Question: Earl and Vonette Crowell owned a farm in Minnesota In
Earl and Vonette Crowell owned a farm in Minnesota. In 1980, they mortgaged the farm to Farm Credit Services and purchased a property insurance policy on the farm (including the farmhouse) from Delafield Farmers Mutual Insurance Co. Fire was among the perils covered by this policy, which ran from October 1985 to October 1988. When the Crowells fell behind on their mortgage payments, Farm Credit began foreclosure proceedings. Upon foreclosure, mortgagors such as the Crowells have a right of redemption for a specified time. The right of redemption allows the defaulting mortgagors to buy back their property after it has been sold to someone else in the foreclosure proceedings. In November 1987, the Crowells' right of redemption expired. Minnesota law provides, however, that farmers who lose their farms to corporate lenders are given an additional opportunity to repurchase their farms under a "right of first refusal." This right meant that Farm Credit was forbidden to sell the farm to anyone else before offering it to the Crowells at a price no higher than the highest price offered by a third party. Farm Credit allowed the Crowells to remain on the farm while they attempted to secure financing to buy the property under their right of first refusal. In November 1987, a fire substantially damaged the farmhouse. The Crowells filed a claim for the loss with Delafield. Although Delafield paid the claim concerning the Crowells' personal effects that were located inside the farmhouse and were destroyed in the fire, it denied the claim on the farmhouse itself. Delafield took the position that because the time period for the Crowells' right of redemption had expired, they no longer had an insurable interest in the farmhouse. The Crowells therefore sued Delafield. Concluding that the Crowells had an insurable interest in the farmhouse, the trial court granted summary judgment in their favor. Was the trial court correct?
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