Opinion
April 10, 1990
Appeal from the Supreme Court, New York County (Burton Sherman, J.).
Plaintiff commenced this action seeking to recover on a fire insurance policy mortgage loss payable clause. Under the designation "insured", plaintiff was listed as "Ben Cohen mortgagee". After the mortgagor defaulted, plaintiff foreclosed on the premises and, as a result of the foreclosure and sale, obtained title for a nominal sum on November 7, 1984. The mortgagor, however, had filed a voluntary petition in bankruptcy on November 2, 1984, triggering an automatic stay. On January 13, 1985, the premises were destroyed by fire. On January 19, 1985, the Bankruptcy Court for the Southern District of New York dismissed the mortgagor's bankruptcy petition and declared that the November 7, 1984 sale was not void. Plaintiff sought recovery from defendant based upon the policy of insurance. The Supreme Court granted summary judgment to defendant on the ground that plaintiff lacked an insurable interest in the property as of the time of the loss.
Whether plaintiff is viewed as mortgagee of the property or as the owner on the date of the loss, he is not entitled to recover under the policy. The policy by its terms insures plaintiff's interest as mortgagee only. Thus, if as plaintiff contends, he was the owner of the property at the time of the loss, his interest was not covered since his insurable interest (the debt) was extinguished after he obtained title. (Whitestone Sav. Loan Assn. v. Allstate Ins. Co., 28 N.Y.2d 332.) Plaintiff's failure to obtain a deficiency judgment within the prescribed time after title passed to him in foreclosure, whether the date of passing is viewed as November 7, 1984 or January 19, 1985, defeats any right of recovery he may have had as mortgagee (RPAPL 1371; Moke Realty Corp. v. Whitestone Sav. Loan Assn., 82 Misc.2d 396, affd 51 A.D.2d 1005, affd on opn of Special Term 41 N.Y.2d 954).
Concur — Ross, J.P., Asch, Milonas, Rosenberger and Ellerin, JJ.