Smith et al v. Allstate Insurance Co

Filing 65

OPINION filed. Signed by Magistrate Judge Joseph H L Perez-Montes on 4/19/2018. (crt,Tice, Y)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
ALEXANDRIA DIVISION

b

LUSTER SMITH

CIVIL ACTION 1:16-CV-00223

VERSUS

JUDGE DRELL

ALLSTATE INSURANCE
COMPANY

MAGISTRATE JUDGE PEREZ-MONTES

OPINION
Plaintiff Luster Smith (“Smith”) seeks payment, penalties and interest from
Allstate Insurance Co. (“Allstate”) pursuant to his homeowner’s insurance policy. A
trial on the merits was held before the undersigned. Because Allstate has shown by
a preponderance of the evidence that Smith intentionally set the fire that destroyed
his home, Smith’s insurance claim is denied.
I.

Background
A.

Procedural History

Plaintiff Smith filed this action in a Louisiana state court against Allstate,
claiming payment under a homeowner’s insurance policy for the total destruction of
his home by fire (Doc. 1-2).

Allstate removed the action, premising jurisdiction on

diversity (Doc. 1). Allstate answered the complaint, asserting the affirmative defense
of arson and denying coverage (Doc. 4). Allstate alleged the evidence showed the fire
was of incendiary origin, and Smith had a financial motive for intentionally
destroying his home (Doc. 4).

B.

Trial Evidence
1.

Eric Zeno (Neighbor)

Eric Zeno (“Zeno”), Smith’s neighbor, testified he saw Smith leave the house
early in the morning (the sun was up). Zeno was not sure what time he saw Smith
leave, but said it could have been 6:00 a.m. (Day 1 of Trial, Witness 1). About 20
minutes after Smith left, Zeno saw smoke coming from Smith’s house (Day 1 of Trial,
Witness 1). Zeno went outside, saw other people gathered, and found someone had
already called the Fire Department (Day 1 of Trial, Witness 1). Zeno saw Smith again
when he returned to his house after fire trucks had arrived.
2.

Kevin Smith (Plaintiff’s Son)

Kevin Smith (“Kevin”), Smith’s son, testified that he is in the Army (27 years)
and the National Guard; he has one brother; his mother is no longer living; and his
father is retired military (Day 1 of Trial, Witness 2). Kevin was living in Arkansas
when the fire occurred on July 5, 2015, but still owned a house in Alexandria,
Louisiana (Day 1 of Trial, Witness 2). Kevin had not been to his father’s house since
April 2015, but spoke to him every day on the telephone (Day 1 of Trial, Witness 2).
A friend called Kevin and told him his father’s house was on fire (Day 1 of Trial,
Witness 2). Kevin contacted a neighbor, Ms. Cooks, who checked on his father, 1 then
he spoke to his father by telephone (Day 1 of Trial, Witness 2). Kevin testified his
father was crying and a little hysterical (Day 1 of Trial, Witness 2). The home was

There was some dispute as to whether Kevin dated his friend, Ms. Cooks, before or after the fire (Day
1 of Trial, Witness 2). Kevin insisted he dated her after the fire occurred, for about 2 months, but he
had known her since childhood.

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an old, wood-frame house, and the kitchen had a bow in the floor (Day 1 of Trial,
Witness 2). Kevin testified the refrigerator look like it could fall through the floor,
due to the bow (Day 1 of Trial, Witness 2). The front of the house was destroyed by
the fire, but the back of the house was not completely gone (Day 1 of Trial, Witness
2).
Kevin testified that his brother, Vallard Smith (“Vallard”), was working
offshore at the time of the fire (Day 1 of Trial, Witness 2). Kevin did not know whether
his father had considered filing for bankruptcy (Day 1 of Trial, Witness 2). Kevin was
unaware his father owed about $48,000 to the IRS because he had not been paying
his income taxes (Day 1 of Trial, Witness 2). He did not know whether Smith was
having any financial difficulties (Day 1 of Trial, Witness 2). Smith had an IRS lien
and had made arrangements to pay it (Day 1 of Trial, Witness 2).
Kevin testified he has things from his parents’ home at his house because he
(and his brother) took a few things after their mother passed away (Day 1 of Trial,
Witness 2). Smith also kept a few clothes at Kevin’s house because he occasionally
spent a day there (Day 1 of Trial, Witness 2). After the fire, Smith stayed in Kevin’s
house (Day 1 of Trial, Witness 2). Smith continued to receive his mail at his own
address for a while after the fire, because Smith forgot to have his mail forwarded to
Kevin’s house.
Kevin testified that his parents had owned the home since 1964, and they were
married about 60 years (Day 1 of Trial, Witness 2). Kevin testified that, although the
neighborhood had changed and become less safe, his father was very attached to his

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house (Day 1 of Trial, Witness 2). Kevin also testified that the lot itself meant
something to them, since it had a large grapefruit tree, a plum tree, a fig tree, and
two pecan trees (Day 1 of Trial, Witness 2).
3.

