No Bad Faith if Preponderance of Evidence Exists That Insured Was an Arsonist

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A fire at the home of Plaintiff Leo Ly caused extensive property damage. Defendant Universal Property and Casualty Insurance Company denied Plaintiff’s claim under his homeowner’s insurance policy, citing to an exclusion for loss caused intentionally by the insured. Defendant believes that Plaintiff started the fire himself to recover insurance proceeds to aid with his financial distress. In Leo Ly v. Universal Property & Casualty Insurance Company, Civil Action No. 19-1239, United States District Court For The Eastern District Of Pennsylvania (May 7, 2021) Mr. Ly sued for bad faith denial of his claim. The insurer asserted a counterclaim for insurance fraud against Plaintiff.

ZALMA OPINION

Arson-for-Profit is usually proved by circumstantial evidence. Although there existed substantial circumstantial evidence that Ly set the fire because he had a motive, opportunity and ability to set the fire and because there was no accidental cause for the fire. An attempt to defraud an insurer and obtain a few hundred thousand dollars for a fire at a house that cost the insured $1; that he mortgaged for $180,000; coupled with the circumstantial evidence outlined by the court defeated the suit. Mr. Ly should try to find a way to avoid a trial and consider himself lucky that no one has charged him with the crime of arson or insurance fraud.