Amco Insurance counter sues Jenny's Uniform Shop owner's husband claiming fire was intentionally set

By Record News | Mar 15, 2016

Former federal judge Patrick Murphy, representing a Marion business that sued to collect insurance on a fire, must answer an allegation that the owner’s husband started the fire.


Former federal judge Patrick Murphy, representing a Marion business that sued to collect insurance on a fire, must answer an allegation that the owner’s husband started the fire.

Amco Insurance filed a counter claim in U.S. district court on March 9, accusing Clayton Litton of deliberately destroying Jenny’s Uniform Shop last year.

“Amco Insurance Company owes no coverage to counter defendants Janell Litton, Clayton Litton, and Jenny’s Uniform Inc.,” Sulema Medrano of Chicago wrote.

She wrote that the shop’s policy excluded losses resulting from dishonest or criminal acts by anyone with an interest in the property.

“Clayton Litton has a financial interest in Jenny’s Uniform, as a co-signer on a business loan taken out for the company,” Medrano wrote.

She wrote that he is a mortgagor on the loan used to purchase the property.

Chief District Judge Michael Reagan presides over the action.

He and Murphy worked as judges in the same court from 2000 to 2013.

In December, Reagan ruled that Amco could not question Clayton Litton.

The shop burned on Sept. 3.

A Marion fire department report identified both Littons as owners.

The report stated that the fire department, Marion police, and the state fire marshal were investigating the fire.

On Sept. 16, at the shop, Janell Litton told Amco investigator Don Weber that she learned of the fire when her husband came in the back door and told her.

She said she talked to fire department investigator Ben Wilson at the shop.

“Ben asked me if I was Clayton’s wife and I told him yes, and then he told me that Clayton asked Ben if it was Ben’s first fire,” she said. “They know one another.

“Ben laughed and said no, but this was my first arson.”

Litton said someone asked her about furnace filters, and how many she had, and whether there were any accelerants in the building.

She said she went to get her hair cut at six, and came home and got in the shower.

She said Clayton went to get his hair cut, and then he was going to take the trash to the shop and get pizza.

Weber asked if Clayton had been back to the shop.

Litton: “He was to the dumpster. He was not to the shop.”

Weber: “He did not go in the store?”

Litton: “He did not go in the store.”

Weber: “But he was the last one here prior to the fire?”

Litton: “He was the last one, not – Well, I guess.”

He asked if someone came to the house, and she said Wilson showed up.

Litton: “My husband knows all these people so he’s thinking this is on a friendly level, and then by the end of the conversation it turns out that it was not friendly.

“He made Clayton sign a piece of paper and he said these are your words, not mine, right?”

Weber asked how many exits there were. She said three, and one was sealed.

“The fire department had a hard time getting over there,” she said.

On Oct. 22, Amco scheduled an examination of Clayton Litton on Nov. 4.

On Oct. 23, Murphy sent Amco a letter stating that nothing in the policy authorized the examination.

On Nov. 6, he sued for declaratory judgment to block the examination.

Reagan scheduled a hearing before Amco had answered.

He took 10 minutes of testimony from Janell Litton on Dec. 11, and ruled that Amco couldn’t question Clayton because it didn’t insure him.

Although Clayton had signed an initial loss claim, Reagan wrote that he was “not aware of any law that makes one an insured merely because he thinks it is so.”

On Jan. 4, Janell signed a sworn statement claiming a loss of $375,192.49.

Amco rejected the statement on Jan. 29.

Murphy filed another declaratory judgment action on Jan. 30, calling the rejection vexatious and unreasonable.

He asked for a declaration that Janell’s statement is sufficient.

Murphy retired from the bench in 2013, and returned to private practice.

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