A lawyer in Charlotte, North Carolina purchased a box of 24 very rare and expensive cigars, then insured them, amongst other things, against fire. Within a month, having smoked all the cigars and without having made even his first premium payment on the policy, the lawyer filed a claim with the insurance company.
In his claim, the lawyer stated the cigars were lost ‘in a series of small fires’. The insurance company refused to pay, citing the obvious reason: he had caused the small fires in the normal fashion. The lawyer sued the company, and WON.
In delivering the ruling the judge agreed with the insurance company that the claim was frivolous. Nevertheless, he stated that the lawyer held a policy from the company in which it had warranted that the cigars were insurable and also guaranteed that it would insure them against fire, without defining what it considered to be ‘unacceptable fire’. It was therefore obliged to pay the claim. Rather than endure a lengthy and costly appeal process, the insurance company accepted the ruling and paid $15,000 to the lawyer for the loss of the rare cigars in the ‘fires’.
But then, after the lawyer cashed the cheque, the insurance company had him arrested; on 24 counts of ARSON. With his own insurance claim and testimony from the previous case used against him, the lawyer was convicted of intentionally burning his insured property and was sentenced to 24 months in jail and a $24,000.00 fine.