The opinion
STATE OF MAINE SUPERIOR COURT
PENOBSCOT, SS. CIVIL ACTION
Docket No. CV-0;;-9 ,I
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DONALD L. GARBRECHT I .
Norma Hersom, LAW lIBRA~V
Plaintiff
JAN 2 5 2008 FILED & ENTERED
SUPERIOR COURT
v. Decision and Judgment
JAN 04 2000
Liberty Mutual Group, PENOBSCOT COUNTY
Defendant
Hearing on the complaint was held on June 5, 7,8 and 9 and December 26,2006.
On each hearing date, plaintiff Norma Hersom was present with counsel, and a
representative of defendant Liberty Mutual Group appeared with counsel. Through her
complaint, Hersom seeks recovery under a homeowner's insurance policy issued by
Liberty, following a fire in June 2003 that caused substantial damage to her camp located
in Lincoln, Maine. Hersom pursues this claim as one for breach of contract I For the
reasons set out below, the court finds that the fire was the product of an intentional act
and that Hersom participated in the events leading to the fire. Therefore, under the
insurance policy, Liberty is not obligated to pay her for the fire loss. The court denies her
claim and, pursuant to statutory authority, awards Liberty its attorney's fees and costs.
Hersom purchased the camp on a date not clearly revealed in the record. The
structure is located on land leased from a third-party and abuts a lake or pond. Hersom
paid $25,000 to buy it and then, possibly at the recommendation of the insurance agency
where she bought the Liberty insurance policy, insured it for $38,000. The policy
excludes coverage for "any loss arising out of any act committed...by or at the direction
of you [Hersom]. ..and... with the intent to cause a loss," See defendant's exhibit 16.
The policy at issue here provided coverage for a one-year period ending on June 27,
IHersom's complaint also alleged claims of unjust enrichment and breach of fiduciary
duty. At the close of her case-in-chief, the court granted Liberty's motion for judgment
as a matter of law on those two counts, leaving only Hersom's claim for breach of
contract.
1
2003. Four days prior to the last day of that policy period, neighbors reported a fire in the
camp. The Lincoln Fire Department responded and was able to suppress the fire, but
only after it caused considerable damage to the building. In September 2003, Hersom
submitted a claim for $33,000 for the fire loss. See defendant's exhibit 63.
The court first finds that the fire was caused by an intentional human act. This
finding is based, first, on the results of the investigation of the fire scene, which
eliminated other causes for the fire, and, second, on extrinsic evidence implicating
Hersom in the circumstances of the fire.
The fire was investigated by state officials, and Liberty also conducted an
investigation through independent consultants. Those investigations did not reveal any
meaningful evidence that the fire had an accidental or non-human origin. The camp was
not being used or occupied when the fire began. As is revealed by burn patterns, the area
of the fire's origin was on an interior waH or the floor in the bathroom, which is located
on the side of the camp closest to a road and furthest away from the water. The fire
began near an electrical service entrance cable that connects the meter and the electrical
service panel. The meter is the outside of the exterior waH, and the panel is on the inside
of that wall in the bathroom. Although there is evidence of an arc (which is an indication
of a malfunction) on the cable, the cable did not cause the fire to start. If the fire began in
the cable, that is, if the cable had malfunctioned, then the insulation for the cable would
have appeared differently than it did. Additionally, the floor immediately below the
cable was heavily damaged. Damage of this magnitude could not have been caused by a
fire that originated in the cable, which was above the floor. Therefore, despite the
physical proximity to the service entrance cable to the origin area of the fire, the former
did not cause the latter.
Beyond this, the circumstances of the fire scene eliminated any innocent
explanation for the fire. For example, the investigators ruled out, as possible causes and
origins of the fire, the electrical meter box located on the outside wall of the camp; the
connection of the exterior power line to the camp itself; interior wiring, switches and
outlets; the baseboard heater in the bathroom and other elements of the heating system;
the electrical panel itself; the water heater; the woodstove and fireplace; kitchen
appliances; and damage caused by animals.
2
In July 2003, the investigation came to include an independent expert who was
qualified and competent to examine whether a fire can be attributed to an electrical cause.
Prior to that time, the other investigators (both public and private) could only conclude
that the cause of the fire was undetermined, subject to the analysis of the possible role of
electricity and electrical equipment and appliances. When the electrical expert eliminated
electrical causes for the fire, this left only an intentional act as the cause.
Although the physical evidence associated with the fire scene is probably
sufficient by itself to establish the probability of arson, extrinsic evidence provides
additional support for that conclusion. This evidence is relevant not only to the question
of whether the fire was set intentionally, but it also bears on Hersom's own role in the
loss.
