ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA.
Hunter and Garth, Circuit Judges and Stern, District Judges.*fn*
This appeal presents for our review two claimed evidentiary errors which occurred during a thirteen-day trial. The plaintiffs Filippo and Carmela Lionti ("Lionti") contend that these two alleged errors should result in the grant of a new trial. We cannot agree.
On September 20, 1978, The Italian Villa, a restaurant and bar owned by Lionti, burned to the ground. Lionti brought this action against his insurer*fn1 after the insurer disallowed his claim for policy proceeds. The insurer refused Lionti's claim on the ground that Lionti set or procured the setting of the fire. The jury returned a verdict in favor of the insurance company. Lionti appeals from an order of the district court denying his motion for a new trial.*fn2 Because we find no error affecting a substantial right of the parties, we affirm.
The Italian Villa was a single story stone structure with a full basement containing a restaurant and bar. At roughly 5:00 a.m. on September 20, 1978, a violent explosion erupted in the building, shattering windows in a house nearby and catapulting debris over 100 feet away.
On November 16, Lionti submitted proofs of loss to his insurance company. These proofs of loss asserted losses of $266,606 for the building itself, $114,256 for its contents, $83,850 for interruptions of business income, and affirmed that the origin of the fire was "unknown to assured." Lionti initiated this action on June 6, 1979, claiming that the insurer had not reimbursed Lionti for the losses sustained, although the insurer had paid Lionti's mortgagee, the First Mortgage Company of Pennsylvania, $180,000 under the policy's loss-payable clause. On September 21 the insurer counterclaimed against Lionti for $180,000, the loss paid to First Mortgage, as subrogees of First Mortgage's rights. The case proceeded to trial on February 13, 1980.
Evidence adduced at trial was overwhelming that the September 20 fire had been set intentionally. Firemen entering the structure found gasoline vapors in the basement so strong that they were unable to remain in the building. Burn patterns on the floor of the restaurant indicated that the fire had been spread by a flammable liquid. Inside the restaurant's kitchen door lay an extension cord plugged into a wall outlet and terminating in an electric charcoal lighter; lying beneath the charcoal lighter were two plastic containers smelling of gasoline. Firefighters removed from the building these two containers and three others; laboratory tests proved at least four of these five containers to contain gasoline. Carpeting and debris throughout the restaurant were also impregnated with gasoline. In the opinion of several experts, the magnitude of the explosion, the residue of gasoline and location of gasoline containers, and the presence of an electric starter coil left little doubt that the fire was of incendiary origin.
Evidence that Lionti was responsible for the fire was also compelling, although largely circumstantial. The evidence of Lionti's complicity fell into three categories.
First, testimony indicated that the Italian Villa was financially troubled during the months before the fire. Sales during the month of August, 1978, were $16,324 substantially less than the August 1977 sales of $25,586. Sales during the nine months preceding the fire were only $133,000, again considerably less than the prior nine months' sales of $217,000. Based on Lionti's corporate 1978 tax return, an expert estimated Lionti's yearly expenses at $84,000; Lionti had available cash, however, of only $58,000, resulting in a cash flow shortage of $26,000. Nine checks issued by Gina Lionti, daughter of Filippo and Carmela, in August and September of 1978 were returned for insufficient funds. By August of 1978, the Italian Villa had fallen behind in payments to at least seven creditors, including three banks or savings and loan associations. Real estate, sales, and payroll taxes for the 1977 tax year were all delinquent.
Second, nine days before the fire, the First Mortgage Company of Pennsylvania notified Lionti that First Mortgage intended to call in a loan of $392,000 and foreclose on its security interests, including the restaurant and Lionti's liquor license. Five days before the fire, Lionti entered into an oral agreement with First Mortgage stipulating that the restaurant would be put up for sale by September 25, and would be sold within ninety days thereafter. On Tuesday, September 19, Lionti was to sign documents memorializing this agreement. No agreement was ever signed. On Wednesday, September 20, the Italian Villa burned to the ground.
Third, several arrangements concerning Lionti's insurance raise strong inferences of Lionti's involvement in the September 20 fire. On September 12 -- one day after First Mortgage notified Lionti of its intention to foreclose -- Gaetano Lionti, son of Filippo and Carmela, approached an insurance agent and sought to purchase and additional $500,000 of fire insurance for the restaurant. After the fire, the agent reported this solicitation to the Pennsylvania fire marshal on his own accord. Asked why he approached the fire marshal, the agent explained, "Well, it's rather unusual when somebody requests a large amount of fire insurance in addition to what they may already have and then a couple of days later there is a fire." In addition, on September 14, Gina Lionti appeared in the office of Lionti's insurance agent and -- for the first time in a two-year history of delinquent payments -- prepaid three months' insurance premiums in advance of the date payment was due.
In the opinion of the insurer's expert, these facts, coupled with the absence of any indication of forcible entry, evidence that only Lionti had keys to the building and the alarm system, the early morning hour of the fire, and the absence of indicators that the fire had been set for revenge, fell "into a classic pattern of an insurance fraud fire."
For his part, Lionti maintained that the fire harmed rather than assisted him financially, suggesting an absence of motive,*fn3 and implied that the insurer colluded with First Mortgage to recover from Lionti, moneys that the insurer owed First Mortgage as a loss mortgage payee named in the policies.*fn4 In addition, Lionti suggested that a disgruntled employee, Brice McLane, may have ignited the fire in revenge for his discharge ...