Chemical Residential vs. Donna Hodge

This case involves the negligent impairment of a security interest. Plaintiff Chemical Residential Mortgage Corporation held a note and deed of trust on the subject real property. Subsequently, defendant Commercial Credit, Inc., negligently executed and filed a release deed on the property. Later, defendant Southern Financial made a second loan to the debtor secured by the same property. After Chemical Residential realized that its deed had been released in error, it brought the instant declaratory judgment action against Southern Financial and Commercial Credit, seeking a declaration that its deed was senior to that of Southern Financial. Southern Financial filed a cross-claim against Commercial Credit for the impairment of its security interest. The trial court found in favor of Chemical Residential and Southern Financial against Commercial Credit, and held that Chemical Residential's deed was senior to that of Southern Financial. On the cross-claim, the trial court awarded Southern Financial damages against Commercial Credit in an amount equal to the total amount due on the secured note. Commercial Credit now appeals, arguing, inter alia, that the trial court's measure of damages was erroneous. We reverse on the issue of damages and remand for a redetermination of those damages.