1 Originall y, J. R. Coleman, M ary Lynn Colem an’s husband, was mad e a defendant to this suit, however, plaintiff did not pr oceed a gainst him at trial due to evid ence a nd belief that he d id not ha ve an ow nership interest in the proper

ty in quest

ion which was ti

tled sole

ly in Mrs. Col

eman’s name.
1 

### IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE Assigned on Briefs J

uly 19, 2000 DONNA BROWN MARTIN v. MARY LYNN COLEMAN, ET AL 

### .

Appeal from the Chancery Court for Humphreys County No. 24-068 Allen W. Wallace, Chancellor

No. M1999-02238-COA-R3-CV - Filed June 18, 2001

This is a dispute over r

eal property

which was the subje

ct o f an installment land sales contract betweenthe parties andover the procee ds of an insuranc

e policy af

ter the dwelling

on the property burned. The trial court

ordered that the title to the property be divested from the Seller and be vested in the Buyer and that the remaining proceeds of the insurance policy be awarded to Buyer a

fter all overdue payments of taxes and insurance and the incurred clean up costs were deducted. The Seller appealson the grounds that the evidence was contrary to the judg ment and that the plaintiff had breached the contract and is entitled to neither the property nor the insurance proceeds. For the reasons below, we affirm the judgment as modified.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed As Modified

P ATRICIA J. C OTTRELL , J., delivered the opinion of the court, in which B EN H. C ANTRELL , P.J., M.S., and W ILLI

AM C. K OCH , J R ., J., joined.
David D. Wolfe, Dic

kson, Tennessee

, for the appella

nt, Mary L

ynn Coleman,

et al. J. P. Bradley, Waverly, Tennessee, for the appellee, Donna Brown Martin.
OPINION

This appeal involves an installment land sales co ntract enter ed into between th e parties in 1988. 1 Ms. Coleman (“Seller”) bought the property in question in the spring of 1988 and borr owed $11,000 from a credit union to finance the purchase. However, shortly thereafter she

agreed to sell2

the property to

Ms. Martin

(“Buyer ”) under an insta

llment land sales c

ontract. The contract provides in pertinent part:

The purcha se price of said property shall be $15,500.00 (fifteen thousand five hundred dollars)

and to be paid as f

ollows:
$500.00 dow n pa ymen t to be p aid befo re t he 1 st d ay o f August, 1988, and 120 monthly payments of $215.21 to be paid the 1st of each mont h, 1st payment being due August 1, 1988.

After rece ipt of last paym

ent SELLER

agrees to conv

ey the subje

ct property

to BUYERS by

good and valid wa

rranty dee d, subject only

to any restr

ictive covenants and easements of record, zoning ordinances or regulations affecting same. If any payment is not paid on or before the 10th of the month in which it is due, an additional 10 percent of said payment must be paid.
***** BUYERS agree

to purchase a fir

e insurance polic

y on said pro

perty in an amount to the satisfaction o

f the SELL

ER.
***** BUYERS agree to make all necessary repa irs to the property after the signing of this agreement

and continue to keep the property in a good state of repair un til sai d contract is fulfilled.

The contract is no

n-transferra

ble without written

consent from the SE

LLER.

If during the existence of this agreeme nt, BUYERS should be more than thirty (30) day s late in making said monthly payment, the SEL LER shall have the right t o decl are this agreement null and void and shall send BUYERS notice to vacate the premises within ten (10) days of such notice. In this

event, the SEL

LER shall reta

in any and all sums paid by BUYERS as liquidated damages or as rental for the use of the premises durin

g the period of o

ccupancy by the BUYE

RS or his lessees.
***** BUYE RS s hal l al so p ay for pro pert y tax es o n an ann ual bas is f or s ubj ect pro pert y.
The contract

was signed by Donna Br own Martin and Mar

y Coleman on July

29, 1988 in front of a notary

public. Buyer took possession immediately. The parties reviewed the terms of the contract and evendiscussed th