Anna Fuller (Neighbor)

Anna Fuller (“Fuller”) testified that she had lived two houses down from Smith
since 1976, and her sons played with his sons (Day 1 of Trial, Witness 3). On July 5,
2015, a neighbor knocked on Fuller’s door and told her son that Smith’s house was on
fire (Day 1 of Trial, Witness 3). Fuller’s son immediately told her, and Fuller drove
to Kevin’s house about 30 minutes later and told Smith about the fire (Day 1 of Trial,
Witness 3). Smith was surprised when she told him, threw his hands up in the air,
shaking them, then got into his car and drove home (Day 1 of Trial, Witness 3). Fuller
did not know Smith was at Kevin’s house, but Smith had told her he was staying at
both houses and she had seen him at Kevin’s house two or three weeks before, so she
went to see if he was there (Day 1 of Trial, Witness 3). Fuller further testified that
she did not see Smith moving furniture out of his house (Day 1 of Trial, Witness 3).
After the fire, Fuller saw people taking wiring, Smith’s air conditioner, and
part of his fence (Day 1 of Trial, Witness 3). Fuller did not recognize any of the
thieves, but she said a lot of people walk through the neighborhood at all hours of the
day and night (Day 1 of Trial, Witness 3). Fuller testified Smith told her, later, that
the fire had started from the refrigerator (Day 1 of Trial, Witness 3).

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4.

Mashack McCall, Jr. (Neighbor)

Mashack McCall, Jr. (“McCall”) testified that he had lived in the neighborhood
for 60 years and across the street from Smith since Smith moved there (Day 1 of Trial,
Witness 4). McCall saw Smith the evening of July 4th when he took a plate of food
to his house (Day 1 of Trial, Witness 4). McCall left home between 7:30 and 8:00 a.m.
the next morning to drive to his hunting camp (Day 1 of Trial, Witness 4). McCall’s
wife called him about 45 minutes later to tell him Smith’s house was on fire, and his
car was not there (Day 1 of Trial, Witness 4). McCall’s wife called him again to report
Smith was back home and trying to get into his house (Day 1 of Trial, Witness 4).
McCall’s wife called him a third time to verify the fire was out, Smith was okay, and
someone was going to pick him up (Day 1 of Trial, Witness 4).
McCall testified that he saw Smith’s car at his house every day before the fire
(Day 1 of Trial, Witness 4). Before the fire, McCall did not see Smith move anything
out of his house (Day 1 of Trial, Witness 4). Two or three days after the fire, McCall
saw thieves going in and out of Smith’s house, taking things like a hot water heater
and small boxes (Day 1 of Trial, Witness 4). According to McCall, the neighborhood
had changed over the years, had become “infested” with drugs, addicts, and homeless
people, and had a lot of crime (Day 1 of Trial, Witness 4). McCall testified that
Smith’s backyard was very vulnerable because there was a vacant house behind his
house and a field next to his house (Day 1 of Trial, Witness 4). Anyone could jump
over Smith’s backyard fence and enter his yard from the vacant house or the field
(Day 1 of Trial, Witness 4).

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When McCall went into Smith’s house the evening before the fire, it looked like
it always did, with plaques and things from the military, Smith’s wife’s teaching, the
VA, and the VFW (Day 1 of Trial, Witness 4). Smith had a white stuffed animal in
his living room and a big calendar (Day 1 of Trial, Witness 4). McCall testified that
Smith checked his son’s house every day, although not always at the same time of
day (Day 1 of Trial, Witness 4).
5.

Luster Smith (Plaintiff)

Smith testified he was 75 years old when the fire occurred (Day 1 of Trial,
Witness 5). He and his wife were married almost 50 years when she passed away,
and he has two sons (Day 1 of Trial, Witness 5). Smith was in the military for 20
years, then he worked at the VA Medical Center in Pineville, Louisiana for 25 years
(Day 1 of Trial, Witness 5). Smith’s wife taught school (Day 1 of Trial, Witness 5).
Smith receives retirement pay from the military and the VA, as well as Social
Security, for a total of $2,898.16 per month (Day 1 of Trial, Witness 5).
Smith has received the National Defense Service Medal, the Good Conduct
Medal, the Meritorious Service Medal, a Bronze Star, Service Stars, the Republic of
Vietnam Campaign Medal, a Bronze Star with Device Expert, and a Purple Heart
(Day 1 of Trial, Witness 5). Some of those awards were destroyed in the fire, and
some were only charred (Day 1 of Trial, Witness 5). All of Smith’s awards were in the
fire (Day 1 of Trial, Witness 5). Smith testified that, after the fire, he went into the
house and retrieved the 2012 calendar with his wife’s date of death circled, and a
teddy bear (“Pookie”) he had given her (Day 1 of Trial, Witness 5).

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Smith testified his father-in-law purchased the house for his wife in the 1960s
and they immediately insured it through Allstate (Day 1 of Trial, Witness 5). They
paid $8,700 for the house, paid it off, then mortgaged it again for $40,000.00 (for
remodeling) about 15 years before the fire (Day 2 of Trial, Witness 1). Smith finished
paying the second mortgage off after the fire (Day 1 of Trial, Witness 5). Smith paid
the premiums on the Allstate homeowner’s insurance policy through the date of the
fire (Day 1 of Trial, Witness 5).
Smith testified that, although he said in his first deposition that he had not
gone into the house after the fire, he had forgotten about retrieving the calendar and
the teddy bear Pookie a couple of days after the fire (Day 1 of Trial, Witness 5). Smith
had also said a fireman had given them to him, which was not correct (Day 1 of Trial,
Witness 5). Smith said his memory became clearer about a week after the fire (Day
1 of Trial, Witness 5). Smith said both the bear and calendar were smoky but not
burned because they were in his wife’s bedroom, which did not burn (Day 1 of Trial,
Witness 5). The teddy bear was a little discolored from smoke (Day 1 of Trial, Witness
5). Smith wiped the bear down but it is still discolored (Day 1 of Trial, Witness 5).
Smith did not remove any medals from his house (Day 1 of Trial, Witness 5). Smith
said he stayed shaky for about six months after the fire (Day 1 of Trial, Witness 5).
Smith testified he always gets up at 5:00 a.m., has breakfast, and dresses (Day
1 of Trial, Witness 5). On the day of the fire, he checked on Kevin’s house after
breakfast, about 6:00 or 6:15 a.m. (Day 1 of Trial, Witness 5). Smith checked Kevin’s
house three or four times per week, at different times of the day (Day 1 of Trial,

