(Civil Code Section 2954.8
Does Not Require a Lender to Pay Interest on Insurance Proceeds
Held in Escrow For Payment of Repairs For Damage Sustained by Home
Covered by Property Insurance)
(April 2021) - In Gray v. Quicken
Loans, Inc., 61 Cal.App.5th 524 (March 2, 2021), the
California Second District Court of Appeal affirmed the trial
court's order dismissing a class action pursuant to a
demurrer filed by Quicken Loans, Inc. (“Quicken”). The
class action filed by William Gray argued that pursuant to
California Civil Code section 2954.8, Quicken was obligated to pay
interest on insurance proceeds paid into an escrow account for the
purpose of funding repairs to homes that had sustained damage
covered by property policies. In affirming the trial court's
order dismissing the Gray lawsuit, the Court of
Appeal reasoned as follows:
