United States District Court, D. South Carolina, Charleston Division
ORDER AND OPINION
Margaret B. Seymour Senior United States District Judge.
Refuge at FPHC (“The Refuge”) owned a building
located at 1410 4th Avenue in Conway, South
Carolina (“the Property”). On March 13, 2014, The
Refuge, as mortgagee, entered into a note and mortgage with
Abundant Faith Lighthouse of Jesus Christ, Inc.
(“Abundant Faith”), as mortgagor, to sell the
Property for $328, 400.00. Under the terms of the mortgage,
Abundant Faith was required to maintain insurance on the
Property. Abundant Faith's insurance coverage lapsed. As
a result, The Refuge obtained a policy of insurance from
Defendant Western World Insurance Group (“Western
World”) in the amount of $500, 000.00 to protect its
mortgage interest in the Property. The Refuge notified
Abundant Faith that it was in default under the mortgage.
order to cure the default, Abundant Faith contacted Plaintiff
GuideOne National Insurance Company (“GuideOne”)
and Defendant Church Mutual Insurance Company (“Church
Mutual”) to secure coverage. Abundant Faith obtained a
policy in the amount of $1, 500, 000.00 from GuideOne and
paid a premium. The GuideOne policy listed Abundant Faith as
insured and The Refuge as mortgagee.
Faith also obtained a policy from Church Mutual in the amount
of $795, 000.00. The Church Mutual policy listed Abundant
Faith as insured, but did not list The Refuge as
mortgagee. Abundant Faith informed Church Mutual that
it wished to cancel the Church Mutual policy, but was
informed it was too late to cancel because underwriting
already had commenced. Abundant Faith never paid a premium to
Church Mutual or took further steps to terminate the policy.
occurred on the Property on July 24, 2016. The Refuge made a
demand under the mortgagee clause of the GuideOne policy, to
no avail. Church Mutual contacted Abundant Faith in order to
discuss the fire loss and later by letter to obtain
information regarding the GuideOne policy in the event
GuideOne provided overlapping coverage for the damage. The
Refuge learned of the Church Mutual policy after the fire and
The Refuge contacted Church Mutual to have the policy revised
to include The Refuge as mortgagee. Church Mutual took no
action. Western World paid $282, 968.36, the amount due and
owing on the note and mortgage, to The Refuge and received an
assignment of the mortgage interest from The Refuge.
25, 2017, GuideOne filed a complaint for declaratory judgment
against Western World and Church Mutual, contending that the
“Other Insurance” clause in its policy rendered
its coverage excess and that Western World and Church Mutual
should each pay a pro rata share of any covered loss or
damage. On July 7, 2017, Western World filed an answer,
cross-claim, and counterclaim. Western World sought a
declaration that the Church Mutual policy was a valid
insurance contract at the time of the fire loss and that
Church Mutual should be estopped to deny that The Refuge was
added to its policy as a mortgagee nunc pro tunc. Western
World further sought a declaration that GuideOne's policy
is not an excess policy because the Western World policy
covered a different interest from Western World's policy.
In its filings, Church Mutual contended that its policy was
rescinded and void from its inception because Abundant Faith
did not intend to obtain a Church Mutual policy and did not
pay any premiums. In the alternative, Church Mutual asserted
that its policy did not cover The Refuge's interests
because The Refuge was not listed as a mortgagee under the
Church Mutual policy.
court issued an order on January 30, 2019, in which it
Western World policy obtained by The Refuge insured interests
separate from the interests protected by the GuideOne and
Church Mutual policies taken out by Abundant Faith.
Therefore, Western World could not be required to make a pro
rata contribution to the cost of the fire loss in conjunction
with GuideOne and Church Mutual.
Church Mutual policy was enforceable because Church Mutual
issued a policy naming Abundant Faith as insured and
considered the policy to be in place at the time of the fire.
Western World policy was excess to the GuideOne and Church
Mutual policies. As a result, payment of the fire loss on the
Property should be apportioned between GuideOne and Church
Mutual in the manner and amounts set forth in their
respective policies had Abundant Faith been entitled to
direct payment. The court noted that GuideOne's mortgagee
clause made its policy proceeds payable directly to Western
World, as assignee of The Refuge.
Western World was entitled to an equitable lien on proceeds
due to Abundant Faith under the Church Mutual policy.
matter now is before the court on Western World's motion
for summary judgment with respect to attorney's fees and
prejudgment interest, which motion was filed on May 21, 2019.
Western World states that, at the time of the loss, Abundant
Faith owed $282, 988.35 to The Refuge pursuant to the
mortgage. Western World seeks $183, 942.43 from GuideOne to
cover the policy benefits owed to The Refuge under
GuideOne's mortgage, plus prejudgment interest in the
amount of $45, 290.70, for a total of $229, 233.19. Western
World seeks $99, 045.93 from Church Mutual to cover the
policy benefits owed to The Refuge under Church Mutual's
policy, plus prejudgment interest in the amount of $24,
380.98, for a total of $123, 426.91. Western World further
contends that it is entitled to attorney's fees in the
amount of $191, 248.00 and costs in the amount of $1, 739.05.
Western World seeks to collect from GuideOne a pro rata share
of $124, 311.20 in attorney's fees and $1, 130.38 in
costs. Western World seeks to collect from Church Mutual a
pro rata share of $64, 792.00 in attorney's fees and
$608.67 in costs.
Mutual filed a response in opposition on June 28, 2019. On
July 26, 2019, Church Mutual filed a motion for summary
judgment, contending that Western World has transferred The
Refuge's mortgage interest to GuideOne and therefore is
not entitled to insurance proceeds from Church Mutual. In the
alternative, Church Mutual moved for partial summary judgment
as to Western World's claims for attorney's fees and
prejudgment interest. Western World filed a response in
opposition on August 1, 2019, to which Church Mutual filed a