Woo, Wed, Insure, Murder

WILLIAM P. HIGHT

Lake Snoqualmish lies a few miles east of Puget Sound. A 500-acre legacy of the Ice Age, its eastern edge laps at the foothills of the Cascade Mountain range. To the south Interstate 90 skirts the lake and begins an initial climb on its path to Granville. Despite its rainy reputation, western Washington experiences a perennial summer drought, and temperatures can reach the high 90s in late July and August. The cool, refreshing water of Lake Snoqualmish then attracts boaters, skiers and swimmers . . . and others who enjoy rowing a raft east across the narrow lake to quieter coves. This latter activity appealed to Chance Cagney and his new wife, Darcy, but the temperature that late July afternoon had soared to 99 degrees, and the normally quiet cove was filled with people, some of whom would become witnesses.

Chance and Darcy had been married for about a year following only a month of intensive courting. They set out on this boating adventure alone, leaving Darcy's two sons, ages nine and 11, and Chance's son, age 14, in a supervised swimming area. Chance, 39, an automobile mechanic at a local dealership, had been married three previous times and had custody of his son from his first marriage. Darcy, 34, was a homemaker whose first husband and father of her children had died of cancer five years earlier. His foresight in purchasing life insurance provided financial security for Darcy and the boys. Chance and Darcy blended their families and purchased a house together, financed largely by proceeds from the sale of her old house.

Rowing the six-man raft back across Lake Snoqualmish from the cove to the beach where the boys were playing took about 20 minutes. Several witnesses observed the methodical, unhurried pace of the single rower. One witness noticed that he faced forward toward the bow, sacrificing efficiency and speed. Another remembered that the rower appeared “expressionless, dumbfounded.” No one reported that the rower sought a swimmer's help or attempted to flag down a motorboat.

Upon landing Chance instructed Darcy's older son to summon a lifeguard but cautioned the boy not to make a commotion. The lifeguard pulled Darcy's blue body from the raft and immediately started cardiopulmonary resuscitation (CPR). As a crowd gathered, a registered nurse rushed forward to help and 911 was called. All the while Chance stood aside and impassively watched the frantic efforts. According to several witnesses he displayed no emotion, made no inquiries about her condition and offered no comfort to the boys. After a few minutes Chance busied himself with deflating the raft and packing up the family's belongings.

Darcy's lifeless body was transported to a nearby hospital where she was pronounced dead. The county medical examiner would later attribute the death to “asphyxia due to fresh water drowning.” The only evidence of external trauma came from “two obliquely directed scratches” on the left side of Darcy's neck. Death was certified as accidental.

We Have a History

I learned about the drowning from reading a newspaper article the following morning. The article contained few details, but the name of the victim's husband startled me. As counsel for Hearth & Home Insurance Company, I recently had led an investigation into a burglary loss reported by, apparently, this same Chance Cagney. The case was still fresh in my memory. In fact, we had settled the claim following mediation only about ten months before, after two years of investigation and litigation. The claim file had arrived in our office with a yardarm of red flags, and our efforts only strengthened the suspicion that fraud was at play.

Hearth & Home had issued Chance a homeowners' policy that required submission of a sworn proof-of-loss document detailing the date, cause and location of the property loss as well as a description of the items lost or damaged and their purchase dates, conditions and values. Chance's proof was a 25-page handwritten inventory of work tools, home tools, electronic entertainment items and miscellaneous personal property including $960 in cash (mostly $50 bills). The inventory listed 214 work tools and 190 home tools. Chance claimed he was in between jobs, which explained the storage of work tools at home. The garage window had been broken, the carpets torn and the walls scraped. The backyard revealed fresh truck tire tracks. It was a list from memory because he claimed a file cabinet with most of his receipts and related paperwork (manuals, guides, warranties) had also been stolen. The list of more than 400 tools was specific in description (e.g., “6 pt. ¾ – 2-inch-deep sockets”) and identified the manufacturer's catalog number for each tool — all high-end manufacturers. For a memory list, it was a tour de force. This led the adjuster to retain outside counsel to investigate the matter. One of our first steps was to consult two experts, an auto mechanic instructor at a local vocational college and an experienced owner of a car repair business. Both confirmed that mechanics at major car dealerships purchase and use their own work tools but never on so grand a scale. There was no question — it was a wish list.

