7 F.3d 1006 (11th Cir. 1993), 91-3924, Resolution Trust Corp. v. Dunmar Corp.

Docket Nº:91-3924.
Citation:7 F.3d 1006
Party Name:RESOLUTION TRUST CORP., Plaintiff, v. DUNMAR CORP. and MICHAEL D. JONES, Defendants-Counterclaim Plaintiffs, THE FIRST F.A., Defendant-Counterclaim Defendant, SHERMAN DANTZLER and JACK SHIREK, Defendants, and THE FIRST F.A. OF ORLANDO and RESOLUTION TRUST CORP., Counter-Defendants. Michael D. JONES, Robert S. Guskiewicz, R.S. Futch, Jr., Plaintiffs
Case Date:November 23, 1993
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit

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7 F.3d 1006 (11th Cir. 1993)



DUNMAR CORP. and MICHAEL D. JONES, Defendants-Counterclaim Plaintiffs,

THE FIRST F.A., Defendant-Counterclaim Defendant,





Michael D. JONES, Robert S. Guskiewicz, R.S. Futch, Jr.,



RESOLUTION TRUST CORP., Defendant-Third Party Plaintiff-Appellee,

Philip Donlevy, William Crawford, Robert Stone, Defendants,



Orlando, Third Party Defendants.

RESOLUTION TRUST CORP., Plaintiff-Counter-Defendant-Appellee,


LAKE PICKETT, LTD., a Florida Limited Partnership; Michael

D. Jones, as general partner, d/b/a Lake Pickett, Ltd., a

Florida Limited Partnership; Michael D. Jones, individually

and as Trustee, Defendants-Counter-Plaintiffs-Appellants,

The First F.A. of Orlando, Defendant.

No. 91-3924.

United States Court of Appeals, Eleventh Circuit

November 23, 1993

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[Copyrighted Material Omitted]

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Brenda Lee London, Robert D. Gatton, Broad and Cassel, Maitland, FL, for appellants.

E. Givens Goodspeed, Giles, Hedrick & Robinson, P.A., Orlando, FL, Kirk K. Van Tine, Baker & Botts, Washington, DC, for appellees.

Appeal from the United States District Court for the Middle District of Florida.

Before FAY and ANDERSON, Circuit Judges, and RONEY, Senior Circuit Judge.

FAY, Circuit Judge:

The appellants, Michael D. Jones, et. al. appeal summary judgment rendered by the district court in favor of the Resolution Trust Corporation ("RTC") in two cases which were consolidated for appeal. The district court held that all of Jones' claims were precluded by the D'Oench, Duhme doctrine and 12 U.S.C. § 1823(e). Because we find the D'Oench, Duhme doctrine does not apply to the majority of Jones' claims 1 against the RTC as Receiver, we REVERSE the district court's grant of summary judgment with respect to those claims. We AFFIRM the district court's order granting summary judgment to the RTC in its corporate capacity, albeit on different grounds.

Standard of Review

Grants of summary judgment are subject to de novo review and this Court applies the "same legal standards that control[led] the district court's determination...." First National Life Ins. Co. v. California Pacific Life Ins. Co., 876 F.2d 877, 881 (11th Cir.1989). Although review of a summary judgment usually focuses on whether there are disputed issues of material fact, 2 in this case the district court ruled as a matter of law that Jones' claims were barred. Therefore, our review is more akin to the review of a dismissal for failure to state a cause of action or a judgment on the pleadings, 3 because the dispute is whether there can be any right to assert the claim in the first instance. Given this posture, we must assume that the material allegations of the complaint are true and construe all inferences arising therefrom in Jones' favor. Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 2206, 45 L.Ed.2d 343 (1974). See also Oladeinde v. City of Birmingham, 963 F.2d 1481, 1485 (11th Cir.1992) (on motion to dismiss for failure to state a cause of action court must "take as true" "all well pleaded" facts alleged in a complaint).


The issue in this case is whether a borrower of a failed financial institution may ever have a valid claim, which involves his loans, against the institution once it is in the hands of the federal regulators. Jones claims he was injured by the tortious conduct of the now defunct bank's employees with regard to two proposals to purchase properties the bank held as security for two of his loans--conduct he claims caused the proposals to fall through and led to his losses. Moreover, he attempts to hold the RTC responsible for this allegedly tortious conduct on the part of the bank's employees because he asserts that the regulators were, in effect, controlling the institution during the relevant period. Stated another way, he attempts to apply principles of agency law to hold the federal regulators vicariously liable for the allegedly tortious conduct of the bank's employees.

