Free Notice Regarding Exhibit Attachment - District Court of California - California

Case 3:08-cv-00443-BEN-POR

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Mexico D. F., May 7. 2008 In answer to your request, in which you asked the intervention of the undersigned, in order to render an expert report in polygraph related to the fire case of the boat "Mi Barur", I present to you the following:

REPORT
PROBLEM POSED. A. Determine whether Mr. Rello Romero Luis Manuel intentionally provoked the fire of the boat Mi Barur" on October 20, 2007, located at dock number 2 of Marina Palmira in La Paz, Baja California Sur.

SICENTIFIC METHODOLOGY
I. APPLICATION OF A POLYGRAPH TEST These were the steps of the scientific methodology that were taken during the test: r * * * * * * * * * * * Introduction of the persons in charge of the test. Authorization in writing to perform the test to respect the fundamental rights of the United Mexican States Constitution. Personal background Review of the medical
-

psychological status of the person being interviewed.

Explanation of the polygraph. In-depth interview. Introduction to control questions. Making and reviewing of questions that were to be used during the test. Elaboration of graphics. Interpretation of the graphics. Post-test interview.

II. QUESTIONS USED DURING THE TEST

1

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The questions that were used are the following: Irrelevant questions 1, 7 y 10, This questions are designed with the purpose of decreasing the emotional stress, as well as to verify the reaction capacity of the subject, as they are not linked with the target fact being investigated. Symptomatic question 2. This is designed with the objective of testing a single fact subject matter of the investigation and to cause the subject not to disperse his psychological attention in other acts. Relevant questions 4, 6 y 8, They are designed with the purpose of exploring the facts subject matter of the investigation, because they are linked to the target of the test. Comparative questions 3, 5 and 9, They are designed with the purpose of balancing the emotional charge, caused by the relevant questions that are linked with the target of the investigation. 11 2T 3C Are you now in Sinaloa'? No Did you answer with the truth all the questions that I made to you today? Yes Do you remember taking women to the boat without the authorization of the owner in any occasion? No Did you intentionally cause the fire by any means of the boat "Mi Barur"? No Do you remember having consumed alcoholic beverages in the boat in any occasion? No Did you intentionally cause the fire of the boat "Mi Barur" on October 20, 2007? No Are you now in Mexico City? Yes Did you smoke in the area of the cabins located at bow on October 20, 2007? No Do you remember, in any other occasion, having defrauded the trust of the owner of the boat? No Are you now in Aguascalientes? No

4R 5C 6R 71 8R 9C

101

The used technique was the MGQT, which is a modified version of the technique developed by John Reid in 1953, who was the first in developing the method comparing comparative questions
-

Translators note: Sinaloa is a one of the 31 States of Mexico. Translators note: Aguascalientes is a one ofthe 31 States of Mexico. 2

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and the guilt complex reaction questions, incorporating that to this technique. In 1968, the Arm Forces Academy modified Reid's technique and call it MGQT, incorporating the principles used in the test of comparative zones of Cleve Backster ZCT comparative questions separated in space and time, which was adopted by the Arm Forces Academy of the U.S.A. in 1961. The main difference between Reid's Technique 1953, and that of the Army MGQT 1968, was that Reid's did not use a numeric analysis, the controls were not isolated in time and/or place regarding the relevant matter, and he permitted multiple matters in the test in a sole series crossing objectives. Crossing objectives consists on two or more different matters or crimes. In the last years, both the Army and the Marine of the United States of America have modified the MGQT in several way and have used this technique in criminal and counterintelligence areas. The results to determine the accuracy of the Poligraph made by some Universities are presented below: * * * Stanford's states a Utah's, a British Columbia's, a 96%. 94%. 96%.

On the other hand: * * Jagiellonian, in Poland, a Another from the government of India, a 95%. 90%

MGQTS PRINCIPLES * * * Comparative questions technique Uniformity of the technique Permits up to five relevant questions concerning a single crime or subject matter and/or several subject mailers.

PSYCHOLOGY OF THE MGQT'S STURCTURE The MGQT is a test designed to cause a threat in the security of the person being examined, without minding if he is guilty or innocent, and focing him to center his attention in the specific questions of the structure of the test. The MGQT uses a structured format where the questions are reviewed with the person being examined. In any event, the exact sequence of how the questions will be made is not known. It designed to avoid external mailers to interfere with the examination, the use of symptomatic questions used in the ZCT technique.

3

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It is used to identify the spot responder, this means to avoid that the person being examined is responding to a question because he is in the same position always, because this technique permits the rotation of both relevant and control questions in each of the sequences, always respecting the recognized principles of the American Association of Poligraphs.

