Insurer wins dispute over fire, pot growing

By Ed White Associated Press DETROIT (AP) - An insurance company can recover more than $130,000 from a Michigan woman whose home burned down when her then-husband smoked marijuana oil in the basement, an appeals court said Tuesday. Brien Matthews had a medical marijuana card and could grow pot for others. But Nationwide Mutual Fire Insurance said the insurance policy was violated because it wasn't informed about the basement nursery at the Bay City home. "Far from merely adding one houseplant ... Mathews had approximately 28 marijuana plants growing in the basement," the 6th U.S. Circuit Court of Appeals said. "Two rooms in the basement had been converted into growing rooms, with one housing plants in the 'vegetative state' and the other serving as the 'flower room,' and Mathews had spent upwards of $20,000 on lab equipment." The fire in January 2012 began when Mathews was smoking oil extracted from marijuana leaves. The extraction process involved butane, which is highly flammable. The home was owned by Kasey McDermott. Nationwide Mutual said it immediately gave her $5,000 and later paid off her $131,850 mortgage before reversing course three months after the fire. "Nationwide's payments were not truly voluntary because it did not have all of the facts," the company said in a court filing. The appeals court agreed with U.S. District Judge Thomas Ludington, who said McDermott's home loss was not covered by the policy. McDermott's attorneys said she should be treated as an innocent victim. "There is no evidence that Ms. McDermott knew her husband was going to use butane to either accidentally or intentionally blow up her home," Jo Robin Davis said in a court filing. Published: Thu, Feb 26, 2015