Godwin v. Farmers Ins. Co. of America, 1

• Decision Date: 11 June 1981
• Docket Number: CA-CIV,No. 1,1
• Citation: Godwin v. Farmers Ins. Co. of America, 129 Ariz. 416, 631 P.2d 571 (Ariz. App. 1981)
• Parties: Richard C. GODWIN, Appellant, v. FARMERS INSURANCE COMPANY OF AMERICA, Appellee. 4138.
• Court: Arizona Court of Appeals

Page 571

631 P.2d 571

129 Ariz. 416

Richard C. GODWIN, Appellant, v.FARMERS INSURANCE COMPANY OF AMERICA, Appellee.

No. 1 CA-CIV 4138.

Court of Appeals of Arizona, Division 1, Department A.

June 11, 1981.

Kunz & Stinson, Ltd., by Richard M. Waugh, Phoenix, for appellant.

Johnson, Jessen, Dake & Oplinger, P. A., by T. Gale Dake and Ruth L. Harris, Phoenix, for appellee.

OPINION

DONOFRIO, Judge.

This is an appeal by Richard Godwin(hereinafter referred to as Godwin) from a judgment and order entered in a contract action involving a fire insurance policy with Farmers Insurance Company of Arizona (hereinafter referred to as Farmers).We affirm the judgment in part and reverse in part.

We find the following facts are relevant to our resolution of this case: Godwin owned a residence located in Scottsdale, Arizona.This residence was separated into two separate living quarters connected by a carport.

On November 21, 1975, a fire occurred in the smaller of the two living quarters.Godwin and his wife were inside these quarters when the fire occurred.Godwin testified that he was awakened in the early morning hours of November 21, 1975 by the smell of smoke.He arose from bed and entered the living room where he had observed the fire in the area of the couch.He thereafter awakened his wife and took her outside.Further Godwin testified that he re-entered the house twice; once, to phone the fire department; second, to retrieve his eyeglasses and to get some clothes.

The Rural Metro Fire Department indicated that the fire was reported to them at 1:32 a. m. on November 21, 1975.The fire department arrived at 1:44 a. m. and had the blaze under control one-half hour later; by the time the fire was under control the smaller of the living quarters was completely destroyed.

A fire investigator with the Rural Metro Fire Department, Mr. Weldon Paxton, conducted an examination of the scene of the fire on the morning of November 21, 1975.He concluded that the fire was caused by arson.The police then conducted their investigation.

Godwin had a homeowner's insurance policy with Farmers.It is undisputed that all premiums were paid and the policy was in full force at the time of the fire.Because of the police and fire departments' investigations, Farmers hired its own investigator, Mr. Thomas Pugh, who came to Phoenix on November 25, 1975, to investigate the loss.Mr. Pugh also concluded that the fire was caused by arson.Godwin hired his own fire investigator, Mr. W. C. Carmichael, who investigated the fire in July of 1976 and concluded that the fire was not incendiary.

Godwin gave Farmers due notice and proof of loss and Farmers refused to pay said loss.Godwin, on March 4, 1976, filed suit in the Maricopa County Superior Court against Farmers for the refusal to pay.

This matter was brought on March 28, 1977 to trial before a jury.At trial, Farmers asserted the affirmative defense of arson by Godwin to void its obligations under the policy.On April 15, 1977, the jury returned a verdict in favor of Farmers.On June 17, 1977, the trial court entered judgment in accordance with the jury's verdict.Godwin filed a motion for new trial and for judgment notwithstanding the verdict and to alter or amend the judgment on June 28, 1977.The court denied this motion on August 8, 1977 by formal written order and this appeal followed:

Further facts will be given as they pertain to the issues involved.

Godwin presents six issues for our review:

1.It was error for the trial court to refuse to instruct the jury that the defense of fraud by arson must be proved by "clear and convincing" evidence.

2.The jury's verdict was unsupported by substantial evidence.

3.The jury's verdict resulted from the erroneous admission of highly prejudicial and patently improper evidence which should have been excluded.

4.The prejudicial remarks, improper questions and objectionable conduct of opposing counsel prevented a fair trial and resulted in a miscarriage of justice.

5.The trial court erred in charging the jury that the insured could not recover for the property his wife lost in the fire.

6.It was error to award attorneys' fees in favor of the insurance company on the basis of A.R.S. § 12-341.01.

STANDARD OF PROOF

Godwin alleges that the trial court committed reversible error by refusing to instruct the jury that the defense of arson be proved by clear and convincing evidence.We disagree.

This is a case of first impression in Arizona.We have examined the case law in other jurisdictions and have decided to follow the majority rule that the burden of proof for the defense of arson in a civil case is satisfied by a preponderance of the evidence.

