George v. Travelers Indem. Co.

Decision Date06 February 1978
Docket NumberNo. 30158,30158
Citation265 N.W.2d 59,81 Mich.App. 106
PartiesHarry GEORGE and Bahjat M. Yaldoo a/k/a Bahjat Mikha, Individually and as corporate officers in behalf of True Value Supermarket, Inc., a Michigan Corporation and True Value Supermarket, Inc., a Michigan Corporation, Plaintiffs-Appellants, v. TRAVELERS INDEMNITY COMPANY, a Foreign Corporation, American Home Assurance Company, a Foreign Corporation, Allstar Insurance Corporation, a Foreign Corporation, and Jefferson Insurance Company of New York, a Foreign Corporation, jointly and severally, Defendants-Appellees.
CourtCourt of Appeal of Michigan — District of US

Costello & Barkey, P. C. by Arthur F. Barkey, Southfield, for plaintiffs-appellants.

Denenberg, Tuffley & Thorpe by Charles R. Tuffley, Southfield, for Travelers.

Ross, Soloy & Murphy by Earl D. Ross, Detroit, for American, Allstar, Jefferson.

Before KAUFMAN, P. J., and BRONSON and D. E. HOLBROOK, JJ.

KAUFMAN, Judge.

This appeal arises out of an action for damages based on the alleged failure of defendant insurance companies to honor the terms of policies covering plaintiffs for the value of a True Value Supermarket, for the contents therein, and for business interruption, after the supermarket burned down on October 31, 1971. At the time of the fire, plaintiff Harry George, the president and sole stockholder of True Value Supermarket, Inc., owed $15,000 to plaintiff Bahjat Yaldoo. Yaldoo was vice-president and director and also managed the store until September 1971. Plaintiffs appeal from a jury verdict of no cause of action as to all claims, which was returned on June 15, 1976, after a lengthy trial.

There was considerable testimony, including admissions by plaintiffs themselves, tending to show that there had been serious trouble with residents of the local community in the period immediately preceding the fire. Yaldoo had an armed confrontation with local youths which led to the circulation of leaflets accusing him of racism and proposing a boycott of the store. The store was picketed and its windows were smashed, as were the windows of Yaldoo's car. Yaldoo was forced to give up his position as manager. He was replaced by Edward George, Harry George's son.

The captain of the arson section of the Detroit Fire Department, Michael Buschbacher, testified without objection that when he questioned Edward George after the fire, Edward George told him that he had received threats ranging from "beating him up to burning the building", and that Captain Buschbacher, who investigated the blaze, testified that in his opinion it had been deliberately set. Indeed, Lhevinne Pickett, a defense witness, testified that he set the fire at the store. He explained he was hired by one Hazim Saeegh, who gave him detailed instructions as to when to arrive at the store, how to get in and hide until closing time, where to find the charcoal lighter fluid needed to start the fire, and where to find an axe with which to break out and get away afterwards. There was no objection to any of this testimony. The trial court did sustain an objection to a question as to what Saeegh told Pickett with respect to the burglar alarm. However, Pickett did testify without objection that he asked Saeegh if the burglar alarm would be on, and he also testified that when he left the store, the alarm did not go off. Over a general objection that the matter was inadmissible and prejudicial, Pickett answered affirmatively the question of whether Saeegh told him why the store was being burned. An objection to a question asking what Saeegh told Pickett was sustained.

because the store had been "harassed by picketing" it had closed earlier than it used to. At trial, Edward George denied saying this. The president of the company which serviced the store's burglar alarm system testified that he had to make frequent service calls throughout October, 1971, to repair the system because it was connected to store windows which were repeatedly broken. His statement that the store was closed for two weeks in October was denied by both Harry and Edward George.

Hazim Saeegh was not called as a witness. Harry George and Bahjat Yaldoo denied knowing either Saeegh or Pickett. Pickett said he did not know either of the plaintiffs and did not know who owned the store he burned. Pickett did testify, though, that the day after the setting of the fire, Saeegh drove him to the parking lot of a Food Farm Market; Saeegh went inside and returned with $1,600 or $2,000 for Pickett. Harry George admitted that he owned a 30% Interest in the Food Farm store.

During cross-examination of the plaintiffs and another of their witnesses, defense counsel repeatedly asked questions relating to the Chaldean national origins of George and Yaldoo. Counsel asked if the previous owners of the True Value Supermarket were Chaldean. He also asked: "What is a Kaldean (sic )?" There were no objections to these questions. When there was objection to additional inquiry about Chaldean markets, defense counsel justified the questioning as relevant to the witness's credibility because he derived a great deal of business from Chaldean clients. There was no contrary argument and the trial court permitted defense counsel to elicit the fact that the witness's agency derived about $10,000 in income from Chaldean markets in 1970-1971.

