Court Opinion

ID: 9490085
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:32:23.752249+00
Date Added: 2024-06-11T17:53:53.389565
License: Public Domain

CONTIE, Circuit Judge,
dissenting.
The majority concludes that Lee is entitled to collect $75,284.65 from the insurer, Royal Indemnity. Because Lee’s $75,284.65 mortgage debt was inadvertently extinguished by *658National Mortgage, Lee’s recovery of the insurance proceeds will result in a double recovery and Lee’s unjust enrichment.
In Benton Banking Co. v. Tennessee Farmers Mut. Ins. Co., 906 S.W.2d 436 (Tenn.1995), the Tennessee Supreme Court held that “the rights of a loss payable mortgagee are determined at the time of the loss.” Id. at 438 (emphasis added) (citation omitted). In this action, National Mortgage suffered the $75,284.65 loss because it held an insured interest in Lee’s property to the extent of Lee’s outstanding debt. Accordingly, National Mortgage was entitled to recover the loss from Royal Indemnity at the time of the loss. Though National Mortgage subsequently lost its right to the insurance proceeds when it mistakenly bid the property in for the full amount of the debt, National Mortgage undeniably suffered the loss in this action. Accordingly, Lee is not entitled to the insurance money.
Simply stated, Lee is now $75,284.65 wealthier than he would have been if his house hadn’t burned down because the majority transformed his $75,284.65 debt into a $75,284.65 windfall. Because Tennessee law does not support this outcome, I would AFFIRM the district court.