Court Opinion

ID: 9647048
Source: CourtListenerOpinion
Date Created: 2023-08-23 13:22:08.269445+00
Date Added: 2024-06-11T18:11:45.003735
License: Public Domain

WINTERSHEIMER, Justice,
dissenting.
I respectfully dissent from the majority opinion because I do not believe the subordination agreement requires the interpretation placed on it by the majority and the doctrine of equitable subrogation is not applicable. If this case is to be reversed and remanded, I believe that the most that should be required is a vacation of the summary judgment and a remand for a determination of the allegedly ambiguous phrase.
The subordination agreement does not make any provision about the application of payments. There is no reference to any preexisting indebtedness, nor a limitation on the total indebtedness. The existing law expressed in Martuscelli v. Planters Bank & Trust Co., Ky.App., 705 S.W.2d 938 (1986) is at variance with the conclusion reached by the majority opinion. There is no clear evidence of fraud or overreaching, and there is no basis to insert into the agreement conditions which could have been stated in the original agreement.
Equitable subrogation has been limited to situations where it is necessary to avoid unjust enrichment. See United Pacific Ins. Co. v. First National Bank, Ky., 457 S.W.2d 833 (1970). Reliance on McNeely, supra, is inappropriate because there was no assignment of the first mortgage, nor any agreement by the second mortgagee to subordinate his security. It is not the function of this Court to change obligations of contract which the parties have made, nor to add a condition which was not written into the original contract. White v. Winchester Land Development Corp., Ky. App., 584 S.W.2d 56 (1979).
I believe the circuit judge and the Court of Appeals have correctly analyzed the language of the subordination agreement, and I would not disturb their decision.