Full opinion text
MEMORANDUM OPINION AND ORDER THOMAS D. SCHROEDER, District Judge. This is a declaratory judgment action by Plaintiff Federated Mutual Insurance Company (“Federated”). Federated seeks to determine whether coverage exists under an insurance policy issued to Defendant Williams Trull Company, Inc. (“Williams Trull”), which was damaged by fire at approximately 11:30 p.m. on October 3, 2007 (the “Fire”). The case was tried to the court for five days, and the matter is ripe for decision. Pursuant to Federal Rule of Civil Procedure 52(a) and for the reasons stated herein, the court finds that Federated has demonstrated exceptions to coverage and thus has no obligation to pay under the insurance policy, and that Williams Trull is not entitled to recover on its counterclaims for breach of the insurance policy for failure to pay and alleged unlawful practices by Federated. I. FINDINGS OF FACT A. Parties 1. Federated is a Minnesota corporation, with its principal place of business in Owatonna, Minnesota. (Doc. 1 (Complaint (“Compl”) ¶2).) 2. The Defendant, Williams Trull, is a North Carolina corporation formed in 1947 and located at 1830 South Scales Street in Reidsville, Rockingham County, North Carolina (the “Premises”). (Tr. 4/15/10 at 177.) The company engaged in retail sale of agricultural and lawn and garden equipment, including large and small mowers, and provided parts and servicing. (Doc. 1 (Compl. ¶ 3); Doc. 8 (Answer ¶ 3); Tr. 4/15/10 at 177-78.) 3. William L. Puckett (“Puckett”) is the sole officer and shareholder of Williams Trull. (Doc. 1 (Compl. ¶¶ 8, 10); Doc. 8 (Answer ¶¶ 8, 10); Tr. 4/15/10 at 176.) Puckett is also the sole officer and shareholder of Puckett Land Corporation, a North Carolina corporation. (Doc. 1 (Compl. ¶¶ 9, 11); Doc. 8 (Answer ¶¶ 9, 11); Tr. 4/15/10 at 181.) 4. Puckett bought Williams Trull on February 14, 2003, after learning from his father, who had been in the farm implement business for 20 years and worked at Williams Trull, that it was available for sale. (Tr. 4/15/10 at 174.) Puckett purchased Williams Trull through his wholly-owned Puckett Land Corporation for $600,000 and mortgaged the Premises. (Tr. 4/15/10 at 176-82.) 5. Puckett graduated High Point University in 1986 with a degree in physical education and recreation. (Tr. 4/15/10 at 172.) Growing up he had worked on his family farm and from the mid-1980s until 2003 was employed as a truck driver for United Parcel Service. (Tr. 4/15/10 at 172-73, 178.) He had no personal experience with the farm supply business or in running a business. (Tr. 4/15/10 at 187; Puckett Examination Under Oath (“EUO”) at 49; see Tr. 4/13/10 at 182.) B. The Federated Insurance Contract 6. Williams Trull purchased a commercial package insurance contract from Federated, Policy Number 9318083 (the “Insurance Contract”), which was in effect and covered the Premises at the time of the Fire. (Doc. 1 (Compl. ¶ 12); Doc. 8 (Answer ¶¶ 12-13).) “Williams Trull Co” is the named insured and beneficiary of any proceeds of the Insurance Contract with respect to Commercial Property Coverage. (See Ex. 1, Doc. 109-1 (Common Policy Declarations).) All premium payments were current at the time of the Fire. 7. For purposes of this litigation, the relevant terms appear in the portion of the Insurance Contract designated “Commercial Property.” (Ex. 1, Doc. 109-1 (Common Policy Declarations and Common Forms); Ex. 1, Doc. 109-4 (Commercial Property Coverage).) The Insurance Contract covered fire damage to the Premises as well as loss of business income and extra expense incurred due to a fire loss. The Insurance Contract limited damages related to lost business income and extra expense to a “period of restoration,” defined as the period beginning immediately after a fire for extra expense coverage and 72 hours after a fire for business income coverage (i.e, lost business income). (Ex. 1, Doc. 109-4, Form No. CP-F-113, § H.2.a.) The period of restoration ended at the earlier of the “date when the property ... should be repaired, rebuilt or replaced with reasonable speed and similar quality” or “the date when the business is resumed at a new permanent location.” (Ex. 1, Doc. 109-4, Form No. CP-F-113, § H.2.b.) But for the claims in this lawsuit, the Fire would be a compensable loss covered by the Insurance Contract. 8. North Carolina law, which the parties agree applies, requires an insurer to provide a blank proof of loss form to the insured within fifteen days of receiving notice of the alleged covered event. Failure to do so results in the insured being “deemed to have complied with the requirements of [the] policy as to proof of loss, upon submitting within the time fixed in the policy for filing proofs of loss, written proof covering the occurrence, character, and extent of the loss for which claim is made.” N.C. Gen.Stat. § 58-3-40. 9. The Insurance Contract also provides: “We [Federated] will give notice of our intentions within 30 days after we receive the sworn proof of loss.” (Ex. 1, Doc. 109-4, Form No. CP 00 10 04 02, § E.4.c.) 10. The Insurance Contract further provides: “This [Commercial Property] Coverage Part is void in any case of fraud by you as it relates to this Coverage Part at any time. It is also void if you or any other insured, at any time, intentionally conceal or misrepresent a material fact concerning: 1. This Coverage Part; 2. The Covered Property; 3. Your interest in the Covered Property; or 4. A claim under this Coverage Part.” (Ex. 1, Doc. 109-4, Form No. CP 00 90 07 88, § A; see Ex. 1, Doc. 109-5 (Commercial Inland Marine Conditions), Form No. CM 00 01 09 04, General Conditions, § A.) C. The Fire 11. The parties agree that Lelon David Williamson (“Williamson”) and his nephew, Kenneth Eugene Sports, Jr. (“Sports”), both in their mid-twenties, intentionally set the Fire late in the night on Wednesday, October 3, 2007, and the court so finds. Both men were arrested by the Reidsville Police Department as they attempted to flee the scene. The Fire inflicted heavy damage, destroying equipment, parts, and other inventory, as well as damaging the business’ computer system and paper files, rendering the building useless for conducting an ongoing business. 12. On October 4, 2007, Williams Trull provided notice of the Fire to Federated and confirmed that Williams Trull would be filing an insurance claim (the “Claim”). That same day, Federated adjuster Merle Costello (“Costello”) visited the Premises and spoke to Puckett. (Ex. 202 (First Notice of Loss); Tr. 4/13/10 at 213-14; Tr. 4/15/10 at 206-07.) 13. Puckett testified that he planned to continue business operations, and within two days of the Fire had called his employees to work. (Tr. 4/15/10 at 208-10.) Williams Trull took several measures to attempt to continue operations, including setting up and using a temporary trailer, arranging for temporary telephones, and obtaining a generator for power from a hardware store. (Tr. 4/14/10 at 94-95; Tr. 4/15/10 at 194-95.) Puckett also had a platform of sorts built upon which work could be performed. (Tr. 4/15/10 at 207-OS.) Williams Trull was able to run power to the computer system in the old building to determine inventory for parts sales. (Tr. 4/15/10 at 210.) However, because of declining business and unavailability of equipment to sell, Williams Trull’s operations were limited mostly to parts and repairs. (See Tr. 4/15/10 at 213-14.) Operations were discontinued toward the end of 2007, and Puckett eventually took another job with a marketing company. (Tr. 4/15/10 at 194-95.) 