e provisions prior

to the contract be

ing signed. The

re is a dispute betweenthe parties as to who drafted the contract. Buyer testified that she did not know where the contract came from and as sumed that Seller h ad it drafted bec

ause she presented it to her for her final approval before signing. On the other hand, Seller testified that she had a friend type the contract from a copy of a similar contract

which Buye

r provided and ha

d previously

signed in anothe

r deal.3

One of the terms discussed prior to signature was the issue of insurance. Buyer

testified that she stated she was concerned that because the property was not in her name

, she would not be a

ble to obtain insurance. Therefore, Seller agreed that Buy er wou ld simply reimburse her for the premiumpayments because she had to keep insurance on the proper ty according to the mor tgage lender. Seller does not dir ectly disput

e this but states, “I told her that I had to have insurance on the house because of borrowing money against it, that I

had to have it for w

hat I owed ag

ainst it and that she needed

to get her own insurance, renters insurance, several times.” Additionally , Seller admitted to accepting reimbursement payments from Buy er for the premiums she pa

id on the insurance policy she held in her name. She eve n kept a r unning ledger of what the annual taxes and insurance premiums were and deducted payments made by Buyer.

The ledger does not

be gin until 1990 and shows that Buyer reimbursed Seller for the insurance policy premiums and the taxes periodically over time. Seller admitted that the ledger

did not reflect a

payment made in March of 1993 for $439 and that there were calculation errors. The principal payment under the installment note was current on the property , b ut Selle r testified that over the early 1990's, the pay ments for insurance and taxes were not made in full and were late. Buyer lived alone on the property until the early 1990's. After that time, she moved out and allowedher sisters and mother to move onto the property. However, Buy er testified that

while she
was not residing onthe property full time, she still maintained the property with her be longings, and it was still a home place f or her and her family whenever someone needed a place to live. She testified that she visited the property and considered it home. Even though she was not living there full time, she contributed to the payments and never considered the property nor the contract

to be assigned or transferred

to anyone e

lse. Buyer

fully expected that when all the payments were made under the contract, she would obtain title to the property. In fact, the parties discu

ssed other people living there and Seller responded, “She mentioned her sister moving in and I said that’s fine. I just need the money to make the monthly pay ment at the credit union.”

The building located o n the real property burned on October 5, 1995 and Seller collecte d $11,000 in insurance proceeds. The proceeds paid off the remaining debt on

Seller’s loan and she paid $2,500 to have the debris cleaned up from the fire.

On October 24, 1995, Seller refunded Buyer’s Oct ober payment paid by money order. Shortly thereafter, B

uyer deman

ded ti tle to the property

, and this suit ensue

d. After a bench

trial, the judge found

that Seller had applied any overpayments in rent to the taxes and insurance due and that these were current as of March 3, 1993, but not paid after that da t e. Therefore, at the time of the fire, there was an unpaid balance of $810 for taxes and insurance. Finally, based on the calculation that $5, 899 was leftowed under the sales contract and deductions for clean up and overdue taxes and insurance, the court awarded a judgment against Seller for the remaining $1,791 of the insurance proceeds to Buyer and awa rded the title to the property to Buyer

. Seller appeals the judgment on the grounds that Buyer breached the contract by allowing others to live on the property, thereby at tempting to assign or transfer the contract without her4

consent, and by being delinquent in payment of pr operty taxes and insurance as required by the terms of the contract. For the reasons herein, we affirm the trial court’s judgment. However, we modify the calculation o

f damages.

I.

