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Contracts Keyed to Kuney
Schoolcraft v. Ross
Citation:81 Cal. App. 3d 75, 146 Cal. Rptr. 57 (1978).
In April 1974, plaintiffs purchased a house from the defendant for $14,500. The parties executed a promissory note and a deed of trust naming the defendant as the beneficiary. In January 1975, the house was destroyed in a fire. Plaintiffs still owed $13,585.01. Pursuant to the fire insurance policy, the plaintiffs could either collect the cash value ($8,250) or receive reimbursement to rebuild (up to $14,100). The plaintiffs informed the insurance company of their intent to rebuild and the company issued a check for $8,250 payable to plaintiffs and defendant with the balance of the $14,100 to be paid upon completion of the house. However, defendant refused to allow the proceeds to be used to rebuild and invoked a clause in the deed of trust to retain the proceeds. Plaintiffs were unable to afford their monthly payments and rent on an apartment causing defendant to foreclose on the property which she then re-purchased at private auction.
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