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Lombardi v. Rhode Island Insurers' Insolvency Fund5/25/2000
n interest. At the time of the fire, Lombardi was insured for up to $79,500, and her indebtedness under the note was approximately $68,540. Thus, a difference of approximately $11,000 was due and owing to Lombardi after a distribution of $68,540 to Colonial. Hence, it is clear to us that Lombardi maintained a substantial interest in the policy that remained separate and apart from that of her lender. At oral argument, plaintiff conceded that some six years later, the balance on the indebtedness exceeded the policy limits, and that Lombardi defaulted on the note because of her inability to continue making payments after losing the income that the property produced. The Fund therefore contends, that any recovery on the policy is clearly for the benefit of Colonial, and therefore Colonial is the proper "real party in interest." However, we note that at the time of the loss, Lombardi was not in default, and therefore her interest in the insurance proceeds at that time was both real and significant. Although Colonial may have been the loss payee under the policy, Lombardi's interests were not forfeited simply because her name did not appear as a "loss payee" in the contract.
Accordingly, although we are satisfied that the trial justice was correct in finding that Lombardi was a "real party in interest," we also recognize that Colonial, as the scheduled loss payee, also possessed an interest in the proceeds, and although Colonial was placed in receivership, its assets came under the control of Resolution, and thus it is Resolution who now properly holds an interest in the proceeds. We recognize that it would be unfair to force the Fund to satisfy the interests of both Lombardi and Resolution, and as a result we conclude that the judgment of the trial justice should be modified to provide for payment to Lombardi and Resolution as their interest may appear, less any attorney's fee payable to the plaintiff's counsel.
For these reasons, defendant's appeal is denied and the judgment is affirmed. We remand this case to Superior Court with directions to modify the judgment in accordance with this decision.
COVER SHEET
TITLE OF CASE: Arlene D. Lombardi, d.b.a. A.D.L. Realty v. Rhode Island Insurers' Insolvency Fund
DOCKET NO.: 98-542 - A.
COURT: Supreme Court
DATE OPINION FILED: May 25, 2000
Appeal from County: SOURCE OF APPEAL: Superior Kent
JUDGE FROM OTHER COURT: Gagnon, J.
JUSTICES: Weisberger, C.J., Lederberg, Bourcier, Flanders, Goldberg, JJ. Concurring
WRITTEN BY: PER CURIAM
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