Submitted: April 17, 2019
Appeal
from United States District Court for the Western District of
Missouri - Springfield
Before
COLLOTON, GRUENDER, and ERICKSON, Circuit Judges.
ERICKSON, CIRCUIT JUDGE.
On
February 14, 2014, Joseph and Casey Dixon purchased a former
resort hotel in West Plains, Missouri, for $120, 000 with the
intention of turning it into a bed and breakfast (B&B)
and marriage retreat. The property contained a 15-bedroom,
12-bathroom structure. The structure was insured for $479,
857 actual cash value-an amount far in excess of the $120,
000 purchase price. On April 12, 2014, the property caught
fire and burned to the ground in a little over an hour.
Allstate
investigated the fire and concluded that it was set by or at
the direction of Joseph Dixon. Allstate paid the mortagees
$107, 526.29 under the terms of the policy. It then commenced
an action seeking a declaratory judgment that the Dixons had
violated the intentional acts exclusion of the policy and
that Allstate was entitled to recover its payment to the
mortagees. The Dixons filed a counterclaim for breach of the
insurance contract. The district court[1] denied the
Dixons' motion for summary judgment. Allstate ultimately
prevailed at trial. The Dixons appeal several evidentiary
decisions and the denial of their motions for summary
judgment, for judgment as a matter of law, and for a new
trial. We affirm.
I.
Background
The
Dixons purchased the subject property located at 791 State
Hwy T, West Plains, Missouri, for $120, 000. At the time of
purchase, they owned an uninsured property in Willow Springs,
Missouri, that they ran as a location for marriage retreats.
The Dixons' stated purpose for purchasing the West Plains
property was to run a B&B and to also use it as another
location for wedding retreats. Between the time of purchase
and the blaze, no material steps were taken to convert the
property into its intended use as a B&B or a wedding
retreat location, and the structure sat mostly dormant.
When
the Dixons were looking to purchase insurance for the
property, they rejected two proposals to insure the property
for $120, 000 and $300, 000 before accepting a proposal to
insure the property for $479, 857 actual cash value and $60,
000 for personal property. The property was insured for
nearly four times the $120, 000 purchase price. One month
after the insurance policy went into effect, the building
burned to the ground. The Dixons filed a sworn statement in
proof of loss. Shortly thereafter, Allstate began
investigating the claim.
At the
beginning of the investigation, Allstate retained Terry
Decker, a certified fire investigator, to collect data about
the incident and the fire scene. Decker was certified as a
fire and explosion investigator by the National Association
of Fire Investigators in 1997 and as a fire investigator by
the International Association of Arson Investigators in 2001.
He also was a certified fire investigator through the
Missouri Department of Public Safety. As part of maintaining
his certifications, Decker was required to engage in ongoing
education and training.
Decker
investigated and photographed the scene, and reviewed
photographs of the house prior to the fire. He interviewed
the Dixons, their neighbors, and public fire officials, and
also reviewed the local fire department report, 911 logs, and
weather history data. Based on that information, Decker
created a timeline of events. Joseph Dixon indicated he left
the property with a man named Donald Hitch sometime between
7:30 p.m. and 8:00 p.m. Dixon described the sky as getting
dark when he left. When the fire was discovered at 9:11 p.m.,
it was "totally involved" and caused the complete
destruction of the building. Decker came up with a number of
hypotheses to explain the blaze, including the possibility of
accidental, undetected fires burning prior to when Dixon left
and the possibility that the fire was burning at or shortly
after Dixon left the property. After weighing those
hypotheses against the collected evidence, Decker concluded
that the fire must have been burning when or shortly after
Dixon left the property. As part of his determination, Decker
considered weather data that showed that twilight set at 8:06
p.m. on the night in question. Given Dixon's statement
that it was getting dark when he left, Decker concluded that
Dixon left the property at or slightly after 8:00 p.m. The
destruction of the building meant that Decker was unable to
come to a conclusive opinion as to the cause or origin of the
fire, but that he could not rule out that it was an
intentionally-set fire. Decker opined that the fire developed
rapidly and progressed at an abnormal rate.
Allstate
retained a second certified fire investigator, Robert Wysong,
to review the fire given the tight timeline that Decker
identified. Wysong was the owner and president of ACS
Investigative Services, a fire investigation company in
operation since 1991. Wysong was certified as a fire and
explosion investigator by the National Association of Fire
Investigators. Wysong reviewed Decker's report as well as
the sworn statements of the Dixons and Donald Hitch and
photographs of the property. Wysong considered a number of
hypotheses regarding the blaze, including the possibility of
a fire caused by lightning, a fire caused by candle, a fire
set in more than one location, and a fire that had been
burning more than an hour. Wysong ultimately concluded that
the fire must have been burning for more than an hour before
discovery or that the area of origin was not a single
location.
Allstate's
interviews with the Dixons and Donald Hitch did not suggest
any alternative issues with electrical appliances that might
have led to the blaze. During Casey Dixon's examination
under oath, she testified that she thought somebody started
the fire. Allstate, relying on the fire expert reports and
the Dixons' sizable financial motive to commit arson,
determined that the loss was not covered because the fire was
intentionally set by or at the direction of Mr. Dixon.
Pursuant to the policy, Allstate issued a payment to the
mortgagees in the amount of $107, 526.29.
Allstate
filed a complaint for declaratory judgment on November 20,
2014. On February 26, 2015, Allstate amended its complaint
and sought a judgment that the intentional acts exclusion
barred coverage for the loss and that Allstate was entitled
to recover its payment to the mortgagees of $107, 526.29. The
Dixons filed a counterclaim alleging that Allstate breached
the insurance contract. The ...