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Witness 5). Smith never lived for any protracted time in Kevin’s house, and all of
Smith’s belongings were in his own home (Day 1 of Trial, Witness 5). Kevin did not
have a TV or radio at his house (Day 1 of Trial, Witness 5). Anna Fuller went to
Kevin’s house to tell Smith his house was on fire, which shocked Smith (Day 1 of
Trial, Witness 5).
At least a week after the fire, an Allstate representative (Childs) visited Smith
at Kevin’s house and took a picture of him with the teddy bear Pookie and the
calendar (Day 1 of Trial, Witness 5). Smith was still not fully alert and was somewhat
confused (Day 1 of Trial, Witness 5). The fire was of incendiary origin and gasoline
was used to start it, possibly from a weed eater that was in the kitchen (Day 1 of
Trial, Witness 5).
Smith said he owed the IRS money, but had been paying them $191.00 every
month from his Social Security check for ten years, and is still doing so (Day 1 of
Trial, Witness 5). Smith owed two separate tax debts to the IRS for non-payment of
income taxes–one for $1,270 and one for about $47,900 (Day 2 of Trial, Witness 1).
Smith had been repaying the smaller tax debt, and was not yet repaying the larger
debt (Day 2 of Trial, Witness 1). Smith stated in his sworn statement that he had
intentionally not paid his income taxes for ten years because he believed he would be
dead before the IRS could collect those taxes from him (Day 2 of Trial, Witness 1).
The IRS placed a lien on his house for the tax debts and began garnishing his Social
Security checks (Day 2 of Trial, Witness 1). Smith also testified that he does not pay
state taxes (Day 2 of Trial, Witness 1).

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Smith finished paying his mortgage after the fire (Day 1 of Trial, Witness 5).
Before Smith finished paying his mortgage, his monthly expenses (including the IRS
lien payments) were $2,352.42 per month, and he had between $400 and $500 left
over every month (Day 1 of Trial, Witness 5). Also, his wife worked as a school teacher
(Day 1 of Trial, Witness 5). Smith testified he has never had financial problems, he
lived within his means, has never filed for bankruptcy, and has no intention of filing
for bankruptcy (Day 1 of Trial, Witness 5).
Smith told the IRS investigator that he knew the IRS debt would be paid from
his insurance check, but testified that he did not actually know that until later (Day
2 of Trial, Witness 1). Smith testified that he hired a tax service to help him deal
with the IRS, but they had not done anything after he paid them $7,000, so he stopped
paying them (Day 2 of Trial, Witness 1). Smith also spoke to a tax attorney, but never
hired him (Day 2 of Trial, Witness 1). Smith spoke directly to someone with the IRS
one time (Day 2 of Trial, Witness 1). Smith told an Allstate adjuster he had never
received notification that there was a lien on his house, but admitted his Social
Security checks were garnished because of the tax lien, and admitted he received
notice that his checks would be garnished (Day 2 of Trial, Witness 1). Smith stated
in his September 2015 statement that he did not realize the IRS would be paid first
from his Allstate claim (Day 2 of Trial, Witness 1).
Smith testified that he did not know anything about a recorded ten-year-old
judgment against him, in favor of First Deposit National Bank for $4,146, that was

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never cancelled (Day 2 of Trial, Witness 1). Smith did not recall the judgment, being
sued, or paying a judgment (Day 2 of Trial, Witness 1).
Smith denied considering filing for bankruptcy within the five years prior to
the fire (Day 2 of Trial, Witness 1). Smith had debts of $26,209 (including his
mortgage), as well as his debts to the IRS, for a total debt of over $70,000 at the time
of the fire (Day 2 of Trial, Witness 1). The mortgage was paid off after the fire (Day
2 of Trial, Witness 1). Apparently, Smith forgot to tell Allstate about a monthly
payment he was making to Tower Loan (Day 2 of Trial, Witness 1). Smith testified
that, even if he did not list his monthly expenses correctly, his monthly income still
exceeded his monthly expenses (Day 2 of Trial, Witness 1). Smith was not behind on
any of his bills and he always had enough income to pay all of his bills (Day 2 of Trial,
Witness 1).
Smith testified that, the day of the fire, he does not think he locked the door
when he left his house because he was not going far (Day 1 of Trial, Witness 5). There
was no evidence of a forced entry or theft prior to the fire (Day 1 of Trial, Witness 5).
Smith left his home between 6:00 and 6:15 a.m. and arrived at his son’s house about
20 minutes later (Day 1 of Trial, Witness 5). Smith admitted he may have said his
kitchen floor was not in need of repair and was not sinking because it did not bother
him (Day 1 of Trial, Witness 5). Smith did not intend to mislead or defraud Allstate,
and if he gave inconsistent statements, he was very upset and did not do so
intentionally (Day 1 of Trial, Witness 5). He had lived in the house for almost 50
years (Day 1 of Trial, Witness 5).