Ill

PROTOCOL TO QUALIFY THE PHYSIOLOGICAL REACTIONS OBTAINED BY THE TEST The numeric evaluation of the MGQT is vertical, there is not an horizontal total, this is because each OR's refers to different matters. To obtain a result of NDI a vertical total score greater to the relevant questions.
+

*

*

3 has to be obtained in each of

*

To diagnosticate a Dl resulta vertical total score of -3 has to be obtained in each of the questions. If none of this scores are obtained, then it is inconclusive or we do not issue an opinion.

*

SCORES OBTAINED IN THE TEST

VAT.2

+I6_8H

1÷3

I

1

4

EXHIBIT A-41 220

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I
TOTALS

iI
I
÷36 +4

+21

I

+4

CONCLUSIONS

1. With respect to the polygraph test performed to Mr. Luis Manuel Rello Romero we obtained a "VERACI1'Y" result NDI, sustained in the quantitative analysis of the psycho
physiological of the person being examined according to the protocols established by the American Association of Polygraphs. 2. No psycho-physiological reactions of lack of veracity were registered when he answered negatively to the question if Mr. Luis Manuel Rello Romero intentionally caused the fire by any means of the boat "Mi Barur".

3. No psycho-physiological reactions of lack of veracity were registered when he answered

negatively to the question if Mr. Luis Manuel Rello Romero intentionally caused the fire by any means of the boat "Mi Barur" on October 20. 2007 and if on October 20, 2007 he smoked in the area of the quarters of bow.

4. For the reasons stated above, the undersigned poligraph experts, Psychologists Julián Flores Anda and Psic. Carlos Enrique Ramos Raths, conclude that according to the protocols of the polygraph techniques and based on the methodology of the psycho physiological test of Deceit Detection PDD and the numeric qualification obtained thereto, that no reactions of deceit were registered in the main subject of the evaluation by Mr. Luis Manuel Rello Romero.

SINCERELY,

PSIC. JULIAN FLORES ANDA Certified Poligraph Expert Supervisor PSIC. CARLOS ENRIQUE RAMOS RATHS Certified Poligraph Expert Person applying the test BIBLIOGRAPHY Tuvia Rosen 2002, The polygraph, myths and reality, Mexico: INACIPE.

5
a

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James Allan Mafte, Ph D. 1968, "Forensic psychophysiology using the polygraph".

Norman Ansley 1990, Validity and accuracy of poligraph decisions in real cases
Elmer Criswell 2003, Study of the test formats of P.D.D., article presented to the Annual Seminar of the American Association of Polygraphs, Sparks, Nevada.

6

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Mexico 0. F.. a 07 de Mayo del 2008
En atenciOn a su solicitud donde requrriá do nuostra intervention de los que suscriben, para dictaminar en materia de poligraria relerente at caso del incendlo dci Darco `CMi Barur' remito a usted Ic sigusente:

DICTAMEN
PROBLEMA PLANTEADO
A. Determiner si el C. Rello Romoro luis Manuel, provocO intencionalrnente el incendio del barco Mi Barur' ci dia 20 tie octube del 2007, en Is Marina de Palmira en Ia Paz, Baja caliFornia Sur en el muelle marcacic con el nijmem 2

METODOLOGIA

CIENTIFICA

I APLICACION DE LA EVALUACION POLIGRAFICA
Estos son los pasos do Ia metodologia cientifica que se emplearon durante Is evaluacion: * * * * Presentation de los Evaluadores AutorlzaciOn pa escrito para lievar a cabo Is prueba Respeto a las garantlas Individuates plasmadas on Ia Constitution Pol%Vca de los Estados Unidos Mexicanos Antecedentes personales Revision tie Is sihiaciOn medico Explicacion del pollgrafo * * Entrevista Profunda Introduccion de preguntas control Formulacion y revision do proguntas quo so van a utilizar durante ci examen Elaboracion
-

psicolOgica del entrevistado

tie graficos

Interpretacion do graficas Entrevista post-test.

.4

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Lie

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r

II PREGUNTAS EMPLEADAS EN LA PRUEBA
Las preguntas quo so utilizaron fueron: In'olevantes jpreguntas 1, 1 y 10, Estas preguntas estn daseñadas con Ia finalidad tie disminuir Is tensiOn emocional, asi comb veriricar Ia capacidad Ge reacciOn del sujeto, ys gte no estan ligadas con & objavvo del bccho que se investiga. $intomática pregunta Z Esta diseñaOa con el obeUvo be evaiuar solo el hacho quo so investiga y que ei sujeto examinado no disperse su atencion psicologica en otros actos. Rolevantes preguntas 4, 6 y 8. Son diseAadas cart a linalidad de exploar los hethos que se investigan, ya qua onàn Jigadas a los obeth'os tie Ia evaluaclon. Coinparativas proguntas 3, 5 y 9. San disenadas con Ia finalidad equilibrar Is carga ernocional, quo generan las preguntes relevantes que estan Iigadas con el objetivo quo se investiga 11 2T 3C

tEstas ahora en Sinalea? No
tContesto con total veracidad a las preguntas que le realice el dia tie hay? Si Recuerdas en al9una otra ocasiOn. LHaber Ilevado inujeres 01 barco sin autorizaciOn Gel propietarlo? No