In Arizona, the burden of proof in civil cases is satisfied by the preponderance of evidence.New York Life Insurance Company v. McNeely, 52 Ariz. 181, 79 P.2d 948(1938).An exception to this rule is that fraud must be proven by clear and convincing evidence.In re Trigg Estate, 3 Ariz.App. 385, 414 P.2d 988, affirmed102 Ariz. 140, 426 P.2d 637(1966).Godwin argues that arson by an insured to collect insurance premiums is a "specie of fraud" and as such must be proven by clear and convincing evidence.

However, we find that in those jurisdictions which follow the minority rule that arson in a civil case be proved by clear and convincing evidence base their analysis, in part, on the assumption that proving an act of a criminal nature requires more than a preponderance of the evidence.Carpenter v. Union Ins. Society of Canton, Ltd., 284 F.2d 155(4th Cir.1960);Jonas v. Northeastern Mutual Fire Ins. Co., 44 Wis.2d 347, 171 N.W.2d 185(1969).This analysis was impliedly rejected by the Arizona Supreme Court in Brown v. Jerrild, 29 Ariz. 121, 239 P. 795(1925).Most of the jurisdictions which hold that the defense of arson in a civil case is proved by a preponderance of the evidence also follow the rule that fraud must be proven by clear and convincing evidence.See e. g., Werner's Furniture, Inc. v. Commercial Union Insurance Co., 39 Ill.App.3d 59, 349 N.E.2d 616(1976);George v. Travelers Indemn. Co., 81 Mich.App. 106, 265 N.W.2d 59(1978);Quast v. Prudential Property & Cas. Co., 267 N.W.2d 493(Minn.1978);Pacific Ins. Co. v. Frank, 452 P.2d 794(Okl.1969);Great American Ins. Co. v. KW Log. Inc., 22 Wash.App. 468, 591 P.2d 457(1979);Klayman v. Aetna Casualty Co., (Colo.App.)501 P.2d 750(1972);Honeycutt v. Aetna Casualty Ins. Co., 510 F.2d 340(7th Cir.1975)cert. den.421 U.S. 1101, 95 S.Ct. 2416, 44 L.Ed.2d 679(1975).Two major insurance treatises do not even recognize that a minority rule exists.See18 G. Couch, Insurance§ 74.664 (2nd Ed. 1968);21 Appleman, Insurance Law & Practice§ 12229, at 252-53(1980).

We conclude that, as in other civil cases where fraud is not specifically alleged, the burden of proving the defense of arson is satisfied by a preponderance of the evidence.

SUBSTANTIAL EVIDENCE

To sustain a defense of arson, the insurer has the burden to prove by the preponderance of the evidence that: (1) the fire was of incendiary origin and (2) the insured was responsible for it.

This Court must sustain a trial court's judgment entered on a jury verdict when it is supported by substantial evidence.Leone v. Precision Plumbing & Heating of Southern Arizona, Inc., 121 Ariz. 514, 591 P.2d 1002(App.1979).It is not our prerogative to weigh the evidence and determine the credibility of witnesses.Van Emden v. Becker, 6 Ariz.App. 274, 431 P.2d 915(1967).Where reasonable men, from the evidence shown, might draw different inferences and conclusions, the reviewing court must accept those inferences drawn by the jury.Bullard v. Stonebracker, 101 Ariz. 584, 422 P.2d 700(1967).

Godwin contends that there is no substantial evidence to support the jury's verdict.We disagree.As was recognized by the Washington Court of Appeals in Great American Insurance, supra, arson as a clandestine act may be proven entirely by circumstantial evidence.That court stated:

"Arson is an offense which is most often proved by circumstantial evidence.It is one of those crimes which is peculiarly of secret preparation and commission; and it is seldom that the prosecution can furnish testimony of an eyewitness who observed the setting of the fire.It is judicially recognized that a well-connected train of circumstances may be as satisfactory as an array of direct evidence.A. Curtis, The Law of Arson§ 485, at 517-20(1936);6A C.J.S.Arson§ 48(1975);5 Am.Jur.2dArson and Related Offenses§ 47(1962);seeW. Hooper, Circumstantial Aspects of Arson, 46 J.Crim.L.C. & P.S. 129(1955)."591 P.2d at 460.

In the instant case, the evidence from which a jury could reasonably and properly conclude that the fire was incendiary may be summarized as follows: Fire investigators Paxton and Pugh investigated the scene of the fire and both concluded the fire was incendiary.Their conclusion was based upon many factors, including the following: the presence of charring below the tile in the foyer; the inconsistency of the burn pattern and the burning below the rug line indicated that flammable substance was poured on those areas in the house; the fire vented itself (burned itself out through a hole in the roof) earlier than would be expected from an accidental fire, and the bowing of the station members (steel poles) showed that the heat of the fire was more excessive than it would be when a fire is accidental.

The evidence from which a jury could conclude that Godwin was responsible for the fire included the following: Godwin was at the scene of the fire; all entrances to the house were locked prior to the fire; Godwin testified that he entered the house to retrieve certain items but that he exited without retrieving any of them.

Godwin had a financial motive for setting the fire: He had been attempting to sell his home for approximately three years prior to the fire without success;...