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Smith also denied speaking to Cooks (Kevin’s friend) at the scene, saying he
did not know her at the time, though she apparently handed him a phone (Day 1 of
Trial, Witness 5). Smith testified that Toni Cooks (Hudson) would not have known
he was at his son’s house because he had only ever seen her twice: (1) the morning of
the fire; and (2) once after the fire, when she dated Kevin (Day 2 of Trial, Witness 1).
Smith testified he may also have failed to say he had a weed eater in his
kitchen and an empty gas can under his carport when he first spoke to the Allstate
attorney (Day 1 of Trial, Witness 5). No weed eater or gas can was ever found by the
investigators (Day 1 of Trial, Witness 5). Smith said all of his tools (hammer, saws,
screw drivers) were gone (Day 1 of Trial, Witness 5). Smith testified the only way
gasoline could have been in the kitchen was from the weed eater (Day 1 of Trial,
Witness 5). Smith also testified he had never lived in Kevin’s house for days, weeks,
or months before the fire (Day 1 of Trial, Witness 5).
Smith testified he was told by Allstate that the fire had been started by
gasoline on the kitchen floor, and it was intentionally set (Day 2 of Trial, Witness 1).
Smith testified he was still not thinking clearly three months after the fire, when he
gave a sworn statement in September 2015 (Day 2 of Trial, Witness 1). Smith said
first heard about the gasoline from Rick Gilly, an Allstate employee (Day 2 of Trial,
Witness 1). However, in his September statement, Smith said he first heard about
the gasoline in September, from Allstate’s attorney.

Smith testified he never

accidentally or intentionally poured gasoline on his kitchen floor and set fire to his
home (Day 2 of Trial, Witness 1).

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Smith testified that, when he and his wife remodeled the house, the kitchen
was converted from gas to electricity (Day 2 of Trial, Witness 1). Smith testified that,
when he stated in September 2015 that nothing had ever been done to the wiring in
the house, that was not true as to the kitchen (Day 2 of Trial, Witness 1). New wiring
was put in the kitchen because it was expanded, but the rest of the house was not
rewired (Day 2 of Trial, Witness 1).
Smith testified he did not want to enter his house after the fire, but he did (Day
2 of Trial, Witness 1). Part of the house was not destroyed, and only had smoke and
heat damage (Day 2 of Trial, Witness 1).

Smith remembered an insurance

investigator making an inventory, but did not recall refusing to enter the house with
her (Day 2 of Trial, Witness 1). In September 2015, Smith stated he did not know of
anything being missing before the fire (Day 2 of Trial, Witness 1).
In November 2015, Smith said in a supplemental statement that he did not
know anything about a defect in his kitchen floor or foundation problems causing the
floor to sink (Day 2 of Trial, Witness 1). Smith testified at trial that he did not know
anything about the kitchen floor sinking and did not recall discussing it with his son,
but it was possible (Day 2 of Trial, Witness 1). Smith stated in a previous affidavit
that, although he knew his kitchen floor was sinking, he did not think of it as defective
(Day 2 of Trial, Witness 1). Smith explained that a sinking kitchen floor was a normal
situation for him since he had lived in the house so long, and he did not pay attention
to it (Day 2 of Trial, Witness 1). He did not consider a sinking floor to be a defect,
since the house was 75 years old (Day 2 of Trial, Witness 1).

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Smith admitted he had cooked breakfast the morning of the fire, and turned
the stove off after cooking (Day 2 of Trial, Witness 1). Smith further admitted he kept
his tools and weed eater stored next to the refrigerator, between the freezer and the
sliding glass door (Day 2 of Trial, Witness 1). Smith did not know whether there was
any gas in the weed eater at the time of the fire (Day 2 of Trial, Witness 1). Smith
admitted that his previous statement, that he had used the weed eater about a month
before, was not true (Day 2 of Trial, Witness 1). In his September 2015 statement to
an investigator, Smith admitted he did not like yard work, had not done any in a
while, and had not used his weed eater in years, although he had previously stated it
had only been three months (Day 2 of Trial, Witness 1). Smith testified the only thing
he had in the house that the gasoline could have come from was the weed eater (Day
2 of Trial, Witness 1). Smith stated he thought he locked the house when he left that
morning, but also stated he did not usually lock it if he was going to be gone for only
a short while (Day 2 of Trial, Witness 1). The investigator told Smith that no tools or
weed eater were found after the fire (Day 2 of Trial, Witness 1). Smith stated they
were probably stolen (Day 2 of Trial, Witness 1). V
The day before the fire was July 4 and Smith could not remember whether he
went anywhere (Day 2 of Trial, Witness 1). Smith testified he does not usually go
anywhere on July 4, but might have told the Allstate investigator that he had gone
to a VFW dance (apparently in an attempt to impress her) (Day 2 of Trial, Witness
1). Smith got up at 5:00 a.m. the next morning, but did not go to church (although he
was a deacon). Smith stated he left his house between 6:00 and 6:30 a.m. on the

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morning of the fire and went directly to his son’s house (Day 2 of Trial, Witness 1). If
he told the Allstate fire investigator that he left his house at 7:00 a.m. that morning,
that statement was wrong (Day 2 of Trial, Witness 1).
Smith had been gone from his home about an hour when Anna Fuller knocked
on Kevin’s door and told Smith his house was on fire (Day 2 of Trial, Witness 1).
Smith thought Anna knocked on the door between 7:00 and 7:30 a.m. (Day 2 of Trial,
Witness 1). However, since the fire did not occur until about 8:45 a.m., it must have
been later (Day 2 of Trial, Witness 1). Smith thought he had locked his house when
he left, but he did not really remember (Day 2 of Trial, Witness 1). Smith also testified
that he was 76 years old, but he did not have Alzheimer’s disease (Day 2 of Trial,
Witness 1).
Smith denied that he ever spent the entire night at Kevin’s house (Day 2 of
Trial, Witness 1). Smith checked on Kevin’s house in the morning and sometimes
checked on it in the evening and stayed a while, just to let people know someone was
there, but he did not spend the whole night or live there because there were no
conveniences such as a TV, radio, washing machine, dryer, or microwave (Day 2 of
Trial, Witness 1). Smith likes to read, so he kept a few books at Kevin’s house (Day
2 of Trial, Witness 1). Smith admitted he might have told the Allstate investigator
(Childs) he “seldom” spent the night at Kevin’s house (Day 2 of Trial, Witness 1).
Smith also admitted he may have told her he liked to watch TV at his son’s house,
even though there was no working TV (Day 2 of Trial, Witness 1). Smith stated he
may have been telling her what he did at his own house, although she had apparently