This is an appeal from a bench trial and accordingly, our standard of review is governed by Tenn. R. App. P. 13(d). Our review of the record is de novo with the presumpti on that the findings of fact are correct “unless the preponderance of the evidence is otherwise.” Tenn. R. App. P. 13(d). We must also give great weight to such factual findings by the trial court that rest on determinations of credibility. Randolph v. Randolph, 937 S.W.2d 815, 819 (Tenn. 1996) . However, no presumption of correctness attaches to the trial court’s conclusions of law. Tenn. R. App. P. 13(d); Hansel v. Hansel, 939 S.W.2d 110, 111 (Tenn. Ct. App.1996).

II.

Tennessee courts have addressed the r ig hts of the parties i

n similar fact situa

tions, particularly

in King v. Dunlap , 945 S.W.2d 736 (Tenn. Ct. App. 1996), whic

h relies heavily

on and quotes ex tensively f

rom Parker v. Tennessee Farmers Mut. Ins. Co. , No. 141, 1988 WL 1389 2 3 (Tenn. Ct. App. Dec. 30, 1988). In King , the sellers, the Dunlaps, entere

d into a contract t

o sell to Mr. Ki ng a lot and h ouse for $6,500 to be paid in monthly installments including interest and an additional monthly amount to pay for insurance and taxes. Upon payment of

the purchase price, the sellers would convey

the property by warra

nty deed to Mr. King. The sellers purchased an insurance pol icy. Mr. King moved on to the pro pert y, made some repair s, and made mortg

age paym ents with irre gula rit y. Two years after the contract was signe d, the building was destroyed by fire. T h e insurance company denied that Mr. King had any insurable interest in the property and that the extent of recovery, if any, to the D

unlaps was the balance owed them by King, not the

val ue o f th e pro pert y. After a thorough examination of authorities, this court held:
Also, as indicated by the foregoing authorities, King, upon e ntering in to the sales agreement

wit h Du nla ps a nd t aki ng po sse ssi on o f th e pro pert y, became the equitable
owner of it. Consequently

, via the doctrine

of equitable conv

ersion, the risk of

loss hadaccrued to King at the time the fire occurred. Conseq uently, the

proper result would be t hat the Dun lap s, t hou gh en tit led to f ull reco very f rom Mid -Century (the insurance company),

must hold those proc

eeds in exc ess of their interest, i.e., the unpaid bal ance of the pu rchase price , in trust for King.
King , 945 S.W.2d at 744 (citations omitted).

In a more recent case, this court has had occasion

to focus on the rig

hts between the buyer and the seller in a similar fact situation, expanding on King :5

King and Parker , as well as the cases discussed i n those opinions, deal prim

arily with the question of whether an insurance company

is required to pay the full amount of the policy or whether

its obligation is limited to the seller’s beneficial interest in the pro pert y, i.e., the unpaid balance of the purchase price. In t he i nstant case, the insurance company has already paid the full amount of

the policy to Seller, and

the question at

issue is whether the proceeds received by Seller must be applied towar ds the purchase price.
Hillard v. Franklin, 41 S.W.3d 106, 115 (Tenn. Ct. App. 2000).

In Hillard, the parties ente red into a contract for

the sale of real property for a total price of $80,000, which included a down payment of $1 0,000 at closing and equa l monthly insta

llments thereafter. The actual sale was not closed, but buyers took possession and had some work done on the property. The main house on the property was

destroyed by fire two months after the contract was executed, and the seller recovered from

her insurance company an amount that included $35,000 for the loss of the dwel l ing. The sale did not close, and the

buyers bro

ught suit for spec

ific enforcement

of the contract and

reduction of the sales price by the $35,000 the seller had received from the insurance company. This court affir med the trial cour

t’s judgment for

the buyers o

n both issues, and it is the court’s resolution of the second issue that is relevant to our discussion herein.

This court in Hillard

quoted from Parker the general ru le that:

where the insured vendor

has sold the property and vendee has gone into possession andpaid a portion of th

e purchase price, but title is still held by the insured, as betweenthe insured and the insurer the insured is the owner of both the legal and equitable titles to the property and entitled to recover the full amount of

the pol icy. However, as between th

e ven dor and the vendee, the insured takes the proceeds of insurance which exceed the amount owed to the vendor, as trustee for the vendee.

