CA junks P56-M fire insurance claim in arson case

CA junks P56-M fire insurance claim in arson case

MANILA – The Court of Appeals (CA) has dismissed a complaint filed by a claimant against an insurance company who refused to pay out the proceeds of a fire insurance policy, citing irregularities in the incident.

In a decision dated October 29 and written by Associate Justice Marlene Gonzales-Sison, the appellate court’s Seventh Division dismissed the petition filed by Emma Concepcion Lin who had sought PHP56 million representing the proceeds of a fire insurance policy with Malayan Insurance Co.

“It should be remembered that the then DILG Secretary Jesse Robredo reported that they were able to establish prima facie evidence of arson (in the case),” the CA said.

Lin is the owner of a parcel of land with six warehouses at Plaridel, Bulacan rented out to various tenants. She obtained bank loans and was required as security for the loan to mortgage the six buildings and to insure the properties.

In the morning of Feb. 24, 2008, a fire broke out, destroying the warehouse buildings. Lin eventually reported the loss and filed a claim for the recovery of the proceeds of the fire insurance policy.

The insurance company hired an independent claims adjuster, Crawford & Co. to investigate and ruled that the fire claim was tainted with fraud.

On April 2008, the Bureau of Fire Protection issued its final investigation report stating that the cause of the fire was attributed to electrical ignition due to grounding.

In December that year, the insurance company denied the claim, citing that there was evidence of arson and that the claim was fraudulent.

The firm claimed that Lin falsely represented that she was not a part of the management of Marubishi Manufacturing Industrial, one of the entities that operated one of the warehouses when company records showed that she was an incorporator and its president.

Lin sought assistance from the DILG, which created an inter-agency task force to conduct an evaluation and review of the fire. The group ruled there had been arson. Criminal charges had been filed against Lin and officials of the companies.

Lin was spared by the prosecution lawyer, which found probable cause to charge all those involved, except Lin.

In ruling against her claim for the insurance proceeds, the CA said the concealment of her relationship with one of the companies occupying the building “amounts to the breach of such conditions” of the insurance policy.

“While the RTC regarded such concealment as an innocent error, the Court would like to point out that the contract of insurance is one of perfect good faith” and that “concealment is a neglect to communicate that which a party knows and ought to communicate,” adding that “whether intentional or unintentional, the concealment entitles the insurer to rescind the contract of insurance.”

The CA said Lin’s business relations with the warehouse tenants were material to her claim since it signifies control over their businesses. (PNA)

Leave a Reply