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No Insurable Interest - No Right to Insurance Proceeds\\n\\nThomas Spoon and Maria Spoon appealed from the Pulaski County Circuit \\nCourt order granting summary judgment in favor of appellees Chester Lee \\nBolds and Linda Bolds in the Boldses\' civil suit for damages related to \\ninsurance proceeds.\\n\\nFACTS\\n\\nIn Thomas Spoon And Maria Spoon v. Chester Lee Bolds And Linda Bolds, \\n2023 Ark.App. 244, No. CV-22-277, Court of Appeals of Arkansas, Division\\n II (April 26, 2023) The Boldses purchased the Spoons\' house by warranty\\n deed on July 2, 2020. In November 2020, the Boldses filed an insurance \\nclaim because they discovered the roof was leaking. The Boldses\' \\ninsurance coverage would not pay because there was preexisting damage to\\n the roof. The Boldses then filed a claim against the Spoons\' \\nhomeowner\'s insurance. That insurer accepted the claim but paid the \\nmoney in dispute ($5,219.48) to the Spoons. When the Spoons failed to \\nturn the money paid on the insurance claim over to the Boldses, the \\nBoldses filed suit, raising claims of breach of contract, declaratory \\njudgment, and unjust enrichment.\\n\\nThe Boldses then moved for summary judgment because the Spoons\\u2019 had no \\ninsurable interest. The Spoons contended they are entitled to the money \\nbecause they were the owners of the property at the time of loss. They \\nclaim that unjust enrichment cannot equitably apply because the Boldses \\ndid not pay for the insurance policy.\\n\\nThe court\'s order found that any and all interest the Spoons may have \\nhad in the house was terminated and extinguished upon the sale of the \\nhouse to the Boldses, and it ordered the Spoons to reimburse the Boldses\\n for the roof repairs.\\n\\nThe Spoons argued that summary judgment was not proper because the court\\n did not address the issues of privity of contract, standing, statute of\\n frauds, or timing. To support their argument, they contend the general \\nrule is that insurance policies are personal contracts between the \\ninsured and the insurer and that the Boldses were not a party to the \\noriginal contract or privy to it.\\n\\nANALYSIS\\n\\nThe issues of breach of contract, unjust enrichment, and declaratory \\njudgment were briefed to the circuit court. To find unjust enrichment, a\\n party must have received something of value to which he or she is not \\nentitled and which he or she must restore. There must also be some \\noperative act, intent, or situation to make the enrichment unjust and \\ncompensable. One who is free from fault cannot be held to be unjustly \\nenriched merely because he or she has chosen to exercise a legal or \\ncontractual right. Further, if one has money belonging to another, \\nwhich, in equity and good conscience, he ought not to retain, it can be \\nrecovered although there is no privity between the parties.\\n\\nIt was undisputed that the Spoons received the insurance money that was \\ndistributed for repair of the roof of a house in which they no longer \\nhad an interest.\\n\\nUnjust enrichment amounted to an alternative, independent basis for the \\ncircuit court\'s ruling, which has gone unchallenged by the Spoons. \\nAccordingly, the Boldses were entitled to the reimbursement.\\n\\nZALMA OPINION\\n\\nThe insurer erred in paying the Spoons since the had no insurable \\ninterest. The Spoons kept the money to which they were not entitled and \\nowed the Boldses for selling them a house with a leaky roof. The Spoons \\nwere clearly unjustly enriched and owed the Boldses for the cost of \\nfixing their roof. What the court did not consider, because it was not a\\n party, the insurer who paid the Spoons did not owe indemnity to them \\nand paid a claim it did not owe. Since the insurer did not care and the \\nBoldses did care, they were entitled to the funds.\\n\\n(c) 2023 Barry Zalma & ClaimSchool, Inc.

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