4R

DoIiberadamcnto ocasionaste ol Incondic a través de cualquier modlo del barco "Mi Barur? No tRecuordas en alguna oa ocasiOn. haber consumida bebidas alcotiolicas en el bareS?
No

5C

GR

tlnlenclonalrnente tu provacaste eI incendio en sI barco "ml barur" el 20 do octubre do 2007? No
stas ahora en Ia ciudad do Mexico? Si /El die 20 do octubre do 2007 u fumaste en ol area do carnarotes do proc? No cRecuerdas en alguna otra ocasiOn, Haber derraucfatio ta conflanza dcl propietario tic,! barco? No tEstas ahora en Aguascahentes' No

71 SR 9C

101

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r

comparativas y las preguntas Ce reacciOn do complejO Ge culpa quo incorporO en esta tOcnica En 1968, Ia Academia do Ia Armada modutico Ia tecnica be Reid y Ia Ilamo MGQT, Ademas le incorporaron los principios preguntas cornparabvas sepamadas en tiempo y espacio utilizados por eI examen do cornparaciOn Ce zones do Clove Backater ZCT, que tue adoptado par Ia Academia tie ia Arms be los E. E. UU. en 196't.

La tecnica ernpleada tue MOOT quo Cs una versiOn modilicada do Ia b5cniCu desan'oIlada por John Reid, en 1953, que tue el primero en desarrollar Ia cornparaciOn do las preguntas

La diferencia principal entre Ia Têcnlca do Reid 1953, y Is del Ejrcito MGQT 1968, tue quo Reid no usaba 01 analisis numerico. sus controles no estaban aisladas por tiernpo yb lugar del asunto relevante. y él permilir, mOltiples asuntos en Is prueba en una sole sena cruando objetivos. Cruzando objetivos consiste en dos o rnés dulerentes asuntos o crirnenes. En Los iltimnos a/tos, tanto el Ejercito coma Ia Marina do los Estados Unidos be Nortearnerica ban modificado el MGOT en varies tormas y ban utilizado eats lecnica en a! Area do crimones y en

contraintebgencia. A continuatiOn se presantan resultados pars determiner Ia exactitud del Poligralo realizadas par

algunas Universidades: *
*

La be Stanford se/tala uti
Lade Utah, eI

96%.
94%.

*

La be British Columbia. el

96%.

Por otro lado: *
*

Jagielionian. en Polonia, el
Otro pore! gobierric, do a India, arrojô ol

95%. 90%

PRINCIPIOS OE MOOT
* * * Ttcnica do preguntas comparetivas Uniformidad en a técnica Permite hasta cinto preguntas relevantes concernierites a un solo crinen a asunto yb varios asuntos.

PSICOLOGiA DE LA ESTRUCTURA MGQT
El MOOT es un examen disofiado pars poner una arnenaza a Ia seguridad del examinado, sin rnportar SI CS cu,ablc a inoccntc, y forzarlo a centrar su atencion en las preguntas especibcas do Ia estructura del examen.
El MOOT use un torrnato estructurado en donde las pregunts son revisadas con el

examinado. Do cualnuier orma Is secuencla exacts do cOmo so forrnularan las preguntas no so conoce
3

e'd

8000tiss

US OQ!ZOw Cfl aode

;a+o

225

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r

Esta di5eñado pare evitar quo asuntos externos intertieran con Is examination, Is utilization do preguntas sintornAticas usaclas en a técnica ZCT.

Es utllizaaa pars Idenllficar al respondlente do punlo Spot Responder. esto so refiere cuando tin cxarninado esta respondiendo a una misma pitgunta por encontrarse en Ia misms position
sternpre. esto Ia eviLs ya que Ia técaica perrnite rotar tanta relevantes coma controles en cads una do sus secuencias. siernpre respetando los principios reconocido par Is AsociaciOn Americana be Poligrafistas.

Ill LINEAMIENTOS DE CALIFICACION DE LAS REACCIONES FISIOLOGICAS OBTENIDAS * La evaluation numénca en Cl MOOT es vertical, no quo cads OR `s so refieren a asuntos diferentes. bay un total horizontal.. esto debido a

*

Pare obtener un tesultado be NOl se dote obtener Un puntaje total be rnanera vertical mayor a t a en cads una do las progunta rolovantos. Pars diagnosticar Un resultado Dl se dote obtener un puntaje total de manem vertical menor a 3 en alguna de las preguntas.
-

*

*

Si no obtenemos ningtri be estos puntajes, entonces tetiemos un inconcluso o no cruitirnos una opiniOn.