14. At the time of the Fire, Williams Trull employed a handful of workers in addition to Puckett: Puckett’s father, Lewis C. Puckett (“Lewis Puckett”), a salesman; Tommy Hinshaw (“Hinshaw”), a mechanic; Bobby Saferight (“Safe-right”), also a mechanic and Hinshaw’s nephew; Brandie N. Wilkerson (“Wilkerson”), a parts manager; Amanda Farlow (“Farlow”), office assistant; and William “Peanut” McNabb (“McNabb”), a mechanic and general helper. (Tr. 4/15/10 at 196— 97.) Approximately two months earlier, Puckett dismissed two employees, Deborah Hinshaw, Saferight’s aunt, and Bob Saferight, Saferight’s grandfather who was also known as “Bobby Saferight,” because the company could no longer afford to keep them on. D. Issues Pending Before the Court 15. Federated asserts two defenses to coverage: that Williams Trull, by and through Puckett, (1) intentionally procured the setting of the Fire, and (2) misrepresented or omitted material facts during Federated’s investigation of the Fire. Federated seeks a declaration that the Insurance Contract is void and that Federated is not liable for any Claim. Following the Fire and at Puckett’s request (on behalf of Williams Trull), Federated, under a complete reservation of rights, made periodic advance payments totaling $130,000 in cash to Williams Trull plus an additional payment of $21,748.11 to Servpro, a restoration cleaning company, for a total of $151,748.11. (Tr. 4/13/10 at 221-26, 254; see Exs. 11-A through 11-E, 12.) Federated also seeks the return of these advances. (Doc. 1 at 7-8 (Count I); id. at 8-9 (Count II).) 16. Williams Trull denies that it was involved in procuring the Fire and asserts two counterclaims against Federated. First, it alleges that Federated breached the Insurance Contract by (1) failing to provide it a blank proof of loss form within fifteen days after receiving notice of the Fire, resulting in a waiver of any affirmative defenses regarding alleged deficiencies in the proofs of loss, pursuant to N.C. Gen.Stat. § 58-3^10; and (2) failing to give notice of its intentions within thirty days of any of Williams Trull’s proofs of loss, resulting in a loss of any rights Federated may have had to deny the Claim or to assert affirmative defenses. Williams Trull seeks compensatory and exemplary damages. (Doc. 2 at 10-14.) Second, Williams Trull alleges that Federated, through its delay and non-payment, engaged in unfair or deceptive acts or practices in its investigation and adjustment of Williams Trull’s Claim, in violation of North Carolina’s Unfair or Deceptive Trade Practices Act, N.C. Gen.Stat. §§ 75-1.1 et seq. (“UDTPA”), as well as N.C. Gen.Stat. § 58-63-15, which defines unfair or deceptive acts or practices under North Carolina’s insurance law. As to these claims, Williams Trull seeks treble damages under N.C. GemStat. § 75-16 and attorneys’ fees under N.C. Gen.Stat. § 75-16.1. (Doc. 8 at 14-17.) 17. The parties have stipulated that if a breach of the Insurance Contract is found, damages (actual cash value) are $469,067.44 for the period covering October 3, 2007, through the end of April 2008. This figure includes $30,447 in lost business income during that period. The stipulation does not cover claims for damages thereafter or for damages pursuant to Williams Trull’s Second Counterclaim under the UDTPA and other law. (Docs. Ill & 111-1.) E. Federated’s First Defense: Intentional Burning of the Premises 1. Official Investigation Related to the Fire 18. John Edward Harris, II (“Chief Harris”), the Reidsville Fire Marshal and reserve officer in the Reidsville police department, testified at trial. His investigation revealed that on the night of the Fire, Williamson and Sports entered the Premises through the back door, which had been kicked open and bore a footprint later determined to belong to Sports. The damage pattern revealed that the deadbolt lock had not been engaged at the time of entry. (Tr. 4/12/10 at 208-09, 228.) The business had no alarm system. (Tr. 4/15/10 at 200.) 19. The Fire was reported shortly after its start, and Reidsville police officer James Michael Austin, Jr. (“Officer Austin”), was called to the scene and took custody of Sports. Both Officer Austin and Chief Harris noted that Sports had a strong odor of gasoline, and cocaine was found in one of his pockets. (Tr. 4/12/10 at 129, 226.) Subsequent tests detected gasoline residue on both Williamson’s and Sports’ clothing. (Tr. 4/12/10 at 225-26.) Austin noted that Williamson was mildly intoxicated, but Sports was “highly” so. (Tr. 4/12/10 at 172.) 20. Chief Harris confirmed that gasoline had been poured on the floor of the building, resulting in an extensive horizontal burn pattern that indicated an intentionally set fire. (Tr. 4/12/10 at 218-22.) He concluded that the Fire was intentionally set. (Tr. 4/12/10 at 209-10.) Chief Harris also noted a gap in the third section of the fence on the property through which persons could enter. (Tr. 4/12/10 at 246.) 21. Sports and Williamson were charged with felony breaking and entering as well as burning an unoccupied building. (See Tr. 4/12/10 at 161.) Sports was also charged with possession of cocaine. (Tr. 4/12/10 at 161.) According to Officer Austin, both Williamson and Sports denied any involvement in the Fire when taken into custody: “They were adamant that they had nothing to do with it.” (Tr. 4/12/10 at 203.) 22. Sports eventually pled guilty to the charge of cocaine possession, and the arson-related charges appear to have been dismissed. (Tr. 4/12/10 at 122.) Other than the disposition of the arson charges, there is no evidence he was offered any inducement to confess or to enter his plea. Williamson, as detailed infra however, died of a drug overdose on December 15, 2007, before any trial or plea agreement could be reached. (See Ex. 7; Tr. 4/12/10 at 153; Tr. 4/13/10 at 140.) 23. No property from Williams Trull was seized from either Williamson or Sports or found along the short path they took after setting the Fire, and nothing was reported to be missing, suggesting to law enforcement that theft was not a motive for the Fire. (Tr. 4/12/10 at 228-29.) 24. Chief Harris, who was a local resident and familiar with the Premises, testified that he observed that the equipment/merchandise on display in the Williams Trull yard had decreased over the time preceding the Fire such that by the night of the Fire very few new items remained for sale. (Tr. 4/12/10 at 222-23.) This contrasted with photographs from 2004 showing a full yard of equipment and merchandise on display. (Ex. 153; Tr. 4/12/10 at 223-24.) 25. Based on his training with the federal Bureau of Alcohol, Tobacco and Firearms (“ATF”) and his observations, Chief Harris began to suspect that the Fire might be “arson for hire,” i.e., employment of individuals to set a fire so the insured can collect insurance proceeds. Factors he considers in deciding whether any fire was a result of arson for hire include (1) the financial condition of the business, (2) the absence of stock or inventory that would normally be present on the lot of a retail establishment, and (3) the absence of any evidence of theft during the fire. (Tr. 4/12/10 at 229.) 