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COMMONWEALTH PENNSYLVANIA v. FRANK E. GRAZIER (10/05/78)

decided: October 5, 1978.

COMMONWEALTH OF PENNSYLVANIA
v.
FRANK E. GRAZIER, APPELLANT. COMMONWEALTH OF PENNSYLVANIA V. ELDON G. STUDEBAKER, APPELLANT



No. 251 January Term, 1977, Appeal from Judgment of Sentence of the Superior Court at No. 1305 October Term, 1975 Reversing Order dated May 1, 1975 and Reinstating Indictments of the Court of Common Pleas, Criminal, of Bedford County, at No. 12 of 1974. No. 252 January Term, 1977, Appeal from Judgment of Sentence of the Superior Court at No. 1304 October Term, 1975 Reversing Order dated May 1, 1975 and Reinstating Indictments of the Court of Common Pleas, Criminal, of Bedford County, at No. 11 of 1974

COUNSEL

Samuel J. Reich, Mark L. Glosser, Pittsburgh, John B. Koontz, Bedford, for Frank A. Grazier.

Gordon E. Stroup, Dist. Atty., J. Andrew Smyser, Deputy Atty. Gen., Bedford, for the Com.

H. David Rothman, Pittsburgh, for Eldon G. Studebaker.

Eagen, C. J., and O'Brien, Roberts, Pomeroy, Nix and Larsen, JJ. Manderino, J., took no part in the consideration or decision of this case. Eagen, C. J., and Pomeroy, J., concur in the result. Larsen, J., dissents.

Author: O'brien

[ 481 Pa. Page 625]

OPINION

This appeal is from an order of the Superior Court which reversed the Court of Common Pleas, Bedford County and held that a prior acquittal in Federal District Court of mail fraud in connection with an alleged arson scheme does not bar a state trial of appellants for the substantive crime of arson. We believe, however, that the acquittal in Federal Court does bar the state prosecution when both prosecutions are based on substantially the same evidence. We are thus compelled to reverse the Superior Court and reinstate the order of the Bedford County Court of Common Pleas. The facts are as follows.

On March 1, 1969, a fire destroyed the New Hoffman Hotel in Bedford, Pennsylvania. At the time of the fire, the hotel was owned by the wife of appellant Eldon G. Studebaker, the mayor of Bedford. Appellant was not a principal in the ownership of the New Hoffman Hotel Corporation; however, over the years, he had lent money to the corporation.

[ 481 Pa. Page 626]

At the time of the fire, Studebaker was personally obligated to pay $7,000 on an outstanding note in connection with the purchase of hotel equipment.

For some time prior to the fire, the corporation had been losing money. Studebaker agreed to aid the corporation in finding a buyer for the hotel. He talked to George Karsnack, who, along with appellant Frank E. Grazier, operated the Bedford Airport. In February, 1969, the principals of the corporation signed an agreement giving K & E Leasing (Karsnack and Grazier) an option to purchase the hotel. On March 5, 1969, four days after the fire, Karsnack agreed to exercise his option and purchase the hotel.

Karsnack then called Carl Luick, a public professional fire insurance adjuster to prepare his claims to various insurance companies. A settlement of $310,100 was reached between Karsnack and the insurance companies.

Following the fire, an investigation was commenced by the Pennsylvania State Police, but because of the lack of either evidence or investigative leads, the investigation was terminated.

In 1972, the Federal Strike Force of the United States Department of Justice began investigating suspected professional arsonists and their associates. With the urging of the federal authorities, state and local police reopened their investigation of the fire. The investigation led to federal indictments against the appellants, Luick and Merril Klein, the arsonist. The indictments charged twenty-two counts of mail fraud and one count of conspiracy to commit mail fraud. Subsequently, a grand jury in Bedford County returned Commonwealth indictments against appellants and Klein charging arson.

At the trial in Federal District Court, the principal witness against appellants and Klein was George Karsnack, an unindicted co-conspirator in the federal mail fraud indictments. Karsnack testified that he and the two appellants agreed to burn the hotel. Karsnack then contacted Klein, who set the fire. Luick, the fire adjuster, became part of

[ 481 Pa. Page 627]

    the scheme when his services were required to estimate damage ...


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