Around 6:00 AM on April 16, 2022, a fire largely destroyed a two-story, wood frame house at 408 Oak St. in Saginaw, Michigan (the “Oak Street House”). Plaintiff Raphael Arnett owned the house, and Defendant Allstate Vehicle and Property Insurance Co. insured it.
Two days after the fire, Plaintiff filed a claim with Defendant, seeking to recover his loss from the fire. On October 14, 2022, Defendant denied Plaintiff’s insurance claim after it concluded that the fire was not an accident but was intentionally set by Plaintiff. Defendant anticipated calling Paul Mabarak—a certified residential appraiser—to offer his expert opinion that the fair market value of the Oak Street House at the time of the fire had been $52,000.
Plaintiff argued Defendant should be precluded from using this evidence at trial because (1) the fair market value is irrelevant under Rules 401 and 402, (2) the fair market value would mislead the jury under Rule 403, and (3) Mabarak’s opinion is inadmissible expert testimony under Rule 702.
Real Estate Appraisal Expert Witness
John Paul Mabara is a certified residential appraiser who works for Mayfield Appraisal Services.
Discussion by the Court
The Court held that the evidence of the Oak Street House’s fair market value is relevant under Rule 401 because it increases the probability Defendant caused the fire, which would exclude his alleged loss from coverage under the express terms of his Policy.
Plaintiff argued that evidence of the Oak Street House’s fair market value would “mislead” the jury “into believing the fair market value of the property is a component of [Plaintiff’s] damages.” But, the upcoming trial is limited solely to the underlying coverage issue, as both Parties have agreed to post-trial appraisal, as mandated by Michigan law. Therefore, Mabarak’s fair market value testimony raises no Rule 403 concerns, either. At bottom, Plaintiff has not shown that the fair market value of his House is “clearly inadmissible” on Rule 403 grounds.
Plaintiff argued that Mabarak’s opinion would “not aid the trier of fact in understanding or determining any issue in the case.” Contrary to Plaintiff’s argument, even the most educated lay juror could not estimate the fair market value of Plaintiff’s house. But Mabarak—based on his specialized knowledge as a certified real estate appraiser—can, and has. As explained, the fair market value is relevant because it is nearly $200,000 less than Plaintiff’s Policy limit, which tends to show that Plaintiff may have had a financial motive to set the fire.
Held
The Court admitted the testimony of Paul Mabarak despite Plaintiff’s objections.
Key Takeaway:
In conclusion, Mabarak’s anticipated expert opinion is precisely the type that Rule 702 allows considering motive is one of several pieces of circumstantial evidence Defendant may permissibly point to in attempt to prove Plaintiff’s alleged loss is excluded from coverage under his Policy.
Case Details:
| Case Caption: | Arnett V. Allstate Vehicle And Property Insurance Company |
| Docket Number: | 1:23cv11138 |
| Court: | United States District Court, Michigan Eastern |
| Order Date: | July 25, 2024 |
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