Allstate Insurance Company v. James Antoon and Mary Antoon

ca02-577

ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

WENDELL L. GRIFFEN, JUDGE

DIVISION II

CA02-577

April 16, 2003

ALLSTATE INSURANCE COMPANY AN APPEAL FROM UNION COUNTY

APPELLANT CIRCUIT COURT [CIV00-200-2]

V. HON. DAVID F. GUTHRIE, JUDGE

JAMES ANTOON and

MARY ANTOON

APPELLEES AFFIRMED

Allstate Insurance Company appeals from a jury verdict entered in favor of James and Mary Antoon which resulted in Allstate having to pay the Antoons' claim for fire loss after it denied the claim on grounds of arson. Allstate argues that the trial court erred in not allowing it to introduce an out-of-court statement made by a witness who died before trial, and in not permitting it to cross-examine the Antoons' expert witness about the deceased witness' statement, which was contained in the expert's report and reviewed by him before testifying. We hold that the trial court's decision on those rulings were not an abuse of discretion.

James and Mary Antoon owned a home located at 730 North Jefferson Street in ElDorado, Arkansas, and maintained a homeowners insurance policy with appellant. The appellees' insurance policy was in full force and effect when a fire destroyed their home on December 28, 1999. During investigation of the fire by Captain Wayne Worth of the El Dorado Fire Department, Margaret Taylor, appellees' elderly neighbor, voluntarily contacted Captain Worth to report that she had seen appellees taking items out of their house in boxes for approximately two weeks leading up to the fire. Captain Worth included Taylor's statement in his official department report. Taylor also made a similar statement to several of appellant's investigators. Following its investigation, appellant determined that the fire was caused by arson, either committed by appellees or at their request, and denied their claim for fire loss. Appellees subsequently filed this lawsuit against appellant to recover under their policy, plus a statutory penalty, interest, and attorney's fees.

Prior to trial, appellant sought to depose Taylor on January 23, 2001, at Taylor's home. However, on the day of the deposition, Taylor became visibility upset and fearful when appellees arrived for the deposition. The deposition was cancelled and was to be rescheduled at a later date; however, appellant was unable to reschedule Taylor's deposition before she passed away.

On March 9, 2001, appellant filed a motion requesting that it be allowed to introduce into evidence the El Dorado Fire Department's official report of the investigation and Taylor's unsworn statement about appellees' activities before the fire under the hearsay exception set forth in Rule 803(6), (8), and (24) and Rule 804(5)(b) of the Arkansas Rules of Evidence. In a pre-trial hearing, appellant proffered: (1) Captain Worth's official reportof the investigation of the fire which mentioned that "[t]he older lady that lives next door asked if I would come over to her house because she had something she would like to tell me....She said that the Antoon boy had been taking things in boxes out of the house for about two weeks"; (2) the affidavit of Mack Hicks, an Allstate claims representative, which asserted that Taylor "stated that, prior to the fire, she observed James Antoon and someone else moving items out of the house...on several occasions at night"; (3) the affidavit of John Kenney, an investigator for Allstate, stating that Taylor stated "over a period of a couple of months prior to the fire, she had observed...James Antoon and another individual removing boxes and placing them in the rear of the pickup"; (4) and the affidavit of Shane Strabala, a law firm employee, stating "Taylor noted seeing a number of boxes which were moved from the house in the weeks leading up to the fire....the items moved from the house were sufficient to set up housekeeping at another residence." After considering the parties' arguments, the trial court denied appellant's request.

At trial, appellees testified that they did not set the fire and that everything they owned burned in the fire. Appellees mentioned that in October of 1999, James bought a set of drums, but that because of the noise, he moved the drum set to his mother's garage a couple of days after they were purchased. Around the same time, appellees stated that they sold their leather furniture to a friend for one hundred and fifty dollars and in exchange for the friend's couch and chair. Appellees explained that the leather furniture was difficult to maintain with little children who spilled food and milk on it and a dog that started gnawing on it. In addition, the appellee stated that before the fire they had taken Christmas items outof the house because they were celebrating Christmas at three different places that year. At the time of the fire, the big presents for their children still remained at the places where they had celebrated Christmas.

