Judge Properly Advised Jury that Homeowners Policy Does Not Cover Theft of Business Property

Robber Failed in Attempt to Turn Victim into Insurance Fraudster

Criminals are, by definition, unreliable and dishonest. In an attempt to obtain a new trial a convicted armed robber tried to convince the Wisconsin Court of Appeal that the victim of his crime attempted insurance fraud and that the instruction given by the trial court that the victim could not collect on its homeowners insurance policy was reversible error.

In State Of Wisconsin v. Kevin M. Lipscomb, Appeal No. 2018AP2353-CR, State Of Wisconsin In Court Of Appeals District II (April 15, 2020) after a jury found Kevin M. Lipscomb guilty of being party to a crime of armed robbery he appealed alleging that the trial court erred by, among other things, by the trial court, sua sponte instructing the jury that the victim’s homeowners insurance policy did not cover the loss. He also seeks a new trial in the interest of justice.


DK and her husband ran a salvage yard business, a part of which entailed buying scrap metal from customers for cash. As a customer, Lipscomb was familiar with the cash-for-scrap aspect. DK made almost daily cash withdrawals from their bank: $20,000 to $30,000 Mondays through Thursdays, and about double that on Fridays so as to cover weekend transactions. The same bank teller, Andria Noel, frequently assisted DK. Noel was Lipscomb’s girlfriend.

One Friday, just after DK—assisted by Noel at the bank—had withdrawn $61,000, DK told police a masked man showed up at her house, pointed a black-and-silver handgun at her, and demanded the bag of money. DK testified that after she turned it over, the masked robber left “quickly.” Lipscomb and Noel both were charged with armed robbery. After a seven-day joint trial, the jury found Lipscomb guilty and acquitted Noel.

Jury Instruction Regarding Homeowners Insurance Policy

One defense theory was that DK had not been robbed at all but had fashioned a plan to defraud her insurance company. DK testified that she and her husband neither were reimbursed by the bank nor recovered any of the stolen cash; that they did not claim a loss under their business insurance policy; and that they did not file a claim under their homeowners policy, as their agent had said it would not cover business funds stolen from their home.

Lipscomb cross-examined Detective Vito Sorce about the victims’ insurance coverage. Sorce testified that the homeowners policy did not cover the $61,000 because it was a business loss. The trial court instructed the jury that Sorce’s testimony in this regard was hearsay and that whether there actually was coverage under the policy had not been established. The court then sua sponte instructed the jury that a homeowners policy would not cover the theft of business property. Lipscomb did not object to the instruction.

The court later explained why it had instructed the jury as it had: “It’s property that’s owned by the corporation and it would not have coverage…. I think confusing the jury and I think leaving that impression with them is inappropriate because there is no coverage for anything. That’s not personal property. They may be owners of the business but because they’re owners doesn’t mean it’s their property, it’s the corporation[‘]s, it’s a separate entity.”


Lipscomb contended that the sua sponte instruction was error. He argued that, by doing so, the trial court inserted itself as a “surrogate witness,” offered improper commentary on the evidence, and “functioned as a partisan.” The error was Lipscomb’s own for not objecting to the trial court’s instruction when it was given. Where an objection could have been made at trial, an appellate court has no power to reach an unobjected-to jury instruction. The appellate court lacks a discretionary power of review that. Lipscomb thus  forfeited his right to appellate review of his challenge to the court’s instruction by not objecting to it.

The defendant must prove, to obtain a new trial, by clear and convincing evidence, that justice has miscarried or that the jury had before it improperly admitted evidence that it fairly may be said that the real controversy was not fully tried. He did not met those burdens.


People who are not insurance experts, including judges, are not capable of testifying as an insurance expert. A judge, however, is an expert on the validity of the evidence put before him or her. Since there was no convincing evidence that there was insurance coverage for the stolen money and there was testimony from the victim that they tried to get money from their insurance company and failed, it was not error to give an instruction that a homeowners policy does not cover business property. This is especially true when the defendant failed to object to the instruction. If an expert had been called lack of coverage would have been explained to the jury. It didn’t matter. The jury believed that Lipscomb was an armed robber and convicted him properly ignoring the claim of insurance fraud.

© 2020 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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