{ "id": 6137768, "name": "Sharon MARION v. TOWN and COUNTRY MUTUAL INSURANCE COMPANY", "name_abbreviation": "Marion v. Town & Country Mutual Insurance", "decision_date": "1997-10-22", "docket_number": "CA 97-162", "first_page": "120", "last_page": "126", "citations": [ { "type": "official", "cite": "59 Ark. App. 120" }, { "type": "parallel", "cite": "952 S.W.2d 681" } ], "court": { "name_abbreviation": "Ark. Ct. App.", "id": 13370, "name": "Arkansas Court of Appeals" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "305 Ark. 374", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1916784 ], "weight": 2, "year": 1991, "opinion_index": 0, "case_paths": [ "/ark/305/0374-01" ] }, { "cite": "35 Ark. App. 139", "category": "reporters:state", "reporter": "Ark. App.", "case_ids": [ 6648818 ], "weight": 2, "year": 1991, "opinion_index": 0, "case_paths": [ "/ark-app/35/0139-01" ] }, { "cite": "89 S.W. 88", "category": "reporters:state_regional", "reporter": "S.W.", "year": 1905, "opinion_index": 0 }, { "cite": "76 Ark. 485", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1501083 ], "year": 1905, "opinion_index": 0, "case_paths": [ "/ark/76/0485-01" ] }, { "cite": "11 Ark. 675", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8727974 ], "year": 1850, "opinion_index": 0, "case_paths": [ "/ark/11/0675-01" ] }, { "cite": "19 Ark. App. 220", "category": "reporters:state", "reporter": "Ark. App.", "case_ids": [ 6649161 ], "weight": 4, "year": 1986, "pin_cites": [ { "page": "225" }, { "page": "280" } ], "opinion_index": 0, "case_paths": [ "/ark-app/19/0220-01" ] }, { "cite": "853 S.W.2d 791", "category": "reporters:state_regional", "reporter": "S.W.2d", "case_ids": [ 10013763 ], "year": 1993, "opinion_index": 0, "case_paths": [ "/sw2d/853/0791-01" ] }, { "cite": "723 F. Supp. 111", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 4048036 ], "year": 1989, "opinion_index": 0, "case_paths": [ "/f-supp/723/0111-01" ] }, { "cite": "263 Ark. 272", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1672613 ], "weight": 2, "year": 1978, "opinion_index": 0, "case_paths": [ "/ark/263/0272-01" ] }, { "cite": "Ark. Code Ann. \u00a7 23-79-104", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "weight": 2, "year": 1992, "pin_cites": [ { "page": "(b)" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 527, "char_count": 10642, "ocr_confidence": 0.718, "pagerank": { "raw": 7.036161490149106e-08, "percentile": 0.42441856648785314 }, "sha256": "62e5c38a2a3fe763ac2a616d87f07d35da8624981b7eef27b977f917c09eddd0", "simhash": "1:b2204672ffeee4d7", "word_count": 1746 }, "last_updated": "2023-07-14T22:52:20.779016+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Rogers and Roaf, JJ., agree." ], "parties": [ "Sharon MARION v. TOWN and COUNTRY MUTUAL INSURANCE COMPANY" ], "opinions": [ { "text": "Sam Bird, Judge.\nAppellant Sharon Marion appeals the dismissal of her suit against Town and Country Mutual Insurance Company and the granting of Town and Country\u2019s motion for summary judgment. We find no error and affirm.\nAppellant purchased a home from Jim Walter Homes a/k/a Mid-State Homes, Inc., and executed a promissory note to Mid-State Trust IV (Mid-State) on December 28, 1992, secured by a mortgage to Mid-State covering the purchased property. A foreclosure proceeding was commenced by Mid-State on September 29, 1995, that resulted in a default judgment being entered against appellant on December 14, 1995. Appellant contested the default foreclosure decree by motions challenging the validity of service of process, but she did not appeal from the court\u2019s entry of the foreclosure decree or the denial of her motions. The foreclosure sale was held on January 24, 1996, and the property was bought by Mid-State, the lienholder, for the entire balance owed by appellant on the note, including interest, costs, and fees. The sale was confirmed by the court on April 8, 1996, and a commissioner\u2019s deed conveying the property to Mid-State was executed and filed the following day. Subsequently, appellant filed a notice of appeal and supersedeas, and on April 25, 1996, the chancellor entered an order staying the judgment pending the appeal from the order confirming the commissioner\u2019s sale.