Palma v. Verex Assurance, Inc.

ROBERT M. PARKER, Circuit Judge:

I. FACTS

On November 28, 1983, plaintiff-appellant Nancy Palma (“Palma”) borrowed $121,300 from City Federal Savings & Loan (“City Federal”) to purchase a condominium. As a condition of the loan, Palma was required to purchase mortgage insurance to protect City Federal from a loss in the event she defaulted on the loan. The mortgage insurance was purchased by City Federal from defendant-appellee Verex Assurance, Inc. (“Verex”). The premiums were paid with Palma’s money, which had been placed in an escrow account.

Palma lived in the condominium until November of…