CALIFICACIONES OBTENIDOS EN EL EXAMEN

VAT 2

4

6
1-1

TL
I
+ii
--

+1

`--I H1H
-1

J.tki. I

I

-t

4

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us 001xal4

ode0

aot*340

do;

EXH1BtFAe4j 226

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r

4 TOTALES

6

+4

+3

CONCLUSIONES 1. En 10 concemionte a Is evaluatiOn poligraflca realizada S C. Rello Rornero Luis Manuel se
obluvo un resultado do "VFRAZ" NOt, sustentado en el anátisis cuantitativo be as reacciones psicofisiolOglcas do examinado durante eI coirido be las tres graficas realizadas be acuerdo a los lineamientos establecidos por Is AsociaciOn Americana de Poligrafisla.

2. En lo referents a si el C. I%ello Roincro Luis Manuel. delberada'nente ocasiono el incendio a través do cunlquier media bet barco "Ml Barur, no so registraron reacciones psicofisiológicas do falta be veracidad, al contcstar negativemente este cuestionamiento. 3. En Ia referente a quo Si eI C. Rello Romero Luis Manual, intencionalmente provoco el incendio en 91 barco `mi barur" S 20 be octubre do 2007 y si 01 dIe 20 do octubre de 2007 fumô en CI area be camarotes do pros, no so registraron reacciones be falLs de veracidad, al contestar negativamente a estos a estos cuestionamientos 4. Por to ya descrilo, 105 quo suscriben poligraflstas Psic. JuIiân FIGres Anda y el Psic. Carlos Enrique Ramos Raths, concluyen quo be acuerdo a los lineamientos de a têcnica poligrtflca y con base en Ia metodologia de aplicaciOn do Ia prueba psicofisiolOgica do Deteccion del Engaflo POD, asl coma, de Is calificaciOn numerics obtenida. en el exarnen practicado al C. Rcllo Romero L.uis Manuel, no se registraron reacciones be engaño 5.

ATEI

PSIC.

`E RAMOS RATHS
Aplicador

r
5

s'S

eooos.tss us oo;xaw e

odaj

ao;flQ

dot

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BIBLIOGRAFIA
tuvia Rosen 2002. El poligratoniltos y realidades, Mexico: INACIPE, James Allan Matte, PhD. 1968. `Forensic psythophysiology using the polygraph. Norman Ansley 1990. Validez y confiatilidacl en decisiones poligráficas en casos rests Elmer Criswcll 2003, Estidia be los formatos do prueba do P. 0. 0., articulo presentado en ci Serninario Anual do Ia Aseclacion Arnencana do Poligrafia, on Sparks Nevada.

8 8000PISs

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Fire Cause Analysis
.4 DIVISION OF
FT INC.

May 20, 2008

To:

Edward M. Bull Banning, Micklow and Bull LLP One Market Steuart Tower #1440 San Francisco, CA 94 105-1429
-

Re;

Mr. Arsenio Farell Campa Motor Yacht Vessel; HIN No,: US Official Number: Date of Loss: Location of Loss: Responding FD: Alarm Time; FCA Ref. No.:

"MI BARUR" 1990 Hatteras HATDT3O11990 975461
October 20, 2007 Saturday

Marina Palrnira, dock #2, slip#2Ol-#2O2 La Paz, Mexico La Paz Fire Department 9:40A.M. 08-10613V

Enclosed for your private and confidential information is my report of the evaluation of the Maze fire investigation report of the above referenced fire. The opinions expressed in this report are based upon the guidelines established in the NFPA 921. Synopsis: In summary, this fire loss occurred in the mid-morning hours at the Marina Palmira Yacht Harbor in La Paz, Mexico. The fire occurred within the "MI BARUR", a 1990, 92-foot motor yacht, manufactured by Hatteras, MI BARUR was moored on the starboard side, facing north at slip #201 & #203 located at the east end of dock #2. No one was on board the motor yacht at the time the fire was reported. Multiple calls were received by witnesses within the marina, who observed smoke emanating from the forward, starboard side, of the vessel, mainly from the starboard galley passageway door. Two of the witnesses, Mr. Francisco Robles and Alfredo Amador were working on adjacent vessels towards the middle of dock #2 and observed the early stages of the fire. With assistance from individuals around the marina, the vessel was moved from its original moored position at the west end dock #2 to north side of dock #7, on the interior east side of the marina breakwater. The vessel was moved so that other vessels would not be harmed by the fire and to provided better access for fire suppression equipment.

Offices: San Francisco Bay Area Sacramento valley Southern California Phoenix. Arizona

BERKELEY. CA.