Hersom has consistently denied that she had any involvement in the fire. In fact,
she was out of state when the fire occurred. Those denials are overshadowed by
persuasive evidence the she arranged for her brother-in-law, Roger Weston, to set the fire
so that she could try to collect the insurance proceeds. Weston is married to Hersom's
sister, Roxanne, with whom she has a close relationship involving frequent contact. The
most powerful evidence implicating Hersom lies with similar but completely independent
accounts of her involvement provided by her sister, Donna Stanley, and a former friend,
Julie Buzzell. The court accepts their testimony as credible.
In the spring of 2003, which was not long prior to the fire, Hersom told Buzzell
that she (Hersom) was facing financial problems and that the "only way out" to gain
relief from this pressure would be for the camp to burn, allowing her to collect the
insurance proceeds. In fact, Hersom was considerably behind in many of her financial
obligations. She had not paid municipal property taxes on her principal residence in
Glenburn, and in fact in May 2003, the Town of Glenburn filed a tax lien certificate
against the property there. See defendant's exhibit 29. Additionally, she had failed to
pay the taxes on the camp itself. See defendant's exhibit 30. (Although the Town of
Lincoln filed a tax lien subsequent to the date of the fire, the tax payment was overdue as
of June 2003.) Her state income taxes from 2001 were outstanding. See defendant's
exhibit 31. Similarly, she had not paid her federal income taxes from the same tax year,
and they were outstanding at the time in June 2003. See defendant's exhibit 56. She was
3
routinely late with payments to creditors, such as medical providers, a student loan
obligee and the mortgagee on her Glenburn house. At the time of the fire, Sears had
terminated her credit with the company. Two weeks prior to the fire, a local fuel
company had retrieved a propane tank from her residence because she in arrears on her
account. See defendant's exhibit 15. This followed months of efforts by the utility to
collect the arrearage. [d. The camp needed repair work that would cost Hersom between
$2,000 and $5,000. Further compounding this financial difficulty was the May 2003
expiration of a spousal support order requiring her former spouse to pay $525 per month.
See defendant's exhibit 11.
Although Hersom was unable to pay many of the debts she owed to various
creditors, the insurance policy with Liberty was fully paid as of the date of the fire.
Both at trial and in pretrial proceedings, such as several examinations under oath,
Hersom has stated that she was unaware of many of these debts. To the extent that
Hersom actually knew that she was in financial difficulty, she would be motivated to find
a source of relief. Beyond such information that she acknowledged, however, Hersom
was extraordinarily evasive in her trial testimony on these financial matters and professed
a remarkable level of willful ignorance of many aspects of her financial predicament.
The court finds it difficult to believe that there were as many holes in the state of
Hersom's knowledge about her financial condition as she would suggest.
This evidence provides collateral support to Buzzell's testimony that Hersom
articulated a plan to realize needed cash through a fire at the camp. Independent of its
corroborating effect, this evidence also persuasively reveals a motivation for Hersom to
arrange for the camp to be burned.
For a time, Buzzell harbored animosity toward Hersom because of Hersom's
relationship with Buzzell's daughter. Buzzell readily acknowledged this history.
However, Buzzell has repaired her relationship with her daughter. Therefore, if there
once existed a reason for Buzzell to falsely accuse Hersom, that reason no longer existed
at the time of trial, when Buzzell testified. The court has considered this aspect of the
evidence and does not find that it is a basis to discount Buzzell's testimony.
The court also credits Stanley's account of a conversation several days after the
fire. Weston admitted to Stanley that he had set the fire pursuant to a plan with Hersom,
4
where Hersom would pay Weston $10,000. To Weston, however, it did not appear that
Hersom would follow through with that payment, and so Weston solicited Stanley to
approach her father (also Weston's father-in-law and Hersom's father) to get that money.
Weston believed that the father would be willing to provide that assistance for the benefit
of Weston's wife.
There are several reasons why Stanley's testimony is credible.
First, she attributes to Weston information about the way he started the fire.
Weston, according to Stanley, said that he used rubbing alcohol as an accelerant. The
scene did not reveal the presence of any accelerant. However, rubbing alcohol is an
accelerant, and it is one that does not leave evidence that it was used. Thus, the use of
rubbing alcohol is consistent with the physical evidence in this case. Also, Weston also
told Stanley that he tried to make the fire appear electrical in origin. This is also
consistent with the physical evidence because, as is discussed above, the fire started near
the electrical panel inside the bathroom and near the electrical service cable.
Second, Weston was one of the few people who had access to a key for the camp.
The evidence establishes that Hersom, her father, her son and Weston's wife, Roxanne
(one of Hersom's sisters), had keys to the camp. The person who started the fire had
access to the interior of the camp without the need to enter it forcibly, because, based on
the best evidence, the camp was locked at the time of the fire, and there is no persuasive
evidence that the perpetrator broke into the camp? Thus, the universe of possible
arsonists was very small, and Weston fell into that group. Weston denied any role in the
fire but was unable to account for his whereabouts on the date of the fire.
