The South Carolina Court of Appeals ordered a new trial in a fire loss insurance dispute based on the admission opinions from the fire chief that responded to the fire.  On August 6, 2014, in Fowler v Nationwide Mut. Fire Ins. Co., —S.E.2d —, 2014 WL 3844215 (S.C. Ct. App. 2014), the court issued an opinion vacating a jury verdict in favor of an insured because the trial court improperly admitted the fire chief’s opinions regarding the origin, cause, and ignition source relating to the fire.  It found that the fire chief was not properly qualified to provide those opinions and the report detailing the fire did not satisfy the public records exception to the hearsay rule.

In the case, the insured’s home was destroyed by fire.  The local volunteer fire department, including the fire chief, responded to the fire and was responsible for putting the fire out.  When the fire department arrived at the scene, the fire had already burned through the roof and a fallen beam had blocked the front door.  After the fire was suppressed, the fire chief completed a standardized form known as a “truck report,” which was required to be completed following each fire.

Following the fire, the insured filed a claim under the homeowner’s policy covering the residence.  The insurance company conducted an independent investigation of the fire.  The cause and origin investigator retained by the insurance company concluded that the fire was incendiary.  Based on that determination and the insured’s financial circumstances at the time of the fire, the insurance company denied the insured’s claims based on the intentional acts exclusion.  The insured then brought suit against the insurance company.

Before trial, the insurance company moved to exclude any testimony by the fire chief regarding the cause and origin of the fire.  It also objected to entry of the corresponding portions of the truck report containing the fire chief’s opinions.  The trial court determined that the fire chief was not qualified as an expert and, thus, could not provide his opinions.  The trial court did, however, admit the truck report into evidence and allowed the fire chief to testify about the rationale in completing the report.  The report included statements concerning the area of origin of the fire (living room), the cause of ignition (unintentional), and equipment involved in ignition (heater).  During his testimony, the fire chief was allowed to testify regarding each of these portions of the truck report.  At the conclusion of the trial, the jury returned a verdict in favor of the insured and awarded more than $500,000 in damages.

The insurance company moved for a new trial based, in part, on the admission of the fire chief’s testimony.  The trial court denied the motion and found that the fire chief’s testimony was admissible under Rule 701 of the state Rules of Evidence.  It also found that the truck report was admissible under the Rule 803(8)—the public records exception to the hearsay rule.  The insurance company appealed.

The appellate court first considered whether the testimony was inadmissible opinion testimony from a lay witness.  It rejected the trial court’s finding that the testimony offered by the fire chief constituted permissible perceptions admissible under Rule 701.  Instead, the Court of Appeals determined that the testimony constituted opinions that “require special knowledge, skill, experience or training” to be properly admitted.  Based on the trial court’s finding that the fire chief did not satisfy this qualification, the appellate court determined that his opinions were improperly admitted.

Next, the Court of Appeals addressed the admissibility of the truck report.  It began by noting that Rule 803(8)(B) applies only to the extent the record does not include “investigative notes involving opinions, judgments, or conclusions.”  Citing the Illinois case of Bloomgren v. Fire Ins. Exch., 162 Ill.App.3d 594, 517 N.E.2d 290 (1987) in support, the South Carolina court found that the truck report was not admissible under the public records exception because the fire chief was not properly qualified as an expert.

Finally, the appellate court determined that the admission of the fire chief’s testimony and the truck report was prejudicial and warranted a new trial.  It determined that there was a “reasonable probability” that the jury was influenced by the inadmissible opinion from the fire chief and the truck report in making its decision.  In particular, it noted that the insured’s attorney repeatedly referenced the inadmissible evidence throughout the trial.

Maloney Lauersdorf Reiner regularly represents clients in fire loss insurance coverage litigation, including advising clients regarding the admissibility of fire expert testimony and evidence.  Please contact us with any questions about this case or any other matter you see addressed on the Insurance Coverage Blog.