MISS. LOFTS v. LEXINGTON INS. CO. OF WILMINGTON, 85-71 C (5).
| Decision Date | 19 November 1986 |
| Docket Number | No. 85-71 C (5).,85-71 C (5). |
| Parties | MISSISSIPPI LOFTS, INC., a Missouri Corporation, Plaintiff, v. LEXINGTON INSURANCE COMPANY OF WILMINGTON, DELAWARE, Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
Donald V. Nangle, Arthur G. Muegler, Jr., Tamara Muegler, St. Louis, Mo., for plaintiff.
Leritz, Reinert & Duree, Joseph L. Leritz, St. Louis, Mo., for defendant.
This cause is before the Court for a decision on the merits on Count IV of plaintiff Mississippi Lofts, Inc.'s amended complaint and on defendant Lexington Insurance Company's counterclaim/set-off. This Memorandum constitutes the Court's findings of fact and conclusions of law for purposes of Fed.R.Civ.P. 52(a).
This case concerns a controversy between Mississippi Lofts, Inc., the owner of a building at 1601-05 Locust Street in St. Louis, Missouri and Lexington Insurance Company, which provided fire insurance coverage for the property. A fire destroyed the property on October 13, 1984, and plaintiff made a claim for coverage under its fire insurance policy for losses it incurred. Lexington declined to provide coverage, though, contending that plaintiff or its agents intentionally started the fire with the object of recovering the insurance proceeds.
Plaintiff then filed this multi-count suit. The parties tried Counts II and III of the amended complaint to a jury on July 9-18, 1986. In these counts, plaintiff sought damage awards from the company under the policy. The Court directed a verdict in favor of defendant Lexington on Count III and submitted Count II to the jury for a decision on the merits. The insurance company based its defense on a contention that plaintiff's agents intentionally set the fire, and the court tendered an instruction to the jury on this defense. The jury returned a verdict in favor of the defendant and against the plaintiff on Count II. At trial, the Court took Count IV of the complaint and the counterclaim under advisement. On October 6, 1986, the Court conducted a hearing at which the parties presented additional evidence relevant to the disposition of these two counts.
The insurance company in its counterclaim requests damages from Mississippi Lofts to compensate it for a payment it made to Interfirst Bank of Austin, Texas, under a standard mortgage clause. Interfirst held the first deed of trust on the Locust Street property at the time of the fire. After the fire, the bank demanded that Lexington pay it the amount of the outstanding note executed by Mississippi Lofts and secured by the deed of trust. The insurance company paid the bank the sum of $530,103.75 and received an assignment of the bank's first deed of trust on the property.
These facts are also relevant to plaintiff's claim in Count IV of the amended complaint. There, Mississippi Lofts seeks a declaration that the assignment of the deed of trust by Interfirst Bank to Lexington Insurance Company has no legal effect. Plaintiff asserts that the insurance company improperly paid the bank under the standard mortgage clause and that, therefore, the Court should not allow the assignment of the deed of trust to cloud its title.
The Court has subject matter jurisdiction of this cause pursuant to 28 U.S.C. § 1332. The Court will consider the insurance company's counterclaim/set-off with the plaintiff's quiet title action in Count IV of the amended complaint.
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