Opinion ID: 1324595
Heading Depth: 1
Heading Rank: 5

Heading: Equity and Insurable Interest

Text: The central issue of this case is whether Belton had an insurable interest in the underlying property at the time he contracted for insurance with Cincinnati. Belton argues his option to purchase the property gave him an insurable interest. To accept this argument, we must find that Belton's option survived Query's termination of the agreement. [4] Nevertheless, regardless of whether Belton's option was enforceable, we hold that Belton did not have an insurable interest in the underlying property because he did not have any equity in the underlying property when he contracted for insurance with Cincinnati. Further, we reserve the question of whether an option to purchase real property creates an insurable interest for a later date. Our holding that a party cannot have an insurable interest in an option to purchase land if that party does not have equity in that land is consistent with our jurisprudence concerning insurable interest. Although, our courts have not used the word equity, we have certainly equated a party's insurable interest in property with a party's personal stakes in that property. In Benton & Rhodes, Inc., v. Boden, the court of appeals held that [t]o have an insurable interest in property, one must derive a benefit from its existence or suffer a loss from its destruction. 310 S.C. 400, 403, 426 S.E.2d 823, 825 (Ct.App.1993). The next year, the court of appeals held that an insured may not recover insurance proceeds in excess of his interest in the property. Singletary v. Aetna Cas. & Sur. Co., 316 S.C. 199, 202, 447 S.E.2d 869, 870 (Ct.App.1994). Therefore, our holding that an option cannot create an insurable interest where its holder has no equity in the underlying property is consistent with our prior rulings. After reviewing the record, it is clear that Belton's equity in the underlying property is de minimis at best. It is unclear how many monthly payments, if any, Belton made to Query. But when Query sought relief from the bankruptcy court, he filed a statement indicating that Belton's total arrearage was $7,810. According to the terms of the contract, Belton was to pay a $50 down payment and then $1,200 a month, with 80% of the monthly payment going toward the purchase of the building. Therefore, 80% of the Belton's monthly payments made to Query arguably constitute equity. Nonetheless, Belton has failed to provide any evidence that the equity he accumulated in the property was not diminished and ultimately depleted because of his arrearages. In addition, as plaintiff, Belton had the burden to set forth specific facts, which included providing evidence that he had equity in the property at the time he contracted for insurance and at the time of loss. The non-moving party may not rest on the mere allegations of his pleading to withstand summary judgment but must set forth specific facts showing that there is a genuine issue for trial. SCRCP 56(e); Bravis v. Dunbar, 316 S.C. 263, 449 S.E.2d 495 (Ct.App.1994). Because Belton has failed to provide such evidence, we hold that summary judgment was proper. We may not draw an inference that Belton had an insurable interest without sufficient evidence to support such a conclusion.