods by which the investigation is undertaken.
The civil investigator acts on behalf of a private citizen, the insurance
company. His investigative authority is determined by contract law and the
provisions of the insurance code, as well as certain administrative requirements.
At the investigative stage, he can only compel the cooperation of the other
party to the insurance contract - the claimant. Under the terms of the contract,
he can require the claimant to give a statement and produce all relevant
books and records. However, he has no authority over any other parties and
can only request their cooperation.
The resources available to the criminal investigator
include all of the traditional law enforcement resources such as intelligence
networks, inter-agency contacts, forensic resources and laboratories, subpoena
process, grand jury investigations and the ability to "make a deal"
with informants and accomplices. Additionally, the criminal investigator
has the ability to access information from the civil investigator under
the circumstances set forth below.
The civil investigator does not have direct access
to any of those resources. At best, he may be able to share in the information
derived from those resources. However, the civil investigator has two powerful
resources at his disposal: time and money. He can devote the time necessary
to complete the investigation without concern about his caseload. He has
the financial resources to carry out the investigation of a complex arson
case without concerns about a department budget or unauthorized expenditures.
There are, of course, practical limitations to this. Still, the resources
of time and money are among the most valuable resources available to the
civil investigator.
Investigative Access to
the Fire Scene and Evidence
The criminal investigator has first access to the
fire scene and can control it. He can take into custody all of the evidence
relating to the fire. He can deny access to the fire scene to everyone else,
even the owner or occupant of the property. He has the exclusive opportunity
to analyze the fire scene before it has been disturbed or changed in any
way.
The civil investigator usually must wait until the fire scene is released.
He can request access to the fire scene while the criminal investigation
is ongoing, but has no right to demand it. In most cases, the criminal investigator
has already completed his fire scene analysis before the civil investigator
even arrives there. The fire scene has necessarily been disturbed and altered.
He must reconstruct the fire scene and determine the conditions which existed
at the time of the fire. Otherwise, his cause and origin determination may
be based upon a faulty premise. Critical evidence may already have been
removed by the criminal investigator. Remaining evidence may have been disturbed
or discarded in the process of the criminal investigator's fire scene analysis.
The civil investigator may be able to overcome these problems with a little
extra effort, but always confronts them in his investigation. This necessarily
complicates the job for the civil investigator. For this reason, cooperation
from the criminal investigator is essential.
Striking a Delicate Balance
The criminal investigator faces a concern in sharing
information and cooperating with the civil investigator. His single greatest
concern is that confidential and sensitive information developed in his
investigation will be disclosed. Additionally, he is concerned that something
will be done by the civil investigator to jeopardize his ongoing investigation.
Contact with a confidential informant or surveillance activities can be
disrupted inadvertently by the civil investigator. Effective communication
between the criminal investigator and civil investigator is the key to avoiding
such problems.
The civil investigator has his own concerns about the disclosure of his
investigative information and activities. The release of confidential information
from his investigative file can not only jeopardize his investigation, it
can create far more serious problems for his client. It can lead to allegations
of "bad faith" against the insurance company or a claim that the
insurance company is trying to promote a prosecution of its insured. The
civil investigator needs to communicate these concerns to the criminal investigator
in order to avoid problems.
The civil investigator's greatest concern is that
information will be withheld from him by the criminal investigator. Time
is the enemy of the civil investigator, as he must complete his investigation
within a short time frame. He needs to find out everything he can possibly
learn, as quickly as possible.
Accessing Information
As previously stated, the criminal investigator
has a number of resources for gathering information in the investigation
of a criminal arson case. There are a number of important resources which
can be utilized in the course of the investigation.
Inquiries in the scope of an official investigation
carry the "authority of the badge". Most citizens will cooperate
with an investigator or a law enforcement officer when asked to do so. Cooperation
on a voluntary basis is the primary source of information for the criminal
investigator.
Information can be obtained through legal process by the use of an investigative
subpoena, search warrant, administrative warrant, grand jury subpoena or
court authorized wiretap. With the use of these tools, the criminal investigator
can get what he needs with or without the cooperation of other parties.
Resources within the law enforcement community can provide other sources
of information. Criminal intelligence networks, inter-agency task forces,
law enforcement data bases and forensic resources are all available to the
criminal investigator involved in an arson case.
Through the arson immunity reporting act (New York
Insurance Law §319), the criminal investigator has the ability to access
virtually all of the information developed in a civil arson investigation.
Much of this information would not otherwise be available to the criminal
investigator. It is one of the most important sources of information available
to the criminal investigator.
The civil arson investigator can only mandate the
cooperation of one person - the claimant. The claimant is required to cooperate
in the investigation by providing information, giving sworn statements and
turning over books and records related to the investigation. This is only
one source of information and may not be enough to complete a full investigation
of the case.
Information from other sources requires a lot of effort and a little luck.
