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MARGARET C. WEEMS v. AMERICAN SECURITY INSURANCE COMPANY

MARCH 12, 1986

MARGARET C. WEEMS
v.
AMERICAN SECURITY INSURANCE COMPANY



BEFORE PATTERSON, C.J.; PRATHER AND ROBERTSON, JJ.

ROBERTSON, JUSTICE, FOR THE COURT:

Today marks the second appearance of this case before this Court. In Weems v. American Security Insurance Co., 450 So.2d 431 (Miss.1984) (Weems I) we held that Mrs. Margaret C. Weems, holder of a third deed of trust on a piece of residential property which has been destroyed by fire, was entitled to recover under the mortgagee clause of a fire insurance policy. Gilding the lily, Mrs. Weems now seeks to resurrect her already finally dismissed charges that the insurer denied her claim in bad faith for which she once demanded an assessment of punitive damages.

For the reasons explained below, we are of the view that Mrs. Weems' bad faith/punitive damages claim was finally dismissed in Weems I. Such claims have but one life. On a more modest point, we have concluded that the trial judge shortchanged Mrs. Weems by almost two years worth of interest on the mortgage debt. To this limited extent, we reverse and render.

 II.

 On December 14, 1981, John C. Barlow contracted with American Security Insurance Company for fire insurance on his home in the amount of $245,000. *fn1 The policy contained a standard mortgagee clause in favor of Mrs Margaret C. Weems, his ex-mother-in-law and the holder of a $30,000 note from

 Barlow secured by a third deed of trust on the home.

 On March 16, 1982, three months after the issuance of the policy, the insured's premises were totally destroyed by fire. As mortgagee, Mrs. Weems made a claim on the policy. American Security denied the claim, asserting that there had been a change of condition or increase of hazard and that Mrs. Weems had failed to notify the insurance company thereof. Specifically, American Security invoked the language of the policy, as mandated by Miss. Code Ann. 83-13-9 (1972) which provides:

 The mortgagee (or trustee) shall notify this company of any change of ownership or occupancy or increase of hazard which shall come to the knowledge of said mortgagee (or trustee) and, unless permitted by this policy, it shall be noted thereon and the mortgagee (or trustee) shall, on demand, pay the premium for such increased hazard for the term of the use thereof; otherwise this policy shall be null and void.

 In Weems I we held that this defense failed on the uncontradicted facts. We directed the entry of judgment in favor of Mrs. Weems and against American Security on the underlying insurance contract claim.

 Not surprisingly, Mrs. Weems on remand filed a motion for summary judgment on the contract claim. In support Mrs. Weems filed the following:

 (1) This Court's opinion in Weems I.

 (2) This Court's mandate in Weems I.

 (3) Her own affidavit attesting to the following facts:

 (a) John N. and Sandra W. Barlow executed a deed of trust to secure the repayment of $30,000 together with interest at the rate of ten (10) percent per annum from the date of April 7, 1980. [The land deed of trust was filed together with the affidavit.]

 (b) The indebtedness, as evidenced by the land deed of trust, has been reduced to judgment in the United States District

 Court for the Southern District of Mississippi, Western Division, in Barlow v. American Security Insurance Company, Cause Nos. W82-0101 (c), W82-0113 (c), W82-0114 (c). [Order of U.S.Dist.Ct., So. Dist. included as Ex." E ", R.22]

 (c) That since the rendition of the above judgment, Barlow had made five payments totaling $200.

 (4) An affidavit by John Barlow attesting to the following:

 (a) That he executed a land deed of trust on April 7, 1980, securing an indebtedness of $30,000 together with interest thereon at the rate of ten (10) percent per annum.

 (b) That American Security Insurance Company issued an insurance policy, No. 4310282, in the sum of $245,000 covering the residence located on the land described in the deed of trust. And that on March 26, 1982, the residence was completely destroyed by fire.

 (c) That the indebtedness to Mrs. Margaret Weems has since been reduced to a judgment entered in the cause aforecited in Mrs. Weems' affidavit and that he has reduced said judgment by $200.

 On July 11, 1984, the trial judge granted Mrs. Weems' motion and entered summary judgment in her favor against American Security in the amount of $30,000 plus interest of ten (10) percent per annum from and after March 30, 1982, plus costs.

 On July 23, 1984, Mrs. Weems filed a motion to alter or amend the partial summary judgment entered in her favor, suggesting that interest on the $30,000 principal amount should run from and after April 7, 1980, being the date on which the note and the insured deed of trust ...


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