Working with a field adjuster and a private investigator, we inspected the house and interviewed Chance on several occasions, gathering background information about friends, former wives and girlfriends, neighbors, coworkers and where he purchased tools. During my first meeting Chance seemed reserved, not particularly nervous and otherwise unremarkable. At 5 feet 8 inches tall and 170 pounds, he was lean, nice looking and apparently fit. His home was well maintained and landscaped. His son was a cute 11-year-old kid at the time. We interviewed his next-door neighbors, whose 13-year-old daughter babysat the boy on a regular basis, and learned that he was a respectful neighbor, friend and caring father. As our circle of interviews widened to include male friends and girlfriends, a more complex and disturbing portrait emerged. We learned from Chance that he was a former Marine and from his neighbors that he claimed to have been involved in covert military operations. A former live-in girlfriend reported that he occasionally headed out late at night dressed all in black for “adventures,” apparently some form of civilian covert operations. He was also very controlling, sought to isolate her from friends and maintained tight, dictatorial control over finances. Male friends confided that Chance had a menacing side and could be violent at times.

A search of court records revealed an interesting civil lawsuit brought by Chance against the State of Washington seeking $500,000 for the wrongful death of his second wife, Beth, seven years previously. She fell to her death while they were hiking alone in Falcon Nest State Park, an ancient volcano overlooking Columbia River gorge. The complaint alleged that the state negligently failed to warn hikers not to take shortcuts off the established trail and sought damages on his own behalf as well as for Beth's eight-year-old daughter who lived with them. The case was dismissed on summary judgment by the trial judge based on statutory immunity, and Chance's appeal had fizzled on a technicality only ten months before the alleged burglary.

Poring over public court records can be a dull and fruitless task. Factually substantive, discovery documents such as interrogatory answers and deposition testimony are often exchanged by counsel with no docket entry or any public trace. Here, however, we found several bombshells.

First, Chance's pre-litigation notice described how Beth's foot slipped as she turned a 90-degree corner: “Unable to stop herself, she rolled and slid down the moderately steep slope and fell over the embankment. [Chance], following approximately five feet behind his wife, could not reach her in time to break her fall. She plunged off the embankment and landed on a rocky shelf approximately 300 feet below. [Chance] ran down the trail, trying to find a way over the rocks to reach her. He was unable to do so.” Second, in response to a “canned” interrogatory asking the attorney general to “please state in detail each act or omission of the Plaintiff which Defendants are contending caused or contributed to the cause of the incident referred to in the complaint,” the response cited failure “to maintain secure footing . . . to remain close enough,” and so on, and then concluded: “[i]t is also believed [Chance Cagney] may have intentionally contributed to the cause of [Beth Cagney's] death. Investigation continuing in that regard.” Finally, in a supplementary answer to an interrogatory Chance acknowledged, reluctantly, that there was a $100,000 insurance policy on Beth's life.

No criminal charges were filed against Chance for Beth's death. He obtained the life insurance proceeds and would later admit that he had not invested or managed his newfound wealth well and that most of it was gone.

Character Testimonials

The picture that emerged from our investigation substantiated early suspicions that the burglary loss was fraudulent. The “character” evidence we unearthed was certainly consistent with a disposition toward fraud, but we had little success in obtaining specific evidence of a secret storage locker, fake purchases or a suddenly reappearing air compressor. Chance's friends and neighbors generally extolled his friendliness and minimized his dark side. Hoping that subpoena power and sworn testimony would help us crack the case, we filed an action for declaratory judgment in federal court, seeking a legal ruling that the claim was fraudulent and that no insurance proceeds were owed. If we could show on a more-probable-than-not basis that any part of the claim was a misrepresentation, under state law the whole claim would be disallowed. (This may vary with jurisdiction; consult counsel.) As costs mounted and prospects for a breakthrough dimmed, however, Hearth & Home and Chance emerged from mediation with a settlement of the $58,000 claim for payment of $28,500. After paying his attorney's fees, Chance netted $16,500.