Information from the public records is available if the investigator knows
where to look for it and how to find it. Information from certain sources
can be obtained through the use of a disclosure release from the claimant.
This includes such matters as financial records, tax records, credit records,
sales and purchase records, business records and other such information.
Other sources of information can only be approached on a voluntary basis.
Information from witnesses, family members, neighbors, friends and business
associates may or may not be provided to the civil investigator. He can
only request it, he cannot compel it.
Information from criminal investigation resources
depends upon a cooperative relationship between the civil investigator and
criminal investigator. Sensitive information may be withheld based upon
the status of an ongoing criminal investigation. However, the arson immunity
act is intended to promote cooperation between the civil investigator and
criminal investigator so that this information can be made available. An
understanding of the arson immunity act is the key to promoting cooperation
between the two sides of an arson investigation.
The Arson Immunity Reporting
Act: The New York Case
New York Insurance Law §319 contains the New
York Arson Immunity Reporting Act. The first immunity act was enacted in
Ohio in 1978. Since then, every other state has adopted similar legislation.
Every state now has an arson immunity reporting act, including the district
of columbia. A federal arson immunity act is expected to be proposed to
congress and may soon be enacted.
The purpose of the immunity act is to promote cooperation between the criminal
and civil sector. It serves to ensure important information about an arson
case is made available to both sides of the investigation. It mandates the
exchange of information under penalty of law. It provides a grant of immunity
from civil liability for insurance companies sharing information developed
in their investigation. The concept of an immunity act resulted from the
concerns of insurance companies that they could be held civilly liable for
turning over their information to the authorities, which was often the case
prior to the enactment of the first immunity act. Despite the fact this
legislation has been around more than fifteen years, there is still some
uncertainty on the part of both criminal and civil investigators about the
application of this law.
The immunity reporting acts in place around the
country vary from state to state. Most of the general provisions are contained
in the immunity act of every state. However, there are differences in certain
aspects of the immunity act depending upon the particular jurisdiction.
This is the text of the current New York Arson
Immunity Reporting Act:
§319 release of information resulting from
insurers' investigation of fires
(a) in this section, "authorized law enforcement agency" means:
(1) any official of any agency authorized to investigate
a fire at the place where the fire occurred;
(2) the district attorney responsible for the prosecution in the county
where the fire occurred; and
(3) solely for the purpose of subsections (b) and (c) hereof, the Federal
Bureau of Investigation or any other federal agency, and the United States
Attorney's Office when authorized or charged with investigation or prosecution
of the fire in question.
(b) each insurer authorized to issue policies
covering losses incurred to personal or real property through fire shall
contact the appropriate authorized law enforcement agency and release information
in its possession resulting from an investigation conducted by it pertaining
to any such fire loss, should the insurer be of the opinion that the fire
was caused by other than accidental means. The notification to a single
authorized agency shall be sufficient for purposes of this section, provided,
however, that in cities with a population over one million, notification
to the appropriate fire protection agency shall be sufficient for the purposes
of this section.
(c) any authorized law enforcement agency may, in writing, require the
insurer to release, to that agency, any relevant information or evidence
deemed important to the authorized law enforcement agency that the insurer
may have in its possession relating to the fire loss in question. Relevant
information shall include, but shall not be limited to:
(1) pertinent insurance policy information relevant
to a fire loss under investigation and any application for such a policy;
(2) policy premium payment records that are available;
(3) history of previous claims made by the insured,
and
(4) material relating to the investigation of
the loss, including statements of any person, proof of loss, and any other
evidence relevant to the investigation.
(d) any insurer providing information to an authorized
law enforcement agency or agencies concerning a particular fire loss for
which the insurer has provided information pursuant to this section shall
have the right to request relevant information and to receive within a
reasonable time, not to exceed thirty days after the receipt of such request,
the information requested, provided that the information is not subject
to the provisions of paragraphs (a), (e) and (f) of subdivision two of
section eighty-seven of the public officers law. This subsection shall
confer no substantive or procedural rights on a defendant in a criminal
action, proceeding or prosecution.
(e) the authorized agency provided with information
pursuant to subsection (c) hereof, in furtherance of its own purposes,
may release or provide such information to any other authorized law enforcement
agency.
(f) any information or evidence furnished pursuant
to this section shall be held in confidence by the appropriate agency until
such information is required to be released pursuant to a criminal proceeding,
or if such agency shall be served a summons or subpoena to testify as to
any information or evidence in its possession regarding such fire loss
in any civil action where an insured or other person is seeking recovery
under a policy against an insurer for fire damage to real or personal property.
There are several key components to the New York
Arson Immunity Reporting Act. First, insurance companies have the affirmative
responsibility to contact the appropriate authorized law enforcement agency
and report any case of suspected arson. Even though the fire may not be
under investigation by the criminal authorities, the insurance company must
notify the authorities when a case of suspected arson is discovered.
