February 7, 2001 

Allstate, based in Northbrook, Ill., chose to fight back against Oswald Carrol's bad-faith claim, after it had paid his wife about $100,000 on the $244,800 policy. It counterclaimed that Carrol actually set the 1997 fire, misrepresented facts about the loss, and concealed important facts from investigators. 

After four days of trial, a Stamford, Conn., jury concluded that Allstate miscalculated and was liable for $500,000 in damages for intentional and negligent infliction of emotional distress, due to its continuing suspicion and extensive questioning of Carrol. 

Both sides agree that the fire at Oswald and Violet Carrol's home spread from a blue metal kerosene container. Carrol's story was that he had it filled at a local gas station to fuel a kerosene heater, and that the attendant evidently filled it with gasoline. It smelled odd to the Carrols, says his trial lawyer, Frederick Ury, of Westport, Conn.'s Ury & Moskow. They left the fuel near a bulkhead door in the basement overnight. 

The next day, after Violet had gone to work, Oswald heard a loud boom around 11 a.m., smelled smoke and found the can in flames. He attempted to put it out with a jacket, but failing to do so, hurled the container out of the basement doorway, then ran to a neighbor's and called the fire department, which arrived quickly. 

The case unfolded on two levels, with the fire experts battling over facts, and the jury attempting to decide whether Carrol was a good person who'd had a bad experience, or an arsonist attempting to deceive Allstate, the court, and the jury itself. 

Ury, in an interview, said he believed that Allstate's investigators quickly "made an assessment" against Carrol when they learned he had lost his job with a parcel delivery service due to a dispute with a client, and that he was unemployed. Carrol was intensively questioned, and Allstate seized on the fact that Carrol did not disclose prior credit card debt. 

But Ury recounted arguments that weighed in favor of it being an accident. The Carrols' mortgage was paid up, Mrs. Carrol was employed, nothing was missing from the house, it was in "immaculate" condition, and the fire occurred during the day. Furthermore, Mr. Carrol's prompt and effective efforts to stop the fire seemed inconsistent with arson, Ury noted. 

The plaintiff's expert witness, former New York City fire marshal John Barracato, theorized that the cap of the kerosene can was loose, and that fumes from the can were ignited by the pilot light of a basement stove. 

"He could show you the [burn] line right on the stove, right down the sink, right to the fuel load. The reason the fumes were above the floor -- usually gasoline fumes sink, because they are heavier than air -- is because the bulkhead door was leaking cold air, and blew the fumes," Ury said. 

Allstate witness Thomas Haynes testified that the fuel appeared to be spread around the floor, as if the fire were intentionally set. 

Ury tried the case with Betty Ann Rogers. Daniel F. Sullivan, of Hartford's Robinson & Cole, represented Allstate. 

In Ury's view, the jury's decision boiled down to a matter of weighing Mr. Carrol's demeanor and character on the witness stand. 

Allstate contended that Mr. Carrol had not fulfilled his obligations under the terms of the insurance contract because he had not completely disclosed his credit card debt. Ury was quick to point out in his questioning of Mr. Carrol that the insurance policy was subject to negotiation on such terms. 

The jury, in a seven-step series of decisions, first concluded that Allstate failed to prove that Mr. Carrol misrepresented and concealed material facts, or that the fire was set by intentional or criminal acts. With that finding, a $26,468 personal property damage award was automatic. 

Next came the issues of negligent and intentional infliction of emotional distress, which the jurors found Mr. Carrol proved, awarding $500,000. 

Finally, the panel found that Allstate had not breached a duty of good faith and fair dealing, but on the basis of its finding of emotional distress liability, awarded the $60,000 in punitive damages that both sides had pre-stipulated, based on the level of attorneys' fees. 

Allstate intends to appeal, Sullivan reports.