A man from Charlotte, North Carolina, having purchased a case of very expensive cigars, insured them against, among other things, fire. Within a month, having smoked his entire stockpile, the man filed a claim against the insurance company, stating that the cigars were lost "in a series of small fires".
The insurance company refused to pay, citing the obvious reason that the man had consumed the cigars in the normal fashion. The man sued - and won.
In delivering the ruling, the judge, agreeing that the claim was frivolous, stated nevertheless that the man held a policy from the company in which it had warranted that the cigars were insurable and also guaranteed that it would insure against fire, without defining what it considered to be "unacceptable fire", and was obliged to pay the claim. Rather than endure a lengthy and costly appeal process the insurance company accepted the ruling and paid the man $15,000 for the rare cigars he lost in "the fires".
After he cashed the cheque, however, the company had him arrested on 24 counts of arson. With his own insurance claim and testimony from the previous case being used against him, the man was convicted of intentionally burning his insured property and sentenced to 24 months in jail and a $24,000 fine.