Steamboat Pilot & Today

A tentative settlement has been reached between a Tree Haus homeowner and his insurance company over the insurance company's refusal to pay claims for a 2003 fire that damaged the house.

Court documents show that homeowner Scott Rouda and Fire Insurance Exchange Inc. are in the process of finalizing that settlement and expect to do so by Friday. If a settlement is reached, a five-day jury trial set to begin Oct. 4 will be vacated. The court has not officially vacated the trial.

On April 10, 2003, Rouda's home in Tree Haus, which was listed for sale for $875,000, was heavily damaged in a fire. A fire investigator for the insurance company named arson as the cause of the fire. The determination was made after gasoline residue was found near the origin of the fire, court documents show.

Rouda sued the insurance company for delaying to pay his claims, being negligent in the investigation and being manipulative in implying Rouda committed arson, court documents show. He also sued the company for loss of income, along with impairment of credit, emotional distress and punitive damages.

In its motion, the insurance company stated it not only considered Rouda to be a suspect in starting the fire, but it later found through discovery that he had motivation to do so.

"Fire Insurance Exchange does not deny the allegation that the plaintiff is the only person considered a suspect in the arson of the house, but denies that it acted maliciously or wrongfully, denies that it suggested prosecution and denies that it coerced the plaintiff to breach the insurance contract with the defendant," the court documents read.

According to the insurance company, leading up to the fire, Rouda's financial resources had been depleted, he had been unable to sell the house, which was one of his last remaining hard assets, and he had expressed a strong desire not to spend another winter in Steamboat Springs. He wished to relocate to Florida to start a business and had plans to do so weeks after the fire, court documents show.

Rouda had not been employed since the mid-1990s, and his house had been for sale since 2001. The 3,000-square-foot house originally was appraised at $975,000, but at the time of the fire was on the market for $875,000. The mortgage on the house was for $645,000.

The insurance company also objected to Rouda's request that attorney's fees and other living expenses be paid by the company.

Rouda had asked for $137,559 for loss of continued income and $183,000 for loss of rental income. He also asked that housing expenses be paid, including $10,388 for a 20-day hotel stay. Another $5,500 was requested for monthly rent, and $4,480 was requested to cover massage therapy for stress related to the fire, court documents show.

Insurance company officials said the company would not pay those expenses because officials thought the money was not used entirely for rent, but to make mortgage payments and cover attorney fees and litigation costs in the case, according to court documents.

In their investigation, insurance company officials suspected the fire started in the laundry room and was intentionally set. Gasoline was found near the origin, and a Bic lighter was found in a nearby wastebasket in the bathroom, court documents from the insurance company show.

The fire investigator's report indicated a "notable" lack of belongings and personal items in the house, court documents show.

In an interview with Rouda, representatives from the insurance company asked whether he had any involvement or responsibility in igniting the fire.

"Oh, God no," Rouda replied. "That's a silly question."

The night before the house burned, Rouda and his dog had slept at a nearby Tree Haus home belonging to Jean and Jeffrey Wolf. The weekend before the fire, Rouda had taken expensive pieces of artwork, including a Salvador Dali piece, and given them to friends, he told the insurance company.

Unrelated to the case, Rouda later was the caretaker of the Wolfs' home, which was destroyed by fire Dec. 9. The Routt County Sheriff's Office continues to investigate both fires, Investigator Rochelle Redmond said.

-- To reach Christine Metz call 871-4229

or e-mail cmetz@steamboatpilot.com