Louisiana Record

Monday, February 24, 2020

Court refuses to reopen Republic Fire and Casualty Insurance's case against couple after suspicious house fire


By Charmaine Little | Nov 26, 2019


The Republic Fire and Casualty Insurance company failed to convince the U.S. District Court in the Eastern District of Louisiana to reopen a case in which the company believed a couple committed fraud after a fire.

The court denied the insurance company’s motion to reopen the case on Oct. 23.

“Republic cannot show by clear and convincing evidence that the defendants’ alleged misrepresentations warrant the court setting aside the July 23, 2018, order of dismissal,” the court ruled.

Republic failed to prove that the defendants lied about getting divorced and filing for bankruptcy, two factors that led to the case being closed under the condition of a $2,000 settlement agreement, the court ruled, saying one of the defendants filed for divorce in January 2019 and filed for a petition for bankruptcy on May 10, 2019.

The court also said there’s no proof of the settlement agreement between the parties as they failed to have the court memorialize the agreement in the original order of dismissal. The parties also never had a formal written settlement agreement.

"All settlement decisions come with the attached risk that future circumstances may arise which cause a party to regret its decision," the court said. "Further, as an aside, the court also declines to reopen this case for an alleged breach of settlement agreement when it does not have the specific terms of the parties’ agreement before it.”

The case had been previously closed shortly after a fire at Mardechria Charles and Derrick McDonald’s home. The couple filed a claim with Republic for damages. The company sent an investigator to look into the cause of the fire, and the investigator found the likely cause was arson. The company took its findings to local police, who arrested McDonald on suspicion of arson, accusing him of setting the home on fire on purpose, but charges were later dropped. Still, Republic refused to pay out for the fire, arguing its findings that the fire was deliberately set nullified the coverage. 

Republic said it would dismiss its claims against the couple if they paid $2,000 after they stated they were in the middle of a divorce and bankruptcy. But once the defendants failed to pay, Republic wanted the court to reopen the case, stating that the defendants falsified information. It claimed that there was no bankruptcy filing, and that the couple had seven cars in their names. It also claimed that they weren’t getting a divorce. But both of those situations were proven to be true, and the couple said they were no longer in possession of five of the seven cars in question.

U.S. District Judge Jay C. Zainey ruled on the case.

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