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Mastowski v. American National Property and Casualty Co.

United States District Court, D. Arizona

August 25, 2017

Charles Mastowski, et al., Plaintiffs,
v.
American National Property and Casualty Company, Defendant.

          ORDER

          NEIL V. WAKE SENIOR UNITED STATES DISTRICT JUDGE.

         Before the Court is a Motion for Summary Judgement (Doc. 99) filed by defendant American National Property and Casualty Company ("American National") against plaintiffs Charles and Sondra Mastowski ("the Mastowskis"). After this motion had been briefed, the parties provided supplemental briefing at the Court's request. (Docs. 127, 128, 130.) Also before the Court are two motions to preclude expert testimony: one filed by American National (Doc. 104), and one filed by the Mastowskis (Doc. 98). The Court now considers these and all accompanying briefing.

         I. FACTUAL BACKGROUND

         The following facts are construed in the light most favorable to the plaintiffs.

         In the early morning hours of August 29, 2014, police received a call from an unknown male reporting light smoke emanating from the Mastowskis' home in Superior, Arizona. (Doc. 101 at 2; Doc. 118 at 2.) Fire crews arrived and extinguished what turned out to be a substantial fire that had done considerable damage to the house and its contents. (Doc. 101-6 at 17.) Police also arrived on scene, including Detective Bryan Lawrence, Chief of Police Mark Nipp, and Officer Anthony Doran from the Superior Police Department. (Doc. 101 at 2; Doc. 118 at 2.) The Mastowskis, however, were not home. Several hours earlier they had embarked on an overnight drive to Henderson, Nevada, where they planned to visit their son. (Doc. 101 at 2; Doc. 118 at 13.) A restaurant receipt shows they had made it to Kingman, Arizona, about 250 miles from Superior, by 6:42 AM that morning. (Doc. 101-5 at 31; Doc. 118 at 14.) After assessing the scene, the police department called Sondra and suggested she and her husband return as soon as possible. (Doc. 101 at 4; Doc. 118 at 2.) The Mastowskis immediately filed a claim under their fire insurance policy; their provider, defendant American National, opened a claim on the policy on August 29, 2014. (Doc. 118 at 19.) The claim was for $102, 993.11. (Doc. 101 at 11; Doc. 118 at 5.)

         The day the claim was filed American National hired investigator Robert Buffington and appraiser Scott Bumm to evaluate the Mastowskis' losses. (Doc. 101 at 4; Doc. 118 at 2.) Over several reports stretching from one day to ten months after the fire, Buffington found no evidence of flammable liquids starting the fire, forced entry to the home, or that the fire was started by accident.[1] (Doc. 101 at 4, 7, 21; Doc. 118 at 2-3, 4, 10.) The final report he submitted to American National in June of 2015 concluded that the fire, which started in four separate areas of the house, was the product of "human involvement, " though he could draw no conclusions about the source of ignition. (Doc. 101 at 21; Doc. 118 at 8.) Under a section entitled "Recommended work to be performed, " Buffington listed, among other things, "Fire modeling can be completed by an engineer, if necessary." (Id.) "Fire modeling" is a form of mathematical modeling used to calculate a fire's duration and trajectory. (Doc. 118 at 24.) American National did not conduct fire modeling, though an expert retained by the Mastowskis insists it should have been done in the course of the investigation. (Doc. 118 at 24.)

         As for who started the fire, the Superior Police Department considered the Mastowskis themselves the prime suspects. (Doc. 101 at 5; Doc. 118 at 3.) A report produced by the Casa Grande Fire Department on September 3, 2014, concluded the fire was "incendiary, " and that ignition "by an open-flame ignition source such as a match or a lighter" was the "most probable cause of the fire." (Doc. 101-1 at 25.) The report also noted that the house was "secured" (i.e., locked) when firefighters arrived. (Id. at 18.) There were no signs of forced entry noted at the time. (Id. at 25.) In light of all this, American National transferred the claim to its special investigation unit based on a decision by its Property Loss Claims Committee. (Doc. 101 at 6; Doc. 118 at 3.) On September 5, 2014, American National also retained a lawyer to investigate the claim. (Doc. 99 at 4; Doc. 101 at 6; Doc. 118 at 3.)