James Davis, the fire marshal with the El Dorado Fire Department, testified that his duties were to perform arson investigations and inspections. Chief Davis testified that he did a follow up to the investigation of the fire conducted by Captain Worth. According to Chief Davis, he could not find any motive for appellees to burn their house. Chief Davis mentioned that he could not determine the exact cause of the fire and that although the fire could have been caused by arson, he could not prove that. Appellant's expert, Gary Brooks, a cause and origin specialist for Crawford Fire and Forensics Unit (an international company offering adjustments services to insurance companies), testified in detail about his investigation of the fire. He determined that the fire was caused by a flammable liquid poured onto the floor and ignited by a person.

The jury returned a verdict in favor of appellees and the trial court entered a judgment awarding appellees $35,000 for content coverage under their homeowners insurance policy, plus interest and attorney's fees. It is from this judgment that appellant now appeals.

I. Residual Hearsay Exceptions

For its first point, appellant argues that the trial court abused its discretion in excluding Margaret Taylor's statement on the erroneous assumption that it was inadmissible because appellees could not cross examine her, thus, testing her accusations. Questions regarding the admissibility of evidence are matters entirely within the trial court's discretion. Belz-Burrows, L.P. v. Cameron Constr. Co., 78 Ark. App. 84, 78 S.W.3d 126 (2002). A trial court's evidentiary rulings will not be reversed on appeal absent an abuse of discretion and a showing of prejudice. Jackson v. Buchman, 338 Ark. 467, 996 S.W.2d 30 (1999).

Taylor told several persons that she observed appellees removing items from their home before the fire. Due to Taylor's death prior to trial, appellant wanted to introduce her statement made to others into evidence as support for its case that appellees intentionally caused the fire that destroyed their house. Neither party questioned the fact that Taylor's statement was hearsay. However, appellant argues that the trial court erred because Taylor's statement was admissible under an exception to the hearsay rule set forth under either Ark. R. Evid. 804(b)(5), where availability of declarant is immaterial, or Ark. R. Evid. 803(24), where declarant is unavailable.

Hearsay is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted. Hearsay statements are not admissible except as provided for by the Arkansas Rules of Evidence. Ark. R. Evid. 802 (2002). Both Rule 804(b)(5) and Rule 803(24), the residual hearsay exception clauses, permit what would otherwise be inadmissible hearsay into evidence under the following conditions:

Other exceptions. A statement not specifically covered by any of the foregoing exceptions but having equivalent circumstantial guarantees of trustworthiness, if the court determines that (i) the statement is offered as evidence of a material fact; (ii) the statement is more probative on the point for which it is offered than any other evidence which the proponent can procure through reasonable efforts; and (iii) the general purposes of these rules and the interests of justice will best be served by admission of the statements into evidence. However, a statement may not be admitted under this exception unless the proponent of it makes known to the adverseparty sufficiently in advance to provide the adverse party with a fair opportunity to prepare to meet it, his intention to offer the statement and the particulars of it, including the name and address of the declarant.

These residual exception clauses are to be narrowly construed and are not meant to authorize trial courts to admit hearsay statements that do not fall within one of the other exceptions contained in Rules 803 and 804(b). Hill v. Brown, 283 Ark. 185, 672 S.W.2d 330 (1984). All the common-law exceptions to the hearsay rule are based upon necessity or upon some compelling reason for attaching more than average credibility to the hearsay. Consequently, any new exception must have circumstantial guarantees of trustworthiness equivalent to those supporting the common-law exceptions. Id. In determining trustworthiness under the residual hearsay exception in 803(24), the trial court must determine that (1) the statement is offered as evidence of a material fact, (2) the statement is more probative on the point for which it is offered than any other evidence the proponent can procure through reasonable efforts, and (3) the general purposes of the rules and the interests of justice will best be served by admission of the statements into evidence. Blaylock v. Strecker, 291 Ark. 340, 724 S.W.2d 470 (1987). Appellant argues that Taylor's statement had sufficient indicia of trustworthiness because she was a disinterested witness; she voluntarily approached the appropriate officials to give her statement; her statement was based upon personal observation; and she never recanted her statement.