26. Chief Harris undertook further investigation, finding that a lawsuit had been filed against Williams Trull by GE Commercial Finance, a floor plan financing company, and that a default judgment for over $30,000 had been entered against Puckett personally in a lawsuit filed by his ex-wife. In light of these findings, Chief Harris notified Officer Austin and the ATF that further investigation of the Fire as an “arson for hire” was warranted. (Tr. 4/12/10 at 231-32.) 27. Within a week of the Fire, Chief Harris requested that Federated provide all information it collected during its investigation. Federated complied, pursuant to North Carolina law. (Ex. 167-RR; Tr. 4/12/10 at 232-33.) As of the date of the trial in this case, however, the ATF investigation of the Fire remained open (Tr. 4/12/10 at 232), and no criminal charges relating to the Fire had been filed against Puckett or anyone other than Williamson and Sports. 28. On October 15, 2007, Chief Harris and Officer Austin interviewed Puckett. According to Chief Harris, Puckett stated that “[t]he shop and parts were doing good.... Sales were down, but we were doing okay.” Puckett also stated that he transferred the tractors out because he did not want to pay charges due under the floor plan, that other equipment had been transferred off the lot, and that suppliers had taken mowers off the lot. (Tr. 4/12/10 at 235-36.) Chief Harris testified that, based on his observations and investigation, he concluded at that time that Puckett had not been truthful about the condition of the company during this interview and thus continued his investigation. (Tr. 4/12/10 at 236.) 2. Confessions of Williamson and Sports 29. On October 24, 2007, Williamson and Sports were released from jail on bond pending trial on their criminal charges. (See Tr. 4/12/10 at 132.) 30. In early November, Williamson told Officer Austin he wanted to speak with him further, and on November 9, 2007, he visited Officer Austin and confessed to his role in the Fire. Williamson’s confession, recorded by Officer Austin and signed by Williamson, provided: I have known Billy Puckett about a year or two. I had a friend who did some work for Billy in the past. Sometime around the First of September of this year Billy called me and said he was having some money trouble and he asked me to burn his business, Williams Trull. He said he would give me $2,000 to do it. I told him that I would do it. We talked for about an hour. He told me that he would leave the deadbolt unlocked and three gas cans at the door for us to use. We talked about it three or four days later because I hadn’t done it yet. The first part of October of 2007 me and my nephew, Kenneth Sports, were in Reidsville at some friend’s house and they got to arguing. We got dropped off at a bar across from Billy’s business. We drink [sic] a beer and decided to go ahead and burn the business. Kenneth only knew about this because I told him a couple of nights before we did it. We didn’t really plan it out. We just went over to the building and Billy had told me about a place in the fence where we could go under it. We did and Kenneth went to a door on the south side and he kicked it open. I saw the three gas cans beside the door and I grabbed one. I poured the gas throughout the building and saw that Billy had left his BMW inside. He was going to sell it the next day for $15,000. He told me to take the cash drawer, but I didn’t. We lit the fire with my lighter. I lit the fire near the hallway where the car was. The guy that was going to buy the BMW was a black guy but I don’t know his name. We set the fire and ran out the same door that we came in. We ran back to the north side of the building and crawled under the fence. We ran a short way and a police car pulled up. He told me to stop and I did. Kenneth kept running but he got caught, too. We had just taken off our latex gloves and tossed them when we got caught. (Ex. 4; Tr. 4/12/10 at 136-37.) Chief Harris provided Federated’s private investigator, Jerry D. Webster (“Webster”), a copy of Williamson’s confession statement on November 13, 2007. (Ex. 168.) Federated’s other investigator, employee Thomas Scott Eddie (“Eddie”), testified that he may not have received a copy of the statement until February 2008, although he may have seen it before then. (See Tr. 4/14/10 at 88.) 31. On November 20, 2007, Sports provided a confession as well, which was recorded by Officer Austin and initialed and signed by Sports. (Tr. 4/12/10 at 113; Ex. 5.) At trial, Sports agreed to the contents of, and authenticated, his confession (Tr. 4/12/10 at 101-09), which provided: On October 3, 2007 I got off work at J & L Flooring at 5:30 PM. My baby’s mother picked me up and drove me to my mom’s house in Greensboro. On the way there we stopped at a store and I bought a 6 pack of beer. I drank a couple of them on the way and the other 4 at my mom’s house. My uncle, David Williamson, was at my mom’s when we got there. We sat around for a while and David asked if we, me and Crystal, wanted to go to Reidsville. We decided to go and Crystal drove. We stopped on the way and I got two 24 oz. Miller Lites. I also got some cocaine on the way to Reidsville. Me and Crystal got to arguing and she dropped us off at some bar in Reidsville. I had never been here before so I don’t know the name of the bar. I drank two or three more beers at the bar and I took a hit for [sic] the coke. We stayed there about 30-45 minutes I guess. David asked me if I wanted to make some money and I said, “Yeah, how much?” David said $10,000. split even. I asked how and he told me some guy wanted to pay us to burn down his business. David pointed to the building beside us (at the bar) and said that one. I said okay and he told me to go under the third section of the fence. We ran around the building and went under the fence. We ran back to the south side of the building and I kicked the door twice. It flew open and we ran inside. I remember running by some shelves and David told me to go back outside and get a gas can on the left side of the door. I went outside and found the gas can where he said it would be. It was a big red plastic gas can. I brought it inside and gave it to David. He started pouring the gas throughout the store and I ran back to the door and waited. I saw David lean over and light the gas trail and we ran outside. We went back to the same spot of the fence and we crawled under it again. We ran from the building and all of the sudden the police up and stopped me. I had just tossed some latex gloves that I was wearing. David brought the gloves from my mom’s house. The first statement I gave you was a lie. I lied to you because I was intoxicated and scared. To this day I have not been paid any money. (Ex. 5.) Sports testified that his initial denial of involvement on the night of the Fire was untrue and that he lied because he was scared and was only “jiving” Officer Austin. (Tr. 4/12/10 at 109.) According to Federated’s investigator Eddie, Chief Harris provided a copy of Sports’ confession on January 29, 2009, (Ex. 168), although Federated’s representatives may have seen the statement in early January 2008. (See Tr. 4/14/10 at 88.) 32. Officer Austin, in coordination with Chief Harris and the ATF, discussed with Williamson his wearing “a wire” during a meeting with Puckett in order to obtain evidence of a payoff by Puckett or other incriminating evidence. Williamson agreed to meet with Austin on December 14, 2007, but then postponed the meeting until December 17, 2007. As will be seen, however, Williamson died in the interim on December 15, 2007, ending any possibility of his recording any conversation with Puckett. (Tr. 4/12/10 at 152-53, 240-42.) 