Third, when Weston explained to Stanley that he wanted money, Stanley
considered giving him money of her own in order to protect Hersom. Also, Stanley
initially did not tell the state's investigator about Weston's confession because, she said,
she wanted to protect her sister. As Hersom's counsel noted during closing arguments,
2 Hersom herself testified that the camp was "secured," although it appears that she
attempted to backtrack from this statement by indicating that she meant only that the
camp was "safe." She also stated that the slider door, which faced the water, did not
lock. However, this evidence is of questionable accuracy because of the very fact that
Ishe provided keys to several family members, who had Hersom's ongoing permission to
Iluse the premises. If someone could get into the building through an unlocked access,
there would be no need for Hersom to provide keys to anyone.
5
the evidence does not disclose a reason why Stanley would now falsely implicate Hersom
in the arson. If so, then there is no basis to ascribe any bias to Stanley. However, Stanley
and Hersom were not on good terms. If Stanley wanted to get Hersom into trouble,
Stanley had the opportunity to do so early in the investigation -- but she did not.
Stanley's reluctance to implicate Hersom enhances the credibility of her testimony.
Finally, by all accounts, Buzzell and Stanley do not know each other and have
never met. There has been no opportunity or occasion for the two to collaborate about
their testimony. Accordingly, that each one of those witnesses implicated Hersom with
testimony that coheres with the larger body of evidence presented in this case provides
powerful corroboration for the other's testimony.
From this evidence, the court concludes that Hersom's claim against the Liberty
insurance policy was based on a loss arising from an "act committed... by or at the
direction of. ..[Hersom]. ..and...with the intent to cause a loss." Accordingly, the loss
falls into this policy exclusion and is not covered by the Liberty policy. Liberty therefore
is not obligated to pay Hersom pursuant to that policy.
Liberty seeks an award of its attorney's fees and costs pursuant to 24-A M.R.S. §
2186. Under that statute, a court may award fees and costs to the insurer when "it is
proven that a person committed a fraudulent insurance act. ..." Among other things, a
"fraudulent insurance act" includes
knowingly and with intent to defraud... [p]resenting or causing to be presented, or
preparing any information containing false representations as to a material fact
with knowledge or belief that the information will be presented by or on behalf of
an insured, claimant or application to an insurer. ..concerning... [a] claim for
payment or benefit pursuant to an insurance policy....
24 M.R.S. § 2186(1)(A). The court assumes, without deciding, that the standard of proof
applicable to this claim is the same one that is associated generally with fraud-based
claims for relief, namely, a requirement that the claim be established by clear and
convincing evidence. See, e.g., Petit v. Key Bank of Maine, 688 A.2d 427, 431 (Me.
1996). Here, the evidence of fraud reaches that standard. The evidence discussed above
establishes a high probability that Hersom's claim for insurance proceeds was fraudulent
because the fire was the result of her direction, because she intended to cause the loss,
and because she acted with the intent to defraud Liberty. Accordingly, the court
6
concludes that Liberty is entitled to an award of reasonable attorney's fees and costs.
Defense counsel may submit an affidavit of attorney's fees and costs within 14 days of
the date of this order. Hersom may submit a response to that affidavit within 10 days of
the filing, and Liberty shall have 7 days from Hersom's filing to submit a reply. This
judgment shall not become final until the claim for attorney's fees and costs is
adjudicated.
The entry shall be:
Judgment is entered for the defendant. The defendant shall be entitled to recover
its reasonable attorney's fees and costs. Determination of attorney's fees and costs shall
be made on the basis of additional filings from the parties. The judgment shall not
become final until the claim for attorney's fees and costs is adjudicated.
Dated: January 4, 2008
Justice, MJ if Superior Court
7
01/04/2008 MAINE JUDICIAL INFORMATION SYSTEM ksmith
PENOBSCOT COUNTY SUPERIOR COURT mjxxi013
PAGE A - ATTORNEY BY CASE VIEW
NORMA HERSOM VS LIBERTY MUTUAL GROUP
UTN:AOCSsr -2005-0004186 CASE #:BANSC-CV-2005-00009
SEL VD REPRESENTATION TYPE DATE
01 0000003163 ATTORNEY:BROGAN, JONATHAN
/"
F FOR:LIBERTY MUTUAL GROUP DEF RTND 03/05/2007
02 0000002972 ~RNEY:JORDAN' ANNE
ADDR:415 CONGRE ST PO BOX 4600 PORTLAND ME 04112
F FOR:LIBE MUTUAL GROUP DEF RTND 02/17/2005
W/DRWN 03/05/2007
03 0000008541 ATTORNEY: BROWN , DONALD F
F FOR:NORMA HERSOM RTND 01/10/2005
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