Hillard, 41 S.W.3d at 114 (quoting Parker, 1988 WL 138923 at *1). Relying upon the authority

cited in King and Parker as dicta as well a

s other authority

, this court held that the proceeds collected by the seller must be applied to the purchase price in buy er’s favor. Id . at

116. Specifically

, we concluded “

a seller must apply

insurance proc

eeds tothe purchase price, at least where the risk of loss falls on the purchaser. The risk of loss during the period between execution of a

contract from the conveyance of real prope rty and the closing generally falls on the purchaser.” Id . at 115 (citations omitted).

Hillard dealt with a situation where no part of the purchase price had been paid and there was
an executory

contract to convey the property . In the case before us, Buy er had been in possession of the property

and making pay

ments on it

for over sev en years. Therefo re, although we consider Hillard helpful to our ana

lysis, its main

import is its reinforcem ent of the principles of King v.2 Seller asserts that the alleged oral modi fication of the contract

regarding i

nsurance cover

age on the property, found by the cour t based on

the partie s’ course o f condu ct, was no t valid and, theref ore, Buyer has no interes

t in the i

nsurance proce

eds. Consequent

ly, Seller i

s restrai ned from arguing

that Buyer’s

arrearage in rei mburs ement of i nsur ance pre miums was also a

breach of the installment sales co ntract. She do es, however, make the argument that if there were an or al agre ement, Buyer breac hed it si nce the tri

al court f

ound no reimbursement

occurred

after March 1993. She also argues that Buyer breached the

written cont

ract by fai

ling to maintain insurance as the contr act required. We agree with the tr ial court’s

conclusion that Buyer ful filled this provi sion by agreei

ng with Se ller for Selle r to main tain the co verage s he alrea dy had and Bu yer wo uld reimburse her for the premium s.
6 Dunlap as those principles apply to the facts before us: once the insurance proce eds have been paid, must they be applied to the purchase price.

Tennessee is o ne of the jurisdictions which follows the equitable rule “that where the building which was the subject of conveyance is destroy ed or damaged, the

vendor must apply the proceeds upon the purchase price and account for the balance to the purchaser.” Hillard, 41 S.W.3d at 115; King , 945 S.W.2d at 743; Parker , 1988 WL 138923 at *4 (quoting 5A A PPLEMAN , I NSURANCE LAW AND P RACTICE , 212-15 (1970)).

In this case, the contract

provided that Buyer was to maintain insurance, confirming the risk of loss would fall on he r. The parties agree d, as their course

of conduct shows,

that Buyer

would reimburse Seller for insurance premiums. Thus, the continued acceptance of the reimbursement of payment for the insura nc e premiums supports the trial court’s conclusion that the parties agreed Seller would maintain the policy and Buyer would pa y the premiums. Therefore, any proceeds from the policy were held in trust by Seller for Buyer ’s b enef it, and may, in the first instance be applied to the remaining balance

owed to Sel ler under the contract. Any excess belongs to Buy er, absent other obligations owed to Seller by Buyer. I f the insurance proceeds pay off the balance of the loan, the Buyer is entitled to conveyanc e of the real property under the contract.

The trial court applied these general principles, ordering the insurance proce eds to be applied to the loan balance, ordering conveyance of the real property

to Buyer, a

nd ordering the

excess insurance proceeds paid to Buyer, after deduction of other obligations or expenses the court found due to Seller.