It is likely that some of these property insurance proceeds were used to pay premiums on life insurance policies that Chance and Darcy purchased. The couple took out new policies on Darcy worth a total of $275,000, and Chance convinced Darcy to change the beneficiary on an existing $100,000 policy from her two sons to him as sole beneficiary. This was part of an agreement to name her as sole beneficiary on an existing policy on his life (which listed his father as beneficiary), a promise Chance failed to keep. On the day of her drowning death, Darcy, an unemployed housewife, had $375,000 in life insurance coverage, and Chance was the sole beneficiary.

Ten years after Beth's tragic death, 12 months after marrying Darcy in Reno and ten months after settling the burglary claim, Chance again found himself at the center of an insurance investigation. In interviews with authorities, he described how Darcy had developed a leg cramp while swimming. While he was steadying the raft so Darcy could climb in, a boat went by and its wake turned the raft over on top of her. He then heard her cough “as if she unexpectedly got water in her mouth.” After about 30 seconds he righted the raft. At that point Darcy was lying facedown in the water. Chance then “breathed into her a couple times,” but there was no response. Chance reentered the raft and pulled her into it. Discovering that Darcy had no pulse, he rowed back to shore; the trip took approximately 20 minutes. Chance did not attempt to summon aid from other boats on the water, nor did he alert anyone on the shore as he approached. When Darcy's sons came to the raft, he told them to get a lifeguard but not to create a fuss. A lifeguard and a paramedic unsuccessfully attempted to revive Darcy. During the resuscitation attempt and afterward, Chance was seen calmly collecting the family's beach gear and loading it in the car.

Witness after witness commented on Chance's absence of emotion. Several concluded he must have been a mere bystander and were astonished to learn that he was the victim's husband. Others assumed his demeanor resulted from shock. Questions abounded. Why did Chase bother to collect the towels and clothing floating in the water before rowing his unconscious wife back to shore? Why did he bother to put on his sunglasses? While accompanying the paramedic to the hospital, Chance mentioned that he had training in CPR; why had he not used it? On the drive home with his children, Chance reportedly told Darcy's older son to “quit crying; it's over and done with.”

The impressions we form from observing the behavior and demeanor of other human beings, as screened through our own life's experience, can lead to conjecture, suspicion and even insight but not necessarily evidence admissible in a court of law. Imagine the daunting task facing county investigators and prosecutors: One witness saw a man and a woman splashing around the raft, but there were no witnesses to any foul play between Chance and Darcy out in the lake. There was no crime scene to secure and examine for evidence, no weapon and no signs of serious trauma to her body. From this bleak beginning prosecutors would have to meet the burden of proving homicide beyond a reasonable doubt.

Prompted by the newspaper article, I immediately contacted the detectives and alerted them to the fact that we had recently handled an investigation of a burglary claim brought by Chance under his homeowners' policy that we believed to be fraudulent. I also pointed the detectives to the Falcon Nest death of his former wife, his $100,000 life insurance benefit and the related wrongful death lawsuit. Thus began a cooperative effort to bring to justice a man who always seemed to be in the vicinity of lucrative insurance claims, some under tragic circumstances.

Different Kinds of Evidence

Over the next few months, police investigators compiled 3,000 documents and elicited statements from 130 witnesses. Chance's friends and neighbors, whom we had interviewed with little success, opened up to the authorities with damning disclosures. Tools allegedly taken in the staged home burglary, along with files of related receipts, were seized by search warrant. Chance's attic and crawl spaces were stuffed with equipment and supplies pilfered from his workplace. Statements from friends implicated Chance in a prior staged burglary at a friend's house as well as planning sessions for his home burglary I had investigated. Material discrepancies in the facts surrounding Beth's death in Falcon Nest State Park came to light from interviews of family members. We also learned that, perhaps seeking to further benefit from Darcy's death, Chance had made false statements in his application for Social Security benefits for his son.

Coordinating with the police, we held off until the last moment, moving to set aside the dismissal of Hearth & Home's declaratory judgment lawsuit (and its settlement) until the day of Chance's arrest on first-degree murder charges. His arrest came exactly one year to the day after our stipulated dismissal had been entered. Under the federal rules, we had one year to file for relief from the dismissal order. Most important, taking Chance into custody protected the newly cooperating witnesses from any retribution. In vacating the dismissal, the federal judge relied on the “disturbing allegations” outlined by Hearth & Home and the county prosecutor regarding Chance's “pattern of insurance fraud.” Eventually, Hearth & Home was able to claim some of the “stolen” tools and pursue salvage rights.