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These claims are asserted against the RTC in both of its capacities.

In response, the RTC in its corporate capacity, as holder of Jones' notes, seeks to foreclose on the subject properties and asserts that Jones' claims are barred by the D'Oench Duhme doctrine and 12 U.S.C. § 1823(e). Both the doctrine and the statute prohibit a party from bringing claims, or raising defenses, which arise out of secret, unrecorded or oral agreements. The RTC argues that, not only do these laws bar Jones' claims as defenses to its foreclosure action, it also argues that D'Oench and § 1823(e) prevent Jones from bringing these claims against the RTC as receiver for New Freedom. The question is whether tort claims, which do not challenge the validity of an obligation, are barred by either the doctrine or the statute which address "agreements."



Michael Jones was a borrower of the twice defunct Freedom Savings & Loan Association. His relationship with the bank began in 1978 with the institution then known as ComBank, which was later acquired by, or merged with, Freedom. Exhibit Vol. R1-51-18-19. (Deposition of Michael D. Jones). Over the years Jones obtained several personal and business loans from Freedom, two of which are involved in the instant case. 4 The first loan was secured by a mortgage on a residential real estate development known as Pickett Downs ("Lake Pickett"). Id. at 31-33. The collateral for the second loan consisted of property which Jones and his partners apparently intended to develop as a "fly-in" residential community with an airstrip ("Airport Property"). Id. at 85-88.

On July 23, 1987, over a year after the last of these loans was made, the Federal Home Loan Bank Board ("FHLBB") declared Freedom insolvent and appointed the Federal Savings & Loan Insurance Corporation ("FSLIC") as Receiver for what will henceforth be referred to as "Old Freedom." 5 The FHLBB simultaneously chartered a new federal savings and loan institution with the same name as the old one, which, for purposes of distinguishing the two, shall be referred to as "New Freedom." The FSLIC then transferred some of the assets of Old Freedom, including the loans at issue, to New Freedom under an acquisition agreement. At the same time, FSLIC, through New Freedom, contracted with The First, F.A. of Orlando ("The First"), another financial institution in the area, 6 to provide management services to New Freedom. Pursuant to this management agreement, Jack Shirek, Executive Vice President and Chief Operating Officer of The First, was made President of New Freedom. The FSLIC also agreed to indemnify The First against various potential liabilities that might arise in discharging the contract. In addition, FSLIC removed the board of directors of New Freedom and replaced them with its own candidates. From this point forward New Freedom was ostensibly a new, independent institution. However, it continued to operate under extremely close supervisory control from FSLIC and the FHLBB. In particular, New Freedom could not extend or renew loans in excess of two million dollars without the approval of the regulatory authorities in Atlanta. Moreover, a representative of the regulators attended the board

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meetings, to observe, if not to advise, the board on its decisions. 7

The Deals

Some time after the creation of New Freedom, between February and May of 1988, Jones and his partners were approached with offers to purchase the Lake Pickett and Airport properties. It is the bank's alleged mishandling and malfeasance with respect to the subsequent negotiations regarding these offers to purchase that form the basis of Jones' claims.

The Lake Pickett Property

In February of 1988, Jones says he was approached by a group of builders interested in buying the Lake Pickett property. According to Jones, he discussed the purchase with Steve Chitwood, a broker representing some of the other builders of the Pickett Downs project, and Terry Hagen, a builder who owned several lots in Phase IV of the development. Jones alleges he reached a tentative agreement with Hagen and Chitwood that the buyers could have the property for $150,000 plus assumption of the mortgage held by New Freedom. The mortgage balance at that time was approximately $850,000. After this agreement was reached, Hagen and Chitwood went to New Freedom to verify the bank would permit an assumption. They met with Robert Stone, one of the defendants in this suit, who was then an officer of New Freedom.

Jones claims that at this meeting Stone told the prospective purchasers that Jones was about to go into default on some other loans, in which case all of Jones' loans would be declared in default because they were cross-collateralized. He further claims that Stone told Hagen and Chitwood that the bank would be willing to sell the property for a discounted price of $640,000. 8 Jones asserts that New Freedom's offer to sell the property at a discount, along with the information concerning the status of his other loans (which he says was erroneous) caused the proposed sale to fall through. He claims the buyers backed out because they now believed they could save approximately two hundred thousand dollars by simply waiting until New Freedom foreclosed and then purchasing the property at a lower price.

The Airport Property

In April of 1988 the Euro-American Investor Group ("Investor Group") expressed an interest to Jones and his partners in purchasing the Airport Property...

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