III.
Seller acknowledges the King v. Dunlap case, but argues its principles should notbe applied here. She contends that Buyer is not entitled to the insurance proceeds because Buyer breached the installmentcontract (1) by not making timely

payments on the taxes, as required in the contract 2 and (2) by allowing other

persons to live on the property and, in effect, assigning the contra ct to someone else. The consequence of these breac hes, Seller argues, is that Buyer cannot avail her self of the equitable theories of unjust enrichment and equitable conversion.7

First, we disagree with Seller’s theory that her obligation to perform under the contract was eliminated by Buyer’s brea ch due to the late pay

ments of taxes. The contract required Buyer to “ pay for property ta

xes on an annual bas

is for subject pro

perty.” Whil

e the tax and insura

nce payme

nts we re in arrears, the payments on the sales contract were up to da te at the time of the fire. Th e contract provided:

If during the existence of this agreement, BUYERS should be more than thirty (30) days late in making said monthly payment, the SEL LER shall have the right to declareth is a greement null and void and shall send BUYERS notice to vacate the premises within

ten (10) days of such notice. In this event, the SEL LER shall retain any and all sums paid by BUYERS as liquidated damages or as rental for the use of the premises durin

g the period of o

ccupancy by the BUYE

RS or his lessees.

It is undisputed that Seller

never provided any notice that the contrac

t was being decl

ared null
an d vo id, Buyer was never asked to vacate the prope rty, nor was she informed that any f uture payments would be treated as rent, rather than installment pay ments under the contract. In fac t , Seller testified that payments for rent, taxes and insurance were late or not paid, but also testified: Q: In regards to this c

ontract, if they

did not comply

with paying

on a timely ba

sis, what did you have the right to do at that point in time? A: I could ask them to move, to leave. Q: And did you at any point ever ask them to move? A: No, I never did.
***** Q: As far as the con

tract, was there

a provisi on if they were late in paying the rent that a late char

ge would be adde

d to the payme

nt? A: Yes. Q: Did you ever add a late charge? A: Not that I remember.
***** Q: By the contract if they didn’ tpay it,you would have a right to cut them off in ten days and sa

y the contra

ct’s null and void, w

hy didn’t y

ou do that? A: I’m not that t

ype person

to do that.

Even if the tax pay

ments, due on an an

nual basis, could b

e considered “mo

nthly pay ments” subject to the Seller’s right to declare the contract void, she never took that step.
Further, it is well settled thatcontinued acceptance of late or non payment without notice that such will no longer be tolerated constitutes a waiver of a right to forfeiture of a contract. Lively v. Drake , 629 S.W.2d 900, 904 (T enn. 1982); American Nat’l Ins. Co. v. Davidson , 166 Tenn. 13, 57 S.W.2d 788, 789-91 (1933); Webb v. First Nat’l Bank and Trust Co. , No. 74, 1990 WL 19643 at *1- 2 (Tenn. Ct. App. Mar

. 6, 1990) (no Tenn. R. App. P.11 application filed); Dacus v. Weaver , No. 29, 1988 WL 138918 at

*2 (Tenn. Ct. App. Dec. 28, 1988) (no Tenn. R. App. P. 11 application filed).3 Seller asserts that when Buyer’s sister moved into the

house in 1990, she consider ed the contract f

or sale to be terminated and the subseq uent holding by Buyer’s family m embers to be a rental arrangem ent.
8 For example, in Lively , our Supreme Court held that where late payments had been accepted over a periodof two year

s without protest or

complaint, the other party must be given notice to cure the
arrears and that no further late payments would be accepted before forec losure would be permitted. 629 S.W.2d at 904.

We cannot c onclude that the contract was unenforceable due to late pay ments of t a x reimbursements.

Seller never provi ded any notice t o Buyer that the establish ed course of d ealings betweenthe parties was unacceptable, no notice was given that the late payments were unacce ptable, Buyer was never provided notice that the contract would be deemed voided, Seller never gave Buyer ten days notice to vacate, nor did Seller give any o

ther form of notic

e that late pay

ments would no longer be acceptable. The fact that Buyer w as current onthe monthly purchase price payme nts and hadmade over seventy percent of the total pay ments under the contract further militates against any interpretation that Seller was reliev ed of her obligations u nder the contrac

t. She was entitled t

o payment of the unpaid amou

nts, and the court p

roperly or

dered them p aid out of the insurance proceeds.