935 PARDEE STREET 94710.2623 USA

510.649.1300
800.726.5939 Fax: 510.649.3099

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Local firefighters arrived on scene and observed heavy flames emanating from the galley door and salon. Firefighters began suppression operations but were driven off the vessel by the intensity of the fire. Firefighters then re-directed their efforts from the exterior of the vessel. Suppression efforts continued until approximately 2:00 P.M. on the same day when the fire was thought to be completely extinguished. The motor yacht "MI BARUR" and all contents sutained a total fire loss. The following morning, a "re-kindle" occurred on the vessel. The vessel was taken outside the breakwater, burned to the water line, and sunk in shallow water. The vessel was submerged for some three days prior to being raised and taken to a local marine facility, Abaroa's shipyard, where she was placed in the ways for inspection. Maze delayed the investigation "while the vessel was raised from the water" and towed to Abaroa's Ship Yard. The initial inspection on October 28, 2007 the vessel was partially under water and was "unable to be inspected for fire Origin and Cause." On October 31, 2007 the vessel was raised and towed to the ship yard. Maze's second site inspection the Ml BARUR was on supoprt stands at Abaroa's Ship Yard in La Paz, on November 8 & 9 2007. Maze Investigation Report pages 4 & 5 Senior Investigator Don Perkins conducted an investigation on April 7, 2008, Don Perkins report page 6 subsequent to Mr. Murphy of Maze Investigations. The data acquired by Investigator Perkins was considered in my evaluation. r MAZE Report Evaluation: Investigation Process: Failure to Document and Examine Potential Evidence: Mr. in Murphy the recovry as failed to industry data examine that evidence can the submergd become ves el ves els dislodged, while it was should be moved or partial y inspect d lost hasbeen knphotgroaphedwprior n therecovery. to submerged. It

and during

*

*

It is also recognized by NFPA 921 section 28.3.5.11 where it states "Boats under the water or submerged should be inspected and photographically documented prior to recovery, if possible." Only "qualified people" should conduct the recovery and documentation. Mr. Murphy was not on site to assure the vessel was properly recovered so evidence was not destroyed. The vessel was "partially" submerged and "the fire scene investigation was delayed while the vessel was raised from the water..." Maze Investigation Report page 4. The vessel should have been examined and documented prior to recovery and at no less the recovery should have been overseen and directed to assure evidence was not lost. The extent of the damage to the vessel allowed for the likely destruction of evidence during recovery.
Page 2 08-10613

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*

investigator Perkins and EE Kilgore noted that evidence was not available for examination Don Perkin's report pages 4, 15, 16, 18, 20 removal of evidence by Mr. Murphy with no documentation.

Failure to Conduct Interviews; Murph p that * * did not witnes who thor ulihp first identify discover and the fire may interview have witnes es. It is Mr. valuableinformation. recognized inthe industry

*

* *

*

*

* *

The "Origin Determination" chapter in NFPA 921 states the "observation of persons who witnessed the fire" should be coordination to determine origin of the fire. Mr. Perkins was able to identifS' these witnesses and document their observations as they entered the entered the vessel and their observations of the fire in the vessel Don Perkins report page 11- 15. Mr. Murphy failed to identify this evidence or failed to document it in his report Maze Investigation report 11 17. This information is important as the ensuing fire destroyed much of the remaining combustibles and patterns. These witnesses provide information that is important to establishing the stage, height and possible location of the fire. These witnesses provide information that the smoke and heat is high and they can see below the high layer in the area Mr. Murphy defines as the origin. Mr. Murphy relied on Captain Rello's interview as being "empirical data" without assuring that is was "capable of being verified" NFPA 921 4.3.3. In particular, Captain Rello admitted to being a heavy smoker, he was in the vessel for some time including having coffee, using the restroom and other activities Maze report pagers 11 15. A heavy smoker often smokes when he conducts these activities, and evaluation of the smoking habits should have been explored. Smoking materials could have been lost in the ensuing fire or the raising of the vessel. It is also know that heavy smoker's olfactories may not be as sensitive and he may not have noted unusual odors in the vessel. Mr. Murphy used this as "empirical data" that nothing was unusual when the captain left the vessel and did not explore or note if smoking activities occurred on the vessels.
-

Murphy order failed to * provide

also and that

relied as there had

"empir cal be n no information in the report

data" previous

that Maze

the uroblems report

with

el ctricalMr. the page 16.

system el ctri al

was inproper working system, orhe

A history of the vessel should be explored including any maintenance issues or problems, replacement of electrical system, electronics and components should be addressed.