We disagree. Appellant offered Taylor's statement to support its theory that appellee committed arson. However, Taylor's statements were not more probative on this point then the testimony of the expert witnesses who investigated the cause of the fire. Furthermore, appellees testified to removing certain items from their home prior to the fire. But what may be even more important is that Taylor refused to make the statements attributed to her under oath when appellant scheduled her deposition. The fact that she would not repeat her statements under oath in her own home certainly gives one reason to be unpersuaded that her unsworn statements carried sufficient indicia of trustworthiness to be admitted into evidence at trial. To admit an unsworn hearsay statement into evidence at trial would defeat the whole purpose of the hearsay rule. The residual hearsay exceptions were intended to be used very rarely, and only in exceptional circumstances. Ward v. State, 298 Ark. 448, 770 S.W.2d 109 (1989). In these circumstances, we cannot say that the trial court abused its discretion in refusing to admit Taylor's statement under either of the residual hearsay exceptions.

II. Cross Examination

For its second point, appellant argues that the trial court abused its discretion in preventing it from cross examining appellees' expert witness, Chief Davis, regarding Taylor's statement contained in the report he reviewed prior to testifying. Specifically, appellant argues that it was prejudiced by not being allowed to cross-examine Chief Davis about evidence in his file that was inconsistent with his opinion.

The cross-examiner should be given wide latitude because cross-examination is the means by which to test the truth of the witness's testimony and credibility, particularly where expert opinion evidence is involved. J.E. Merit Constructors, Inc. v. Cooper, 345 Ark. 136, 44 S.W.3d 336 (2001). In Farr v. Henson, we noted that:

Cross-examination is a leading and searching inquiry of a witness for further disclosure touching particular matters detailed by him in direct examination. Washington Nat'l Ins. Co. v. Meeks, 249 Ark. 73, 458 S.W.2d 135 (1970). Cross-examination serves to sift, modify, or explain what has been said in order to develop facts in a view favorable to the cross-examiner. Id. Its objects include weakening or disproving his adversary's case, breaking down his testimony in chief, testing his veracity, accuracy, and honesty, and exhibiting the improbabilities of his testimony. Id. The general rule is that a judge has wide latitude in imposing reasonable restrictions on cross-examination based upon concerns about confusion of the issues or interrogation that is only marginally relevant. Board of Comm'rs of Little RockMun. Water Works v. Rollins, 57 Ark. App. 241, 945 S.W.2d 384 (1997).

79 Ark. App. 114, 120-21, 84 S.W.3d 871, 876 (2002). We will not reverse a trial judge's decision in this matter unless we find a clear abuse of discretion. Id.

Chief Davis testified on behalf of appellees that in determining motive and cause for the fire, he reviewed the entire fire department's report, which included Taylor's statement that appellees removed property from the house prior to the fire. According to Chief Davis, he did not find any obvious motive for appellees to have burned down their house. Appellant sought to cross-examine Chief Davis about Taylor's statement which it believed was inconsistent with his opinion. The trial court would not allow this line of cross-examination stating: "I am concerned that if we let it in only for expert purposes that I can't adequately explain to the jury that there [sic] it is separate for one purpose and not for another. I am going to balance it and I'm concerned that the prejudicial effect may be greater."

We find no abuse of discretion in the trial court's decision. Had the witness been cross-examined about Taylor's unsworn hearsay statement, appellant would have succeeded in accomplishing through cross-examination what the rules of evidence plainly prohibit. Cross-examination does not license otherwise inadmissible hearsay evidence.

Affirmed.

Robbins and Bird, JJ., agree.