Seller’s other argument is that the contract prohi bite d its assignment without Seller’s approval and that Buyer breached this provision. Seller asserts that the contract includes a provision allowing conversion of th e sale s arrangement to a rental arrangement upon any breach or termination. 3 We find no such provision in the contract. The provision to which Seller refers allows Seller to declare the c

ontract void if Bu

yer is more

than thirty d

ays late in ma

king a monthly payment. When that provision is revoked,

In this event [notice of

voiding the agr

eement], the SEL

LER shall reta

in any and a

ll
sums paid by BUYERS as liquidated damages or as rental for the use of the premises during the perio

d of occupancy

by the BUYE

RS or his lessees.

We read this language as allowing Seller to retain prior mon

thly payments if she declared the contract void because of late payment. Further, we do not find any language in the contract, nor any evidence in the record, to support the conclusion that Buyer was not allowed to have someone besides herself live in the home. The contract only provided that she could not assign the contract to someone else without Seller’s consent. The record reveals testimony

by both parties that they

did not consider that the contract had been “assigned” to any one other than Buyer.

Add iti ona lly, the contract pro vision quoted above leads us to believe the parties contemplated that the property could be subleased during the installment peri od. Cle arl y, the language provides that occupancy may

be by Buyer or he

r lessees. Therefore, there could be no breach of the contract by the mere fact that persons other than Buyer occ upied the premises. Additionally, the record reflects Seller was aware Buyer’s sister was living on the property and did not object; therefore the Seller acquiesc

ed in the arrang

ement.4 Buyer apparently disagrees with the calcul at ions and asks this court “to modify wha t the Plaintiff should receive f

rom the insur

ance proceeds t

hat was abo ve t he p urc has e pr ice .” N ospecifi

c suggesti

on is made
as to an appropriate modificati on, but we int

erpret thi

s statement as

suggesti

ng that the t

rial cour

t should not have deducted the

insurance an

d tax payments due fr om Buyer to Seller

and the cleanup c

osts. However, Buyer has not specifically raised th ose dedu

ctions as

an issue on a

ppeal or prov

ided any authori

ty or argument regarding

their pr opriety. In any event, we find no err or in the court’s decision to award those reimbursemen ts to Seller o ut of the in surance proceed s otherw ise due B uyer. 9 Fin all y, Seller asserts tha t the trial judge i

mp roperly

relied on the doct

rine of “unjust enrichment” i n its reasoning. Specifically, she claims that there is no unjust benefit she received from the insurance proceeds. Unjust enrichment is a quasi-contractual the ory or is a contract impli

ed-in-law in which a court may

impose a contrac

tual obligation wh

ere one does not e

xist. Courts will impose a contractual obligation under an unjust enrichmen t theo ry when: (1) there is no contract bet

ween the partie

s o r a contract has become unenforceable or invalid; and (2) the defe nda nt w ill be u nju stl y e nriched absent a quasi-contractual obligation.
Whitehaven

Comm. Baptist Church v. Hollowa

y , 973 S.W.2d 592, 596 (Tenn. 1998) (citing Paschall’s, Inc. v. Dozier , 219 Tenn. 45, 407 S.W.2d 150, 154-55 (1966)). Mor eover, und er the theory of unjust enrichment, “liability can be created where one per son receives a benefit at the expense of another and

it is unjust or inequitable for him to retain this benefit.” Newton v. Cox , 954 S.W.2d 746, 747 (Tenn. Ct. App. 1997) (quoting Jaffe v. Bolton , 817 S.W.2d 19, 26 (Tenn. Ct. App. 1991)).

