Shaba v. Allstate Indemnity Company

Filing 37

OPINION AND ORDER denying 30 Motion in Limine; denying 26 Motion in Limine; granting 29 Motion in Limine. Signed by District Judge Terrence G. Berg. (Chubb, A)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
RITA SHABA,
Plaintiff,
v.
ALLSTATE INDEMNITY CO.,

CIV. NO. 13-10690
HON. TERRENCE G. BERG
HON. LAURIE J. MICHELSON

Defendant.
______________________________/
OPINION AND ORDER DENYING PLAINTIFF’S
MOTION IN LIMINE (DKT. 26), GRANTING
DEFENDANT’S MOTION IN LIMINE (DKT. 29) AND
DENYING DEFENDANT’S MOTION IN LIMINE (DKT. 30)
This case involves a claim for fire insurance proceeds. Plaintiff
Rita Shaba (“Plaintiff”) owns a rental property – 19385 Charest,
Detroit, Michigan (the “Property”) – that was damaged by a fire on
November 24, 2012. Plaintiff’s property was insured by Defendant
Allstate Indemnity Company (“Defendant”). Following the fire, Plaintiff
submitted an insurance claim to Defendant. Defendant denied
Plaintiff’s insurance claim, due to a suspicion that the fire was
intentionally set by Plaintiff or by someone at Plaintiff’s direction.

Plaintiff and Defendant have each moved in limine seeking to
prevent the introduction of certain evidence; Defendant also moves to
reverse the order of proofs at trial (Dkts. 26, 29 and 30).

The Court

heard oral argument on these motions on February 10, 2014. In brief,
Plaintiff’s motion seeks to prevent Defendant from introducing evidence
at trial concerning other fire losses on five (5) other properties owned or
managed by Plaintiff’s brother (Robert Shaba) or sister (Rana Shaba).
Defendant’s first motion in limine (Dkt. 29) seeks to prohibit Plaintiff
from introducing evidence concerning “Allstate’s general dealings
and/or handling of other insurance claims,” “Allstate’s alleged bias
against the City of Detroit and/or [] Plaintiff’s race or ethnicity and/or
any direct or implied reference that Plaintiff’s denial was racially or
ethnically motivated,” “Plaintiff’s and/or her brother, Robert Shaba’s
lack of criminal prosecution for the November 24, 2011 fire,” and
“general or generic references to other fires or arson in the surrounding
neighborhood and/or [the] City of Detroit.” Defendant’s second motion
in limine (Dkt. 30) seeks to reverse the order of proofs at trial, and
permit Defendant to lead the proofs and present rebuttal. Following
oral argument, the Court ruled that Plaintiff’s motion (Dkt. 26) was
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denied, Defendant’s first motion (Dkt. 29) was granted and Defendant’s
second motion (Dkt. 30) was denied.
Defendant’s motions are adjudicated for the reasons stated on the
record in open court. With regard to Defendant’s first motion to exclude
evidence concerning Defendant’s general handling of other claims in the
City of Detroit, or its alleged racial or ethnic bias in dealing with such
claims, the Court finds that such evidence is not relevant, and is clearly
more prejudicial than probative, and thus inadmissible under Fed. R.
Evid. 403. Plaintiff does not allege that Defendant acted with racial or
ethnic bias in this case. As to any evidence showing that Robert Shaba
was not prosecuted for arson, the parties have agreed that this evidence
is inadmissible under Kelly's Auto Parts, No. 1, Inc. v. Boughton, 809
F.2d 1247, 1253 (6th Cir. 1987).
As to Defendant’s second motion (Dkt. 30), seeking to reverse the
order of proofs and allow Defendant to proceed first with its defense, the
Court has broad discretion to resolve this issue.