\nIn the meantime, on January 26, 1996, appellant applied for homeowner\u2019s insurance from appellee, Town and Country Mutual Insurance Company. During the process of completing the application for insurance, appellant failed to mention to the insurance agent the pending foreclosure action or that Mid-State had purchased the property at the foreclosure sale. The structure burned to the ground on July 22, 1996, as the result of an accidental fire. Appellant filed a claim and proof of loss with appellee. The claim was denied by appellee for two reasons: material misrepresentation by appellant in the insurance application for failure to disclose the foreclosure action, and appellant\u2019s lack of an insurable interest in the property at the time of the fire.\nAppellant filed suit against appellee and filed a motion for summary judgment. Appellee filed a motion to dismiss and a motion for summary judgment. Mid-State filed a motion to intervene and appellee responded in opposition to it.\nNo formal hearing was held, and all the issues were presented to the court on the pleadings and briefs. Appellant\u2019s motion for summary judgment was denied. Appellee\u2019s motions to dismiss and for summary judgment were granted, without explanation. Mid-State\u2019s motion to intervene was not addressed.\nOn appeal appellant first argues that the trial court erred in dismissing her complaint on the grounds that she had no insurable interest in the property. Insurable interest is defined in Ark. Code Ann. \u00a7 23-79-104 (Repl. 1992):\n23-79-104](a) No contract of insurance of property or of any interest in property or arising from property shall be enforceable as to the insurance except for the benefit of persons having an insurable interest in the things insured at the time of the effec-tuation of the insurance and at the time of the loss.\n23-79-104](b) \u201cInsurable interest\u201d as used in this section means any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment.\nAppellant contends that at the time she applied for the insurance, she had an insurable interest in the property because she was living in the home, and Mid-State had not yet received the commissioner\u2019s deed. She says that as soon as the sale was confirmed by the court and the commissioner\u2019s deed was executed, she filed a supersedeas, which she contends suspended the force and effect of the foreclosure judgment. Thus, she argues that because she still had the right to possession and Mid-State could not get a writ of assistance, she had an insurable interest at the time of the fire. Furthermore, she argues that she was bound by her bond to pay all costs and damages if she were eventually successful in the prosecution of her appeal from the foreclosure-sale confirmation order.\nArkansas Code Annotated section 23-79-104 requires that, for the insurance policy to be enforceable, an insurable interest in the insured property must exist both \u201cat the time of the effectuation of the insurance and at the time of the loss.\u201d We do not agree with appellant\u2019s argument that she had an insurable interest in the property when the fire occurred on July 22, 1996.\nIn Fleming v. Southland Life Ins. Co., 263 Ark. 272, 564 S.W.2d 216 (1978), an appeal involving a mortgage-foreclosure action, our supreme court held that where the mortgagor has waived his statutory right of redemption, a judicial sale is complete upon confirmation of the sale, and the mortgagor\u2019s right of redemption terminates at that time (although it may be be terminated even sooner if so specified in the foreclosure decree).\nIn Adams v. Allstate Ins., 723 F. Supp. 111 (E.D. Ark. 1989), a fire occurred after a foreclosure sale but before approval of the sale by the state court. The appellate court held that the foreclosure did not affect appellant\u2019s interest in the property because it was not yet final and that Adams retained an insurable interest in the residence until the commissioner\u2019s sale was approved by the state court. Of course, Adams is factually distinguishable from the case at bar because here the fire did not occur until more than three months after the sale had been confirmed and after the commissioner\u2019s deed had been delivered to Mid-State, the buyer at the foreclosure sale.\nThe authority referred to above is controlling in this case. The confirmation of the foreclosure sale and the delivery of a commissioner\u2019s deed to the buyer had the effect of terminating appellant\u2019s insurable interest in the property. This holding is also in accord with Jones v. Texas Pac. Indem. Co., 853 S.W.2d 791 (Tex. Ct. App. 1993), wherein the appellate court affirmed the trial court\u2019s order granting appellee insurance company\u2019s summary-judgment motion on the grounds that appellants, the former owners, became \u201ctenants at sufferance\u201d following a mortgage foreclosure and had no insurable interest in their dwelling at the time of the fire because (1) they were subject to immediate eviction; (2) they had no future legal interest in the dwelling; (3) they had diminished motive to protect the property; (4) they did not suffer any pecuniary loss; and (5) they did not receive any benefit from the dwelling, even though they were still living there.