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                                                              [DO NOT PUBLISH]



                IN THE UNITED STATES COURT OF APPEALS

                           FOR THE ELEVENTH CIRCUIT
                             ________________________

                                   No. 18-10174
                             ________________________

                           D.C. Docket No. 1:16-cv-23520-UU


LARISSA PATEL,

                                                     Plaintiff – Counter Defendant –
                                                     Cross Claimant – Cross
                                                     Defendant – Appellant,

versus

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
a New Jersey corporation, et al.,

                                                     Defendants – Third Party
                                                     Plaintiffs – Counter Claimants,


SIMMONS BANK,
f.k.a. First State Bank,

                                                     Third Party Defendant –
                                                     Cross Defendant – Appellee,

SIMMONS BANK,
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                                                      Third Party Defendant – Cross
                                                      Defendant – Cross Claimant –
                                                      Appellee.

                            ________________________

                     Appeal from the United States District Court
                         for the Southern District of Florida
                           ________________________

                                (December 18, 2018)

Before ED CARNES, Chief Judge, ROSENBAUM, and DUBINA, Circuit Judges.

PER CURIAM:

       This is an appeal from the district court’s order granting summary judgment

to the Appellee, Simmons Bank, and against the Appellant, Larissa Patel

(“Larissa” or “Plaintiff”). As found by the district court, the facts in this case are

undisputed; thus, we decide only questions of law. After having the benefit of oral

argument, reading the parties’ briefs, and reviewing the record, we affirm the

district court’s order.

                                I.     BACKGROUND

       In March 2003, Plaintiff’s father, Bansidhar Kalidas Patel (“Mr. Patel”),

purchased a $1,000,000 life insurance policy (“the Policy”) from Pruco Life

Insurance Company (“Pruco”). The Policy named Plaintiff as sole beneficiary, and

it included two provisions permitting Mr. Patel to change the designated

beneficiaries or assign the policy.
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      Mr. Patel was the Member/Manager of the Aiken Hospitality Group, LLC

(“AHG”). In July 2014, on behalf of AHG, Mr. Patel entered into a loan

agreement with First State Bank of Tennessee for a secured $3,995,000 loan,

which he personally guaranteed. The loan agreement lists as “Collateral” a

mortgage and an assignment of the Policy, among other items. Simultaneous with

signing the loan agreement, Mr. Patel signed a mortgage in favor of First State

Bank. Two months later, Mr. Patel executed a collateral assignment of the Policy

in favor of First State Bank (the “Assignment Agreement”). The Assignment

Agreement gave First State Bank “the right to receive any Death Benefit as its . . .

interest may appear.” (R. Doc. 59, Ex. D, p. 64.) Toward the end of September

2014, Simmons Bank acquired First State Bank, thereby acquiring the loan and

First State Bank’s assignment rights. Simmons and AHG then executed a Change

in Terms Agreement related to the loan that provides that the death of any member

of AHG (that is, Mr. Patel) constitutes an “Event of Default,” upon which the

lender may declare the entire principal balance and accrued interest under the

agreement immediately due. “[I]n addition to its option to declare the entire

unpaid amount of the Note due and payable,” the Bank could choose to “[a]pply

the proceeds from any disposition of the Collateral to the satisfaction” of “[t]he




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unpaid amount of any interest due on the Note” or “[t]he unpaid principal amounts

of the Note.” (Id. at pp. 41–42.)

      On June 5, 2016, Mr. Patel died intestate while the Policy was still in effect.

On August 12, Simmons Bank submitted a claim to Pruco for the Policy’s full

Death Benefit, but Plaintiff demanded that Pruco pay the full Death Benefit to her

instead. Subsequently, Plaintiff filed a civil action in Florida district court against

Prudential Life Insurance Company (“Prudential”) to recover the Death Benefit.

Prudential filed an answer and asserted a third-party complaint against Simmons

Bank. Later, the parties entered into a written stipulation for the substitution of

Pruco in place of Prudential because the Policy had been issued by Pruco. The

district court granted the joint stipulation, substituted Pruco as the proper

defendant, and dismissed Prudential from the case.

