Morse v. State Farm Fire & Cas. Com.

• Decision Date: 08 June 2010
• Docket Number: No. 4:09-cv-00136-JEG,4:09-cv-00136-JEG
• Citation: 733 F.Supp.2d 1065
• Court: U.S. District Court — Southern District of Iowa
• Parties: Robert MORSE and Linda Morse, Plaintiffs, v. STATE FARM FIRE & CASUALTY COMPANY, Defendant.

733 F.Supp.2d 1065

Robert MORSE and Linda Morse, Plaintiffs,
v.
STATE FARM FIRE & CASUALTY COMPANY, Defendant.

No. 4:09-cv-00136-JEG.

United States District Court,
S.D. Iowa,
Central Division.

June 8, 2010.

733 F.Supp.2d 1066

Erin M. Carr, Carr and Wright, Des Moines, IA, for Plaintiffs.

Rex A. Rezac, David J. Stubstad, Fraser Stryker PC LLO, Omaha, NE, for Defendant.

ORDER

JAMES E. GRITZNER, District Judge.

This matter comes before the Court on a Motion for Partial Summary Judgment brought by Defendant State Farm Fire & Casualty Company (State Farm), which Plaintiffs Robert Morse (Robert) and Linda Morse (Linda) (collectively, the Morses) resist. The Court held a hearing on the motion on May 18, 2010. State Farm was represented by attorney Rex A. Rezac. The Morses were represented by attorney Erin M. Carr. The matter is now fully submitted and ready for disposition.

I. BACKGROUND ¹

The Morses lived in a single family residence in Guthrie Center, Iowa, (the Guthrie

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Center house) with their nine-year old grandson, B.H., until the house was destroyed by fire on April 28, 2008. On the morning of the fire, the Morses and B.H. left the Guthrie Center house between 4:20 and 4:30 a.m. and drove to Des Moines, Iowa, where Linda was scheduled to work at 6:00 a.m. and where B.H. was scheduled to undergo a tonsillectomy. At 4:52 a.m., Grant Sheeder, one of the Morses' neighbors, called 911 and reported that the Guthrie Center house was on fire. The Guthrie Center Fire Department responded to the call at 5:07 a.m. At 5:35 a.m., while the Morses were still driving from the Guthrie Center house to Des Moines, Chris Sheeder, another of the Morses' neighbors, called Linda and informed her that the Guthrie Center house was on fire. The Morses continued driving to Des Moines, believing that it was important to deliver B.H. to B.H.'s mother so that he would not miss his scheduled surgery. The Morses delivered B.H. to B.H.'s mother in Des Moines, and Linda notified her employer that she would not be working that day. The Morses then returned to the Guthrie Center house and found that it had been destroyed.

State Farm insured the Guthrie Center house under farm/ranch policy number 95-B5-6677-4 (the policy). The policy covered the Guthrie Center house and the Morses' personal property therein for "accidental direct physical loss," including loss caused by fire. Def.'s App. 99. The policy stated that "[i]f you or any person insured under this policy causes or procures a loss to property covered under this policy for the purpose of obtaining insurance benefits, then this policy is void and we will not pay you or any other insured for this loss" (intentional acts clause). Def.'s App. 102. The policy further provided that if the insured "intentionally concealed or misrepresented any material fact or circumstance relating to the insurance, whether before or after a loss," the policy was void (concealment or misrepresentation clause). Def.'s App. 103. The Morses reported the fire to State Farm on or about April 28, 2008, and at the time of the claim, State Farm provided the Morses with a $2000 cash advance and with temporary living arrangements at a Heartland Inn in Des Moines, Iowa, at a total cost of $12,061.28 to State Farm.

Later on the day of the fire, and apparently without the benefit of any detailed cause and origin investigation, the Guthrie Center Fire Department noted on an Iowa Incident Report that the form of heat ignition that started the fire was electrical. State Farm originally assigned the Morses' claim to Fire Company Field Claim Representative William Meyer (Meyer). However, soon after State Farm began its investigation State Farm identified what it felt were indicators of fraud and therefore reassigned the Morses' claim to Stacy Niemann (Niemann) of State Farm's Special Investigations Unit. Niemann informed the Morses that their claim had been referred to him for a follow-up investigation and noted, "[a]n investigation into the circumstances of this fire needs to be completed before a decision can be reached concerning the merits of your claim." Def.'s App. 129.