3. Evidence of Williamson’s Statements to Friends and Family 33. Federated offered testimony of Williamson’s friends and family who claimed that Williamson told them, both before and after the Fire, that he had been hired by Puckett to set the Fire. As discussed in the Conclusions of Law, infra, as to the intentional burning claim the court conditionally admitted portions of this testimony at trial as statements against penal interest under Fed.R.Evid. 804(b)(3), over Williams Trull’s objection. (Tr. 4/12/10 at 4-22.) 34. Williamson’s mother, Brenda (“Brenda Williamson”), testified by deposition that before the Fire Williamson told her “he was going to get a lump sum of money” and could help her pay her bills. (Brenda Williamson Dep. at 26, 28, 37-38, 42-43.) She told her son she hoped he was “not doing anything stupid,” and he just grinned. (Id. at 28.) She also testified that he told her after the Fire that he burned the Premises for money and did it because he had “seen money signs.” (Id. at 23-24.) Once she discovered that he had committed the arson, she urged him to confess to “get things right.” (Id. at 47.) 35. Erin Kathleen Patón (“Patón”), the unwed mother of Williamson’s two children, testified at trial. At the time of trial she worked at Carolina Bank processing mortgages while attending college. She had known Williamson for several years and had an on- and off-again relationship centered principally on their two children. She stated that Williamson called her “a lot” from jail after he was arrested for setting the Fire. She stated that in one of the conversations over Williamson’s three-week period of incarceration he told her that “he and his nephew burnt down the building and that a man named Billy Puckett had hired him to do it and was going to give him $10,000 for doing it.” (Tr. 4/13/10 at 143^44.) She further testified that Williamson said that the money would come from insurance proceeds and that Puckett was expected to provide bail money for him and Sports but was unable to do so because Puckett was awaiting payment from the insurer. (Tr. 4/13/10 at 143^45.) According to Patón, she met with Safe-right at his trailer where he lived and was provided $800 in $100 bills to be put toward Williamson’s bail. (Tr. 4/13/10 at 143, 146-48.) When Patón picked up Williamson upon his release, he told her to drive him to Saferight’s trailer in Brown’s Summit, N.C. (between Greensboro and Reidsville), “so Bobby could get in touch with Billy to get the money.” (Tr. 4/13/10 at 148-50.) She did so, but waited in the car. (Id.) Williamson went in, exited without any money, and was mad. (Id.) 36. Melissa Hazelwood (“Hazelwood”), who was Williamson’s girlfriend for four years, testified that within the month before the Fire he told her he was “getting ready to come into a lot of money.” (Hazelwood Dep. at 14-15.) According to her, “he didn’t tell me the guy’s name right offhand, but he said that he ... was going out of business or getting ready to go into bankruptcy or something.” (Id. at 15, 18-19, 42-43.) She also testified that “when he made bond,” Williamson told her that “Billy Puckett was not going to pay him his money” for the burning, though she was unfamiliar with Puckett’s name at the time. (Id. at 16-18, 53-54.) He further admitted to her that he had climbed under the fence to burn the building. (Id. at 33.) The day he died, she observed Williamson with “like $500” or “$300.” (Id. at 37, 57-58.) 37. Stacey Stickle (“Stickle”), Williamson’s niece, is a 25 year-old “stay-at-home mom” with three children. She testified that she and her family discussed the details of the Fire and Williamson’s death. (Tr. 4/13/10 at 130-31, 134.) According to Stickle, in mid to late September 2007 toward “early evening” as she was driving Williamson somewhere, he confided that Puckett had offered him $10,000 to burn his business because the business was “going under,” stated that the money would come from insurance proceeds, and placed on the car dashboard a map of the Premises with an “x” marking the location of the door he was to enter. She says she told him the idea was “stupid” but did not believe he would carry it out. (Tr. 4/13/10 at 125-26, 135.) On cross examination she conceded she had not previously told anyone, including Federated’s investigator, about the map, although it does not appear that the investigator asked about it directly. Rather, she said she had “forgotten about it” and “[i]t was so traumatic for us to lose him, you know, that that wasn’t something that I was focused on.” (Tr. 4/13/10 at 131.) While she and Patón had discussed the situation, she explained, the map was “something that I kept to myself.” (Tr. 4/13/10 at 131.) Stickle also testified that she met with Williamson on December 15, 2007, the day he died, and he had a “pocketful of money,” which Williamson said was a “partial payment” of $5,000 (though he spent some of it), noting he was still owed $5,000. (Tr. 4/13/10 at 124-27.) Stickle also said she was present at a gathering where Williamson told his sister (her mother) and Stickle’s stepfather about the money he was offered to burn down the building. (Tr. 4/13/10 at 135-36.) There was no testimony that anyone, including Stickle, her mother or stepfather, tried to dissuade Williamson from committing arson. (Tr. 4/13/10 at 135-36.) 38. At trial, Sports testified that on October 3, 2007, he got off work at about 5:30 p.m. and encountered Williamson at Sports’ mother’s house in Greensboro. Williamson had been drinking and asked Sports if he “wanted to make any money.” (Tr. 4/12/10 at 88.) Sports expressed interest but said that Williamson “didn’t really explain it at the house until we got to the bar.” (Id.) Williamson identified Puckett’s name “a few days” after they were jailed together, yet Sports had no further discussions with Williamson after Sports’ release from jail. (Tr. 4/12/10 at 98-99, 117.) On cross examination at trial, Sports conceded that he had told Federated’s investigator he learned about Puckett from his “family members,” which Sports explained included Williamson. (Tr. 4/12/10 at 119-20.) Sports also testified that he believed Williamson obtained the latex gloves they used from Sports’ mother, who kept them at her home in her capacity as a nurse. (Tr. 4/12/10 at 108, 114.) 39. According to Thomas Lee Davis (“Davis”), who had known Williamson for ten years, the night Williamson was released from jail Williamson told him that Puckett had agreed to pay him $25,000 to “burn a place down for insurance money.” (Davis Dep. at 21-22, 37-38.) Davis later allowed it could have been $20,000, consistent with what Davis had apparently told police. (Id. at 31.) Davis testified that Williamson also told him then that “the guy that wanted him to burn the building down had left the gate unlocked and left gas there for him to set the fire with.” (Id. at 62-63.) He also said that Williamson told him that the first time he got any money from Puckett was about seven days before Williamson’s death, when he had collected $1,000 from Puckett, and that Puckett paid him another $1,000 the night before Williamson died. (Id. at 24-25, 28-31, 74, 82.) 