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State Farm Tried to Nail Its Customers for Arson, but the Bad Guys Were Firefighters

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More recently, State Farm doled out another $250,000 to the Johnsons, the result of a March 2010 judgment in a breach-of-contract/bad-faith lawsuit that the couple filed in 2006.

That came after State Farm countersued the couple for fraud and sought reimbursement of about $850,000 in claim payments and other payouts.

The failed State Farm countersuit led in June to yet another lawsuit by the Johnsons against the insurer, to be heard in Maricopa County Superior Court.


The 911 calls flooded in just after 6 on the morning of December 20, 2003. A big house in north Peoria was engulfed in flames.

Next door, Phoenix firefighter Pat Bolley had just risen for work. According to police reports and court documents, Bolley said he smelled smoke, looked around his own residence, and then stepped outside.

The Johnsons' home was engulfed in flames.

Firefighters from several agencies responded quickly, but the blaze was so powerful that they could only work it defensively. Thankfully, no one was injured.

It was a Saturday, and the Johnsons were planning to work on the house later that morning. They and their daughters hoped to move in within weeks.

A friend called them about the fire.

"I was in a fog after that," Betty Johnson says.

The two drove to North 87th Avenue, about eight miles away, and were overwhelmed by what they saw.

"Bad," Mike Johnson recalls. "It was bad."

The home's address is listed as Peoria, but it sits in a county island, so the case fell under the jurisdiction of the Sheriff's Office.

Deputy Jim Oliver got to the scene shortly before 7 a.m. and first spoke with some of the neighbors. A woman told him she had sold the property to the Johnsons, to the dismay of the Bolley family next door.

The Johnsons had started construction about 2½ years earlier, and the woman told the deputy there were "several incidents of the Bolleys' coming outside to harass the Johnsons, when they showed up to work on the house. "

Someone wisely asked the distraught Johnsons to sit in an ambulance, and that is where Oliver spoke with them. He wrote that the couple was "obviously devastated" and in tears.

Betty Johnson said she had called the Phoenix Fire Department months earlier to complain about the ugly situation with the Bolleys. But the couple claimed to have no idea who would have torched the place, if it were arson.

Deputy Oliver spoke with another neighbor, Kent Arnold, yet another Phoenix firefighter, who also knew about the troubles between the Johnsons and the Bolleys. He said he had learned from Pat Bolley that the Johnsons allegedly were stiffing subcontractors for work on their new house.

Arnold told the deputy that he had seen Mike Johnson carry several large metal gas cans into the garage about a month earlier.

"He immediately thought to himself, 'Man, I bet that place burns,'" Oliver wrote in a report. "I asked what that meant. He said he thought Mr. Johnson might have money problems, especially with the contractors, so he might burn it down. He also told me, when he heard the dogs barking and got up and saw the fire, 'I got a gut feeling, they burned it down.'"

Sheriff's Detective Jim McCarthy arrived about 9:30 a.m. His task was to determine the cause and origin of the fire, which authorities already saw as suspicious, especially after they learned that the electricity to the house wasn't connected.

Another sheriff's investigator, Phil Dougherty, also spoke with the Johnsons, later writing, "Michael [Johnson] said there was nothing kept at the house to cause it to catch fire."

Mike Johnson tells New Times that he didn't mean there was nothing inside the home. He says he had been referring to flammable items such as gas cans. But that statement and others like it by the Johnsons loomed large in State Farm's eventual conclusion that the couple was grossly exaggerating their personal-property-loss claim.

Pat Bolley had left for work, and the sheriff's detectives wouldn't speak with him for a few days, when Detective Dougherty called the firefighter.

Bolley told Dougherty that the Johnsons were very upset with him for telling subcontractors working on the new home to beware of getting scammed by his future neighbors.

Bolley said he knew Betty had given letters to several subcontractors supposedly written by a BankOne (now Chase) loan officer on bank stationery.

Signed by a "Lillian" (no last name), the letters addressed to Betty Johnson said the bank would not release money to pay the subs because of supposedly shoddy workmanship.

Bolley said he learned from concrete subcontractor and fellow firefighter Robert Brewster that Betty had created the fraudulent letters to avoid paying Brewster and other workers.

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Paul Rubin
Contact: Paul Rubin