08.1 06/3

Page 3

08-10613

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r * Investigators Perkins and Kilgore note that some of the electrical components and systems were not available for inspection and therefore could note be ruled out Don Perkin's report pages 15 16. NFPA 921 states that the vehicle and appliance history needs to be obtained Section 24.2.1, 24.4.2, chapter 25 and chapter 28. Maze report page 15 states major changes had occurred but this information was not explored as to additional problems or activities that occurred in the fire area. A change in original systems such as activities by third parties should be explored as a potential failure does exist. This information would provide assistance in the evaluation of any hypotheses and provide information on problems with equipment or appliances. Such information on the electrical system and appliances was readily available from the marine surveyor, the captain and the owner.
-

*

*

Murphy type of

has fire within

listed with the

the minutes in

cause

as av ilable the

"ince diary" fuels would compartmen

with

open Mr. flame Maze rapidly go to"flash over" `NFPA 921 chapter 5.

report and

34 &35. "ful room This involemnt"

*

*

*

The fire discovery, witness information, and description of the fire indicates a fire that took a period of time to develop Don Perkin's report pages 11 15, which often occurs with a fire from an accidental ignition source, as this type heat source generally does not generate enough energy to progress directly to flaming combustion but takes time to develop. Ventilation effects during fire spread masks or destroys the original fire movement and patterns sequential, and will often have deeper fire charring and fire damage other that the fire origin., and mask or destroy the first patterns of the fire. These effects were not addressed by Mr. Murphy or are not addressed in the report. Don Perkin's report pages 25 & 26.
-

Murphy sta es the mat res pages 33 & 34. * *

tireoriginated in the polyurethane wil flow like an

area of ignitable

the liquid

captains and

Mr. bunk

and burn on

goes the

on tostate the flo r Maze report

*

The report also states this is the area of the captain's quarters are lowest and longest burning Maze report pages 31, 32, 34. Mr. Perkins investigation revealed carpet remained in the area on the floor and below yet the carpet on the deck of the Captain's compartment Don Perkin's report pages 19 & 20 remained intact receiving no flaming or heat related damage.. NFPA 921 discusses burning of plastic and burning of floors in chapters 5 & 6, which is not consistent with the Maze report and the fire starting in this location. Murphy from of the Mr. Placed the emphasi on the vessel Maze scene examination!. ves el report page being 14 "FOR and 32 SALE" [noted and that during items had been removed Mr.Murphy's discus ion

*
08-10613

Mr. Murphy uses this information on reaching his conclusions.
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*

NFPA 921 section 22.3 cautions the investigator that such indicators are not to be used in determining cause as this information "not directly related to the fire or explosion cause". They may be used to determine witnesses for interviewing or to determine if they had prior knowledge. Murnhv and is identify Mr. conducted the recom nde an evidence bvNFPA and 921 investigation of the contents as chapter 16 ves el at he and removed the chapter11. Abaroa's Ship material Yard. from He did not thevessel label which

*

*

*

*

To conduct a proper investigation the area should be "reconstruction" to observe patterns and to locate evidence to make an accurate origin determination NFPA 921 17.3.2. These tasks requires the removal of debris and replace the contents to their pre fire location. NFPA 921 states the investigator "should accept the necessity of removing debris from the entire area of interest". The fire burned uncontrolled consuming much of the available fuels to the water line fuel controlled fire, making sequential patterns more difficult to identity and the need for "reconstruction" of the fire scene. Investigator Perkins conducted this reconstruction, revealing data that was not evaluated by Mr. Murphy, or not addressed in his report Don Perkin's report pages 20- 25. 921 the in chapter 17 origin. Mr. his report. requires Murphy that "arc failed to do map ing" be NFPA arc conducted to map ing or did provide not datato identify this determine information

* *

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The information provided by Investigator Perkins and Kilgore indicate much of the electrical system was destroyed or was missing. Mr. Murphy does state he looked at the "shore power" and electrical systems Maze report pges 29, 30, 33 but provides little information, and how far he followed or traced the system with much of the materials to do such an analysis missing. See Kigore discussion Perkins report pages 16, 17. Arc mapping requires tracing and following all the circuits in the origin including the cords to the appliances and the appliances themselves. This information is not addressed in Mr. Murphy's report, and likely could not be conducted do to the loss of much of the electrical system and components. The battery system in these vessels provides a lot of "fault current" energy for ignition of a fire if any failure occurs NFPA 921 chapter 8, chapter 25 and chapter 28 addressed in Maze report pages 22 & 23, and Kilgore discussion Perkin's report page 16.