40. Federated argues that the testimony of Williamson’s friends and family as to Williamson’s receipt of cash shortly before his death demonstrates that Williamson received a payment in return for setting the Fire. Federated contends that the $130,000 it advanced Williams Trull (including a $20,000 payment on October 19, 2007, prior to Williamson making bail, and a $20,000 payment on December 7, 2007, and negotiated four days later, just before Williamson died (Exs. 11, 11C)) was a source of payoff payments. 41. The only advance payment for which Williams Trull was not required to submit receipts was the $20,000 check dated October 19, 2007, and deposited into the Williams Trull checking account on October 22, 2007. Two days later, the checking account balance had been reduced to $633.19 and went negative the following day. Puckett testified that the $20,000 advance payment was used for the salaries of his employees “for several weeks of payroll” and electronic payments for payroll tax. (Tr. 4/15/10 at 213; Exs. 11A, 150.) Though no funds can be traced directly from Williams Trull/Puckett to Williamson, Federated’s payments were sufficient to provide a source of payment. 42. In assessing the credibility of witnesses, the court notes that the story Williamson’s friends and family reported he told them was largely consistent, except for the amount of money he claimed he was to be paid. While Williamson confessed to Officer Austin that he was offered $2,000 for the Fire (Ex. 5; see Tr. 4/12/10 at 136), Williamson’s friend, Davis, recalled him saying he was offered $20,000 or $25,000. (See Davis Dep. at 22, 31.) Hazelwood, by contrast, testified that Williamson told her he was going to get “between five to ten thousand dollars.” (Hazelwood Dep. at 15.) Sports, in his confession, stated that Williamson said the payoff was $10,000, which they would split. (Ex. 5; see Tr. 4/12/10 at 148-49.) This is consistent with the testimony of Patón and Stickle, who both testified that Williamson told them he had been offered $10,000, and of Stickle, who testified that the day he died he had received $5,000 of a $10,000 payoff. (Tr. 4/13/10 at 124-27, 143.) 43. The court has also considered that Williamson and many of his various friends and family members, including several who testified live at trial, were engaged in a lifestyle of excessive illegal drug use and alcohol binges, some of which extended for several days. (See Davis Dep. at 67-68 (drug use was “possibly every day”).) Moreover, for every witness who testified that Williamson told him or her that he was going to commit arson, sadly not a single one felt any compulsion to either talk him out of it or to report him to law enforcement. Such is the fabric of their character, but it is just in such an environment that someone could be found to persuade to commit arson. Consequently, the court finds that while recollections differ, the testimony is sufficiently credible to be believed as it relates to the claim that Williamson acknowledged to others his involvement in “arson for hire” for Puckett. This is particularly true as to the testimony of Stickle, Patón, and Sports, who appeared live at trial and whose demeanor the court was able to judge; the court finds them credible as to what Williamson allegedly told them. 4. Evidence of Communications Between Williamson and Puckett 44. Federated asserts that Williamson and Puckett knew each other and spoke with one another both before the Fire and after Williamson was released from jail. As to how they knew or may have known each other, Federated offered in part the deposition testimony of Brenda Williamson, who testified that Williamson used to work for Puckett, but no details were provided. (Brenda Williamson Dep. at 33.) Federated also offered evidence of Williamson’s association with Saferight, who worked for Puckett. Federated argues that Puckett and Williamson must have communicated in a manner to avoid detection and offered the testimony of friends and family. 45. Patón testified that upon Williamson’s release on bail, he asked her to get “on the computer” to find Puckett’s telephone number because he did not like “having to go through Bobby [Saferight]” to contact Puckett and “wanted to get in touch with Billy himself.” (Tr. 4/13/10 at 150-51.) According to Patón, she located Puckett’s home telephone number on the Internet and gave it to Williamson, who attempted to use his cell phone to call Puckett, but got no answer. (Tr. 4/13/10 at 150-51,156-57,163.) 46. Patón, Davis, and Hazelwood testified that Williamson tried to contact Puckett by telephone and in person on multiple occasions after being released from jail in order to receive payment for setting the Fire. Patón testified she was present when Williamson attempted to call Puckett and on several occasions when Williamson attempted to get money by calling Saferight. Patón never saw or heard Williamson actually speak with Puckett on the phone, however. Nor did she drive Williamson to Reidsville to try to find Puckett, despite her having driven Williamson to the Reidsville police department. (Tr. 4/13/10 at 150-51,157-58.) 47. Hazelwood testified that she was present during at least one phone call Williamson made to Saferight in which Williamson told Saferight to call Puckett to find out where his money was for setting the Fire. (Hazelwood Dep. at 36-37.) 48. Davis also said he was present when Williamson “cussed” Puckett out on the phone “because he wouldn’t pay him.” (Davis Dep. at 23, 89-90.) Davis estimated that Williamson called Puckett approximately thirty times between release from jail and December 15, 2007. (Id. at 71-72.) 49. Though Patón, Hazelwood and Davis testified to multiple attempted phone calls from Williamson to Puckett, Puckett’s cell phone records, which Federated introduced, indicate a total of five calls to or from Williamson’s cell phone: four short phone calls (one of four seconds, two of five seconds, and one of twenty seconds) from Williamson’s cell phone in close proximity to one another on October 29, 2007; and a 42-second call from Puckett’s cell phone to Williamson’s approximately two hours later. (Ex. 18.) Neither party offered any evidence as to whether the duration of these calls, particularly the shorter ones, was sufficient for any communication to have occurred, although the 42-second call may have been. Puckett explained that he called Williamson’s cell phone only because his cell phone registered missed calls from a number he did not recognize. According to Puckett, he had business cards on his desk, and because “a lot of customers will pick them up,” he surmised the missed calls were from someone trying to reach him for assistance. Because of this, he said, “[t]his [returning calls] is something that I do.” (Tr. 4/15/10 at 215-16.) This explanation does not fully account for the 42-second call, however. 50. Although Puckett did not deny Federated access to his home telephone records, Federated reports that the service provider (Time Warner) refused to provide them (Tr. 4/14/10 at 134), and Puckett’s home telephone records were not produced at trial. Federated claims it was unable to obtain Williamson’s cell phone records. (Id.) Thus, if the testimony of Patón, Hazelwood and Davis is accurate, some of Williamson’s alleged calls must have been made from and to different telephones. 