Track Mortgage Group, Inc. v. Crusader Insurance

Opinion

GILBERT, P. J.

A lender holds a first deed of trust. The property suffers severe damage. The lender is named a loss payee on the debtor’s property insurance policy. After the debtor defaults on its loan, the lender forecloses on the property and thereafter prevails in its action for breach of contract and bad faith against the insurance company.

The lender’s contract damages are limited to the difference between the amount secured by the deed of trust and the amount of the lender’s credit bid at the foreclosure sale (the credit bid rule). Here we hold the lender’s tort damages are also…