      On September 23, 2016, Simmons Bank filed suit against Pruco in the

Eastern District of Tennessee. The parties to the case in the Southern District of

Florida filed a joint motion for entry of an agreed order of interpleader that

preliminarily and permanently enjoined Simmons Bank from prosecuting the

Tennessee state court action. The district court granted the joint motion and

ordered Pruco to deposit the full Death Benefit in the court’s registry. After the




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district court received notification of the deposit of the Death Benefit, it dismissed

with prejudice Pruco from this action.

       Interestingly, in March 2017, the parties reached a settlement in this case

that provided that the Death Benefit would be split $400,000 to Plaintiff and

$600,000 to Simmons Bank. The settlement was subject to approval by the Small

Business Administration, which refused to approve any settlement that gave

Simmons Bank less than the full Death Benefit amount. Accordingly, the

settlement collapsed, the district court reopened the case, and the parties filed

cross-motions for summary judgment. After the district court granted summary

judgment in favor of Simmons Bank, Plaintiff perfected this appeal.1

                                            II. ISSUES

       The district court defined the legal issues in this case as follows:

       (1) Does Tennessee Code Annotated § 56-7-204, which governs

           assignments of life insurance policies, require payment of the full Death

           Benefit to Simmons Bank?

       (2) If Simmons Bank is entitled to the full Death Benefit under Tennessee

           law, is Plaintiff equitably subrogated to Simmons Bank’s secured



       1
        At the time we heard oral argument in this case, the loan was not in default; Simmons
Bank had not instituted a foreclosure action against AHG; and there was currently a balance due
and owing on the loan.
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         position under Tennessee or South Carolina law, thereby becoming a co-

         mortgagee and secured creditor with Simmons Bank against AHG?

                             III.   STANDARD OF REVIEW

      We review a district court’s order granting summary judgment de novo. See

Am. Gen. Life Ins. Co. v. Schoenthal Family, LLC, 555 F.3d 1331, 1337 (11th Cir.

2009). We also review de novo questions of law. See Muratore v. United States

Office of Personnel Mgmt., 222 F.3d 918, 920 (11th Cir. 2000).

                                      IV.       ANALYSIS

                      A. Assignment of Life Insurance Policy

      In her cross-claim against Simmons Bank, Plaintiff concedes that her count

for recovery of the Death Benefit is governed by the substantive law of the State of

Tennessee. (R. Doc. 49, ¶ 14; Doc. 54, p. 5; Doc. 60.) Thus, as did the district

court, we apply Tennessee law. Tennessee Code Annotated § 56-7-204 governs

the assignment of life insurance policies as security for loans. TENN. CODE ANN. §

56-7-204 (2008). It states in relevant part:

               (a) Whenever the insured in a life insurance policy owned by the
                   insured has reserved to the insured the right to change the
                   beneficiary under the policy, the insured has the right to and
                   may assign the policy, to the extent and in the manner permitted
                   by the terms of the policy, as security for a loan, or for any other
                   purpose, without the beneficiary joining in the assignment or
                   assenting to the assignment, and the rights and interests of the
                   beneficiary, including a spouse or child of the insured, in the
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                   policy or its proceeds, shall be subject and subordinate to the
                   rights and interests of the assignee as created and defined by the
                   assignment.

                                         ***

             (b)(2) Any assignment permitted in this section, whether made before
                 or after May 7, 1969, is valid for the purpose of vesting in the
                 assignee all the rights and benefits assigned, and shall entitle the
                 insurer to deal with the assignee as the owner of all rights and
                 benefits conferred on the insured under the policy, in accordance
                 with the terms of the assignment without prejudice to the insurer
                 on account of any payment it may make or any individual policy it
                 may issue arising from conversion prior to receipt at its home
                 office of notice of the assignment.

             (b)(3) This section acknowledges, declares and codifies the existing
                right of assignment of interests under life insurance policies.

Id. § 56-7-204(a), (b)(2) & (b)(3).