51. According to Officer Austin, during his November 9, 2007, confession, Williamson retrieved his cell phone from his car and showed Austin the speed-dial list, which had an entry for “Billy P” at speed dial # 79 with Puckett’s cell phone number. A copy of a photograph Officer Austin said he took (Tr. 4/12/10 at 141-43) was admitted as Exhibit 6, but it showed “Billy” and not “Billy P.” 52. Sometime after Williamson died, i.e., after December 15, 2007, Officer Austin obtained and brought Williamson’s cell phone to the Reidsville Fire Department. Photographs of it taken by Chief Harris (introduced as Plaintiffs’ Exhibit 207) (Tr. 4/13/10 at 39^2; Tr. 4/15/10 at 158-63) showed a listing for “Billy” but not “Billy P,” as testified to by Officer Austin. (Tr. 4/13/10 at 39-42.) 53. An examination of Officer Austin’s photograph (Ex. 6) reveals that it appears to be a copy of one of the twelve photos taken by Chief Harris (Plaintiffs Ex. 207). Thus, the photograph that Officer Austin retained appears to be the photo of Williamson’s cell phone taken after Williamson’s death. Williams Trull contends that the evidence suggests that Williamson or someone else altered the cell phone to support a claim to implicate Puckett. Williams Trull points out that Williamson possessed his cell phone for some time prior to showing it to Officer Austin to support his November 9, 2007 confession and that by the time Chief Harris took his photos, Patón had been using it for some time after Williamson’s death. (Tr. 4/13/10 at 158-59.) The court concludes, however, that although the date Puckett’s cell phone number was entered into Williamson’s cell phone is unknown, the discrepancies in Officer Austin’s testimony do not undermine his testimony that he observed Williamson’s phone at the time of his confession. More than likely, Officer Austin was mistaken about recalling that the cell phone listed “Billy P” instead of “Billy,” as reflected in the photo, or that he, rather than Chief Harris, photographed the phone. 5. Williamson’s Death 54. Late on the night of December 15, 2007, Williamson died of a drug overdose in a Guilford County motel room. The police were called to the scene around 10:00 p.m. {See Tr. 4/13/10 at 93-94.) According to a witness, Williamson had been sniffing Oxycodone (obtained from Stickle, his niece) and drinking beer as well as taking other illegal drugs. {See Tr. 4/13/10 at 132.) 55. Williamson’s mother, Brenda, testified by deposition that at about 8:00 p.m. on the night of his death she and Stickle picked up Williamson from the motel and drove to a trailer she believes was Safe-right’s but returned to the motel when they determined that Saferight was not home. (Brenda Williamson Dep. at 16-17, 24.) His mother also testified (without objection) that her son had told her and Stickle: “Don’t worry about me. After tonight, you won’t have no worries.” {Id. at 29-30.) Neither Brenda Williamson nor Stickle identified any signs that Williamson had been in any altercation with anyone. 56. Williamson’s friend Davis testified by deposition that he had been with Williamson the night of his death and told police that night that Puckett gave Williamson $1,000 for burning the business, which “was part of the $20,000 Puckett had agreed to pay to have the building burned.” (Davis Dep. at 29-30.) Davis testified further that he learned this information directly from Williamson and not from anyone else. (Id. at 31.) 57. The court finds that Davis appeared to be under the influence of drugs and/or alcohol at critical times he allegedly observed events to which he testified, which negatively affects his ability to recall them reliably. Consequently, while his testimony may be consistent with that of other witnesses, the court concludes it is suspect insofar as it relates to recollection of specific events, and the court will not rely upon it in that regard for its decision. 58. Guilford County Deputy Sheriff Tracy William Smith (“Deputy Smith”) testified that upon arriving at the motel at about 9:55 p.m. on December 15, 2007, he saw what he believed were signs of a struggle: Williamson had blood around his face and mouth and appeared to have been in some kind of altercation; the motel room door had been kicked open; and neither of his two friends (Davis or a “Mr. Holmes”) had any sign they had been in a fight. (Tr. 4/13/10 at 93-101.) Federated contends that this supports Davis’ alleged statement to Deputy Smith the night Williamson died that Williamson and Puckett got into a fight “last night,” meaning Friday night. The problem is that Davis’ alleged statement was recorded in Deputy Smith’s report, but Davis was not examined on it in his deposition. It is therefore hearsay, and the court denied its admission at trial. (Tr. 4/13/10 at 119-23.) Because of this hearsay bar as well as the court’s finding that Davis lacks credibility given his significant concurrent drug and alcohol abuse at the time of the events, the evidence of any fight with Puckett is insufficient. The court therefore assumes, without deciding, that on Friday night, December 14, 2007, Puckett attended the high school basketball games of his daughter and son, which did not end until after 9 p.m., and that during that time he could not have been involved in any alleged fight. (Defendant’s Ex. 208; Tr. 4/15/10 at 175-76, 218-20; Tr. 4/16/10 at 27.) 6. Bobby Saferight 59. Both parties implicate Saferight in the Fire. Federated argues that he served as a liaison between Williamson and Puckett. Williams Trail suggests that he had his own motivations to collect insurance proceeds to be paid for damage to his tools during the Fire. 60. Saferight worked at Williams Trull in the repair department with his uncle Hinshaw. Both men filed claims with Federated for Fire damage to their tools and tool boxes. Saferight’s claim was for approximately $20,000. (See Saferight Dep. at 72.) No evidence was presented that it had been paid in any amount. (Cf. Tr. 4/14/10 at 106-08,147,157-58.) 61. At his EUO, Saferight concealed and downplayed his knowledge of and friendship with Williamson. When asked twice if he knew Williamson, Saferight replied “Not a Williamson” and “Not no [sic] Williamson.” (Saferight EUO at 38.) Given the context, it was clear that the inquiry was about Williamson. He denied knowing Sports as well. (Id.) 62. At his deposition on September 30, 2009, when Saferight was confronted with evidence that he had indeed known Williamson, Saferight tried to explain his previous denials by stating that he had known Williamson as “D.A.” and asking if Williamson’s last name was “Williams.” (Saferight Dep. at 69-70.) This is unconvincing. Substantial evidence indicates that Saferight and Williamson were well-acquainted. 63. For example, there is evidence that Williamson and Sports stopped by Safe-right’s home a few hours before the Fire. The parties stipulated that Krista McGraw (Sports’ “baby momma”) would testify that she drove Williamson and Sports from Greensboro to the sports bar next to Williams Trull on the night of the Fire. According to her, “[o]n the way to Reidsville, they went by a trailer in Browns Summit. She did not go in the trailer.” (Doc. 113.) Brown’s Summit, of course, is where Saferight’s trailer was located. (E.g., Tr. 4/13/10 at 127, 147, 149.) This is also consistent with Sports’ testimony that he and Williamson stopped in Brown’s Summit to get some cocaine, and with the testimony of Williamson’s former girlfriend, Hazelwood, who confirmed that Williamson and Saferight were very close friends who talked daily on the phone and that she observed Saferight supply Williamson with cocaine. (Hazelwood Dep. at 22-23, 28-29.) In addition, Williamson visited Saferight upon being released from jail, before the EUO testimony (Tr. 4/13/10 at 149-50), and even Saferight acknowledged — in his unique way — how he and Williamson knew each other. Further, Brenda Williamson testified that her son stayed at Saferight’s home from time to time and that Saferight drove him back and forth to work. (Brenda Williamson Dep. at 17-21.) Saferight admitted as much at his deposition. (Saferight Dep. at 18-23.) According to Williamson’s mother, Williamson attempted to see Saferight the night Williamson died. (See Brenda Williamson Dep. at 16-17.) Finally, Saferight attended Williamson’s funeral on December 19, 2007. (Tr. 4/13/10 at 130; see Ex. 10 at 15.) 