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r Murph v is identifes a * * Mr. cause ap rently based on trying to use elimnatig al NFPA other section 18.2 cause "Proces of Maze report 34, 35t. Elimnatio" where he

*

This section is not suited for the case and NFPA 921 specifically states that it cannot be used in such cases. NFPA 921 states that the investigator must have a "clearly defined origin" and when the origin must be "known to the exclusions of all other potential origins", "some of the conditions and circumstances that prevent the origin from being clearly defined include the degree or extent of damage such as those from a fully developed fire, or adverse effects of fire suppression activities" this vessel was submerged in water for extinguishment and severely damaged by the fire, and raised prior to examination. Mr. Murphy's failure to conduct a complete scene analysis and gather all the data, also the destruction of much of the evidence, does not provide a "clearly defined origin". Murphy again know to be ap ears to be 921 cautions the conlusively to the used indiscriminately". also NFPA using exclusion of all NFPA investigaor other 921 that this potenial section 18.2 to method define can igniton Mrth. e only be sources" ignitonsource used but "when it and that this is "not

*

This section also requires the "testing and rejections of alternate hypotheses", which did not occur as all the data was not developed, or Mr. Murphy did not address this in his report. 921 NFPA section 4.3 7 warns the col ected, no specific fire of and explosion presumption as to origin, "avoid investigator to can be reasonably incidents should be sequence, cause, fire presumption. Until data have formed or been tested. All ap roached by theinvestigator investigations spread, without responsiblty for

hypothesis ignit on

incident." * * Both the marine surveyor and Mr. Murphy had discussion with witnesses about if Captain Rello had set the fire prior to conducting the scene examination. Mr. Schwede was overheard asking witnesses if Captain Rello started the fire Don Perkins report page 14.

On October 30, 2007 Mr. Murphy asked Captain Rello if he had set the fire Maze report page 12, which is approximately 8 days prior to conducting his examination of the vessel. * Mr. Muphy was at the same conference as Mr. Schwede prior to conducting this investigation.

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Chapter 4 is data" to hypothes , the hypothes does not undetermined. "empircal *

921

clear; dev lop investigaor with

the and must stand a "test" rather "careful

investigaor their and

must ad itonal serious

gather all hypotheses. If data,

the data

data, does re valuate chal enge", it

and not the

NFePvaAluate all sup orht ethe data; final and if should belisted the as

With the information available there are other hypotheses that must be evaluated as being the possible origin, possible cause and fire spread.

Please feel free to contact me on any points needing further clarification. Submitted by,

Hal Lyson, CFI Fire Investigator Fire Cause Analysis
08.10613-OI.RHL
H Lisa

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EXHIBIT "B"

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`a
AIitfariè,e Adjusters. Inc.
175 Water Sfreet,
14th

Floor

New York, New

York 10033 Tel. #: 212-458'6$13 Fa,c ii: 212.458-6520

E-Mail: Stsan.Smitb31AlG.com March 10, 2008 VIA CERTIFIED AND REGULAR MAIL Certified Mail No.: 70072560000172840513 Michael Hallmark President Mi Barur, Inc. 2525 ShelterIsland Drive, Suite B San Diego, CA 92106 * Re: * M/Y MI BARIJR Insured: Policy No.: Date of Loss: Our Reference No.:

H

H
Ml Barur, Inc. YM 868-56-66 October 20, 2007 LE08939

Dear Mr. Hallmark: * Underwriters have reached a decision on the claim of Mi Barur, Inc. for total loss by fire occurring on October 20, 2007. The. evidence discovered in the investigation supports the conclusion that the fire was started with the siiflcant involvement of Captain Rello. Fir this reason, and other reasons stated more fully below, underwriters must decline your claim. Underwriters authorized release of the fire investigation report, which was provided to you. The report concludes that the fire was intentionally set on the Captain's bunk. The fire investigator reviewed other possible causes, such as an accidental cause including smoking or electrical cause, but ruled them out. Captain Rello denied that he ev;r used or slopt in the Captain's quarters; he observed that no lights on in those quarters the morning of the fire. He could point to no unusual events before the fire, such as flickering lights or smell of smoke. We understand that the fire investigator has ruled out any electrical source in that area as a cause.
Underwriters could find no evidence to suggest that anyone other than the Captain set the fire. Captain Rello was the only person staying on the boat;, the other permanent crew had left La Paz for different reasons. The MI BARUR was located at the end of a dock behind a locked security gale with videosurveillance. We understand that those who claim to have seen the video say that there was nothing unusual. While we must question why the Marina would not turn over the tapes, the report that there was nothing out of the ordinary suggests that no other person was involved in setting the fire.

Captain Rello was the last person leaving the boat before the fire started.
Company of American International Group,
A Member
* . .

Inc.

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.s.

