Gerald Thompson sued Allstate Insurance Company to recover for fire loss under the terms of a homeowner’s insurance policy. The jury returned a verdict in favor of Thompson and Allstate appeals.
The policy in question was purchased by Thompson as the sole owner of the house and he insured the house in the amount of $31,000. Subsequently, Thompson and his wife were divorced, and pursuant to the divorce decree, he conveyed to her one-half of his interest in the house. As a part of the Thompsons’ separation agreement the parties agreed to sell the property at fair market value upon certain stated events, and to divide the proceeds equally. Both Thompson and Ms. Thompson had first option to buy the interest of the other party. Ms. Thompson and their son had possession of the house, but Thompson was liable for and made mortgage payments on the outstanding indebtedness of $11,000. Ms. Thompson was not listed as a named insured on the policy, nor was Allstate notified of the conveyance. The house was completely destroyed by fire. Allstate paid Thompson $15,000 for the house but informed Thompson that his former wife’s one-half interest was not covered by the insurance. Thompson sued to recover the remaining one-half interest. The jury’s verdict awarded Thompson $15,500 for the house. Allstate contends that the trial court erred by failing to direct a verdict in its favor because Thompson did not have an insurable interest in Ms. Thompson’s one-half interest in the house. The Standard Fire Policy in the
This court has recently discussed the issue of an insurable interest in a case factually similar to the instant case. See Allstate Ins. Co. v. Ammons,
“The principles applicable here have been enunciated in our cases on this subject. As set forth in American Reliable &c. Ins. Co. v. Woodward,
Whether or not Thompson had an insurable interest in Ms. Thompson’s one-half interest in the property depends on whether Thompson suffered a pecuniary loss over and above his one-half interest in the property as a result of the fire. See Ammons, supra; Huckaby v. Ga. Farm &c. Ins. Co.,
We find this case controlled by our recent decision in Allstate Ins. Co. v. Ammons,
However, our inquiry does not end here. “The crucial issue relative to recovery is what loss the plaintiff suffered as a result of the fire. Huckaby v. Ga. Farm Bureau Mut. Ins. Co.,
According to Ammons, the insured has an interest in one-half of the proceeds of the entire amount insured ($31,000) after deduction of the amount owed on the mortgage ($11,000). Id. at 259. Chief Judge Quillian reiterated this formula in the second Ammons case but held that the insured was awarded too much: “. . . the jury’s verdict was that Ammons’ total loss was $37,000 and that his share of the equity in the house was $11,552, upon which judgment was entered. $11,552 was the approximate difference between the maximum limits of the policy and the amount paid to the mortgagee and at least twice as much as Ammons would have been entitled to under the formula set forth in our prior opinion in the case.” (Emphasis supplied.)
Thus the formula provided for in both Ammons cases is that the insurer is to pay one-half of the insured’s interest in the house after expenses. Since the insured was obligated on the mortgage for $11,000 at the time of the loss and since the house was insured for $31,000, Thompson is entitled to one-half of the difference between these two figures or approximately $10,000. He received $15,500 from Allstate prior to trial from which he paid the $11,000 mortgage leaving him only $4,500. According to the formula set out in Ammons we think he is entitled to approximately $5,500 more from the insurance company. However, we reverse the jury verdict and remand the case to the trial court on the issue of damages.
Judgment reversed and remanded for further proceedings not