Case Name: Wendy M.L. COOPER, Appellant, v. Angie ALFORD, Appellee
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 1984-02-08
Citations: 446 So. 2d 1093
Docket Number: No. AQ-372
Parties: Wendy M.L. COOPER, Appellant, v. Angie ALFORD, Appellee.
Judges: SHIVERS, J., concurs.
Reporter: Southern Reporter, Second Series
Volume: 446
Pages: 1093–1099

Head Matter:
Wendy M.L. COOPER, Appellant, v. Angie ALFORD, Appellee.
No. AQ-372.
District Court of Appeal of Florida, First District.
Feb. 8, 1984.
Rehearing Denied March 15, 1984.
George E. Day, Fort Walton Beach, for appellant.
Siegfried F. Kessler of Smith, Grimsley, Remington, Kessler & Simpson, Fort Walton Beach, for appellee.

Opinion:
MILLS, Judge.
Cooper appeals from a final judgment finding that her husband's estate is not entitled to proceeds from an insurance policy in which he was a loss-payable mortgagee. We reverse.
The Coopers owned property with a partially completed house on it. They procured a fire and extended coverage insurance policy from Allstate Insurance Company (Allstate) for $20,000 on the dwelling and $4,000 on its contents. Several months later, the Coopers sold the house to Alford who gave the Coopers a promissory note and a purchase money mortgage as security for a portion of the purchase price.
Alford then procured a homeowner's policy from United States Fidelity & Guaranty Insurance Company (U.S.F. & G.) insuring the property for $71,000. As required by the mortgage deed, William Cooper was made a loss-payable mortgagee. He was designated in the mortgagee clause of the U.S.F. & G. policy "second mortgagee as interest may appear.". Two other mortgagees were also designated loss-payees.
After selling the property to Alford, the Coopers renewed the Allstate policy. Alford did not know about this renewal. When the house was totally destroyed by fire, Allstate paid the Coopers $16,800, the approximate amount of the Coopers' interest as mortgagees at the time of the loss.
Later, U.S.F. & G. issued a check for $71,000 payable to Alford, Alford's attorney, William Cooper, and the other two loss-payable mortgagees. William Cooper would not endorse the check over to Alford so Alford brought suit to compel endorsement. William Cooper died and his wife, Wendy, was substituted in the suit as personal representative of his estate.
The parties entered into a court approved stipulation whereby all payees would endorse the check from U.S.F. & G. and $20,-000 of the proceeds would be held in escrow for the benefit of the prevailing party. The trial court found for Alford. The court authorized release of the $20,000 to Alford and directed Cooper to give Alford the promissory note and a satisfaction of mortgage.
Cooper contends that her husband's estate is entitled to the proceeds of the U.S.F. & G. policy to the extent of her husband's interest as a mortgagee at the time of the loss. She asserts that the interest of a loss-payable mortgagee is determined at the time of the loss and, in this ease, was not diminished by subsequent events. Alford contends that payment to the Coopers under the Allstate policy of a sum equal to their interest as mortgagees extinguished any interest Cooper had in the U.S.F. & G. proceeds.
We held in Springfield Fire and Marine Insurance Company v. Boswell, 167 So.2d 780 (Fla. 1st DCA 1964), that a vendor in a sale-purchase contract for real property is entitled to the proceeds from a fire insurance policy in which he is the named insured regardless of the fact that the vendor has received an amount equal to the purchase price from the proceeds of a policy procured by the vendee in which both vendee and vendor were named insureds. Here, in a situation nearly converse to Boswell, it would be inconsistent to hold that the interest in the proceeds is extinguished. Absent an agreement or provision to the contrary, a loss-payable mortgagee with interest as may appear may recover the amount of that interest at the time of the loss despite recovery under the loss-payable mortgagee's separate policy in which he is the named insured.
South Carolina Insurance Company v. Pensacola Home & Savings, 393 So.2d 1124 (Fla. 1st DCA 1981), does not compel a different result. • That case held that a loss-payable mortgagee's interest in the proceeds of the policy in which he is designated loss-payee is reduced by the amount realized by the mortgagee from the proceeds of a foreclosure sale. The purpose of a foreclosure sale, however, is to reduce or extinguish the mortgage debt. Here, the proceeds from the insurance policy taken out by the mortgagee while still owner of the property were never intended to satisfy the mortgagor's obligation to the mortgagee.
Accordingly, Mr. Cooper's interest in the proceeds of the U.S.F. & G. policy was not diminished when Allstate paid the Coopers under the Allstate policy. Mr. Cóoper was therefore entitled to receive from the proceeds of the U.S.F. & G. policy the amount of his interest as it appeared at the time of the loss.
We acknowledge that the mortgagee will receive more in cumulative insurance proceeds than was owed by the mortgagor at the time of the loss. But a contrary result would mean that the mortgagor would receive a windfall simply because the mortgagee had previously obtained a separate policy in which the mortgagor was neither a named insured nor a loss-payee. Hardly an equitable result.
In view of our disposition of this appeal, we do not consider the second issue raised by Cooper.
Reversed and remanded for proceedings consistent with this opinion.
SHIVERS, J., concurs.
ZEHMER, J., dissents with opinion.