SEA ISLE OPERATING CORPORATION, A FLORIDA CORPORATION, APPELLANT,
v.
DAVID HOCHBERG ET AL. APPELLEES
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Sea Isle Operating Corporation challenges a decree in an interpleader action holding that mortgagees' claim to hurricane insurance proceeds was superior to the mortgagor's claim. The court affirmed, holding that the mortgagee's right to insurance proceeds vests at the time of loss and is not extinguished by subsequent foreclosure unless the debt is fully discharged.
The mortgagee's right to receive insurance proceeds vests at the time of loss and is not extinguished by subsequent foreclosure proceedings unless the debt evidenced by the note and mortgage is discharged in full. Therefore, the Hochberg interests' claim to the insurance proceeds was superior to Sea Isle Operating Corporation's claim.
“The right to receive the insurance proceeds was fixed at the time of the loss, and subsequent foreclosure proceedings could not have extinguished this right unless the debt evidenced by the note and mortgage was discharged in full.”
States the core holding—that mortgagee's rights to insurance proceeds vest at time of loss and survive foreclosure unless debt is fully paid
Previewing 1 of 2 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceSea Isle Operating Corporation mortgaged the Sea Isle Hotel to the Hochberg interests to secure a note exceeding $1,302,635.65. The hotel was damaged …
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Appellant seeks review of a final decree entered in an interpleader action. Said decree held the claim of the appellees, David R. Hochberg, et al, superior to the claims of the appellant.
The appellant corporation owned the Sea Isle Hotel and gave a note secured by a mortgage on said property to the Hochberg interests in a amount in excess of $1,302,-635.65. The hotel was damaged by hurricane “Cleo”. Subsequent thereto, the Hochberg interests foreclosed the mortgage. The insurance coverage for the loss during the hurricane was not adjusted or settled prior to foreclosure and sale of the property. The final decree of foreclosure awarded the Hochberg interests the sum of $1,302,635.65 and, at the foreclosure sale, they purchased the property for $1,000,000.-00. No deficiency decree was sought in the foreclosure action, and no common law suit to recover on the note has been instituted to obtain a judgment for the difference between the foreclosure sale price and the amount awarded in the final decree. See: First Fed. S. & L. Ass’n v. Consolidated Develop. Corp., Fla.1967, 195 So.2d 856. Beneficial Fire & Casualty Company filed the instant interpleader action, to which the appellees, Hochberg, et al [and others] filed a claim. The Hochberg interests based their claim on the provisions of the mortgage previously foreclosed which held, in part, that in the event any sum of money becomes payable under such policy or policies [windstorm] the mortgagee shall have the option to receive and apply the same on account of the indebtedness hereby secured or to permit the mortgagor to receive and use it.1 After hearing the cause, the trial court entered the final decree appealed herein. We affirm.
The right to receive the insurance proceeds was fixed at the time of the loss, and subsequent foreclosure proceedings could not have extinguished this right unless the debt evidenced by the note and mortgage was discharged in full. See: Atlantic & Gulf Properties, Inc. v. Palmer, Fla.App. 1959, 109 So.2d 768; Langford v. Bond Realty Corporation, 5th Cir. 1931, 47 F.2d 480; Rosenbaum v. Funcannon, 9th Cir. 1962, 308 F.2d 680; Connelly v. Central States, etc., Pension Fund, 5th Cir. 1963, 315 F.2d 683; 59 C.J.S. Mortgages § 519; 5 Couch on Insurance 2d, § 29:75.
Therefore,. the final decree here under review be and the same is hereby affirmed.
Affirmed. '
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Lutheran Brotherhood v. Hooten, 237 So. 2d 23 (Fla. 2d DCA 1970)…t law on the notes by foreclosing its mortgage and obtaining a deficiency decree. However, Lutheran Brotherhood’s right to recover under the policy of insurance became fixed at the time of loss. Sea Isle Operating Corp. v. Hochberg, Fla.App.3d 1967, 198 So. 2d 336, 337; 5 Couch on Insurance 2d § 29:75 (1960). This right could not be lost until the entire debt was satisfied in full. See Sea Isle Operating Corp. v. Hochberg, supra; Rosenbaum v. Funcannon, 9th Cir. 1962, 308 F. 2d 680, 685; Lea v. Liverpool & Lo…
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Paskow v. Calvert Fire Ins. Co., 579 F.2d 949 (5th Cir. 1978)…ls Ins. Co., 497 F. 2d 709 (CA8, 1974), where the court regarded an express limitation to buildings only as repugnant to the policy because the loss payee had a security interest in only personal property. . In Sea Isle Operating Corp. v. Hochberg, 198 So. 2d 336 (Fla.App. 1967), a Florida court said that the mortgagee’s right to receive the insurance fund is fixed at the time of the loss but what the court meant was that foreclosure by the mortgagee subsequent to the casualty loss does not extinguish his eq…
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SFR Servs., LLC v. GeoVera Specialty Ins. Co. (M.D. Fla. 2021)…553 F. App’x 908, 910 (11th Cir. 2014). If a policyholder has an insurable economic interest at the time of a covered loss, “[t]he right to receive the insurance proceeds [is] fixed at the time of the loss.” Sea Isle Operating Corp. v. Hochberg, 198 So. 2d 336, 337 (Fla. 3d DCA 1967). From these very basic principles, the Court can immediately draw two conclusions about this case. First, the Brauns clearly had an insurable interest in the Property at the time of the alleged loss—they lived in the Proper…
Authorities Cited
- Atl. & Gulf Props., Inc. v. Palmer, 109 So. 2d 768 (Fla. 3d DCA 1959)
- Rosenbaum v. Funcannon, 308 F.2d 680 (9th Cir. 1962)
- Langford v. Bond Realty Corp., 47 F.2d 480 (5th Cir. 1931)
- State v. City OF Coral Gables, 195 So. 2d 856 (Fla. 1967)
- First Fed. Sav. & Loan Ass'n OF Broward Cnty. v. Consol. Dev. Corp., 195 So. 2d 856 (Fla. 1967)
- Vaughan B. Connelly v. Cent. States Se. & Sw. Areas Pension Fund, 315 F.2d 683 (5th Cir. 1963)