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asked about Kevin’s house (Day 2 of Trial, Witness 1). After the fire, Smith stayed
at Kevin’s house and had his telephone land line moved there (Day 2 of Trial, Witness
1). Although all of Smith’s bills were sent to his house, in June 2015 Smith filled out
an application for a credit card at WalMart with his son Kevin’s address (Day 2 of
Trial, Witness 1). Apparently, both his and Kevin’s addresses were provided (Day 2
of Trial, Witness 1).
Smith testified the teddy bear Pookie and the calendar were sitting in his wife’s
bedroom on a gold chair from Japan that was close to the outer wall (Day 2 of Trial,
Witness 1). Smith testified the teddy bear did not burn, but had some smoke and
heat damage (Day 2 of Trial, Witness 1). Smith wiped away some of the residue that
was on it (Day 2 of Trial, Witness 1). The bear was originally white, and is now a
dusty-looking off-white (Day 2 of Trial, Witness 1). Smith noticed his wife’s hope
chest was also okay (Day 2 of Trial, Witness 1).
Smith initially thought, and stated, a fireman or policeman must have brought
the teddy bear and calendar out to him (Day 2 of Trial, Witness 1). Smith told
Allstate’s investigator the firemen had given them to him (Day 2 of Trial, Witness 1).
Smith told Allstate’s attorney that if he had gone into the house, he would have gotten
his medals and the pictures of his wife (Day 2 of Trial, Witness 1). Smith also thought
the firemen had gotten several things out of his house for him, such as medals and
year books, but the firemen said they did not take anything out of the house and
Smith cannot find those items (Day 2 of Trial, Witness 1). Smith testified at trial

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that he entered his house on July 7th and picked up the teddy bear and some of his
charred medals (Day 2 of Trial, Witness 1).
Smith testified that, after he began thinking more clearly, he did not go to
Allstate and correct his misstatements because he did not realize what he had been
saying to Allstate (Day 2 of Trial, Witness 1).
6.

Barbara Ann Cole (Neighbor)

Barbara Ann Cole (“Cole”) testified that she had lived in Smith’s neighborhood
for 55 years (her entire life), and her house was across the street and a few houses
down from Smith’s home (Day 1 of Trial, Witness 6). Cole’s husband, Randy Cole, cut
Smith’s grass, using his own mower, weed eater, and gasoline (Day 1 of Trial, Witness
6). Cole testified she washed her car the morning of the fire, from after 7:00 a.m. to
about 8:45 a.m. (Day 1 of Trial, Witness 6). Cole first noticed smoke in the sky,
smelled something burning, walked down the street, and saw black smoke coming
from Smith’s house (Day 1 of Trial, Witness 6). Another neighbor had already called
the fire department (Day 1 of Trial, Witness 6). Cole then went to Anna Fuller’s home
to see if she knew how to get in touch with Smith (Day 1 of Trial, Witness 6). Cole
testified Fuller said Smith had been “staying with his son” (Day 1 of Trial, Witness
6).
7.

Randy Cole (Neighbor)

Randy Cole testified that he had known Smith for about 12 years, and had
been mowing his yard every two weeks for about eight years (Day 1 of Trial, Witness
7). Randy Cole used his own mower, weed eater, and gasoline to mow Smith’s yard

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(Day 1 of Trial, Witness 7). Randy never saw a gas can under Smith’s carport, and
never knew of Smith cutting his own grass (Day 1 of Trial, Witness 6). Randy testified
that Smith was not always at home, but he always returned home (Day 1 of Trial,
Witness 7).
8.

Thomas Force (Expert Witness)

Thomas Force (“Force”), a firefighter and fire prevention officer with the
Alexandria Fire Department, was accepted as an expert in the field of investigation,
origin, and cause of fires (Day 2 of Trial, Witness 2). Force was the senior officer on
site during the fire at Smith’s home (Day 2 of Trial, Witness 2).
Force testified that no one asked him about retrieving anything from Smith’s
home (in accordance with department policy), and none of the firefighters there
remember Smith asking for anything from his house (Day 2 of Trial, Witness 2).
Force did not see the teddy bear or the calendar in any pictures of the fire scene, or
in the bedroom (Day 2 of Trial, Witness 2). Force testified the bear in the photo did
not look like it had been in a fire because it was not sooty, wet, wrinkled, burned, or
damaged by fire suppression efforts, and its eyes were not melted (Day 2 of Trial,
Witness 2). The gold chair the bear and calendar were supposed to have been on had
extensive fire and heat damage (Day 2 of Trial, Witness 2). When the bear was
introduced into evidence, Force said it could not have been in the room during the fire
because it would have a lot more damage (Day 2 of Trial, Witness 2). Since the bear
is synthetic, it would have melted at a fairly low temperature and would have more
damage even if the soot was washed off (Day 2 of Trial, Witness 2). Force also testified

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that the calendar, which appeared to be a coated paper, would have been partially
burned at a minimum, given the fire conditions in the room (Day 2 of Trial, Witness
2). The room was damaged by the fire, or the heat and smoke from the fire, so the
bear would have been damaged also (Day 2 of Trial, Witness 2).
Force also did not see a weed eater, and did not recall seeing a gas can (Day 2
of Trial, Witness 2). The fire started in the kitchen near the refrigerator and freezer
(Day 2 of Trial, Witness 2).