Second, the insurance company must respond to any
request under the immunity act by providing virtually everything in its
investigative file. The insurance company is required to turn over its file
and cooperate fully in the investigation of the case.
Third, the information can be shared with any other
law enforcement agency investigating the fire. The agency provided with
the information may release the information to any other authorized law
enforcement agency.
Fourth, the act specifically provides that the
information turned over by the insurance company be kept in strict confidence
until required to be released pursuant to a criminal proceeding or by a
summons or subpoena in a civil action. There is no requirement that the
insurance company receive advance notice of any intended disclosure.
Fifth, the act requires the cooperation of the
criminal investigator in the insurance company's investigation upon request
and requires providing testimony at a civil arson case on behalf of any
party serving a summons or subpoena. The concerns about jeopardizing an
ongoing criminal investigation are usually resolved by the fact it typically
takes several years for a civil arson case to come to trial. However, the
insurance company needs to share in the results of the criminal investigation
long before that and the act provides an insurance company the right to
request relevant non-privileged information from the law enforcement agency
investigating the fire. Although the criminal investigation may still be
ongoing, the insurance company needs to share in the information in order
to make a decision on the claim, usually within thirty to sixty days of
the filing of a claim. Without the information, the insurance company may
be put at risk in deciding whether or not to raise the defense of arson
to the claim.
The arson immunity reporting act is a powerful tool in the investigation
of arson by criminal and civil investigators. An understanding and appreciation
of the immunity act by both sides will enable everybody to benefit while
maintaining the independence of the two investigations.
Cooperation Through Understanding
As previously stated, while there is much in common
between a criminal investigation of arson and a civil investigation of arson,
there remain importance differences. Many criminal investigators have little
or no understanding of the processes involved in a civil arson investigation.
Many civil arson investigators have little or no understanding of the processes
involved in a criminal arson investigation. Sometimes the two sides don't
know why the other side is doing something or not doing something. This
can lead to frustration, anger and bewilderment in trying to understand
what the other side is doing. Here are some of the more common questions
raised by criminal and civil investigators when trying to understand what
is going on. A better understanding and awareness of what the other side
is doing will lead to a spirit of trust and cooperation which furthers the
interests of all investigators.
Common Question #1: "Why
aren't the authorities doing anything?"
Civil investigators are often frustrated to learn that nothing is happening
on the criminal side of the investigation. Although a scene investigation
may have been completed, the background investigation and follow-up by the
authorities may not be proceeding. To the civil investigator, it may look
like the authorities are not doing their job. However, the unfortunate truth
is that arson investigators in the public sector are among the most understaffed
and overworked individuals. When an investigator is asked to handle fifteen
to twenty new fire investigations each month, he faces an impossible burden.
Unless and until there is adequate funding and staffing for public sector
fire investigators in this country, this problem will always be with us.
Common Question #2: "Why
haven't they arrested this guy?"
a civil investigator who has developed a strong case of arson often wonders
why the authorities have not made an arrest. There may be a number of explanations
for this. First, all of the information may not be known to the authorities.
It is the responsibility of the civil investigator under the immunity act
to make sure all information developed in the civil investigation is turned
over to the authorities. Second, the evidence may not be legally sufficient
to file criminal charges. Many civil investigators don't have an appreciation
of the burden of proof in criminal cases, which makes it more difficult
to pursue an arrest. It is not enough to have a strong case; it must be
a case proved beyond all reasonable doubt. Third, unless the district attorney
is willing to file charges it makes no difference what kind of case you
have. The charging decision can be based on a number of factors, not just
the sufficiency of evidence. When other factors come into play, they can
cause a seemingly strong case to be closed without arrest.
Common Question #3: "Why
is the insurance company in such a hurry?"
For law enforcement investigators, the only real deadline is the applicable
statute of limitations. In arson cases that is typically four (4) years.
Of course, there is always a practical limitation in terms of the availability
or memory of a witness, the existence of physical evidence and other such
problems. In terms of an absolute deadline, however, there is only the statute
of limitations. For insurance companies, it is a far different matter. In
a strict legal sense, there is no such thing as an insurance "policy".