Chance's “pattern of insurance fraud,” cited by the federal judge, became the centerpiece of the state's case. He was eventually tried on three counts — murder in the first degree (Darcy Cagney), theft in the first degree (Hearth & Home), and theft in the second degree (Social Security). As the trial approached, a range of motions was considered by the state court trial judge. Evidence of an earlier false automobile theft and the two staged burglaries was allowed in. The similarities in the deaths of Beth and Darcy were allowed in to rebut the defense of accident and to prove motive (life insurance proceeds), along with incriminating statements made to friends and neighbors. Excluded was evidence of Chance's brother's conviction of first-degree murder of a hitchhiker, Chance's grandiose misrepresentations of his military service, his harsh disciplinary measures taken against his natural and stepchildren, polygraph test results and “witnesses' testimony as to their opinion and personal reactions to the defendant's demeanor following the deaths of his wives.”

Both the state and the defense offered videotaped reenactments of the scenarios involving motorboat waves affecting the raft, accompanied by testimony from aquatic accident experts. The state's expert had been a safety consultant for the actual raft's manufacturer. Based on the reenactments involving that very raft, he concluded that the circumstances described by Chance “simply could not reasonably have taken place.”

Key to the prosecutor's case was her ability to prove a decade-long, common scheme involving the various acts of fraud against insurance companies. Backed by the evidence, including the testimony of 26 witnesses, the prosecutor was able to tell a compelling story she described as “woo, wed, insure, murder.” A pattern emerged of a single father who groomed single or divorced women with young children; married them; advocated the security of life insurance; and, with a policy in force, became emotionally cold, distant, manipulative, menacing and finally murderous.

Chance was found guilty of all three charges and sentenced to 50 years in prison for the murder count, an exceptional sentence warranted by the planning involved and the motivating greed. The judge ruled that a sentence above the standard range was justified by choosing to murder Darcy “in such a way as to directly involve her children as witnesses.” He was sentenced to 12 months in prison for the staged burglary and six months for the Social Security convictions.

Affirming the murder conviction, the court of appeals commented that Chance's “guilt was truly overwhelming.”

In addition to approving the trial judge's evidentiary ruling on “common scheme,” the court of appeals also approved admission of extensive evidence to counter the defense theory that Darcy's death was just an accident. The court concluded that “the marked similarities between the victims, the physical circumstances of the crimes, and the relatively complex nature of the crimes support a commonsense inference that the deaths of [Chance's] spouses were not mere fortuities.” Both Beth and Darcy were single mothers, both married Chance after very short courtships, both obtained large life insurance policies after the marriage and both died within a year of marrying Chance. Each death occurred during a recreational outing that was planned by Chance so that he could be alone with the victim, and the location of each death was remote, with no witness nearby. “Each killing was an orchestrated plot, predesigned to ensure the availability of a large life insurance policy and to cloak the victim's death with the appearance of accident. We are convinced that these similarities are sufficiently unusual to ensure that a second recurrence would be objectively improbable.”

By statute, of course, a slayer who is the beneficiary of a life insurance policy insuring his victim may not receive life insurance benefits. In subsequent state court proceedings, Chance's father was appointed guardian of his grandson, who received $88,000 in benefits. Darcy's best friend was appointed guardian for her two orphaned children, each of whom received $149,000 in benefits.

The murder conviction and institutional confinement did not diminish Chance's greed. He opposed Darcy's estate representative and sought an accounting and recovery of property (including some he had secreted), finally relinquishing his community property rights for $30,000 from sale of their house. This was deposited in his criminal counsel's trust account. He also filed a petition challenging the criminal trial judge's minimal award of $4,500 in restitution. He lost.

About the Author

William P. Hight, J.D., CPCU, consults and provides expert testimony on insurance coverage and good-faith claim handling. A graduate of Duke University (B.A.) and the University of California, Davis (J.D.), he is a member of the Washington and California State Bar Associations and has more than 38 years' experience in private law practice. (Additional information can be found at www.HightLaw.com.)