Force determined the fire was caused by human

involvement, pouring gasoline in the kitchen and starting it (Day 2 of Trial, Witness
2). An arson investigation was opened and is technically still open, although there is
no longer any active work being done on the case (Day 2 of Trial, Witness 2). Although
there is no evidence that Luster Smith was responsible for the fire, Smith could not
be ruled out as a suspect (Day 2 of Trial, Witness 2).
9.

Kerri Steger (Allstate Adjuster)

Kerri Steger (“Steger”) testified that she is a contents large loss adjuster for
Allstate (Day 3 of Trial, Witness 1). Steger inventories contents after a loss, large
losses only (Day 3 of Trial, Witness 1). Steger inventoried Smith’s house on July 8,
2015 (Day 3 of Trial, Witness 1). Smith told her he could not go into the house with
her and was very emotional (Day 3 of Trial, Witness 1). Steger went through the
house, took photographs, then went out and talked to Smith twice before she started
the inventory (Day 3 of Trial, Witness 1). Steger testified that, in Smith’s wife’s
bedroom, the clothes were melted off the hangers, there was heavy soot and smoke,
and there was a large hole in the wall from the kitchen (Day 3 of Trial, Witness 1).

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Steger did not see a large white teddy bear or a 2012 calendar in the house (Day 3 of
Trial, Witness 1). The chairs in Smith’s wife’s bedroom were sooty, charred, and had
heat damage (Day 3 of Trial, Witness 1). Anything sitting on the chairs would have
had the same damage (Day 3 of Trial, Witness 1). Steger testified the calendar and
bear should have had heavy smoke and soot on them if they were in the bedroom, so
she did not think they were in the bedroom during the fire (Day 3 of Trial, Witness
1). Steger did not think the bear and calendar in the photograph could have been in
the bedroom during the fire because everything in that room was heavily smoked,
sooty, and/or partially burned (Day 3 of Trial, Witness 1). Steger further testified
that, to clean something like a stuffed animal, just wiping it down will not get the
soot and odor out of it (Day 3 of Trial, Witness 1).
The only thing Steger took from the house and gave to Smith was a box with
his wife’s funeral programs that had been in the front middle bedroom closet (Day 3
of Trial, Witness 1). Steger testified she sends everything to be cleaned that could
possibly be salvaged (Day 3 of Trial, Witness 1). If something cannot be cleaned, she
has to list it as a total loss (Day 3 of Trial, Witness 1). Nothing in Smith’s home was
salvageable (Day 3 of Trial, Witness 1). Steger did not find any tools or a weed eater
in Smith’s house (Day 3 of Trial, Witness 1).
Steger inventoried Smith’s house five days after the fire (Day 3 of Trial,
Witness 1). If a claimant tells her something has been stolen and it was damaged by
the fire, she includes it in her inventory (Day 3 of Trial, Witness 1). If something was
stolen that was not damaged, the claimant is instructed to file a theft report with a

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law enforcement agency and a separate claim with Allstate (Day 3 of Trial, Witness
1).
10.

Daniel Snow (Expert Witness)

Daniel Snow (“Snow”), a retired forensic consultant and expert in the origin
and cause of fires and explosions, testified that he was employed by Allstate to
investigate the fire (Day 3 of Trial, Witness 2). Snow found the heaviest damage in
the southwest corner of the kitchen (Day 3 of Trial, Witness 2). Snow sent a piece of
the wood flooring from the kitchen to a lab, which found it had evaporated gasoline
and no oil (Day 3 of Trial, Witness 2). Snow concluded a “good amount” of gasoline
was poured on the floor and intentionally ignited, causing the house fire (Day 3 of
Trial, Witness 2). Snow also found the glass on the sliding glass doors in the kitchen
had burst outward (Day 3 of Trial, Witness 2). Snow did not find anything that could
have accidentally caused the fire (Day 3 of Trial, Witness 2). Snow also did not find
any remnants of a weed eater or other tools in the house (Day 3 of Trial, Witness 2).
Snow also testified that a weed eater was not responsible for the gasoline on the
kitchen floor because there was no oil mixed in with the gas (Day 3 of Trial, Witness
2).
Snow stated he did not think the bear could have been in the house during the
fire because its synthetic fur was not sooty or melted (Day 3 of Trial, Witness 2).
Snow also stated the bear would still smell like smoke (Day 3 of Trial, Witness 2).
The calendar would have been burned completely, given the temperatures in that

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room (Day 3 of Trial, Witness 2). In Snow’s opinion, given the time line established
by the testimony, Smith set the fire in his house (Day 3 of Trial, Witness 2).
11.

Linda Childs (Investigator)

Linda Childs (“Childs”) testified that she is a self-employed private
investigator who was employed by Allstate to gather information, canvass witnesses,
and preserve evidence on Smith’s claim (Day 3 of Trial, Witness 3). Childs testified
Smith told her two different stories about the bear when she interviewed him: (1) that
a firefighter brought the bear out to him; and (2) that he got the bear out of the house
himself (Day 3 of Trial, Witness 3). Childs did not notice any fire damage to either
the bear or the calendar (Day 3 of Trial, Witness 3).
12.