State Farm retained Independent Forensic Investigations Corporation (IFIC) to conduct a forensic investigation of the fire scene. On May 1, 2008, IFIC fire investigator George Howe (Howe) entered the Guthrie Center house, with Robert's permission, and began an investigation to determine the cause of the fire. Following

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his inspection, Howe remarked that "[t]he front door on the south side of the dwelling had been forced open, reportedly by the fire department," and that "the interior of the dwelling sustained smoke and heat damage throughout." Def.'s App. 86. Howe noted, "[t]he fire does appear to have originated in the bath/laundry room." Def.'s App. 87. The bath/laundry room was a multi-function room that contained "clothing, at least three portable space heaters and a rug doctor carpet cleaning machine. Also in this room was located the furnace, washer and dryer, bathtub, toilet, sink and a ceiling mounted bath fan/light combination." Def.'s App. 91. Howe concluded that the electric space heaters were not plugged in at the time of the fire. Howe found "[t]here was only minor heat damage to the inside of the furnace and no indication the furnace was involved in the cause of the fire," and that while "[t]here was no significant fire damage to the back of the [washer and dryer] and no indication either appliance was involved in the cause of the fire," the "most intense fire damage occurred to the front of the washer and dryer." Def.'s App. 87.

The Morses suggested that the furnace, which was installed in November 2007 at a cost of $2000.00, was likely the cause of the fire. Robert stated that when the furnace was in use, it often smelled like it was getting hot, and the pipe that transported the furnace's exhaust air would be hot to the touch. State Farm's investigator did not test run the furnace; but, on May 12, 2008, Howe returned to the Guthrie Center house with IFIC electrical engineer Todd Hartzler (Hartzler) to investigate the furnace. Following an inspection of the furnace, Hartzler concluded,

[t]he power circuit for the furnace was traced out and wired with a 12 gauge yellow jacketed Romex cable. This cable had been installed in the circuit breaker panel but only connected to the ground and neutral buses. The black, or hot wire of this cable, was not connected to a circuit breaker. The insulation on the black wire had never been stripped in preparation for a connection to a breaker. An unused 20 amp circuit breaker was found inside the bottom of the electrical panel. The breaker was covered with cobwebs and it was clear that it had never been utilized within the electrical panel. It is believed that this circuit breaker was likely intended to provide power to the furnace circuit.

Def.'s App. 92. Hartzler concluded that "the furnace was not connected to a source of electrical energy and could not operate." Id. Hartzler also ruled out the washer and dryer, space heaters, the bath fan and associated wiring, the light fixture installed over the sink, electrical outlets throughout the room, the carpet cleaner, and a corded trouble light as possible causes for the fire and concluded that "the electrical wiring and appliances played no role in the cause of the fire." Id.

Howe also removed flooring samples from the bath/laundry room to be tested for the presence of ignitable liquids. Armstrong Forensic Laboratory, Inc. (Armstrong) examined the samples provided by Howe and determined that the samples did not contain identifiable ignitable liquids. However, Armstrong cautioned that the "[f]ailure to identify an ignitable liquid in any sample of fire debris should not be interpreted to mean that an ignitable liquid could not have been present. It means only that none could be recovered from this debris." Pl.'s App. 125.

In a report dated June 5, 2008, Howe informed Niemann that "[t]he electrical system, furnace, and all electrical appliances in the bath/laundry room have been ruled out as potential fire causes by an electrical engineer and, at this time, we have been unable to identify any likely or logical accidental cause for this fire."

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Def.'s App. 89. Howe concluded that "[b]ased on the information available at this point in the investigation it appears, in my opinion, that this fire was most probably set intentionally." Id.

On August 6, 2008, Niemann interviewed the Morses' neighbor, Kerry Sheeder (Kerry), and Kerry's father, Richard Sheeder (Richard). Kerry and Richard stated that on April 27, 2008, the day before the fire, they each saw Linda and B.H. carry boxes out of the Guthrie Center house and load the boxes into the Morses' pickup truck. Kerry, who was calving cows in a pasture southeast of the Guthrie Center house on April 27, said that the Morses' truck "was pretty darn full almost ... almost full [with boxes]." Def.'s App. 35. Richard similarly testified, "[w]hen I went up the hill I looked around through the back of the cab and it looked like that [truck] was jammed quite full almost back to back." Def.'s App. 33. Linda said that she only loaded the truck with three duffel bags, which contained the Morses' clothes for their planned week in Des Moines.

During the course of the investigation, State Farm also interviewed the Morses on multiple occasions. With regard to the events at the Guthrie Center house on the morning of April 28, 2008, Linda stated that the furnace was running when she used the bathroom that morning, that no space heaters had been turned on, and that nothing seemed out of the ordinary. Robert agreed that nothing was unusual that morning. Linda said that she was the last person to exit the house and that she locked the door behind her. Linda also said that on the day of the fire the Morses possessed the only two known sets of keys to the house.

Niemann learned during the...