Dallas Fort Worth Insurance Lawyer Blog
Here is a 2024 opinion from the Southern District of Texas, Houston Division, wherein the insurance company, State Farm Lloyd’s, is refusing to pay the claim because State Farm believes the insured cause the fire on purpose in an effort to collect insurance monies. The opinion is styled, Raynelle King v. State Farm Lloyds.
On November 18, 2018, a late-night fire broke out in King’s home, and King filed a claim with State Farm. Arson investigators later found gasoline residue in debris samples from the room where the fire started. King was apparently in considerable financial distress at the time. As a result, State Farm denied King’s claim alleging that she had set fire to her own home. King sued, arguing that State Farm wrongfully denied her claim. State Farm has now filed a Motion for Summary Judgment. State Farm asks the Court to find that King committed arson and therefore cannot recover under the policy. After careful review, the Court finds that there is a genuine dispute of material fact, and State Farm is not entitled to judgment as a matter of law. The Court, therefore, DENIES the Motion.
On the night of November 18, 2018, Plaintiff King’s house caught fire, which caused extensive damage. At the time, King held a homeowner’s insurance policy from State Farm that covered fire loss, among other things. King submitted a claim for damages under her policy, which State Farm denied. King sued State Farm for failing to pay out her insurance policy. She asserts various causes of action under
Texas law including breach of contract and violations of the Texas Insurance Code.
Arson is an affirmative defense to an insurance claim for a loss resulting from a fire. To establish
this affirmative defense, the insurer must prove by a preponderance of the evidence that the insured set the fire or caused it to be set. Because arson is usually planned and committed in secrecy to avoid detection, the insurer generally must rely on circumstantial evidence. To establish the affirmative defense absent direct evidence, the insurer must offer evidence that: (1) the fire had an incendiary origin; (2) the insured had a motive to set the fire or cause it to be set; and (3) the insured had an opportunity to set the fire or other circumstances linking the insured to the fire.” When reviewing the record for evidence of these elements, courts examine the totality of the circumstances and whether the evidence points to the ultimate fact to be established—that the insured committed arson.
In this case, State Farm points to King’s own testimony to convince the Court that King committed arson. According to King, she lived on the property with her sister, LaTonya, and her nephew, Kody at the time of the fire. LaTonya and Kody stayed in “the second bedroom,” where the fire started. On the night of the fire, the three returned home from dinner at about 9:30–10:00 p.m. They watched a movie, and LaTonya and Kody fell asleep on the living room couch. King testified that she went to bed at about 1:00 a.m., and she woke up on multiple occasions to the smell of an “awkward odor” that became “stronger” through the night. She eventually noticed the fire coming from the second bedroom, behind the dresser
on which a television was located. After seeing the flames, she ushered LaTonya and Kody out of the house and called the fire department.
According to State Farm, King’s own version of events indicate that she started the fire. On the first element of the arson defense, State Farm points to a report by Apex Fire Investigation Services—a company it retained to investigate the cause and origin of the fire—that ruled out accidental causes of the fire and classified the fire as incendiary based in part on gasoline residue in debris samples from the second bedroom. Second, as to motive, State Farm identifies multiple pieces of evidence suggesting that
Plaintiff was in dire financial straits at the time of the incident. And, finally, for opportunity, State Farm contends that, by King’s own account, she was the only person who could have started the fire because “the windows and doors were locked, and her sister and nephew were sleeping on the couch.”
While State Farm’s evidence may support a finding that King committed arson, it does not establish this fact; it creates a factual dispute. State Farm has not identified a case where a court has found at the summary-judgment stage that the insured committed arson. And the caselaw actually points to the contrary.
The Court then discussed the cases ruling to the contrary.
These cases illustrate that even strong circumstantial evidence of arson merely creates a factual dispute, and courts consistently defer to juries to resolve this dispute. This Court follows suit. Here, State
Farm has offered probative evidence of incendiary origin, motive, and opportunity to link King to the fire. And King, through her testimony and affidavit, has maintained that she did not cause the fire. The Court concludes that the totality of the evidence creates a factual dispute that a jury must resolve.