Fernando I. Morales, Jr. (Investigator)

Fernando I. Morales, Jr. (“Morales”) testified that he is a special investigator
(“senior claims analyst”) employed by Allstate (Day 3 of Trial, Witness 3). Morales
testified Smith’s case was sent to the special claims department because it was
incendiary and there were financial distress issues, which indicate a potential for
fraud or deception on the part of the insured (Day 3 of Trial, Witness 3). Rick Gilly
was the structure adjuster. Steger’s job was contents, and Gilly employed Dan Snow
to investigate. Sandra Hendricks was the first special investigator, but the claim was
passed to Morales when she became ill (Day 3 of Trial, Witness 3). Hendricks took a
detailed statement from Smith, so Morales did not need to (Day 3 of Trial, Witness
3). Morales hired Childs to canvass witnesses (Day 3 of Trial, Witness 3).

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Morales recommended denying the claim (Day 3 of Trial, Witness 3). Gilly’s
assessment of the value of the home was between $30,000 and $40,000, but the
coverage limit (to rebuild) was much higher than that (Day 3 of Trial, Witness 3).
Morales found the IRS lien of $47,967 was an indication of financial distress (Day 3
of Trial, Witness 3). Smith’s claim was worth $203,000, which would have been paid
to the IRS (first) and Smith (Day 3 of Trial, Witness 3). Smith would not have
received enough to replace his house (Day 3 of Trial, Witness 3). However, if the
claim was paid, Smith could live in Kevin’s house for two years and his sons would
not later inherit the tax liens (Day 3 of Trial, Witness 3).
Morales testified that Allstate also investigated the issue of whether Smith
occupied his home for 60 days before the fire, but did not deny his claim on that basis
(Day 3 of Trial, Witness 3). The basis for the denial of Smith’s claim was arson (Day
3 of Trial, Witness 3).
II.

Law and Analysis
A.

Burden of Proof

A denial of liability based on arson, by a fire insurer sued on a fire insurance
policy, is an affirmative defense. See Miley v. U.S. Fid. & Guar. Co., 94-1204 (La.
App. 1st Cir. 4/7/95, 3), 659 So.2d 792, 794, writ denied, 95-1101 (La. 6/16/95), 660
So.2d 436. Under Louisiana law, 2 to sustain the defense of arson, or incendiarism,
insurers bear the burden of proving the defense by a preponderance of the evidence.

Because this case falls within federal diversity jurisdiction, we must apply Louisiana law. See Wilson
v. State Farm Fire & Cas. Ins. Co., 178 Fed. Appx. 437, 440 (5th Cir.2006) (citing Erie R.R. Co. v.
Tompkins, 304 U.S. 64, 79-80 (1938)).
2

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See Wilson v. State Farm Fire & Cas. Ins. Co., 178 Fed. Appx. 437, 440 (5th Cir.
2006), cert. den., 54 U.S. 888 (2006) (citing Sumrall v. Providence Washington Ins.
Co., 221 La. 633, 60 So.2d 68, 69 (1952)). Recognizing that in most cases the only
evidence of arson is circumstantial due to the fact that perpetrators of incendiarism
do not engage in such activity notoriously, the Louisiana Supreme Court has
repeatedly stated that:
Inasmuch as the defense is arson, the burden rested upon the insurer to
establish, by convincing proof, that the fire was of incendiary origin and
that plaintiff was responsible for it. It is well settled that the insurer
need not prove its case against a plaintiff beyond a reasonable doubt; it
suffices that the evidence preponderates in favor of the defense. Proof,
of course, may be and invariably is entirely circumstantial. And, in
these instances, a finding for defendant is warranted where the evidence
is of such import that it will sustain no other reasonable hypothesis but
that the claimant is responsible for the fire.
See id.; Rist v. Commercial Union Ins. Co., 376 So.2d 113, 113-14 (La. 1979). As an
evidentiary matter, “[m]otive plus the incendiary origin of the fire [will], in the
absence of believable rebuttal evidence, be sufficient to sustain the affirmative
defense pleaded by the insurer.” See Wilson, 178 Fed. Appx. at 440 (citing Sumrall,
60 So.2d at 70); see also Ashworth v. State Farm Fire & Cas. Co., 738 F. Supp. 1032, 1034
(W.D. La. 1990).
Louisiana law requires the insurer to prove the claimant was in “dire financial
straits” before it would be proper for a court to infer from circumstantial evidence
that he had the motive necessary to commit arson. See Wells v. State Farm Fire &
Cas. Co., 2013 WL 6044371, at *3 (E.D. La. 2013) (citing Wallace v. State Farm Fire
& Cas. Ins. Co., 345 So.2d 1004, 1007, writ ref’d, 349 So.2d 334 (La. 1977) (insured
was not in such dire financial condition as to motivate him to commit arson)); see also
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Kelly v. Commercial Union Ins. Co., 709 F.2d 973, 976 (5th Cir. 1983) (the court was
not convinced that the plaintiffs' financial status was such as would motivate a person
to burn down his property); Evans v. State Farm General Ins. Co., 36,539 (La. App.
2d Cir. 12/11/02), 833 So.2d 1143, 1147, writ den., 2003-0125 (La. 3/21/03), 840 So.2d
539 (although insureds were not in “deep” financial need due to a prior bankruptcy,
the amount of the claim greatly exceeded the value of the property, creating a
financial motive for arson).
The incendiary nature of the fire is not disputed by Smith (Doc. 62, p. 2/13).
Smith contends there is no direct evidence that he is responsible for setting the fire,
and that he did not have a financial motive to destroy his home. Smith argues he
was not deeply in debt, he had a good income, and he was always able to pay all of
his bills every month.
The parties dispute Zeno’s testimony. Zeno was uncertain as to the time Smith
left his home and did not establish a time line, but he saw smoke about 20 minutes
after Smith left. The time the smoke was seen by other neighbors and the fire
department was called, sometime between 8:15 and 8:45, is established with more
certainty. 3 The fire department reports show the incident occurred at 8:45 a.m. (it is
unclear whether that is when the neighbors reported the fire or when the fire trucks
arrived at the scene). Although Smith contends he left his home between 6:00 and
6:30 a.m., his testimony is self-serving and is not supported by any other testimony

