469_C282

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Homeowner	ATIMA
Additional Interest	Mortgagee

DEFINITION OF "AS INTERESTS APPEAR" DETERMINES COURT RULING

At the time of the fire loss of their residence on February 16, 1995, James and Mary Hardy had a fire policy issued by Indiana Insurance Company, which provided for payment to the mortgage company "as interests appear." Citizens Bank of Western Indiana, the mortgagee, merged with Fifth Third Bank (Bank). The insureds submitted their Proof of Loss to Indiana, and subsequently Indiana provided Bank with the necessary form. Bank completed the form and returned it on October 11, 1995, requesting $27,782.43. At that time, Indiana advised Bank that it was having problems with the claim and there would be a delay in payment.

On January 16, 1996, Indiana denied the claim filed by the insureds and a month later sent Bank its draft in full payment of its claim. Bank, however, refused to execute the attached release. It demanded an additional $2,140.95 in payment of attorney fees and costs. In March, Indiana sent Bank's attorneys the original draft and advised Bank that no additional amounts were due under the policy. Bank then filed this action to recover $29,085.32 which included the balance due on the mortgage, plus legal fees in the bankruptcy action which followed.

The lower court entered summary judgment in favor of Indiana Insurance, and Bank appealed.

The higher court said the question before it was the definition of "as interests appear" in the loss payable clause in the policy. It ruled that the phrase referred to the amount due under a fire policy "at the time of the loss" and not for any subsequent costs paid by the mortgagee.

The judgment entered in the trial court in favor of the insurance company was affirmed.

Fifth Third Bank, Appellant, v. Indiana Insurance Company-No. 83A01-0112--CV-472-Court of Appeals of Indiana-July 24, 2002-771 North Eastern Reporter 2d 1218.