\nAlso, we do not agree with appellant that the filing of a notice of appeal and a supersedeas bond in the foreclosure action had the effect of extending her insurable interest beyond the confirmation of the foreclosure sale. This argument disregards the function and effect of the supersedeas. As stated by this court in Searcy Steel Co. v. Mercantile Bank of Jonesboro, 19 Ark. App. 220, 719 S.W.2d 277 (1986):\nThe effect of a supersedeas on a judgment was discussed by our court as early as Fowler v. Scott, 11 Ark. 675 (1850), which declared that the function of a supersedeas is to stay the execution of the judgment pending the period it is superseded, but the validity of the judgment is not effected [sic] by the stay. It is merely a legal prohibition from execution on the judgment until that prohibition has been removed by operation of law or a judgment of the supreme court. In Miller v. Nuckolls, 76 Ark. 485, 89 S.W. 88 (1905), the court reaffirmed its declaration in Fowler and restated that the supersedeas does not have the effect of vacating the judgment but only stays proceedings to enforce it.\n19 Ark. App. at 225, 719 S.W.2d at 280.\nThe position taken in Searcy Steel Co., supra, was reaffirmed by this court in Everett v. Wingerter, 35 Ark. App. 139, 816 S.W.2d 613 (1991); see also Ryder Truck Rental, Inc. v. Sutton, 305 Ark. 374, 807 S.W.2d 909 (1991).\nAt the time appellant filed her supersedeas and obtained the court order staying execution on the April 8, 1996, judgment, the court had already confirmed the foreclosure sale, the commissioner\u2019s deed had been executed and delivered, and title had passed to Mid-State. The supersedeas and stay order were effective only to prohibit further execution of the judgment by Mid-State and did not have the effect of nullifying the court\u2019s confirmation of the sale or the commissioner\u2019s deed that followed. For all intents and purposes, title to the property was vested in Mid-State and appellant no longer had an insurable interest therein.\nThere is another reason appellant did not have an insurable interest in the property at the time of the fire. As stated above, at the foreclosure sale, Mid-State\u2019s bid for the property at the foreclosure sale was equal to the entire amount of appellant\u2019s debt to it, including principal, interest, costs, and fees. Upon confirmation of the sale, appellant\u2019s debt to Mid-State was thus fully extinguished. At that point, appellant no longer had an \u201cactual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance . . .\u201d as required by Ark. Code Ann. \u00a7 23-79-104(b). Appellant\u2019s voluntary undertaking by her supersedeas to \u201cdeliver possession of the foreclosed property, and to pay all costs and damages for delay that may be adjudged against appellant on appeal ...\u201d cannot be used to bootstrap herself into having an insurable interest in property that she no longer owned, upon which she owed nothing, that she did not rent, and of which she was in possession solely by virtue of the court\u2019s stay.\nContrary to appellant\u2019s argument, the determination that appellant had no insurable interest in the property did not have the effect of rendering the property \u201ctotally uninsurable,\u201d nor did it necessarily leave Mid-State with an \u201cuninsured dwelling\u201d while appellant prosecuted her appeal. When the sale to Mid-State was confirmed and the Commissioner\u2019s deed delivered to it, Mid-State became the owner and it had an insurable interest in the property.\nBecause we find that appellant had no insurable interest in the property at the time of the fire, it is unnecessary to reach the other issues argued by appellant.\nAffirmed.\nRogers and Roaf, JJ., agree.", "type": "majority", "author": "Sam Bird, Judge." } ], "attorneys": [ "Oscar Stilley, for appellant.", "Randall Templeton, for appellee." ], "corrections": "", "head_matter": "Sharon MARION v. TOWN and COUNTRY MUTUAL INSURANCE COMPANY\nCA 97-162\n952 S.W.2d 681\nCourt of Appeals of Arkansas Division IV\nOpinion delivered October 22, 1997\nOscar Stilley, for appellant.\nRandall Templeton, for appellee." }, "file_name": "0120-01", "first_page_order": 148, "last_page_order": 154 }