Underwriters have not determined if others were invélved in planning the fire. It is not necessary to the current coverage decision, but underwriters reserve the right to further investigate others possibly involved and assert any related defenses. * New Hampshire Insurance Company issued the Executive Yacht Policy of insurance YM- 868-56-66 effective 9/23/07 08 to Mi Barur Inc, located in San Diego, California. California law and maritime law will therefore govern the contract.
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While the policy would generally cover damage to the hull caused by accidental fires, it does not cover fires started by or with the involvement of a captain or others acting on behalf of the insured. Your policy states: 10. CAUSES OF LOSS THAT ARE NOT COVERED B. We shall not cover any loss or damage arising out of: I Intentional Acts: Any intentional misuse or misconduct, criminal, `willful or malicious act or lack of reasonable care or due diligence, in the operation or maintenance of your yacht, tender or trailer;
*
* **

*

*

5 Any willful misconduct, criminal, or dishonest act by an insured, your employees, or any person to whom you entrust your yacht; The policy also includes the Captain with in the definition of "YOU," and may thereby make his conduct the conduct of the named insured. Any involvement of an insured in the fire would subject the claim to an arson defense to a fire loss. It may also implicate certain provisions under California law such as Insurance Code Section 533 relating to willful action of the insured and/or Civil Code section 1668, relating to willful injury or violation of law. There are other facts that have come to underwriters' attention that constitute additional bases for underwriters declining coverage as follows: First, Mi Barur Inc. was formed as a US company, naming you, the yacht broker, as the sole president and director of the company. The purpose of the formation wasto obtain US vessel documentation. As a Mexican citizen, Mr. Farell could not legally obtain US documentation for his boat. So, he created and wholly owns Mi Barur, Inc. with his wife. Even though he is the decision maker for Mi Banur Inc and manager of the MI BARUR, the statement of any official involvement of Mr. Farell with Mi Barur Inc. is avoided; he is not mentioned in the submission for US documentation. Mi Barur Inc. appears to be a shell company, set up to use your US citizenship as the designated president and director, so that the company could try to meet US vessel document requirements. Member Company of American International Group, Inc.
A
*

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2

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`S
Mi Barur Inc. was presented as a US compan seeking to insure the MI BARUR, which was also represented to be calling in US ports, particularly San Diego. However. after the vessel was purchased and modified in San Diego. it never returned to US waters, and Eherewas no intent for it to call in the US. The reality of the risk presented for insurance was that it was a' boat purchased by Mexican resident for priyate pleasure use only in Mexican waters. That was not the risk disclosed to underwriters. Both maritime law and California law require the utmost gdod faith in disclosing of matters material to the risk. The foregoing was not disclosed. Nor was the basis for the purchase cost dièclosed. The application rej,resented the purchase cost to be $2.2 million. We aclmowledge a survey supporting the valuation, but the boat was actually purchased for about $1 million plus a trade in, which brought only $620,000 in resale. Before the fire, the boat was listed at $1.9 million, and the only offer received was for $1.7 million. Pending any further development of facts, Underwriters must reserve rights to assert the condition of the policy which states: 3. CONCEALMENT OR MISREPRESENTATION Any relevant coverages shall be voided if you intentionall' conceal or misrepresent any material fact or circumstance relating to this insurance, or your insurance application, whether before or after the loss. *

New Hampshire is declining this claim based upon the information developed in its investigation. If you feel that underwriters' assessment is wrong or that underwriters have not considered relevant infonnation, please provide the bases for your own assessment and the facts and information that support your position. The conclusions of the investigation are serious, and underwriters would like to make sure they have considered all relevant facts and infonnation that reasonably support alternative conclusions. If you believe that a further inspection of the hull is necóssary, please provide ample advance notice so that we may arrange attendance for any further inspection. Otherwise, we see no' reason to continue to incur the sigitiflcant expenses being charged by Mr. Abarroa to retain the hull. There is significant salvage value to the engines, which underwriters do not claim in view of their coverage decision. Underwriters will agree to pay for continued storage of the hull until the end of March, which should allow sufficient time for you to decide on how you will approach any further salvage and destruction of the hull. Underwriters are also paying for storage of contents of the boat at Atalanta Marina, which underwriters hereby tender to your possession. Underwriters will likewise pay for storage until the end of March and then authorize removal or destruction if you have not claimed them. Underwriters continue to reserve all rights, defenses and remedies available under the policy and at law, including but not limited the right to reimbursement of expenses
A Member Company of

American International Group, Inc.

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* *

incurred and the right to rescind or decline on other facts that may be discovered, and underwriters do not waive any such rights, defenses and remedies by this declination or further actions taken in response to this claim. If you feel this claim has been wmngthlly denied, you may have the matter jth reviewed by the California Department of Insurance at: Claims Services Bureau, 1 Floor,300 South Spring Street, Los Angeles, CA 90013 Tel: 800 927-4357.
*

*

Please advise the undersigned if you have any questions or comments Very truly yours
*

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*
* *

Regional Hull Manager Marine Claims Department

A Member Company of * * American International Group. Inc.
*

EXHIBIT B 239