         American National's continued investigation yielded a report about the Mastowskis' neighbors, who, according to the report, told investigators that the Mastowskis were "loners" who kept to themselves and had recently put significant work into their home. (Doc. 101 at 8; Doc. 118 at 4.) American National went on to collect the Mastowskis' financial records, cell phone records, and service call records from the Superior Police Department. (Doc. 101 at 9-10.) At American National's behest, Charles and Sondra then each completed two oral examinations under oath, one on November 6, 2014, and one on March 13, 2015.[2] (Doc. 101 at 12; Doc. 118 at 5; Doc. 101 at 19) The first round turned up inconsistencies in the Mastowskis' respective accounts of whether and when they might have lost an extra electronic opener to their garage. (Doc. 101-4 at 31.) A detective also submitted a report to American National's attorney noting, among other things, that nothing of value was stolen from the home before the fire and that Charles never retrieved several guns police officers had removed from the property the day of the fire. (Doc. 101-5 at 10.)

         On May 31, 2015, American National's retained counsel produced a recommendation and opinion letter detailing his investigation findings. (Doc. 101-5.) Many of the findings echoed those made previously by local fire officials and by American National's hired investigator. However, the letter also set out a theory that the Mastowskis may have had a financial motive to set the fire. While the investigation revealed the Mastowskis had kept up timely payments on their automobiles, the letter detailed several other indications that they may have been experiencing financial hardship at the time of the fire. Specifically, the letter stated that the Mastowskis had once filed for bankruptcy (without specifying when), that they purchased their house in 2013, but that Charles was periodically unemployed between August of 2013 and April of 2014, at which time a serious illness caused him to leave his job with a mining company indefinitely. (Doc. 101-5 at 51-52.) The letter informed American National that the Mastowskis had recently cashed out Charles's pension worth $35, 000 and used about $28, 000 to repay their daughter for money they had borrowed to pay off credit card and gambling debts. (Doc. 101-5 at 52.) The letter also stated that "$20, 000 was transferred to savings on August 26, 2014" (id), though it offered no details about where that money came from, whose savings account it went to, and whether that money was readily accessible to the Mastowskis afterward. The letter noted two other possible suspects for the fire: one of several individuals connected to a December 2013 break-in across the street from the Mastowskis, as well as an unknown male who was photographed in the Mastowskis' driveway on September 10, 2014. (Doc. 101-5 at 53.) The letter provided no other details regarding evidence for or against either of these suspects, except to note that "[t]he involvement of a disgruntled contractor or person or persons in possession of keys or the garage controller to the Mastowski residence is possible." (Doc. 101-5 at 54.)

         Ultimately the letter stated:

Taken as a whole evidence of a greater weight, more convincing evidence, establishes the following:
1. The Mastowskis had motive and opportunity to cause the loss;
2. There was no forced entry;
3. Nothing was stolen or removed from the premises including items with street value like tools, golf clubs, guns and electronics;
4. The next door burglary involved forced entry and theft as well as damage to the premises;
5. There was no damage to the Mastowski residence except by the fires;
6. The fires were set in an attempt to burn the premises completely however [sic], an obvious and useful tool for this arson, charcoal lighter fluid, was left unused on the Kitchen island despite the fact that at least three fires were attempted to be started in the Kitchen;
7. The Mastowskis would have gained a new residence, a personal property check in the amount of tens of thousands of dollars and had their living expenses paid while waiting for the premises to be rebuilt;
8. The Mastowskis would have been able to live in Mesa, AZ where Mr. Mastowski was receiving treatment for his medical condition.

(Doc. 101-5 at 57.) The letter recommended denying the claim "due to the insured's, Charles and Sondra Mastkowskis' intentional ...


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