Inferring the Intrusion of an Incendiary Interloper

COMMERCIAL PROPERTY – SUBROGATION – DIRECTED VERDICT
Insurance Co. of State of Pa. v. Just Mgt. Corp.
(2nd Dept., decided 10/14/2008)

This really isn't a coverage case, but "interloper" is a cool word, so I'm blogging this decision.

Insurance Company of State of Pennsylvania paid for the fire loss of its insured's building and commenced this subrogation action against the property manager, alleging that the fire was due to the property manager's negligence. At the close of evidence at trial, the trial court granted defendant's motion for a directed verdict and dismissed the complaint.

The Second Department REVERSED and remitted the matter back to trial:

Viewing the evidence in the light most favorable to the plaintiff (see Szczerbiak v Pilat, 90 NY2d 553, 556), the Supreme Court erred in granting the defendant's motion. The evidence presented at trial established that the defendant provided the day-to-day management of the property, which included changing the locks to the doors and gates of the premises after the eviction of the property's last tenant. Only the defendant had custody of the keys to these new locks. Several weeks after the locks were changed, a representative of the defendant, Christopher Shaman, found that a rear door of the property was open. On that day, according to fire department records, Shaman noticed that the front doors to the premises were open and also saw a person running through the rear door. Shaman testified at trial that he did not know if the lock on this rear door, which was a doorknob "turn" lock, had ever been changed after the eviction of the last tenant. Shaman locked all of the doors and gates to the property.

The following day, the fire department responded to a fire at the property and, finding all of the gates and doors to the property to be locked, cut through the roof of the property to gain access to the interior. The plaintiff's fire investigation expert determined that the fire had originated from "three separate and distinct" fires that had been constructed like campfires, made with materials likely found within the building. The expert testified that there were no signs of flammable liquids, and no ignition or heat source from a utility, appliance, or machine that could have caused the fires. He further testified that he was informed by Shaman that all of the building's utilities had been shut off at the time of the fire. He also testified that he "could not find a way" in which a person or persons entered the building, other than through the use of a key.

The circumstantial evidence was sufficient for the jury to reasonably infer that it was more likely that the defendant's negligence in failing to maintain the security of the property, rather than some other factor or occurrence, resulted in the intrusion of an interloper into the property and the subsequent fire, and could have enabled the jury to reach a determination in favor of the plaintiff based on the logical inferences to be drawn from the evidence (see Gayle v City of New York, 92 NY2d 936, 937; Schneider v Kings Highway Hosp. Ctr., 67 NY2d 743, 744-745; North Am. Specialty Ins. Co. v Schwanter, 39 AD3d 511, 512). In view of the foregoing, the defendant was not entitled to judgment as a matter of law, and the plaintiff is entitled to a new trial.

The reasonable inference of an interloper's intrusion.  An incendiary interloper, at that.  Nice. How often have you seen a property insurer subrogate against the property manager for an arson loss? Evicted tenants, unchanged/old lock, key entry, set fires. That'll do it.