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Werner's Furniture v. Commercial Union Ins.





APPEAL from the Circuit Court of Cook County; the Hon. JAMES D. CROSSON, Judge, presiding.


Werner's Furniture, Inc. (plaintiff) brought action against six insurance companies upon their policies seeking an accounting to determine plaintiff's loss and damage due to a fire on plaintiff's business premises. Plaintiff sought recovery for damage to the contents of the store and the signs on the building, and also for business interruption. A jury found in favor of plaintiff in the total amount of $11,016. Plaintiff appeals and defendant cross-appeals.

In this court, plaintiff urges that the damages awarded are grossly inadequate so that plaintiff should be awarded a new trial on the issue of damages only; the trial court should have instructed the jury to disregard defenses concerning alleged arson by plaintiff and the filing of fraudulent proofs of loss; the trial court should have directed a verdict in favor of plaintiff and then directed the jury to assess damages and the trial court erred in refusing an instruction tendered by plaintiff regarding proof of fraud in connection with the proofs of loss. Defendants contend that plaintiff's evidence of damage was not worthy of belief and that the verdict as rendered was within the prerogative of the jury. On the cross-appeal, defendants urge that the trial court should have directed a verdict for defendants on the theory that the fire commenced as a result of arson. The issues before us fall readily into a logical subdivision. We will consider first the liability of defendants upon their policies of insurance. We will then concern ourselves with the award of damages.


In their answer to plaintiff's complaint, defendants alleged that plaintiff furnished them with sworn proofs of loss which were false and fraudulent in that these documents set forth under oath that the loss did not originate by any act or design of plaintiff; whereas plaintiff, by its president, knew that the fire was of incendiary origin. The answer further alleged that plaintiff, by its president, had wilfully and maliciously set fire to the premises and caused the loss. Plaintiff denied these allegations in its reply. As shown, the jury decided these issues in favor of plaintiff. The court denied a motion by defendants to direct a verdict in their favor upon the theory of arson and denied defendants' motions for judgment notwithstanding the verdict.

Plaintiff was engaged in the retail furniture business in Chicago. It operated the store here involved at 2234 West 95th Street which sold contemporary furniture; another store farther east on 95th Street for early American furniture and a warehouse at another location.

The evidence concerning the defense of arson shows that Nate Shayne, a salesman who had worked for plaintiff since 1963, testified that he had been at work on the day of the fire, Sunday, March 30, 1969. He stated that he had opened the store located at 2234 West 95th Street, about noon and left around 5:30 P.M. in the company of Harold Pekoe, president and principal shareholder in plaintiff, and two customers. However, in a statement taken by plaintiff's investigator, Shayne had stated that he had left the store close to 6 P.M.

Harold Pekoe was in Hot Springs during the week prior to the fire. He returned to the store on that day at 2 o'clock or 3 o'clock in the afternoon. Everything looked normal. No flammables were evident. He left around 5:30 or from 5 to 5:30, together with Nate Shayne and two customers. In describing these customers, Shayne had referred to certain store invoices. Only Pekoe and Nate Shayne had keys to the store and the front and back doors were both securely locked when they left. Pekoe further testified that he was called to the store on the evening of the fire and arrived there about 9 P.M. The fire had not yet been put out. He hired public adjusters to handle his insurance claim. The proofs of loss were prepared in plaintiff's behalf by plaintiff's auditor and by the auditor for the adjuster.

The two customers who had been at the store on the date of the fire were subpoenaed by defendants. They testified that they had left the store around 5 P.M. Mrs. George Mayer stated that she and her husband, unaccompanied, had left the store together. The door was locked when they tried to leave. She did not see anyone leave the store behind them, but did not pay attention. Mr. George Mayer testified that the salesman had shut the door behind him and his wife. No one walked out of the store with them.

Plaintiff also called Melanie Irwin. She had been employed by plaintiff as a secretary and saleswoman from 1960 to the time of the fire. She testified that she had gone to work on Sunday, the day of the fire, and that she must have stayed until between 3 o'clock and 5 o'clock that afternoon. However, she also testified that she stayed that day until closing time and she was sure that she left the store with Pekoe and Shayne. She did not notice anything unusual at that time. Shayne had previously testified that no one else was working at the store that day other than Pekoe and himself. Pekoe had previously testified specifically that Melanie Irwin was not at the store that Sunday.

Jim Frickman testified that he was a part-time security guard at a restaurant next to the store. He saw smoke coming out of the building around 6 P.M. He went to the front of the store and saw the fire spreading. He returned to the restaurant to call the fire department and to clear the area of children. He specified the time of this incident as "a minute or two to six o'clock."

David Curtin, a chief in the Chicago Fire Department, testified that the fire alarm came in "around" 6 P.M. or 7 P.M. The fire was not extinguished for 7 hours and 35 minutes. An explosion occurred 10 or 15 minutes after the fire department arrived. The witness did not know the cause of this. The store windows were "all out" by that time.

Frank Klausing, an independent fire investigator retained by defendants, who had considerable experience in the Chicago Fire Department, testified regarding his investigation of the fire. He commenced his work on April 2, 1969. He had wreckers remove the debris from the front of the building because it appeared that the fire had started there. He then tried to reconstruct the fire scene, studying burn patterns and combustibles. The south wall and southeast corner of the front of the building had collapsed. The fire had progressed from the front of the structure, facing south, to the rear. The fire pattern rose dramatically as it moved.

Part of his investigation was a so-called reconstruction of the premises which attempted to place burned members or portions of the structure in an approximation of their original positions. He determined that the point of origin of the fire was at floor level in front of display platforms on each side of the front of the store. The fire burned under these platforms and rose in height toward the back of the store. One indication that the fire had traveled along the floor was the fact that stuffed chairs and wooden furniture about 8 feet from the point of origin remained intact although they were severely charred.

When the investigator removed the debris, he found spalls in two areas on the floor at the front of the store. A spall is a pit, hollow or chip in the concrete where it has been subjected to a high temperature for a prolonged period of time. The area surrounding the spall may be somewhat raised. The spalls indicated to him that a flammable liquid had been spilled at both locations and had puddled. It was highly improbable that the spalls existed before the fire because they would have made the floor uneven. The area was one over which customers were obliged to walk.

The witness was told that Mr. Pekoe had been having trouble with the gas heaters located near the ceiling of the store. There was great heat at ceiling height during the fire, so that several ceiling joists fell to the floor. However, he was certain that the fire could not have started in the ceiling area. In such a case, the roof would have fallen in before the fire reached the sales area. Further, if the fire began in the space between the ceiling and the roof, there would have been a great deal more smoke and fewer flames due to the lack of oxygen in that area.

Likewise, he testified, the fire could not have been started by a lighted cigarette. First, there would not have been sufficient time for the cigarette to ignite the store between the time the store closed and the fire was reported. Also, if a cigarette had caused the fire, there would have been a great deal of smoke before the smoldering fire erupted into flame. He did not know whether a cigarette had been dropped in the store earlier in the day. Klausing also testified that he had interviewed Mr. Shayne as ...

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