An Indianapolis lady whose property fell into foreclosures after her home burned was unable to persuade the Court docket of Appeals of Indiana that her mortgage allowed for a part of the insurance coverage fee to cowl her lawyer charges.
Mary Flannagan had a mortgage on property in Indianapolis. In February 2017, a fireplace destroyed the home on the property.
Flannagan retained the agency that was then generally known as Tate Bowen Daugherty Funk Spandau LLC in June 2017. In October 2018, State Farm Casualty Insurance coverage Co. issued two settlement checks totaling $74,373.23.
Nonetheless, in July 2018, Lakeview Mortgage Servicing LLC had initiated foreclosures proceedings on the property. Flannagan filed for a declaratory judgment, searching for a declaration that Lakeview and the mortgage servicer, LoanCare LLC, didn’t “have an curiosity within the [Hazard Insurance Proceeds], particularly allotted for the Plaintiff’s lawyer charges, and/or for a declaration from the Court docket as to the extent of [Lakeview and LoanCare’s] curiosity within the [Hazard Insurance Proceeds].”
In April 2020, Flannagan filed a movement for partial abstract judgment towards Lakeview “on the difficulty of the amount of cash that must be paid to Tate & Bowen from the cash paid by State Farm for the fireplace declare.”
Lakeview responded with a cross-motion for partial abstract judgment requesting judgment within the quantity of $102,119.17 towards Flannagan. Additionally, the mortgage holder requested an order declaring that LoanCare was entitled to all insurance coverage proceeds issued by State Farm till the judgment was glad.
The Marion Superior Court docket denied Flannagan’s movement and granted Lakeview’s cross-motion. The court docket entered judgment towards Flannagan within the quantity of $97,665.37 and ordered that LoanCare was entitled to all insurance coverage proceeds issued by State Farm.
The Court docket of Appeals affirmed in Mary M. Flannagan v. Lakeview Mortgage Servicing, LLC, Metropolis of Indianapolis Division of Enterprise & Neighborhood Companies, and State of Indiana, 21A-MF-2043.
On attraction, Flannagan argued the mortgage didn’t management the distribution of all the quantity paid pursuant to the State Farm insurance coverage coverage as a result of the time period “insurance coverage proceeds” was not outlined in both the mortgage or coverage. She claimed the time period referred to the hazard insurance coverage proceeds much less the price of her lawyer charges.
As a part of her argument, Flannagan asserted that “proceeds” referred to the “web quantity obtained (as for a examine or from an insurance coverage settlement) after deduction of any low cost or fees.” As well as, she pointed to the Merriam-Webster Dictionary, which defines “proceeds” as together with “the whole quantity introduced in.”
Nonetheless, the Court docket of Appeals took an in depth studying of the mortgage and decided the plain language didn’t help Flannagan’s interpretation of the phrase “insurance coverage proceeds.” Specifically, the part of the mortgage titled “Fireplace, Flood, and Different Hazard Insurances” supplied that upon a loss, the insurance coverage firm is to make the fee on to lender as an alternative of to the borrower and lender collectively, the court docket dominated.
“The Mortgage doesn’t expressly confer with a partial distribution of insurance coverage proceeds or, at the very least the place the proceeds don’t exceed the quantity of the mortgagor’s indebtedness, to a distribution of a portion of the insurance coverage proceeds to the lender and a portion of the proceeds to the mortgagor,” Choose Elaine Brown wrote for the appellate court docket. “Additionally, the Mortgage doesn’t counsel the quantity of insurance coverage proceeds to which the lender is entitled should be lowered by an quantity equal to the prices or lawyer charges incurred by the mortgagor to safe the proceeds.”