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Fairchild v. Bilbo

Court of Appeals of Mississippi

June 23, 2015

MARC L. FAIRCHILD AND DONNA D. FAIRCHILD, APPELLANTS
v.
JOHN BILBO AND GWEN BILBO, APPELLEES

Page 602

[Copyrighted Material Omitted]

Page 603

COURT FROM WHICH APPEALED: FORREST COUNTY CHANCERY COURT. DATE OF JUDGMENT: 02/10/2014. TRIAL JUDGE: HON. M. RONALD DOLEAC. TRIAL COURT DISPOSITION: GRANTED APPELLEES' REQUEST FOR DECLARATORY JUDGMENT AND SPECIFIC PERFORMANCE.

FOR APPELLANTS: PHILLIP LLOYD LONDEREE.

FOR APPELLEES: CHARLES EDWARD GREER V.

BEFORE IRVING, P.J., BARNES AND FAIR, JJ. LEE, C.J., IRVING AND GRIFFIS, P.JJ., BARNES, ISHEE, ROBERTS, CARLTON AND MAXWELL, JJ., CONCUR. JAMES, J., CONCURS IN PART AND DISSENTS IN PART WITHOUT SEPARATE OPINION.

OPINION

Page 604

NATURE OF THE CASE: CIVIL - CONTRACT

FAIR, J.

[¶1] John and Gwen Bilbo entered into a lease-purchase agreement (LPA) with Marc and Donna Fairchild for their property. The LPA gave the Bilbos the option to purchase the property on or before July 1, 2017. The property was covered by two hazard insurance policies. After a tornado destroyed the property, the Bilbos sought specific performance of their option to purchase. The Fairchilds refused. The chancellor found that the Bilbos were entitled to specific performance as well as the insurance proceeds from both policies. We affirm the chancellor's decision.

FACTS

[¶2] The Fairchilds owned real property in Forrest County, Mississippi. On June 27, 2012, they entered into the LPA to lease/sell their home to the Bilbos. The Fairchilds provided the Bilbos the option to purchase the property for $80,000 on or before July 1, 2017. As consideration, the LPA required the Bilbos pay a down payment of $15,000 to the Fairchilds on or before July 31, 2014, to be applied to the purchase price. The LPA also required the Bilbos to " make monthly payments in the amount of $489.88 including principal and interest according to the amortization schedule . . . and additionally the escrow applied at the designated rate of the [Fairchilds'] loan." The LPA also required the Bilbos to " maintain a hazard insurance policy with a minimum of $80,000 on the structure and dwelling located on the property only," with the Fairchilds named as additional insured. The LPA further stated that " [b]oth parties agree and understand that any destruction of the improvements on the property by fire, flood or otherwise, shall not terminate or void this Agreement."

[¶3] The Bilbos obtained a hazard insurance policy through State Farm Fire and Casualty Company (" State Farm" ) in the amount of $89,900 - $9,900 more than what was required under the LPA. Meanwhile, the Fairchilds had a separate hazard insurance policy on the property through Alfa Insurance (" Alfa" ). The Alfa policy was obtained when the Fairchilds took out a mortgage loan on the property, prior to the LPA. The Alfa policy was paid through the escrow account and named the Fairchilds and the mortgage holder as the insureds.

[¶4] Under the LPA, the Bilbos' monthly rental payment included an escrow insurance payment for the Alfa policy ($489.99) plus the escrow applied at the designated rate of the Fairchilds' current loan, totaling $730.97 per month. The Bilbos paid the escrow payments on the Fairchilds' mortgage from August 2012 to September 2013, during which time the State Farm and Alfa policies were in effect.

[¶5] On February 10, 2013, a tornado hit Forrest County. Improvements to the Fairchilds' property ...


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