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GALLO v. CITY OF PHILADELPHIA

August 15, 1997

JAMES J. GALLO, et al.
v.
CITY OF PHILADELPHIA



The opinion of the court was delivered by: DALZELL

 Dalzell, J.

 August 15, 1997

 I. Factual Background

 On the morning of Sunday, June 11, 1989, a fire erupted at Gallo Cabinets, a custom cabinet shop plaintiff James J. Gallo owned and operated in Philadelphia. The Fire Department quickly arrived and put out the flames, but not before the store was extensively damaged.

 Defendant Assistant Fire Marshall Lt. Renald Pelszynski also arrived on the fire scene that Sunday morning to begin his investigation into the cause of the fire. "At some point after Pelszynski's initial inspection," according to Gallo, Lt. Pelszynski prepared the following Fire Marshal's Incident Report:

 
Method of IGN [i.e., "ignition"]: Heating Iron to Class A Combustibles
 
Investigation: Disclosed the fire originating along the north wall towards the west corner of 1724. The fire originates on a wood shelf adjacent to a wall mounted box housing a duplex electrical outlet and an electrical switch. An electrical heating iron used for a lamination process was plugged into the top of the duplex outlet and the iron was found on the wooden shelf. All insulation was burned away from the cord as a result of the fire. An approximately 1 foot long piece of electrical cord remained in the bottom part of the duplex with slight beading noted at the end of the cord. The owner reports that a retracting extension cord was kept plugged in there. Note -- the heating iron in question has no on/off switch. Temperature adjustment can be made but the unit must be unplugged to de-energize it.
 
This property was the site of a 2 alarm fire on 10/25/88. Lt. Sheldon's investigation, cause: electric/wiring.

 Ex. 2 of Pls.' Mem. of Law in Response to City of Philadelphia's Mt. for Partial Summ. J. (hereinafter Pls.' Mem. of Law at Ex. .").

 Gallo maintains that the salient point in the report is that Lt. Pelszynski listed the cause of the fire as "ELEC/APPL," meaning, Gallo contends, that Lt. Pelszynski believed an electrical appliance caused the fire, specifically, a "Heating Iron to Class A Combustible." Although Gallo does not know when this report was prepared, he claims that it was the "original report." See Pls.' Mem. of Law at 8.

 Gallo then filed a claim for damages with his insurance carrier, defendant Pennsylvania Lumbermens Mutual Insurance Co. ("PLM"). PLM hired defendant Gerald Kufta of Kufta Associates to conduct an investigation into the cause of the fire at Gallo Cabinets. Defendant Kufta Associates in turn retained the law firm of Cozen & O'Connor and its Director of Investigations -- and former Philadelphia Fire Commissioner -- Joseph Rizzo, to assist in the investigation. Both Cozen & O'Connor and Rizzo are also defendants in this case.

 Gallo claims that Kufta and Rizzo visited the fire scene on June 13, 1989. That same day, Rizzo called Lt. Pelszynski, see Pl.'s Mem. of Law at Ex. 3 (time records for Cozen & O'Connor at entry no. 2). Kufta also spoke to Lt. Pelszynski before visiting the fire scene and spoke to him at least once thereafter. See Kufta's Dep. at 94 (attached to Pls.' Mem. of Law at Ex. 4).

 Gallo claims that, after speaking with Rizzo and Kufta, Lt. Pelszynski changed his previously prepared Fire Marshal's Incident Report. See Pls.' Mem. of Law at 5. The "revised" Incident Report states, in addition to the text quoted above,

 
Method of IGN: Open Flame
 
. . . .
 
. . . .
 
The owner, in a telephone interview, stated that the business had closed on Friday at approximately 4:30 pm that the heating irons are no longer used in their laminate process.
 
Attachment: At 10:00 am, 6/28/89, Mr. James Gallo Jr. presented himself at the F.M.O., 3rd & Spring Garden Sts., for a scheduled interview with Lts. R. Pelszynski & J. O'Drain. Mr. Gallo informed Lts. Pelszynski & O'Drain that upon the advice of his lawyer, David Pallett - 790-1444, he declined to answer any questions. Mr. Gallo then left the F.M.O. at approximately 10:15 am.
 
It is the opinion of this writer that the cloth was deliberately wrapped around the heating iron several times. The iron was energized by an adjacent duplex outlet controlled by an on/off switch which was found in the on position. The physical examination of the cloth wrapping indicated the damage to be consistent with an external heat application. That heat having been caused by an open flame application to Class A combustible materials present on the shelf by an intentional design.

 "At some point thereafter" Lt. Pelszynski referred the Gallo Cabinets investigation to the joint Philadelphia-Federal Arson task force. Pls.' Mem. of Law at 6. *fn1" In July of 1990, the United States Attorney's Office for our District launched an investigation into the fire at Gallo Cabinets, and, on May 31, 1994, a grand jury indicted Gallo on two counts of mail fraud, one count of malicious destruction of a building by fire, and one count of making a false statement to obtain a loan. Defendants Thomas J. Rooney and William J. Campbell, Special ...


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