      Simmons Bank argues that, pursuant to this statute and the terms of the

Assignment Agreement, it became entitled to the full amount of the Death Benefit

upon Mr. Patel’s death. Plaintiff argues that, pursuant to several Tennessee

judicial opinions (most issued prior to the enactment of § 56-7-204), Simmons

Bank was required to declare that AHG was in default on the loan before it could

recover the Death Benefit, and because Simmons Bank has not declared AHG in

default, it is not entitled to the Death Benefit. Although no Tennessee court has

interpreted this particular statute, we find guidance in Tennessee law on how to

interpret statutes. In construing the applicable provisions of a statute, we construe
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unambiguous statutes “to mean what they say.” State ex rel Earhart v. City of

Bristol, 970 S.W. 2d 948, 951 (Tenn. 1998) (citing Montgomery v. Hoskins, 432

S.W. 2d 654, 655 (1968)). We must also “ascertain and give effect to the

legislative intent and the ordinary meaning of the language of the statutes.” Id.

Statutes are to be construed strictly, but not so strictly that the legislative intent is

annulled. State v. Netto, 486 S.W. 2d 725, 728 (Tenn. 1972).

       We conclude that this statute is unambiguous and construe its meaning

plainly. Hence, we highlight three clear meanings from the statute:

              (1) An insured may assign a policy, without the assent of the
                  beneficiary, in any manner provided by the terms of the policy
                  (subsection (a));

              (2) The beneficiary’s rights and interests are thereby subordinated to
                  the rights and interests of the assignee (subsection (a)); and

              (3) The assignee is vested with all rights and benefits assigned, and the
                  insurer may deal with the assignee as the owner of all such rights
                  and benefits (subsection (b)(2)).

Applying the plain meaning of the statute to the Policy, we conclude that it

supports Simmons Bank’s position. The record clearly demonstrates that Mr. Patel

assigned the Policy to First State Bank, and such assignment was permitted. As

the beneficiary of the Policy, Plaintiff’s rights and interests were thereby

subordinated to First State Bank’s rights and interests. The Assignment

Agreement conferred on First State Bank the right to receive any Death Benefit. A
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natural reading and straightforward application of the statute, therefore, yields the

result that Simmons Bank, as First State Bank’s predecessor in interest, is entitled

to receive the Death Benefit.

      We reject Plaintiff’s contention that Simmons Bank has to first declare that

AHG defaulted on the loan before Simmons Bank can recover the Death Benefit

proceeds. Plaintiff relies primarily on Third National Bank v. Hall, 209 S.W.2d 46

(Tenn. Ct. App. 1947), to support its contention. Third National Bank was decided

fourteen years prior to the enactment of the statute at issue. Additionally, the case

does not establish any requirement that a creditor declare default before it is

entitled to the proceeds on an assigned life insurance policy. Thus, we agree with

the district court that neither Third National Bank, nor any other case cited by the

Plaintiff, supports its argument that Simmons Bank must declare AHG in default

before it can obtain the Death Benefit. Accordingly, we conclude that the district

court correctly determined that Simmons Bank is entitled to the Death Benefit

proceeds from the Policy.

                            B. Equitable Subrogation Claim

     Plaintiff asserts an equitable subrogation claim in a cross-claim against

Simmons Bank. Specifically, she argues that if we decide Simmons Bank is entitled

to the full Death Benefit, then she is subrogated in the amount of the Death Benefit


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to Simmons Bank’s secured position, thereby becoming a co-mortgagee and a co-

secured creditor. According to the Plaintiff, she would become approximately a 25%

owner of AHG’s loan.

         Plaintiff assumes without explanation that South Carolina law applies.

Simmons Bank responds that the parties stipulated that Tennessee law governs this

entire action. While the record does demonstrate that the parties stipulated that

Tennessee law governs the first issue in this case, the record does not clearly reveal

any agreement as to choice of law concerning the equitable subrogation issue. See

Doc. 80, Plaintiff’s Third Motion for Summary Judgment (asserting for first time

that South Carolina law applies to the subrogation claim). Regardless of which state

law applies, we conclude Plaintiff cannot succeed on her equitable subrogation

claim.

