Recently, a defense attorney in a case I’m working on attempted to inject elements of “The Arson Defense” into the lawsuit. Only problem is, we are not claiming fire damage. However, that got me thinking about the various defenses insurance companies typically use to avoid paying insurance claims. Today, I will discuss “The Arson Defense.”

In State Farm v. Vandiver, 970 S.W.2d 731, 736 (Tex.App.—Waco 1998, no writ), the Court succinctly laid out “The Arson Defense:”

A. THE ARSON DEFENSE . . . To establish the affirmative defense of arson, an insurer bears the burden of proving by a preponderance of the evidence that the insured set the fire or caused it to be set. The crime of arson, being in defiance of law, is ordinarily conceived in secrecy and executed in such a manner as to avoid detection and exposure; and proof of such an unlawful enterprise must, in the very nature of things, be made by circumstances which tends to cast light upon the incident is legitimate and proper. In order to establish the affirmative defense, the insurer must offer evidence: (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.

Id. (internal citations omitted). In Vandiver, the policyholder brought suit against State Farm to recover for damages that resulted from the destruction of her home by a fire for which State Farm denied coverage. As one of their defenses, State Farm asserted “The Arson Defense,” claiming that the policyholder set the fire in order to recover the insurance money. In support of its argument, State Farm noted that the parties agreed that the fire had an incendiary origin, which met the first requirement of “The Arson Defense.”

Next, State Farm argued that the policyholder had a motive for setting the fire. State Farm submitted records showing that: (1) the policyholder was experiencing financial stress at the time of the fire; (2) the policyholder’s monthly expenses exceeded her income at the time of the fire; (3) the policyholder lived with a man who did not have steady employment and she assisted him in his child support obligations; and (4) the policyholder’s sister had accrued almost $5,000 in unauthorized charges on one of the policyholder’s credit cards. The Court concluded that “[t]he totality of the reasonable inferences arising from these circumstances constitutes some probative evidence that Vandiver had a motive to set her house on fire or cause it to be set on fire.” Id. at 737.

Last, the Court turned its attention to whether the policyholder had an opportunity to set the fire or other circumstances linking the policyholder to the fire. In support of their allegations, State Farm noted among other things that: (1) there were several inconsistencies in witnesses’ testimony; (2) only the policyholder’s sister could testify to the policyholder’s whereabouts at the time of the fire; (3) the policyholder had seven dogs on her property and two neighbors testified that the dogs typically barked at strangers who came around but neither of them heard the dogs barking the night of the fire, although both were outside that evening; (4) one of the neighbors found the house to be secured when he came over to investigate the fire; and State Farm had previously paid a claim of loss for a barn on the policyholder’s property which had been consumed by a fire, the cause of which remained undetermined. The Court concluded that “[t]he other circumstances recited all combine with these factors to justify a conclusion that Vandiver was the person who set the house on fire.”

In Vandiver, the evidence was sufficient to support “The Arson Defense.” However, in my experience, insurers assert “The Arson Defense,” regardless of whether there is sufficient evidence, to delay valid claims. In the end, my only real advice to any of you reading this post is the following: Don’t be shady. Seriously. There’s nothing I detest more than people who bring fraudulent insurance claims to try and make a dishonest buck. In the end, those fraudsters are hurting insurance companies and policyholders who have valid claims. Oh, and they risk going to jail, too. It’s just not worth it.