Jem Enterprises v. Washington Mutual Bank
Opinion
Lead Opinion
Kitching, J.
A property owner and a lender dispute which party had the right to control earthquake insurance proceeds. The trial court concluded that the lender was entitled to control the disbursement of proceeds used to repair the property and granted summary judgment for the lender. Because the owner assigned insurance proceeds to the lender under a deed of trust, the lender had the right to control the disbursement. We therefore affirm the judgment. We address other issues in the unpublished portion of this opinion.
Factual and Procedural Background
1. The Real Property and Deed of Trust
Cross-complainants and appellants JEM Enterprises and Edward M. Burgh (collectively JEM) own an apartment building in Northridge. The property is encumbered by a deed of trust in favor of Coast Federal Bank, F.S.B. (Coast), securing a loan made to a prior owner. The deed of trust states in relevant part:
2. The Earthquake Insurance and Loan Defaults
JEM acquired earthquake insurance for the property effective in October 1993. The apartment building suffered extensive damage in the Northridge earthquake in January 1994.