In this case, the con tract required

that Buyer

maintain fire insurance

on the property

and the evidence shows the parties o rally agreed that Buyer would reimburse Seller f or the premiums on her existi ng policy. Seller collected and credited these pay ments. Therefore, she was, in essence, holding the policy in

trust for Buy

er. While both an oral and written contract existed in this case, if Seller wereallowed to keep th e insurance pro

ceeds, as well a

s the real proper

ty, she would

receive
a benefit for which she did not pay, and would thereby be unjustly enriched. While we do not think it necessary

to rely on th

e doc trine of unjust enrichment, because the authorities discussed earlier provide the same

result on the basis of other equitable principles, we do not find that the trial court erred in conside

ring that doctri

ne as well.

IV.

The trial court applie

d the principles s

et out ea rlier regarding distribution of the insurance proceeds: payment of the remaining balance on the loan to Seller, with remainder to Bu

yer. I t also granted Seller payment of unpaid taxes and insurance payments due from Buyer and reimbursement for expenses Seller inc

urred in cleaning up the property after the fire. We ag ree this was the proper method of allocating th

e proceeds. 4 Howev er, the actual calc ulation of the amou

nt of paymen

ts5 The trial

court indicated

it was usi

ng “Defendant’s f

igures” to

calculate

the payoff, and Seller di sputes that the figures used b y the court were her figur es. Because o

f our resol

ution of t

he issue of

calculati

on of the loan’s payoff, Seller’s arguments in this regard are moot.
10 remaining on the loan is more p roblematic. I

n making that calculation th e trial court accepted testimony from a question asked by Buy er’s counsel to Seller: Q: My question is: Do you know wha t Donna owed y

ou when the house

burned and do you know what you owed the cre dit union when the house burned, two different figures, do you know what they are? A: I just paid the credit union what they said I owed them. I never fig

ured Donna’s. I guess cou

ld have figure

d it up in monthly

payments. ***** Q: For our calculation purposes, we could start at August 1, 1988, and figure all the months until October of 19 95, or September,

cutoff at October, andthat would be how much she’s pai

d you; is that r

ight? A: Correct. Q: And then whatev

er’s left owing

is what was left ou

t of that? A: I’m confused, but I think so. Q: Well, I calculated it up and she lacked 56 months paying y ou off w hen the fire happened. A: If you say

so. I haven’t figured it up. Q: That’s just my calculation. Somebody else needs to do it too.

As the in itial series of questions indicates, there appears to have been some confusion regarding the amount Seller still owed the credit union on the mortgage and the amount

Buyer owed Seller under the installment sales contract. In other testimon y Seller state s she paid o ff the mortga ge on the property with $6,700 of the proceeds from the insurance policy

. The o nly relevant payoff figure, however, is the amount owed by Buyer to Seller. The law is that Buy er is entitled to have the insurance proceeds applied toward payment of her loan to Seller

. The judge also accepted

an amortization schedule whichwas introduced through testimony of Seller. She testified that her ex-husband hadrun the schedule

off some time prior

in response to
a question by Buyer’s sister as to the pay off amount on the loan. 5 The amortization sc hedule isfor
a loan amount of $12,591.48 at 12% interest based on a payment of $215.64 for 88 months. There is no testimonyin the record as to what the numbers represent. The findings and ruling of the court show that the ju dge accepted the statement that

56 months were lef

t owed under the c

ontract. However, us ing the amortization table, the trial court apparently used the remaining pri ncipal balanc e appli cableafter

56 payments had been made, rather than 56 pay ments remaining, and held that amount, $5,899, was what Seller was owed under the loan.

