Fire claims are intimidating, complex, and downright incindiary—especially when arson is a potential conclusion. The U.S. Fire Administration estimates that one in every 10 fires in theU.S.is set deliberately. The National Fire Protection Association (NFPA) reports that at least 26,500 structures and 14,000 vehicles were intentionally set on fire in 2011 (the most recent year for which data is available).

Even when arson is established, it can be difficult to prove that an insured set a fire, as opposed to someone else. Since many arsonists work alone and at night, witnesses can be tough to find, while the fire involved in the crime itself also destroys much of the evidence. As a result, circumstantial evidence can be critical. Debt, divorce, and financial troubles like pending foreclosure, tax liens, and bankruptcy can provide insight into the crime and motive.

In light of these challenges and in the face of wildfires and plant explosions, how can adjusters and other claims professionals ensure their investigations are thorough, accurate, and defensible in court? Let's begin with heeding lessons from a recent arson case and the warning signs displayed on the next page.

Getting Caught for Arson

On June 17, 2008, a fire broke out at 1021 Mark Avenuein Scranton, Pennsylvania. When the fire department arrived at the scene, they not only found both the residence and garage on fire, but also the neighboring residences. Samantha McDonald and her infant son were also injured as a result of the fire.

In 2012, after a meticulous investigation and subsequent court proceedings, Thomas S. Gervasi, the owner of the property, was convicted of of six counts of arson (endangering persons), four counts of criminal mischief, two counts of arson (reckless burning or exploding), and one count each of arson (endangering property) and insurance fraud.

The Investigation

When investigating the fire, Pennsylvania State Trooper Russell Andress and Scranton Fire Detective Martin Monahan discovered that the fire started in the garage attached to 1021 Mark Avenue. Both officers spoke to Gervasi on multiple occasions during the investigation. Gervasi maintained that he was present at the property doing yard work when the fire began. He told the officers that he did not know how the fire started and that he suspected it was either the catalytic converter in his Cadillac Escalade or an old chain saw he had trouble starting that day.

The investigation eliminated Gervasi's proposed causes, and a number of other potential ones. It also revealed a large hole in the right rear corner of the garage that had burned through the floor. Investigators smelled an overpowering odor of gasoline when digging through the debris in the hole and found a large number of steel belts from a tire at the bottom of it.

Additionally, investigators discovered Gervasi had filed for bankruptcy in 2004. The bankruptcy was discharged unsuccessfully on June 12, 2008, merely 5 days before the fire. They also learned that Gervasi owned numerous properties that were in foreclosure at the time of the fire, including 1021 Mark Avenue. In addition, there were multiple liens and late credit card and mortgage payments.

After examining all of the physical evidence, interviewing witnesses, and probing Gervasi's financial circumstances, Andress officially declared the fire arson and arrested Gervasi.

Trial Court Decisions

At trial, Trooper Andress testified regarding photographs from the scene and his report of an experiment he conducted to test the theory that the fire was started in a tire. As part of the experiment, Trooper Andress stuffed cotton/polyester rags inside an old car tire, sprinkled gasoline on them, and then lit them on fire. The test was not to recreate the actual crime, but a test of the trooper's general theory regarding the mechanism (gasoline) used to ignite the fire.

On December 21, 2011, a jury convicted Gervasi of the 14 charges. On March 16, 2012, he was sentenced to a term of no less than five and no more than ten years' incarceration in a state correctional institution, followed by one year of special probation.

The Appeal

Predictably, Gervasi appealed the court's decision based on the findings of the investigation (Commonwealth v. Gervasi, 1533 MDA 2012, 1666 MDA 2012 [Pa.Super. 07/08/2013]).

The appeal centered on the following questions:

Was Gervasi's financial situation admissible in court?
Are re-creations admissible?
If one or both questions are answered in the negative, then should the judgment be reversed?
Was he arrested late, and was the refusal to take the jury for a view prejudicial to Gervasi?

In general, appeals of admissibility evaluate the record in the light most favorable to the verdict winner, giving the prosecution the benefit of all reasonable inferences to be drawn from the evidence. Evidence will be deemed sufficient to support the verdict when it establishes each material element of the crime charged and the commission thereof by the accused, beyond a reasonable doubt. Nevertheless, the Commonwealth need not establish guilt to a mathematical certainty. A defendant's guilt may be proven by entirely circumstantial evidence, especially in arson cases.

Allowing Financial Evidence

Since Gervasi failed to object at trial to the presentation of his financial condition, he could not preserve that issue for review. Regardless, appellate courts give the trial court broad discretion, only reversing a trial court's decision to admit or deny evidence on clear evidence that the court abused its discretion. An abuse of discretion is not merely an error in judgment; it's an overriding misapplication of the law, the exercise of judgment that is manifestly unreasonable, or the result of bias, prejudice, ill-will or partiality.

The trial court found that evidence regarding Gervasi's financial situation was relevant to establish his motive to commit arson with which the appellate court agreed. Although the Commonwealth cannot introduce evidence of financial problems in order to suggest to the jury that some stigma be attached to the individual defendant, the court has held that there is no absolute bar to the admission of all evidence of financial difficulties. Under such circumstances, the admissibility of the disputed testimony should be assessed under the traditional considerations of relevancy. In fact, evidence of specific debts may be introduced where the jury may clearly draw an inference that the financial difficulties of the defendant were material to his motive or state of mind in committing a crime.

Evidence is not unfairly prejudicial simply because it is harmful to the defendant's case. The trial court is not required to sanitize the trial to eliminate all unpleasant facts from the jury's consideration where those facts are relevant to the issues at hand. The court concluded that the evidence of Gervasi's financial condition was relevant evidence of motive.

Re-creating the Events

There are three basic types of evidence that are admitted into court: 1) testimonial evidence, 2) documentary evidence, and 3) demonstrative evidence. Trooper Andress reenactment of the burning tire is demonstrative evidence. The purpose of demonstrative evidence is to render other evidence more comprehensible. As in the admission of any other evidence, a trial court may admit demonstrative evidence when relevance outweighs any potential prejudicial effect.

The appellate court concluded that the trial court properly handled demonstrative evidence, as it was relevant to show that the Commonwealth's theory of how the fire started—evidence that was more easily understood through demonstration. Gervasi's argument also failed because the court instructed the jury, using language agreed upon by the parties, on the nature of the experiment and that it was a demonstration merely to test the trooper's theory of how the fire started.

Based on these key elements, and other arguments during trial and appeal, the Superior Court of Pennsylvania upheld Gervasi's conviction in July 2013.

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