64. In addition, Saferight was the approximate age of Williamson and Sports, had grown up in the Greensboro area, and had a criminal drug history. It was Eddie’s discovery of these facts that led him to suspect a connection between Saferight and the arsonists. (Tr. 4/14/10 at 58-59.) 65. Thus, by the time of his January 9, 2008 EUO, Saferight knew Williamson’s true name. Based on Saferight’s answers at his EUO, his earlier attendance at Williamson’s funeral, and other evidence as described herein, it is clear that Saferight testified falsely at his EUO and was attempting to conceal his relationship with Williamson. 66. Federated also points to an ominous warning by Saferight’s uncle before the Fire. “[Sjeveral weeks before the Fire,” Hinshaw warned Farlow to remove her personal belongings from the business “because something was going to happen” there. (Hinshaw Dep. at 30.) When asked about this in his deposition, Hinshaw explained that he was just reflecting his concern that the business would be shut down. (Id. at 31.) Federated draws a more sinister inference and argues that it demonstrates awareness of Saferight’s involvement in planning the Fire for Puckett. 7. Williams Trull’s Financial Condition at the Time of the Fire 67. As noted, the financial condition of an insured is a key consideration in determining whether the insured had a motive to commit or facilitate arson. By any measure, Williams Trull was in financial distress. In fact, by the time of the Fire, it was insolvent. Whereas a healthy company’s assets exceed its debts, Williams Trull’s debts exceeded its assets by a factor of 2.4. (Tr. 4/15/10 at 9.) Its financial condition was sufficient to provide a substantial motive to arrange the Fire. 68. The details of the company’s overall financial health following Puckett’s purchase of it, including its accelerated decline in 2006, is addressed infra in the court’s analysis of Federated’s misrepresentation defense. For purposes of the intentional burning defense, the court finds that the company’s net income had declined from a loss of over $7,000 in 2005, to a loss of over $89,000 in 2006, to a loss of over $862,000 for the nine months ending September 30, 2007. (Ex. 125; Tr. 4/15/10 at 9, 38-40.) Though in the first nine months of 2007 Williams Trull had sales of $1,336,939 (which annualizes to slightly less than $1.8 million) (see Tr. 4/15/10 at 140), its cost of sales grossly exceeded its sales (id. at 143). In other words, the company was selling equipment below its cost, so that the more that was sold, the greater were its losses. (Id.) 69. Significantly, Williams Trull had sold multiple pieces of equipment “out of trust” in 2006 and 2007, meaning it had accepted payment from the customer but spent the money elsewhere instead of timely paying the finance company or the manufacturer. This constituted a fundamental breach of the financing arrangements. The amounts were substantial. By September 30, 2007, after all (or virtually all) equipment had been repossessed by suppliers, Williams Trull still owed over $400,000 to the financing companies. (Tr. 4/15/10 at 24-30.) Increasingly, Williams Trull had become more desperate for cash. In the spring of 2007, Puckett applied for, but was turned down for, a loan from the Small Business Administration. (Tr. 4/15/10 at 15-16.) In about July 2007, Puckett sold all his personal stock in United Parcel Service, his former employer for 20 years. (Tr. 4/15/10 at 16.) As lending sources dried up, Williams Trull was forced to obtain financing from Venture Bank, a venture capital company that made unconventional loans to high risk borrowers, at the exorbitant interest rate of 121 percent. (Tr. 4/15/10 at 12-13.) The lender swept Williams Trull’s bank account weekly in the amount of $2,500 for payments. (Tr. 4/15/10 at 13.) In the three months preceding the Fire (July, August, September 2007), up to 57 Williams Trull checks were either paid by the bank as overdrawn or returned for lack of sufficient funds. In the three days preceding the Fire (October 1-3, 2007) at least 26 additional checks were paid by the bank as overdrawn or returned for lack of sufficient funds. (Tr. 4/15/10 at 11-12, 37.) By the end of September 2007, the company’s bank account was negative (- $6,933). (Tr. 4/15/10 at 11.) 70. Not only was Williams Trull’s past bad, its future was bleak. After months of delinquencies dating to 2006, its relationship with Case, one of its suppliers, was terminated in May or June 2007. (Puckett EUO at 44-46; see Tr. 4/13/10 at 167-68.) By the time of the Fire, not only had all of Williams Trull’s suppliers and floor plan financers repossessed equipment, they had refused to provide any more in the future. In fact, the last supplier’s removal of equipment occurred just five days before the Fire. Williams Trull’s debt was growing and was unsustainable under even the best of realistic projections. For example, in the six to seven months following the Fire, the company was projected to lose another $205,564. (Tr. 4/15/10 at 35.) The company’s debt was so steep that Puckett was forced to borrow on behalf of the company using his personal credit card. (Tr. 4/15/10 at 13.) 71. Puckett’s employees observed that he was under considerable financial stress (Amanda Farlow Dep. at 70; Tr. 4/13/10 at 188-89), which included personal financial pressures that had been building up to the time of the Fire. (Tr. 4/15/10 at 10.) Puckett had personally guaranteed a number of the company’s loans and floor plan financing arrangements, and although the precise amount of his net exposure on the guaranties is unclear on this record, his guaranties included the FNB loan that held a September 30, 2007, balance of $182,521. (See Exs. 167-WW, 167-XX, 167-ZZ; Tr. 4/15/10 at 10, 17.) He also personally owed $20,050 on credit card balances (on which he paid on average only $2.64 above the monthly minimum balance). (Tr. 4/15/10 at 65-66.) In addition, he owed his ex-wife a substantial sum pursuant to their property settlement, having obtained a second mortgage on the family farm to pay $100,000 to her and having given her a $200,000 promissory note for the balance, payable at $25,000 per year. By the time of his EUO, he was a year behind on these payments and his ex-wife had obtained a $25,000 judgment against him (plus attorneys’ fees and interest). (Tr. 4/15/10 at 181; Puckett EUO at 24-27; Ex. 167-FFF.) Even on a daily basis Puckett was underwater; his fixed living obligations and expenses exceeded his income by $1,755 a month. (Tr. 4/15/10 at 10.) 8. Williams Trull’s Evidence and Arguments in Response 72. Williams Trull advances several arguments in support of its defense of Federated’s claim that it procured the Fire. 73. Williams Trull first points to Puckett’s trial testimony. Puckett testified that on the night of the Fire he left work at about 5:30 p.m., went to the gym, and then to Covington Wesleyan church (about five miles away) for the Wednesday night service. (Tr. 4/15/10 at 198-99.) He left church about 8:30 p.m. and was at home when he received a call from law enforcement about the Fire at about 11:30 p.m. (Tr. 4/15/10 at 199.) 