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Yes, Insurance Company is a Victim of an Arson

Post 4815

In September 2019 Otho Harris visited a Boost Mobile store for assistance with his broken cellphone. He became enraged when he was told that it could not be repaired. He returned in the middle of the night and set fire to the store,

After difficult relationships with three different appointed attorneys, he opted to represent himself and eventually pleaded guilty. He was sentenced to eight years in prison and ordered to pay $195,701 in restitution.

In United States of America v. Otho Harris, No. 23-1294, USCA, Seventh Circuit (May 23, 2024) the USCA resolved the restitution order.

FACTS

Harris challenged only the restitution order, arguing that it was not supported by a proper investigation and determination of the loss amount.

BACKGROUND

Over the next year Harris agreed to plead guilty and signed a written plea agreement with the government.

THE PSR

The probation office filed a pre-sentence report about a month before the sentencing hearing. It included a description of the financial impact of Harris’s crime on two victims- the owner of the Boost Mobile store and his insurer-in the total amount of $195,701. The PSR incorporated the insurance company’s 13-page claim report.

The judge imposed a sentence of eight years in prison and ordered Harris to pay restitution in the total amount of $195,701-$35,000 to the insurer and the balance to the store owner.

DISCUSSION

The Seventh Circuit had previously opined that a criminal defendant waives the right to contest the judge’s factual findings at sentencing when he expressly states on the record that he has no objection to the findings.

Harris’s conduct at the sentencing hearing was based on a month’s time to review the PSR and the incorporated insurance accounting.

ZALMA OPINION

Arson is a vicious crime where firefighters and passers-by are injured or die. Mr. Harris was lucky that his vicious act only damaged property not people and he would only serve 8 years in prison and make restitution to the victims of his crime, the Boost store, its owner and the insurer that paid its limit to the store owner. I have heard judges, in the last 55 years of my career in insurance, say that insurers cannot be victims of a crime of arson. Reality and the Seventh Circuit concluded that the insurer is a victim entitled to restitution.

(c) 2024 Barry Zalma & ClaimSchool, Inc.