On cross-examination, Edward George was asked if his new wholesale business sold mainly to Chaldean markets. There was no objection.

On cross-examination, Harry George was questioned at great length about his Chaldean nationality, the size of the Detroit Chaldean community, whether the community is "closeknit", whether Chaldeans attend a particular church, whether there is a Detroit-area Chaldean telephone directory, and whether Harry George had sponsored or assisted Chaldean immigrants to the United States. The only objection was to the question whether the Chaldean community was closeknit. Counsel for Harry George objected that "the Kaldean (sic) community here has nothing to do with this trial. It is immaterial and irrelevant". Defense counsel responded that "we intend to prove in this case that there was a that the individual who was hired to set this particular fire was in fact hired by a gentleman who was Kaldean (sic ), as opposed to the theory of the Plaintiff in this case, which I think is obvious". He suggested that inquiry would be relevant if the Chaldean community was very small, and the trial judge allowed him to ask about that.

There was never any testimony to the effect that Saeegh was a Chaldean. In On appeal, plaintiffs raise several issues; only the one regarding the questioning of plaintiffs and their witnesses merits extended discussion.

proceedings out of the presence of the jury, the trial court sustained an objection by the plaintiffs when defense counsel asked Pickett whether Saeegh was a Chaldean. The only source of Pickett's knowledge of Saeegh's nationality was hearsay, which was not allowed into evidence.

Initially, however, it is necessary to review the evidence presented at trial as it relates to the legal defense offered by defendant to build the proper foundation from which to dispose of plaintiffs' major contention.

Where an arson defense is raised by an insurer, the burden is on the insurer to prove by a preponderance of the evidence that the plaintiff set fire to the building or caused it to be set on fire. Walz v. Peninsular Fire Insurance Co., 221 Mich. 326, 343, 191 N.W. 230 (1922). The elements of arson may be established by circumstantial evidence. People v. Porter, 269 Mich. 284, 292, 257 N.W. 705 (1934); Peterson v. Oceana Circuit Judge, 243 Mich. 215, 217, 219 N.W. 934 (1928). Where there is independent evidence of the incendiary origins of a fire, Michigan courts have affirmed arson convictions based on circumstantial evidence of motive (such as insurance coupled with business difficulties) plus opportunity (such as access to the building). People v. Dorrikas, 354 Mich. 303, 307-308, 92 N.W.2d 305 (1958); People v. Bailey, 42 Mich.App. 359, 361-363, 202 N.W.2d 557 (1972); People v. Horowitz, 37 Mich.App. 151, 153-158, 194 N.W.2d 375 (1971), lv. den. 387 Mich. 753 (1972).

In this case, it was undisputed that the fire resulted from arson. The plaintiffs were heavily insured and there was evidence from which the jury could conclude that the corporation was heavily in debt as well as evidence suggesting that community hostility had made it unprofitable, if not impossible, to carry on the business. Plaintiffs presented contrary evidence, but it was for the jury to decide what to believe and what to disbelieve. People v. Fuller, 395 Mich. 451, 453, 236 N.W.2d 58 (1975); People v. Chamblis, 395 Mich. 408, 420-421, 236 N.W.2d 473 (1975). Of course, the plaintiffs had easy access to their own store. George owned the corporation and had keys to the store, and Yaldoo had managed the store until a few weeks before the fire. The jury could believe that one or the other of these men was sufficiently familiar with the store to furnish the detailed instructions successfully followed by the arsonist Pickett. There was enough direct and circumstantial evidence of motive, opportunity and incendiary cause for the jury to find that the arson defense was established.

Plaintiffs contend, however, that on these facts the conclusion that they are responsible for starting the fire stems from the impermissible pyramiding of inferences. A conclusion cannot be inferred from a fact which was itself derived inferentially from circumstantial evidence. People v. Atley, 392 Mich. 298, 314-316, 220 N.W.2d 465 (1974); People v. Jacobson,72 Mich.App. 489, 497, 250 N.W.2d 105 (1976); People v. Little, 58 Mich.App. 12, 16, 226 N.W.2d 735 (1975). Plaintiffs stress the fact that, though Pickett admitted burning the store for Saeegh, there was no evidence linking Saeegh to the plaintiffs. But this...

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