Dichira v. Nawid
In Dichira v. Nawid, the Appellate Division up held the principle that a mortgagee’s relationship with its mortgagor is entirely contractual, that our client Countrywide did not have a contractual duty to maintain liability insurance on the subject property, and that it did not engage in any conduct which gave rise to a legal duty independent of the contract. A tort plaintiff had sued the property owner for negligence. In turn, the property owner brought a third party complaint against Countrywide, alleging that Countrywide had a duty to pay his liability insurance premium out of escrow funds, which it failed to do, leaving him uninsured. The Appellate Division, Second Department, affirmed summary judgment in favor of Countrywide, holding that it had no contractual or other legal obligation to pay liability insurance premiums for the benefit of the mortgagor.