Holland v. McCullen
Florida District Court of Appeal
764 So.2d 810 (2000)
Michael Holland (codefendant) mortgaged his home to Midfirst Bank (plaintiff), then sold the property to the McCullens (codefendants) under a wraparound second mortgage: the McCullens paid Holland, who was supposed to keep paying the bank on the first mortgage, and who agreed to indemnify the McCullens if he defaulted on that first mortgage. After a dispute over the mortgage's hazard-insurance clause, the bank declared Holland in default and sued to foreclose; the McCullens crossclaimed against Holland for breach of contract, indemnification, and civil theft, and the trial court granted them summary judgment on the crossclaim based on Holland's stipulated default.
Whether, in a wraparound financing arrangement, the buyer's wraparound-mortgage payments to the seller, which the seller uses to pay the first mortgage, create an enforceable indemnification obligation when the seller defaults on that first mortgage.