Plaintiff retains the

burden of proof on her breach of contract claim. Consequently, it is
appropriate to allow Plaintiff to open and to rebut any defense that may
be offered. Allowing Defendant to go first would increase the potential
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for confusing the jury, presenting the case as if Plaintiff were the
accused, being sued for committing arson. Maintaining the standard
order of proofs will avoid this confusion and make it clear that the case
is about Plaintiff’s complaint that her insurance claim was not paid.
The Court does not find that reversing the order of proofs at trial is
appropriate in this matter. Defendant’s request to lead the proofs at
trial is denied. See, e.g., Nissan v. State Farm Fire & Cas. Co., Case No.
11–13047, 2013 WL 4482957 *4 (E.D. Mich. Aug. 20, 2013).
The Court next turns to Plaintiff’s motion in limine (Dkt. 26) to
exclude evidence of other fire insurance claims.
A. Plaintiff’s Motion in Limine is Denied
As noted earlier, Plaintiff’s motion seeks to prevent Defendant
from introducing evidence at trial concerning other fire losses on
properties owned or managed by Plaintiff’s brother (Robert Shaba) or
sister (Rana Shaba).
Plaintiff testified at her deposition that her brother “managed” the
Property. Defendant contends that Plaintiff may be a “straw owner” of
the Property, and that Mr. Shaba was the true owner.1 Defendant also

Error! Main Document Only.Specifically, Defendant proffered the following evidence in its
response to Plaintiff’s motion in limine (Dkt. 27): Robert Shaba reportedly located the Property for
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proffered evidence indicating that Robert Shaba had three prior fire
claims for rental properties in the City of Detroit in the five years
preceding the loss at issue in this case, and that he was also involved in
two prior fire insurance claims for rental properties purportedly owned
by his sisters – one owned by Plaintiff, and the second owned by
another sister, Rana Shaba. Defendant states that Robert Shaba acted
as the property manager for these houses on his sisters’ behalf. In
brief, the other fires are:
1) December 31, 2006 fire loss of property located at 19192
Hershey, Detroit, Michigan. The property was owned and
insured by Robert Shaba;
2) June 30, 2007 fire loss of property located at 19381 Havana,
Detroit, Michigan. The property was owned and insured by
Robert Shaba;
3) November 20, 2009 fire loss of property located at 19327
Hershey, Detroit, Michigan. The property was owned and
insured by Robert Shaba;

purchase (Plaintiff’s Deposition, Tr., p. 43:22-25, Dkt. 27, Ex. 2); Robert Shaba suggested to the
Plaintiff that she purchase the Property (Id. at p. 44:1-5); Plaintiff had never been inside the
Property (Id. at p. 45:13-17 – 46:5); Plaintiff could not describe the Property (Id. at p. 52:21-53:8;
56:8-16); Plaintiff was not involved in procuring the insurance policy but was merely “told by Robert
Shaba where to sign” (Id. at p. 68:24 - 69:7); Robert Shaba located the tenants for the Property (Id. at
p. 50:13-24); Plaintiff never met any of the tenants who occupied the insured premises (Id. at p.
73:17-18); Robert Shaba prepared the lease agreements (Id. at p. 77:24-28); Plaintiff could not
describe any of the alleged improvements made at the Property or their costs (Id. at p. 54:17 - 55:22;
57:7-10); Plaintiff allowed her brother access to thousands of dollars she had hidden at their parent’s
home for the purpose of paying for improvements to the Property (Id. at p. 49:7-24; 56:3-7; 56:17-57;
57:7-60:25); and, Plaintiff testified that she relied entirely upon her brother to manage the Property
as she “trusted him” (Id. at p. 45:13-17; 46:6-10; 48:14-17; 60:19-22).

