Judge: Insurance Company not Liable for Iowa Developer’s Burned Home

A Polk County judge has ruled a former insurance company of an Iowa developer’s home destroyed by fire won’t have to pay the balance of its $1.5 million mortgage.

The Des Moines Register reports that Judge Robert Hutchison ruled that Two Rivers Bank and Trust failed to present sufficient evidence to require Federal Insurance Co. to pay the nearly $1 million that remained on the home of developer John Kline.

Fire destroyed the 16,000-square-foot Urbandale home in 2009.

The bank claims the Federal Insurance policy was cancelled for nonpayment two days before the fire. The home was then insured by American Family Mutual Insurance, which paid more than $621,000.

American Family claims in a lawsuit that Kline and his wife set the fire as their finances crumbled. Kline, who has filed a countersuit against American Family demanding payment, has denied setting the fire.