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Arson is probably the dumbest form of insurance fraud. With modern municipal fire departments arson fires seldom totally destroy the premises, evidence is always left for arson investigators to review, and firefighters and the public are exposed to danger of injury and death and, as a result, judges have little mercy for an arsonist. Arsonists hoping to make a profit from a fire seldom sit back and accept their punishment when they are convicted.
In State v. Jones, Slip Copy, 2014 Iowa App. LEXIS 1179 (Iowa App., 12/10/14), [enhanced version available to lexis.com subscribers], the Iowa Court of Appeal was faced with a convicted arsonist who claimed there was insufficient evidence to convict her and that the punishment handed down was too severe.
Donna Jones appealed from the judgment and sentence entered following her convictions for second-degree arson and two counts of insurance fraud.
On May 6, 2012, a fire began in a bedroom of Jones’s Davenport home. The fire was contained to the bedroom, though smoke and heat damaged the rest of the house. At the time of the fire, Jones owed approximately $53,338.15 on the home and there was a $17,095.60 judgment lien against it. Although Jones was nine months behind on her house payments and owed the IRS approximately $4000, she was current on her homeowner’s insurance policy payments to Allied Nationwide Insurance (Allied).
On the day of the fire, Jones attempted to drop off her step-grandson, who lived with her, at a bowling alley. After learning the bowling alley was closed, Jones dropped him off at her daughter’s house. She claimed to have soiled her clothes on her way home and changed them when she returned. She told investigators she put the clothes in the laundry and lit a candle in the bedroom to cover the odor. Jones then left the house without extinguishing the candle taking her dog with her.
While at a retail establishment Jones received multiple calls from her neighbor, who was attempting to inform her of the fire. Jones did not answer her phone initially. Surveillance video shows she left the store two minutes after receiving the call her house was on fire. Jones appeared to be wearing the same clothes during a visit to the store earlier that day, even though she claimed to have changed between visits.
During his investigation, Davenport Fire Department Lieutenant Robb Macdougall observed a partially-melted candle on the floor on the right side of the bed. Items near the candle were not burned. However, the top of the bed was extensively damaged, and the posts above the bed were also damaged. Based on his observations, Lieutenant Macdougall determined the fire began in the northwest corner of the bedroom. He was unable to determine a cause but ruled out the possibility of an electrical fire or an accelerant fire.
Chief Fire Marshall Mike Hayman also investigated the fire. Based on the burn patterns, mattress damage, and charring, he determined the fire began on top of the mattress on the northwest corner of the bed. Chief Hayman ruled out the candle as the source of the fire because it was found almost fully intact and the dresser near it had limited damage. Chief Hayman determined the fire was intentionally set.
Allied hired Terry Brown, a fire investigator, to determine the cause of the fire. Brown also determined the fire originated on the northwest corner of the bed given the charring patterns on the bedposts. He also found charring underneath the candle found on the opposite side of the bed, which indicated the candle was not on the floor when the fire began. Because the melting temperature of carpet is well above the melting temperature of the candle, Brown concluded it would have been “scientifically impossible” for the candle to have burned the floor underneath it.Had the fire originated with the candle, Brown would not have expected to find any of the candle remaining.
Brown also determined two smoke detectors in the home had working batteries that were disconnected at the time of the fire. He concluded the fire was set intentionally when “an open flame ignition device” was used to ignite the bed. A butane lighter was found on the nightstand next to the bed.
In the days following the fire, Jones rented a house and submitted paperwork to Allied to be reimbursed for the rent and security deposit on the house. However, she never lived in the house. Instead, Jones lived in an RV.
Following a jury trial, Jones was found guilty on all three counts. She was sentenced to an indeterminate term for no more than ten years in prison and fined $1000 on the arson charge. She was sentenced to indeterminate terms for no more than five years in prison and fined $750 on each of the insurance fraud charges. The sentences were ordered to run concurrently.
SUFFICIENCY OF THE EVIDENCE
Jones first contends there is insufficient evidence to establish she committed arson. Because she argues she did not commit arson, Jones also contends the evidence is insufficient to show she committed fraud by submitting to Allied a sworn statement that swears she did not cause the loss by an act, design, or procurement.
Substantial evidence revealed that the fire was intentionally set. Both Chief Hayman and Brown reached the same conclusion: the fire was intentionally set and began in the northwest corner of the bedroom, rather than on the floor on the opposite side of the bed where the candle was found.
There is also substantial evidence to indicate Jones caused the fire. Jones made sure the house was empty on the day of the fire, taking her step-grandson to her daughter’s house earlier in the day and bringing her dog to the grocery store with her. Jones was the last person in the home before the fire began and left shortly before the fire was discovered. Her financial difficulties provide a motive for the fire.
In sentencing Jones, the court noted the pre-sentence investigation report recommended probation. It then stated, “The problem the Court has is, these were deliberate bad acts that put other people at risk.” The court went on to generally discuss the dangers involved in setting fires and defrauding insurance companies. It then addressed Jones’s specific situation, noting her financial situation, and opined that she committed the arson as “an easy way out to solve it” even though it put lives in danger. The court found “that prison is the most appropriate sentence here because of the dangerousness of what your deliberate bad act was.”
The Court of Appeal agreed these statements indicate the court placed considerable emphasis on the serious nature of the crimes.
However, other statements show the court considered other factors in sentencing Jones. After sentencing, the court added, “I don’t see you as a good person that’s likely to change,” opining that Jones blamed others for her problems and “that isn’t the best frame of mind to rehabilitate.” It added that in addition to sending the community a message that serious consequences will be given to those who set houses on fire, the prison sentence was also intended to put Jones in a frame of mind to rehabilitate.
Because all of the court’s statements indicate it considered multiple factors in determining the appropriate sentence, we find no abuse of discretion.
Insurance fraud is a serious crime and a felony in most states. Arson is more serious and akin to attempted murder. The sentence Jones received was appropriate and could have been longer. Jones left behind every red flag indicator of an arson-for-profit: (1) Financial difficulties and far behind on mortgage payments, but insurance premiums paid in full; (2) she removed child and dog from the home; (3) she defrauded insurer by claiming she rented a replacement dwelling but, instead, lived in an RV. Although the insurer did not have to pay Jones her conviction would have no effect on the claim of her mortgagee.
By Barry Zalma, Attorney and Consultant
Reprinted with Permission from Zalma on Insurance, (c) 2015, Barry Zalma.
Barry Zalma, Esq., CFE, is a California attorney who limits his practice to consultation regarding insurance coverage, insurance claims handling, insurance bad faith and fraud and acting as a mediator or arbitrator on insurance disputes. Mr. Zalma serves as a consultant and expert almost equally for insurers and policyholders. He founded Zalma Insurance Consultants in 2001 and serves as its only consultant. He recently published the e-books, "Zalma on Rescission in California - 2013"; "Random Thoughts on Insurance" containing posts from this blog; "Zalma on Insurance;" "Murder and Insurance Don't Mix;" “Heads I Win, Tails You Lose — 2011,” “Zalma on Diminution in Value Damages,” “Arson for Profit” and “Zalma on California Claims Regulations,” and others that are available at Zalma Books.
Mr. Zalma can be contacted at Barry Zalma or firstname.lastname@example.org, and you can access his free "Zalma on Insurance Fraud" newsletter at Zalma’s Insurance Fraud Letter.
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