February 28, 2012 in City

Mansion fire’s cause a mystery

Two weeks after blaze, investigators still unable to find origin
By The Spokesman-Review
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A fire that gutted a Post Falls mansion two weeks ago has stymied investigators.

“We’ve reached a dead end,” said Dan Ryan, a Kootenai County Fire Department division chief.

The cause of the Feb. 16 blaze remains undetermined, he said. Investigators also failed to pinpoint where the fire, which was visible for miles, started.

Though the case isn’t formally closed, Ryan said local fire investigators have abandoned their inquiry, as have agents of the Idaho State Fire Marshal’s office and the federal Bureau of Alcohol, Tobacco, Firearms and Explosives.

Investigative help had been sought because of the size and circumstances surrounding the fire. Foreclosure on the $1.5 million home was imminent, and the owner, Pamela Wallace, has filed for bankruptcy with her husband, Leonard Wallace.

The couple had moved valuables and some furnishings from the home in the days leading up to the fire. The Wallaces told police they were removing belongings as the possibility of eviction neared.

Furthermore, the night of the fire, the Wallaces had engaged in a shouting match over flooding damage in the home, apparently caused by dishwasher problems. Police were summoned to the home, but a report wasn’t filed.

With the water turned off at the home, Leonard Wallace left for the night to stay in small living quarters in his workshop several miles away. Pamela Wallace spent the night with friends. The couple’s grown children rented a motel room for the night.

Hours later flames engulfed the home.

After the fire, a dog trained to sniff out fuel residues led investigators to several items, but lab tests revealed the petroleum product was slow-burning lamp oil, Ryan said. The Wallaces told investigators early in the investigation that they sometimes used fuel lanterns or torches to illuminate the deck of their riverfront home.

“Lamp oil isn’t something one would use to start such a fire,” Ryan said. “We haven’t even been able to determine where it started.”

The 10,000-square-foot home had an open floor plan that helped the fire spread. The home was built in 1986 and remodeled in the 1990s. It had large windows and soaring brick walls, cherry wood, decorative marble and granite, and multiple fireplaces, all situated on landscaped grounds along the north bank of the Spokane River.

Ryan said the insurance company has since demolished the walls as a safety precaution.

The next step may be negotiations between the insurance company and Deutsche Bank, the lender foreclosing on the property.

The Wallaces have alleged that their financial problems stem from an elaborate Montana business fraud that resulted in a multimillion-dollar judgment against them.

They are attempting to use bankruptcy protection to escape the judgment by relitigating the case, surrendering mostly undeveloped property to lenders and then reorganizing their finances by keeping a couple of cash-generating properties, including an apartment complex in Cheney.

Their $24 million bankruptcy is being challenged by creditors. A court hearing in mid-March will pit the Wallaces against creditors who want the couple’s properties seized and sold and their remaining assets turned to cash for repayment of debts.

The conclusion of the fire investigation may do little to slow the bankruptcy case.

Ryan said any time investigators can’t figure out a fire it’s troublesome.

“We’re disappointed,” he said. “No one wants to walk away scratching his head.”

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