74. Puckett denied any involvement in the Fire and specifically denied communicating with Williamson or anyone else, including Saferight, about setting the Fire: Q In one of the statements, Mr. Williamson’s statement, I think it said that you and Mr. Williamson had been friends for a year or a year or two. Are you friends with Mr. Williamson? A No, sir. I’ve never known the individual and never had any dealings with him at all. Q When you say “never had any dealings”: — you said you didn’t recognize his picture. Did you ever talk to him, maybe not face to face? A No, never talked to him at all. Q Okay. Did you ever call Mr. Williamson from a pay phone? A No. Q Did you ever get a message somehow to Mr. Williamson that you wanted someone to burn your building? A No, sir. Q Did you ever talk to anybody — did you ever ask anybody else whether they would burn the building if they got some money? A No, sir, not at all. Q Did you ever suggest to somebody, well, if this building goes, there may be some money in it? A No. No. Q Okay. Have you ever said that — I am going to be specific — to Bobby Safe-right? A No, sir, never. Never said that to anybody. Q If there’s been testimony that you asked Mr. Saferight, he said, no, but said I got somebody who will, would that be truthful? A No, that would not be truthful because I never talked to anyone about doing that. (Tr. 4/15/10 at 215-17.) Puckett also denied that he ever gave Saferight cash to “take care of whoever torched the building.” (Id. at 217.) 75. Federated did not cross examine Puckett at trial on his alleged involvement in the Fire, but rather relied on his deposition and EUO testimony. 76. Next, Williams Trull addresses motive and contends that Puckett was actively engaged in building a future for the company. In the summer of 2007 (approximately July), it hired Greg Price (“Price”), a business consultant with International Profit Associates, to analyze the company’s performance and implement procedures to make it profitable. (Puckett EUO at 58-59.) Price worked at Williams Trull for about six weeks and was paid approximately $50,000. (Tr. 4/15/10 at 188.) Williams Trull notes that Price never advised Puckett that he should close the business. (Tr. 4/15/10 at 189.) However, Price’s analyses would have demonstrated to Puckett that his business was in dire straits, and it resulted in several cost-cutting measures. For example, Price’s advice led to the aforementioned dismissal of Deborah Hinshaw and Bob Saferight in August 2007. (Puckett EUO at 58-61; Saferight Dep. at 34.) 77. Third, as noted, Puckett endeavored to keep Williams Trull operating immediately after the Fire through the rest of 2007. (See Tr. 4/15/10 at 208-09.) In fact, Puckett’s father continued to report to the Premises until two weeks before trial “in case somebody, a customer, would come by,” even though the business was effectively closed. (Tr. 4/15/10 at 194.) Federated responds that because the arsonists were caught leaving the scene, Puckett was pressured to carry on as if he had no involvement in it. It also argues that it is not inconsistent with arson for Williams Trull to have endeavored to remain in business only to sell parts and service, using insurance proceeds to pay down creditors. 78. Fourth, the Fire was set when Puckett had one of his dogs on the Premises. The dog, “Cougar,” was a part-German Shepherd named after the mascot for the high school at which Puckett’s daughter attended. (Tr. 4/15/10 at 189-90, 203.) Puckett testified that at his daughter’s urging the prior March/April, he acquired Cougar as a puppy from his daughter’s high school classmate/softball teammate. (Tr. 4/15/10 at 189-90.) Though the dog originally lived at Puckett’s house, Puckett had been keeping it at the business since May 2007, because it did not get along with his dogs at home. (Tr. 4/15/10 at 190.) 79. Williams Trull offered evidence that Puckett cared for the dog. After arriving at the Premises the night of the Fire, Puckett told the firemen that his dog was inside. (Tr. 4/15/10 at 199, 202.) While still fighting the fire, the firemen located the dog in Puckett’s office lying under his desk. The dog was no longer breathing but was slowly revived with assistance. (Tr. 4/15/10 at 203.) Officer Austin observed CPR being given to a small puppy when he arrived at the scene the night of the Fire. (Tr. 4/12/10 at 127.) After the Fire, Puckett took Cougar to live with Puckett’s pastor. (Tr. 4/15/10 at 203.) 80. Fifth, Williams Trull notes that the Fire damaged Puckett’s BMW automobile parked in the Williams Trull building that evening. Puckett drove two vehicles and parked whichever vehicle he was not driving home in the Williams Trull building overnight. (Tr. 4/15/10 at 191.) Shortly before the Fire, the BMW had been parked in front of the building during the day with “For Sale” signs listing a sales price of $15,000, and anyone nearby would have been aware of the automobile and the asking price. (Tr. 4/15/10 at 191-92.) Puckett testified, without contradiction, that on the day of the Fire he had agreed to sell the BMW to a man who had previously examined and test-driven the car. (Tr. 4/15/10 at 192-93.) The buyer returned the BMW from a test drive, including a stop at a credit union, at about 4:30 p.m. the day of the Fire, and it was parked in the Williams Trull building. (Id.) As the buyer departed, Puckett told him that he would clean up the car and have it ready for him in the morning. (Tr. 4/15/10 at 193.) Williams Trull argues that it would have made no sense for Puckett to have put the BMW in the same building he planned to have burned. Puckett insured the BMW through, and made a claim to, Farm Bureau Insurance Company, which eventually paid the claim. (Ex. 167-AA; Tr. 4/13/10 at 14-15, 252-53.) 81. Sixth, Williams Trull argues that Eddie admitted he had no evidence that anyone ever saw Williamson and Puckett talking or that they had ever met face-to-face. (Tr. 4/14/10 at 131-33.) Eddie also testified that he had no additional evidence that Puckett knew Sports. (Tr. 4/14/10 at 128.) 82. Seventh, though Federated argues Puckett initially submitted an inflated claim for lost business income of over $1 million, Puckett did not submit any lost income claim until after having been requested twice by Federated to include lost business income in its proof of claim. Williams Trull argues that this is inconsistent with a desire to defraud Federated for lost profits. 83. Eighth, Williams Trull argues that it and Puckett were not the only ones with a financial motive to arrange the Fire. It points to Saferight, who filed his claim for $20,000 in damages to his tools and tool box and who knew, but lied about his relationship with, Williamson. Saferight and his uncle, also an employee of Williams Trull, engaged in several conversations with Federated about the status of their claims. Federated advised Saferight that his claim was under investigation and that no decision would be made until the investigation was resolved. (Tr. 4/14/10 at 147-48.) Federated did not direct anyone to investigate Saferight’s affairs, (Tr. 4/15/10 at 103), and as of the date of trial neither par