Brown v. Allstate Ins. Co.
| Decision Date | 01 November 1999 |
| Docket Number | No. 3065.,3065. |
| Citation | 523 S.E.2d 807,337 S.C. 499 |
| Parties | Tommy E. BROWN, Sr., Respondent, v. ALLSTATE INSURANCE COMPANY, Appellant. |
| Court | South Carolina Court of Appeals |
Richard L. Patton, of Patton & Associates, of Greenville, for appellant.
James C. Cothran, Jr.; and Robert M. Holland, both of Spartanburg, for respondent.
Tommy E. Brown, Sr., brought this action for (1) breach of contract and (2) bad faith refusal to pay benefits against his automobile insurance carrier, Allstate Insurance Company, after Allstate refused to pay for the fire loss of Brown's 1984 Corvette. After a bench trial, the court found Allstate had breached the insurance contract and awarded Brown $25,000 in damages. The court ruled Allstate did not act in bad faith in refusing to pay benefits. Brown does not appeal from the ruling in reference to the bad faith theory. Allstate appeals alleging the trial court erred in admitting evidence concerning the non-prosecution of Brown for arson. We reverse and remand.
On the evening of February 13, 1995, Brown drove his 1984 Corvette to Gaffney to run an errand. While en route, the car allegedly had mechanical problems and the engine shut down. Brown parked the car at the intersection of Crenshaw Road and U.S. Highway 29, a heavily traveled roadway between Cowpens and Gaffney, and left it at that location for the night.
At approximately 2:00 a.m. on the morning of February 14, 1995,1 the car was found burning where Brown claims he parked it. Officer Patton, with the Cherokee County Sheriffs Department, attempted to call Brown by telephone at his home, but was unable to locate him. Officer Patton reported the incident to the Spartanburg County Sheriffs Department. The car was a total loss as a result of the fire and was taken to a salvage yard.
Brown attempted to collect for the fire loss under the automobile insurance policy he maintained on the car with Allstate, but Allstate refused payment. Brown brought this action against Allstate for breach of contract and the tort of bad faith refusal to pay benefits. He sought damages of $30,000 for the value of the Corvette and prejudgment interest on this amount.
Allstate answered and counterclaimed, alleging in pertinent part that Brown had destroyed his car by an act of arson, and he committed misrepresentation and "reverse bad faith" by asserting a false claim. Allstate averred Brown had both the motive and opportunity to set the fire or have the fire set, and Brown misrepresented or concealed his involvement.
In an order following the bench trial, the court characterized Brown as "confused" as to what happened after he left the car parked by the side of the road. Specifically, Brown did not know whether he returned to his home or his girlfriend's home to spend the evening. Brown claimed to have called Debra Cooper, his former sister-in-law, from his home, but his home telephone records did not verify that such a call was made. However, Cooper testified she did receive such a call, and Brown explained the call could have been made from his girlfriend's home or a pay phone, but he could not remember.
All of the parties admitted the car was intentionally burned. A mechanic who examined the car after the fire testified that oil in the crankcase had been mixed with water while the engine was running, which could have caused great damage to the engine.
As to the car's value, Mr. Hamrick, owner of Hamrick's Used Cars and Trucks, stated the 1984 Corvette was worth an estimated $30,000. Mr. Hamrick had been in the automobile business for twenty years. Less than one month prior to the fire, Hamrick's son had "detailed" the Corvette. Hamrick knew the car to be in mint condition with many add-ons, such as "ground effects."
Mr. Mathis, a mechanic in Cowpens, had maintained the car for the eleven years Brown had owned it. According to Mathis, Brown kept the car in near perfect condition. On February 13, 1995, Mathis saw the car. At that time, the motor was "mid miles and was in good condition as far as he could tell." He acknowledged on cross-examination that he could not determine the interior condition of the engine without taking it apart.
Allstate presented evidence that the N.A.D.A. bluebook indicated a car of average condition was worth $9,000. The trial court noted Allstate did not attempt to have the vehicle appraised as a collector's car or specially equipped car in light of its enhanced stereo system and "ground effects."
Melinda Brown, Brown's former wife, testified Brown admitted to her that he had been having problems with the engine prior to the fire and that he didn't have the money to fix the car. The trial court found Melinda Brown's testimony was not credible, noting Melinda Brown smiled at inappropriate times during her testimony, did not recall the parties had exchanged criminal warrants prior to her contacting the insurance company, and seemed to gain "some strange pleasure from her testimony against" Brown. As a result, the court disregarded her testimony as "unreliable and biased." The court found that, although Brown had the opportunity to set the fire, Allstate failed to establish Brown had the motive to do so. The court noted that, the morning after Brown parked the Corvette on the side of the road, he went to his usual repair shop to make arrangements to have the car towed, and apparently did not realize it had burned. Further, the court ruled the water in the crankcase was consistent with the fact the car broke down prior to the fire. Finally, the court held there was no evidence Brown was financially stressed other than the testimony of his former wife, which the court found unreliable. Moreover, the cost of repairing the vehicle was less than the total loss of the vehicle. The court determined the car was worth $30,000, less $5,000 for the "blown engine," and awarded Brown $25,000 for breach of contract.
The court dismissed Brown's cause of action for bad faith refusal to pay benefits because there were several factors which justified Allstate's initial refusal to pay benefits: (1) there were traces of gasoline in the carpet padding; (2) the stereo and alloy wheels had not been stolen; (3) there were inconsistencies in Brown's testimony as to where he went after leaving the car on the side of the road and where he made the telephone calls from; and (4) Allstate had the statement by Melinda Brown which attempted to establish a motive for the burning. The court declined to award prejudgment interest as there was no sum certain involved. Allstate appeals.
On appeal of an action at law, tried by a judge without a jury, this Court's review extends to the correction of errors of law, but we may not disturb the trial court's findings of fact if there is any evidence which reasonably supports those findings. Townes Assocs., Ltd. v. City of Greenville, 266 S.C. 81, 221 S.E.2d 773 (1976). The trial court's findings are equivalent to a jury's findings in a law action. Id.
Allstate contends the trial court erred in allowing Brown to present evidence of his non-prosecution for arson, as such evidence is inadmissible in a civil proceeding to recover insurance proceeds for fire loss. We agree.
During trial, the following colloquy occurred during the direct examination of Brown by his attorney:
To defeat recovery on a fire insurance policy, the insurer must show by a preponderance of the evidence, and not by clear and convincing evidence, that the fire was of an incendiary origin and the insured caused the fire. See Rutledge v. St. Paul Fire and Marine Ins. Co., 286 S.C. 360, 334 S.E.2d 131 (Ct.App.1985). In Carter v. American Mut. Fire Ins. Co., 297 S.C. 218, 375 S.E.2d 356 (Ct.App.1988), this Court set forth the elements of civil arson: "`An insurance company can prevail in an arson defense based solely on circumstantial evidence if it shows that the fire was of incendiary origin and that the plaintiff had both the opportunity and motive to have the fire set.'" Id. at 220, 375 S.E.2d at 358 (quoting Fortson v. Cotton States Mut. Ins. Co., 168 Ga.App. 155, 308 S.E.2d 382, 385 (1983)).
To rebut the circumstantial evidence of arson, Brown sought to introduce...
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