Zeno testified he saw smoke coming from Smith’s house about 20 minutes after he saw Smith drive
away, but Zeno was uncertain what time that was. McCall testified his wife saw smoke sometime
between 8:15 and 8:45 a.m. Cole saw smoke about 8:45 a.m., then walked down the street to Fuller’s
house. Fuller said the fire trucks arrived sometime between 9:00 and 10:00 a.m.
3

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or evidence. Smith clearly had the opportunity to start the fire in his house before he
left that morning. Smith’s testimony that he was not home at the time of the fire is,
likewise, self-serving and uncorroborated.
Neither Smith nor anyone else was able to provide another explanation as to
how and why gasoline was ignited on his kitchen floor. Smith’s claim that his weed
eater must have leaked is contradicted by the physical evidence that there was no oil
in the gasoline found on the floor. No one was able to verify Smith’s statements that
he had a weed eater in his kitchen, or that he kept a gas case under his carport.
Instead, the evidence established that Randy Cole cut and trimmed the grass in
Smith’s yard with his own tools and gasoline, and Cole had never seen a weed eater
or a gas can at Smith’s house.
No one saw anyone other than Smith leaving his house the morning of the fire,
and no one was able to suggest a person, other than Smith, who may have had a
motive to set Smith’s house on fire.
The parties argued extensively about the teddy bear Pookie at trial. Smith
testified he removed the bear and a calendar from the house two days after the fire.
Allstate argues, however, that the bear and calendar must have been removed before
the fire. Again, Allstate’s theory is that the bear and calendar had sentimental value
for Smith, and that their removal from the house before the fire – and Smith’s lack of
candor about the same – are powerful evidence that Smith intentionally started the
fire. The Court agrees.

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All testifying fire investigators were unanimous in their opinion that the bear
and the calendar could not have been in the house fire because they did not have
smoke or heat damage. The physical items were admitted into evidence and shown
to witnesses at trial. They bore no semblance of the damage suffered by any other
item in Smith’s house. Smith testified the items were stored on a gold chair. Photos
of the chair were also admitted and compared to the bear and calendar. The chair,
and the items and walls around it, suffered extensive fire damage. The bear and the
calendar, however, were aged, disclored (almost certainly from age), but bore neither
visual nor olfactory evidence, of any kind, that they were exposed to the fire. All of
this evidence and testimony supported a plain conclusion. Smith’s testimony that he
did not remove the items before the fire is simply implausible and unsupportable.
Smith further contends he did not have a motive for destroying his home.
Allstate’s theory is that Smith wanted to destroy his insured property in order to have
enough money (from insurance) to pay his debt to the IRS. Smith argues he had
already paid one debt to the IRS over the last ten years, and would have no problem
paying off the second debt. However, Smith’s second debt was much larger than the
first, and he had not begun paying it. Smith could probably foresee a larger payment,
and thus a smaller monthly income than he had been enjoying. The insurance money
would enable Smith to pay off his tax debt, so his sons would not later inherit it.
Moreover, Smith’s tax debt to the state had not yet been realized. A second tax debt
payment would decreased his monthly income even further.

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Smith’s financial circumstances were sufficiently dire to motivate him to
commit arson. Therefore, Smith had a financial motive for destroying his home.
Although lengthy arguments are made in the post-trial briefs about Smith’s
misrepresentations, Special Investigator Morales clearly testified that Smith’s claim
was denied because of arson. He explained that Smith’s inconsistent statements
tended to make Allstate believe some statements were false, which led Allstate to
look for the reason for his misrepresentations (Day 3 of Trial, Witness 3). The
inconsistencies weighed against Smith in Allstate’s arson determination.
Smith’s inconsistent statements also weigh against him here. Even allowing
for inconsistencies due to age and upset, Smith’s testimony was not fully credible. In
particular, Smith offered conflicting stories about how he came to possess the teddy
bear and the calendar at his son’s house, and how they were both unscathed by fire.
Smith also offered inconsistent statements as to how much time he had been spending
at his son Kevin’s house and whether or not he had been living there part time; his
financial circumstances, including his tax debts to the IRS; whether his son Vallard
Smith was offshore at the time of the fire and when he last saw him; whether he had
locked the doors of his house on the day of the fire; and the nature of his dealings
with the IRS to repay his tax debts.
Material misrepresentations were not the basis for Allstate’s denial and, thus,
may not form the basis of this Court’s decision. But they do militate heavily in favor
of the Court’s finding regarding the actual basis of Allstate’s denial.

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Under the facts of this case, Allstate established by a preponderance of the
evidence that the fire in Smith’s home was of incendiary origin and that Smith had a
financial motive and an opportunity to cause the fire. The preponderance of the
evidence shows that Smith intentionally caused the fire in his house. Therefore,
Smith’s claim for payment, penalties, and interest under his homeowner’s insurance
is denied.
III.

Conclusion
Accordingly, pursuant to a judgment issued this day, Luster Smith’s claim for

payment, penalties, and interest under his Allstate homeowner’s insurance policy is
denied and dismissed with prejudice.
THUS ORDERED AND SIGNED in Chambers at Alexandria, Louisiana on
this 19th day of April, 2018.

_____________________________________
Joseph H.L. Perez-Montes
United States Magistrate Judge

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