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4) January 14, 2011 fire loss of property located at 502 Colton,
Detroit, Michigan. The property was owned by Plaintiff Rita
Shaba and managed by Robert Shaba; and,
5) July 19, 2011 fire loss of property located at 20011 Hanna,
Detroit, Michigan. The property was owned by Rana Shaba and
managed by Robert Shaba.
Defendant seeks to introduce evidence concerning this prior fires, and
attendant insurance claims, under Fed. R. Evid. 404(b) and under
Michigan’s “doctrine of chances.” Rule 404 provides that prior-acts
evidence, when relevant, is admissible unless it is offered to prove “the
character of a person in order to show action in conformity therewith.”
The Rule includes a non-exhaustive list of those purposes for which
prior-acts evidence may be admitted: “motive, opportunity, intent,
preparation, plan, knowledge, identity, or absence of mistake or
accident.” Fed. R. Evid. 404(b).
The issue squarely presented in this case is whether the fire that
damaged the property was an accident or whether it was set as part of a
plan or scheme by Plaintiff – or her brother – to make fraudulent
insurance claims. That Plaintiff’s brother made or was involved in at
least five prior fire claims, several of which were suspicious, is probative
of whether the fire in this case was accidental or intentional.
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Defendant also proffered evidence that Robert Shaba was the trueowner of the Property, and that Plaintiff may have been just a “strawpurchaser.” The evidence proffered by Defendant about Robert Shaba’s
prior fires revealed some similarities. In particular, that each fire
involved rental properties in the City of Detroit, and each fire occurred
in close proximity to the eviction, or threatened eviction, of the tenants
of those properties. Additionally, Defendant intends to introduce expert
testimony that the prior fires were acts of arson or, as to one fire, of an
undetermined cause, but raising some suspicions of arson.
Furthermore, prior-acts evidence in this case could be particularly
relevant because of the doctrine of chances, recognized by Michigan
courts. That doctrine posits that the more often an accidental or
infrequent incident occurs, the more likely it is that its subsequent
reoccurrence is not accidental or fortuitous. Where prior acts of
apparent coincidence are similar, the repeated reoccurrence of such an
act takes on increasing relevance to support the proposition that there
is an absence of accident. See, e.g., People v. Mardlin, 487 Mich. 609
(2010) (evidence of prior fires admissible in arson prosecution, as they
constituted a series of similar incidents – fires involving homes and
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vehicles owned or managed by the defendant – the frequency of which
objectively suggested that one or more of the fires was not caused by
accident).
In sum, the Court finds that evidence concerning the prior fires is
admissible under Fed. R. Evid. 404(b), to prove motive, intent, plan,
absence of mistake or accident. See, e.g., Hammann v. Hartford Acc. &
Indem. Co., 620 F.2d 588, 589 (6th Cir. 1980); Westfield Ins. Co. v.
Harris, 134 F.3d 608, 614 (4th Cir. 1998). Defendant’s explanation for
why it denied Plaintiff’s insurance claim is that it had reason to believe
that Plaintiff and her brother were involved in an on-going scheme or
plan to commit insurance fraud. Defendant seeks to offer the proof of
the circumstances of the prior claims to show Plaintiff’s motive, intent,
plan, and the absence of any mistake or accident relating to this fire
loss.
As stated on the record during the hearing on these motions,
Defendant will, however, be required to make an offer of proof for each
of the five prior fires, before any evidence concerning these fires will be
allowed to be presented to the jury. The offer of proof will address the
circumstances of the prior fire claim, and will articulate the permissible
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purpose under Fed. R. Evid. 404(b) for which the evidence is being
offered. Furthermore, the Court intends to give the jury a limiting
instruction, advising that the jury may not consider evidence of the
prior fires for impermissible purposes, specifically “to prove that on a
particular occasion the person acted in accordance with the character or
trait.” Fed. R. Evid. 404(a)(1).
For the reasons set forth above, Plaintiff’s motion in limine (Dkt.
26) is DENIED, Defendant’s first motion in limine (Dkt. 29) is
GRANTED, and Defendant’s second motion in limine (Dkt. 30) is
DENIED.
SO ORDERED.
s/Terrence G. Berg
TERRENCE G. BERG
UNITED STATES DISTRICT JUDGE
Dated: February 14, 2014

Certificate of Service
I hereby certify that this Order was electronically submitted on
February 14, 2014, using the CM/ECF system, which will send
notification to each party.
s/A. Chubb
Case Manager

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