Universal Mortgage Co., Inc. v. Prudential Insurance Company, and Does I Through Xx, Inclusive

Universal Mortgage Company (Universal) appeals the district court’s denial of leave to amend its complaint and the award of summary judgment in favor of Prudential Insurance Company (Prudential). Universal contends that Prudential unlawfully failed to pay insurance benefits under a policy in which Universal was named loss payee. Because Universal’s debt was extinguished when upon foreclosure it bid the full amount due, we affirm.

FACTS

On June 26, 1981, Ernest DaRoza executed a deed of trust on residential property. The deed of trust secured a loan made by Universal to DaRoza for $76,000. Prudential issued a fire and casualty insurance policy covering the property at issue and naming Universal as beneficiary under a “lender’s loss payable endorsement.” Prudential agreed to pay any covered losses under the policy directly to Universal.

DaRoza defaulted on the loan and on September 9, 1982, the trustee issued a Notice of Trustee’s Sale. Universal sent its agent, Ricky Patton, to post a notice of the trustee’s sale on the property and to inspect the property for damage. The deed of trust provided that the mortgagee has a right of entry in the event that DaRoza failed to make his…