         Both Tennessee and South Carolina law generally recognize a cause of

action for equitable subrogation. See generally Bankers Trust Co. v. Collins, 124

S.W.3d 576, 579 (Tenn. 2003) (subrogation is a “creature of equity”); Blankenship

v. Estate of Bain, 5 S.W.3d 647, 650 (Tenn. 1999) (subrogation allows an insurer

to assert the rights the insured had against a third party); Shumpert v. Time Ins. Co.,

496 S.E.2d 653, 656 (S.C. Ct. App. 1998) (the elements of the doctrine of equitable

subrogation are that the party claiming subrogation has paid the debt; the party had


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a direct interest in the discharge of the debt or lien; the party was secondarily liable

for the debt or for the discharge of the lien; and no injustice will be done to the

other party by the allowance of the equity). “Subrogation may be broadly defined

as the substitution of one person in place of another with reference to a lawful

claim or right.” Shumpert, 496 S.E.2d at 656 (quoting 73 Am.Jur.2d Subrogation §

1 (1974)). “Subrogation is defined as ‘the substitution of another person in the

place of a creditor, so that the person in whose favor it is exercised succeeds to the

rights of the creditor in relation to the debt.’” Bankers Trust, 124 S.W.3d at 579

(quoting Blankenship, 5 S.W.3d at 650).

      The purpose behind the doctrine of equitable subrogation is to make a party

who paid the debt whole and ensure that another party does not obtain a double

recovery or windfall. “The rationale to employ equitable subrogation is to prevent

unjust enrichment.” Bankers Trust, 124 S.W.3d at 580. In the context of a life

insurance policy used as a security for a loan, the right of subrogation depends on

the insured’s intent. Falk v. Vreeland Trading Corp., 325 S.E.2d 333, 335 (S.C.

Ct. App. 1985). If it appears that the insured intended the policy to be used as the

primary fund to pay off the debt, then the beneficiary is not entitled to subrogation.

Id. We conclude the same is true under Tennessee law, though no case expressly

so holds. The “lack of explicit [Tennessee] case law on an issue does not absolve


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us of our duty to decide what the state courts would hold if faced with it.”

Guideone Elite Ins. Co. v. Old Cutler Presbyterian Church, Inc., 420 F.3d 1317,

1326 n.5 (11th Cir. 2005). Instead, we must “predict” how “the highest court [of

Tennessee] would decide this case.” Turner v. Wells, 879 F.3d 1254, 1262 (11th

Cir. 2018) (citing Guideone, 420 F.3d at 1326 n.5). And since every other

jurisdiction to have addressed the issue asks whether the insured intended the

beneficiary of a policy to be equitably subrogated to the assignee’s interest in these

circumstances, we conclude Tennessee surely would as well.

      The cases Plaintiff relies on to support her equitable subrogation claim are

all distinguishable. In each of the cases cited by Plaintiff, the court had before it

evidence that the decedent intended for the beneficiary to receive the death benefits

irrespective of the assignment of policy proceeds. No such evidence exists in the

record here. In fact, the only evidence in the record here shows that Mr. Patel

assigned the life insurance policy to First State Bank as collateral for AHG’s loan.

Pursuant to the Assignment Agreement, First State Bank “will have the right to

receive any Death Benefit as its . . . interest may appear.” (R. Doc. 59, Ex. D, p.

64.) There is simply no evidence in the record tending to show that Mr. Patel

nonetheless intended Plaintiff to receive the Death Benefit proceeds. Accordingly,

we hold Plaintiff is not entitled to equitable subrogation.


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      This is indeed a sad and unfortunate case for the Plaintiff. Nevertheless, our

review of the record persuades us that Mr. Patel’s intent was crystal clear that the

bank was entitled to receive the Death Benefit proceeds. Accordingly, for the

foregoing reasons, we affirm the district court’s order granting summary judgment

for Simmons Bank.

      AFFIRMED.




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