892 F.2d 1522 (11th Cir. 1990), 88-5525, Federal Deposit Ins. Corp. v. Marina
|Citation:||892 F.2d 1522|
|Party Name:||FEDERAL DEPOSIT INSURANCE CORPORATION, in its corporate capacity, Plaintiff-Appellee, Cross-Appellant, v. Anthony MARINA, Jorge De La Torriene, Miami Equity Corporation, Cubico, Ltd., Inc. and Ramon Milian Rodriguez, Defendants-Appellants, Cross-Appellees.|
|Case Date:||January 29, 1990|
|Court:||United States Courts of Appeals, Court of Appeals for the Eleventh Circuit|
Jeffrey M. Weissman, Ft. Lauderdale, Fla., for defendants-appellants-cross-appellees.
Patricia H. Thompson, Kimbrell & Hamann, Miami, Fla., for plaintiff-appellee-cross-appellant.
Appeals from the United States District Court for the Southern District of Florida.
Before VANCE [*] and COX, Circuit Judges, and CAMP [**], District Judge.
Defendants Anthony Marina, Jorge De La Torriene, Ramon Rodriguez, Miami Equity Corporation, and Cubico LTD (collectively the Borrowers) appeal a final judgment entered on a jury verdict in favor of the Federal Deposit Insurance Corporation (FDIC). The FDIC cross-appeals the district court's denial of its motion for a directed verdict on an issue decided favorably to the borrowers. For reasons set forth below, we affirm in part and reverse in part.
The facts underlying this case are essentially undisputed. In 1981, the Union Trust Company Bank of Puerto Rico (Union Trust) loaned defendant Miami Equity Corporation (Miami Equity) $214,048.00. Miami Equity in turn executed and delivered to Union Trust two promissory notes evidencing this indebtedness. Shortly thereafter, in substitution of these notes, Miami Equity executed a consolidated mortgage note for this sum. The new note was secured by a second mortgage on property located in Dade County, Florida. Additionally, $200,000.00 of the Miami Equity obligation was personally guaranteed by defendants Cubico, Marina, Torriene, and Rodriguez. The notes provided for an annual interest rate of "pr + 2%"; the parties agree that this was an abbreviation for "prime plus 2%". Approximately two years after execution of the mortgage, Union Trust and Miami Equity executed an agreement releasing the Dade County property from the lien of the mortgage and substituting other realty as collateral.
In 1982, Union Trust loaned Marina $100,000.00 (Marina obligation) and Torriene $100,000.00 (Torriene obligation). Marina and Torriene in turn executed and delivered promissory notes to Union Trust reflecting this indebtedness. Both notes also indicated an annual interest rate of "pr + 2%". The Marina obligation was guaranteed
by defendants Cubico and Torriene, and the Torriene obligation was guaranteed by Marina and Cubico.
In December 1983, the Secretary of the Treasury of Puerto Rico determined that Union Trust was financially unsound. Accordingly, the Secretary closed the bank and tendered to the FDIC the appointment as the bank's receiver, which the FDIC accepted pursuant to 12 U.S.C. § 1821(e). 1 As receiver, the FDIC froze approximately $160,000.00 of Cubico funds deposited with Union Trust on grounds that the above loans were past due. Six months later, these funds were applied to the outstanding principal and interest balances on the obligations, making the interest payments on all three obligations current and reducing the outstanding principal amounts of the Marina and Torriene notes to $36,536.80. The FDIC in its corporate capacity then purchased from the FDIC in its receivership capacity certain assets of Union Trust. Among the assets acquired were the debts of the borrowers as of the date of the bank's closing plus interest and attorneys' fees.
The FDIC in its corporate capacity subsequently filed this suit in the district court against the borrowers to collect these debts. The borrowers asserted that the Secretary failed to comply with Puerto Rican law in closing Union Trust, thus violating the bank's constitutional and statutory rights. The borrowers also interposed several affirmative defenses, including the defense that Cubico's guaranties on the Miami Equity obligation were released pursuant to an accord and satisfaction between Union Trust and Cubico, and the defense that "prime plus 2%" was an ambiguous term because Union Trust never had a discernible "prime rate." 2
The district court granted the FDIC's motion for summary judgment on the illegal takeover defense; the accord and satisfaction and the prime rate issues were submitted to the jury via a special verdict form. The jury found that there was no "accord and satisfaction between the Union Trust Company and the defendants whereby the parties agreed pursuant to the Hypothecation Agreement to release the defendants from their guarantees on the $200,000 Miami Equity Corporation loan." R5-132-1 (quoting the special verdict form). The jury also found that the rate of interest designated on the notes was not tied to the New York prime rate of interest, as the FDIC had contended. The district court accordingly entered a final judgment directing the borrowers to pay the principal amounts due on the obligations, plus the prejudgment interest remaining unpaid at the Puerto Rican statutory rate to the date of judgment, and attorneys' fees. The final judgment also authorized the FDIC to foreclose its mortgage on the encumbered property. The borrowers filed the instant appeal, asserting the following bases for reversal: 1) the district court erred in granting the FDIC's motion for summary judgment on the illegal takeover defense; 2) the district court erred in precluding certain testimony concerning the
alleged accord and satisfaction, thus handicapping the borrowers in their presentation of this defense; and 3) that in light of the jury's finding on the prime rate issue, the district court erred in calculating the rate of interest from the date of default rather than from the date of execution of the notes and in denying the borrowers credit for interest payments made at the illusory interest rate. The FDIC cross-appeals, contending the district court erred in denying its motion for a directed verdict on the prime rate issue. Each argument will be addressed seriatim.
A. Illegal Takeover Defense
Shortly after the Secretary of the Treasury closed Union Trust and appointed the FDIC its receiver, the bank filed suit against the Secretary, the FDIC, and another bank involved in the purchase and assumption transaction in the Superior Court of Puerto Rico. Union Trust charged that the Secretary had violated Puerto Rican law in taking over the bank, 3 depriving the bank of its property without due process of the law. Union Trust sought both an injunction and judicial review of the administrative decision to place the bank in receivership. The territorial judge determined that the Secretary had indeed closed the bank without the hearing provided by Puerto Rican law and remanded it to the Department of the Treasury with orders to conduct an administrative proceeding with such a hearing. The record does not indicate the outcome of this action.
Based on this proceeding in the Superior Court of Puerto Rico, the borrowers contend that the takeover of Union Trust and the subsequent transfer of its assets to the FDIC as receiver was illegal. The borrowers argue that this illegal acquisition bars the FDIC in its corporate capacity from suing on the instruments and guaranties. The district court granted the FDIC's motion for...
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