It is an insurance contract. All of the rights and responsibilities of the
insurance company and the corresponding rights and responsibilities of the
insured person are contained in that contract. An insurance contract contains
a "loss payable clause". This is a statement in the contract of
when a claim is due and payable. In a commercial insurance policy, it is
typically thirty (30) days after the submission of all of the claim documents
and compliance with the other duties imposed upon the insured in presenting
a claim. It is important to note that on the thirtieth day the claim is
due and payable if all other conditions have been met. In a typical homeowners
insurance policy, the period of time is sixty (60) days. There are virtually
no insurance policies that allow more than sixty (60) days after submission
of all claim documents and compliance with the other duties for the insurance
company to make its decision. In most situations, the insured will submit
the claim documents and satisfy all other duties within the first thirty
(30) to sixty (60) days after the fire. This then leaves the insurance company
another thirty (30) to sixty (60) days (whichever is applicable) to complete
its investigation and make a final decision. It is highly unusual for the
entire process to take more than one hundred twenty (120) days after the
fire.
anybody who has ever participated in an arson investigation knows that this
is not much time. In some cases, it is simply not enough time. However,
the insurance company must make its decision or else a decision will be
made for it. If a company has not made a formal decision on the claim by
the deadline imposed under the contract of insurance, it will be considered
as if the insurance company had denied the claim. Once that happens, the
insured has no other responsibilities to the insurance company in terms
of cooperating in the investigation, supplying records, giving statements
or anything else. The insured is free to file suit without waiting any further.
Once a lawsuit has been filed, the insurance company can be held liable
for interest, costs and the insured's attorney fees unless the insurance
company wins the lawsuit outright. The award of attorney fees in fire cases
can be substantial. It can reach several hundred thousand dollars in a complex
arson case. Certainly, the prospect of facing all of that puts a great deal
of pressure on the insurance company to make a timely decision. The possibility
of a "bad faith" claim seeking punitive damages into the millions
of dollars is every insurance adjuster's worst nightmare. If it seems that
the insurance company is in a rush to complete its investigation, that is
absolutely right. They have to be in a hurry.
Common Question #4: "Why
did the insurance company pay this S.O.B?"
"I can't believe the insurance company paid
this claim!" "We're just about to break this case open!"
"Everybody knows the S.O.B. is guilty as hell!" When a law enforcement
investigator is hot on the trail of an arsonist, it can be shocking to learn
that the insurance company has just paid the claim. However, there are a
number of reasons why an insurance company must sometimes pay a suspicious
claim. Here are a few of those reasons.
First, the time deadlines referenced above can
force an insurance company's hand. While a case can, in fact, be about to
"break wide open" the risk in waiting for that to happen can be
enormous. If something goes wrong, if a witness changes his story, if something
new comes to light pointing to another suspect, then an insurance company
can find itself in serious trouble. If this happens in a law enforcement
investigation, everybody can simply say "we were wrong" and walk
away. An insurance company cannot walk away. The claims adjuster handling
that file knows that the wrong decision can ruin his career. For him, it
is a high stakes game.
Another reason for the payment of a suspicious
claim can be traced to something that happened earlier in the handling of
the file. When an insurance company makes a mistake, it will probably come
to light if the claim is later litigated. Improperly obtained evidence could
lead to a major lawsuit. Allegations of libel and slander may be raised
against the company. If the company was not alerted to the suspicious circumstances
of the claim, it may already have committed to payment of the claim or may
have caused the insured to take some actions in reliance upon the payment
of the claim. Waiver and estoppel arguments can cause an insurance company
to pay a claim. In arson cases, perhaps the most common reason for payment
of a suspicious claim is concern about the cause and origin aspect of the
case. All of the suspicious circumstances in the world mean nothing unless
the fire can be proved to be incendiary in origin. An insurance company
may conclude that the evidence of incendiarism is weak or may learn that
the insured has retained a fire expert who will testify that the fire is
accidental in origin. In that event, an insurance company will have to decide
if it is willing to take the risk of losing at trial, with all of the consequences
outlined above, when the fundamental issue of incendiarism is in dispute.
Common Question #5: "Why
did the insurance company pay off the arsonist's mortgage?"
Once again, the answer is found in the contract of insurance. Virtually
every insurance policy contains a section dealing with the rights of mortgage
companies and lienholders on the property. In almost all policies, it is
specifically stated that the mortgage company or bank will still be paid
for its interest in the property no matter what the named insured may do
to cause a loss. When a fire occurs to property which is subject to a mortgage
or lien, the claim of the mortgage company or bank will be treated completely
separate from the claim of the named insured or property owner. In cases
of arson, unless the mortgage company or bank was itself involved in causing
the fire, their claim will be paid. It is truly ironic that while a mortgage
is often the primary motive behind a case of arson, the insurance company
has no choice but to pay off that mortgage even when it is proved that the
insured property owner set the fire.
Conclusion
The resources and rights provided to criminal and
civil investigations of arson operate within distinct frameworks. The underlying
objectives of the investigations are different, although the two investigations
are frequently pointed in the same direction. The information developed
in the course of the respective investigations brings both sides closer
to the truth. Each side has access to certain information that the other
side cannot obtain. Each side has distinct advantages and disadvantages
encountered in the investigation. Bringing the two investigations together
provides the best of both worlds. The ability to do so without jeopardizing
either side is dependent upon a respect and understanding of each side's
concerns. When that can be done, the interests of both sides will be served.
 Reprinted with permission from the author.
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