Court Opinion

ID: 9617395
Source: CourtListenerOpinion
Date Created: 2023-08-22 04:54:49.133677+00
Date Added: 2024-06-11T18:04:08.957544
License: Public Domain

*649Beasley, Judge,
concurring specially.
I cannot concur in that portion of the opinion related to the theoretical viability of an unjust enrichment claim.
As shown by the complaint as amended, the theory of the Palmers’ suit is that they are entitled to the insurance proceeds which the mortgagee1 scheduled in the policy received from the insurance company from which the Palmers purchased the policy.
The policy includes the New York standard Mortgage Clause which is quoted in pertinent part in the majority opinion. Certain provisos follow, such as that the premium must be kept up, notice of hazard changes must be given, and the. insurer has the right of subrogation to claims of the mortgagee against the mortgagor or owner to the extent of payment to the mortgagee.
The mortgagee’s interest must be determined as of the date of the loss, August 4, 1985. Pacific Ins. Co. v. R. L. Kimsey Cotton Co., 114 Ga. App. 411, 416 (3) (151 SE2d 541) (1966). At that time, the mortgagee was entitled to the proceeds ultimately paid because the value of the lender’s security had been diminished due to fire, a covered peril.
This entitlement was not waived or forfeited by later foreclosing on the security (the entire property, not just the buildings) when the borrowers defaulted in payments on the debt. The deed to secure debt, containing the provision quoted in the majority opinion, constituted a contract between the parties to this case and governs the entitlements of each.
Thus, according to their agreement, the passage of the insurance proceeds was already in contemplation of the parties, at foreclosure, as the fire had already occurred. That provision was part of the security required by the lender for its loan. Calvert Fire Ins. Co. v. Environs Dev. Co., 601 F2d 851, 855 (5th Cir. 1979), alludes to this when it says that “[lender’s] status as loss-payee gives it no less a separate contractual remedy than would an additional security deed on other property.”
By the plaintiffs’ own hand, they agreed that the lender’s right to the insurance proceeds would remain after foreclosure, at least in the amount of the debt existing before foreclosure. That amount being $46,022.46, and the insurance proceeds being $24,031.07, plaintiffs’ claim fails as a matter of law.
Although the foreclosure extinguished the debt for which the property in its undamaged state was security in the first place, paying it off with the loan association’s funds, the acquisition of the property *650in its damaged state carried to the lender as purchaser the right to the insurance proceeds because of the provision in the security deed. Acquisition by the lender did not extinguish its right to the insurance proceeds but rather preserved it. This was foreclosure by sale and not strict foreclosure. That is, transfer of the property itself did not extinguish the debt, because the property was paid for by the purchaser. The damaged condition of the property diminished its value and had no effect on or relationship to the amount of the debt, which stayed the same, and that is precisely what the lender sought to protect itself against by the provision in the security deed.
Decided October 25, 1988 —
Rehearing denied December 15, 1988
Frank C. Vann, for appellants.
Kirbo & Bridges, Bruce W. Kirbo, Randall E. Chew, for appellee.
Although it is not relevant to its right to the insurance proceeds, the loss payee demonstrated that this contractual arrangement did not result in unjust enrichment or “double payment.” It showed that it had to expend not only the insurance proceeds but more to sell the property in an effort to recoup the funds it had paid out to extinguish the loan debt, resulting in a net loss. So as it turned out, the amount of the debt, which was the price paid for the property at foreclosure, was higher than the restored value of the property. This, of course, would not occur if someone other than the lender acquired the property at the foreclosure, and that is why the security deed limits the lender/forecloser’s right to pre-foreclosure insurance proceeds to instances in which the lender is the purchaser.
The policy, which is a contract between plaintiffs here and their insurance company, and the security deed, which is a contract between plaintiffs and their lender, are in tandem. In both contracts, the plaintiffs agreed that the lender would be entitled to the insurance proceeds even if it acquired the property by purchase at foreclosure after the peril occurred.

 Not a true mortgagee, because the deed to secure debt expressly stated the conveyance was a deed passing title and not a mortgage, but the insurance policy refers to the lender as mortgagee or trustee.