We agree with the methodology employ ed by the trial court. Seller arg ues that she was entitled to an amount

calculated by the number of months remaining on the contract multiplied by6 Weobtained a re

liable and readily acc essible amortizati

on schedule fr

om an amortizati

on calculat

or located at http://www.townandco untryfinance.com/amort.htm and used the number of months of

the contract, 120, at 12% intere

st for a loan amount of $15,000 . Those facts produce a monthly payment of $215.22, and the contract her

ein provi

ded for monthly payments of $215.21
11 the monthly payment amount of $215.21, a figure she asserts would be greater than the total amount of the policy

proceeds. Howe

ver, the contrac

t states, “In the event that the BUYERS wish to pay the entire indebtedness off early they ma y doso depending uponLakeside Employees Credit Union.” Although we are not cert ain what the last c

lause was intende

d to mean, it is clear that the parties anticipatedthat Buyer could pay off the loan prior to its ten yea r ex piration. Although Seller was entitled to the benefit of the bargain she made, selling the property for $4,000 more than she paid or financed to buy it and receiving 12% interest as long as the balance of the loan was unpaid, she was not entitled to 12% in

terest bey ond the date Buy

er paid the princ

ipal indebtedness

. The parties did not specify how the payoff amount would be co m puted, and resort to an amortization table is the usual and accepted method of making such a determination. However, the table use d by the trial court was based on a principal amount and duration that do not match the terms stated in the contract between the parties. Therefore, we find that this amort

ization schedule is irrelevant to calculation of the payoff amount in this case.

There is no evidence in

the record of an amortization schedule for $15,000 for 120 months at 12% interest. Ho wever, we are able to take judicial notice under Tenn. R. Evid. 201 of an amortization schedule based o n these terms. Rule 201 states “[a] judicially noticed fact must be one
no tsubject to reasonable dispute, in that it is either (1) generally known within the territoria l jurisdiction of the trial court or (2) capable of accurate and ready determination by resort

to sources whose accuracy cannot be reasonably questioned.” “While a court can take judicial notice of a mathematical computation that is understandable to a layman . . . i t cannot judi cially notice a complex mathematical formula .

. . in the absence of ‘sources whose accuracy cannot reasonably be questioned.’” Corbett v. Corbett , No. 03A01-9601-CH-00008, 1996 WL 480741 at *4 (Tenn. Ct. App. Aug. 26, 1996) (no Tenn. R. App. P. 11 application filed) (quoting Tenn. R. Evid. 201(b)). The standardand readily available and accepted mathematical c alculation of an amortization sched ule may be judicially noticed. Therefore, we will us e an amortization schedule for $15,000 at 12% interest to be paid

in 120 months. 6

The sales contract c

alled for 120 month

ly payments of $215.21. The first payment was made in August 1988, and the monthly payments were curr ent as of September 1995. By our calculations, that equates to 86 payme nts having been made by Buy er prior to the fire. Therefore, only 34 payments,

of the 120 contemplated

by the contract, remained. Using the appropriate amor tization schedule, after

86 payments

are made, the remaining balance of the loan is $6,175.16. This is the amount Buyer owed Seller for

the property

at the time of the f

ire and isthe amount properly credited to Buyer’s principal balance from the insurance pr oceeds and awarded to Seller.12

We a gree that the amount of delinquent payments due from Buye r to reimburse Seller for taxes and insurance premiums ($810) should also be deducted from the insurance

proceeds, along withthe costs of cleaning up the property ($2,500). Deducting, from the $11,000 of insurance proceeds,the $6,175.16 for re maining payments under the contract, $810 for owed taxes and insurance premiums and $2,50 0 for cle an-up costs , the remainder f rom the policy

proceeds is $1,5 14 .84. Because the Se ller was paid the i

nsurance proce

eds in this case, a

judgment should accordingly be entered aga inst Seller for the remaining proceeds of $1,514.84.

V.

For the reasons stated herein, we affirm the order and judgment of the trial court that the title to the property at issue shall be vested with Buy er. However, we modify the amount of damages awarded and order that Seller pay to Buy er $1,514.84. Further, the costs of this ap peal are taxed to the app ell ee, M s. C ole man , fo r wh ich exe cut ion may i ssu e, i f nec ess ary.

___________________________________ PATRICIA J. COTTRELL, JUDGE