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Lawskills.com Georgia Caselaw
CHARTER MORTGAGE COMPANY v. GRAY et al.
69979.
BANKE, Chief Judge.
Action on note. Fulton Superior Court. Before Judge Cooper.
The appellant mortgage company held a note and security deed on a house owned by the appellees, Mr. and Mrs. Gray. The house was severely damaged by a fire, and the proceeds of a fire insurance policy covering the structure were eventually sent to the mortgage company by the insurance company. Mr. Gray subsequently entered into a contract with a contractor to repair the house. However, the contractor failed to complete the repairs and has been sued by Mr. Gray in a separate action.
Held:
The facts of this case are virtually identical to those found in McWaters v. Frederick W. Berens, Inc., 143 Ga. App. 392 (238 SE2d 717) (1977). Here, as in that case, the contract between the homeowners and the contractor merely required that payments to the contractor be made at specific intervals. Mr. Gray acknowledged in his deposition that he gave no other instructions to the mortgage company and that he never requested appellant to inspect the work before making payments.
In McWaters, supra, this court held that a mortgage company does not, under such circumstances, hold the insurance proceeds in a fiduciary capacity or as a trustee or escrow agent, absent an agreement specifically creating such an arrangement. As in McWaters, the lender here had no duty, implied or otherwise, to perform inspections or otherwise oversee the work of the contractor. It follows that the trial court erred in its denial of summary judgment for the appellant.
Lenwood A. Jackson, for appellees.
Lowell H. Hughen, W. Lyman Dillon, for appellant.
DECIDED APRIL 8, 1985.
Thursday May 21 16:19 EDT


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