Federal Deposit Ins. Corp. v. Laguarta

• Decision Date: 28 August 1991
• Docket Number: No. 90-2064,90-2064
• Parties: FEDERAL DEPOSIT INSURANCE CORPORATION, as Manager of the FSLIC Resolution Fund, as Receiver of Liberty Federal Savings and Loan Association, Plaintiff-Appellee, v. Julio S. LAGUARTA, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1231

939 F.2d 1231

FEDERAL DEPOSIT INSURANCE CORPORATION, as Manager of the FSLIC Resolution Fund, as Receiver of Liberty Federal Savings and Loan Association Plaintiff-Appellee, v. Julio S. LAGUARTA, Defendant-Appellant.

No. 90-2064.

United States Court of Appeals Fifth Circuit.

Aug. 28, 1991.

Charles W. Kelly, Stephen A. Roberts, Griggs & Harrison, Austin, Tex., for defendant-appellant.

Robert W. Dupuy, Brown, Maroney & Oaks Hartline, Dallas, Tex., for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Texas.

Before WISDOM, GARWOOD, and JOLLY, Circuit Judges.

GARWOOD, Circuit Judge:

This is an appeal from a summary judgment in favor of the Federal Deposit Insurance Corporation (FDIC; Receiver) against Julio S. Laguarta (Laguarta) for a deficiency on a promissory note secured by two tracts of commercial real estate in Houston. Concluding that Laguarta presented--just barely--enough evidence below to defeat the motion for summary judgment, we reverse and remand for further proceedings.

Facts and Proceedings Below

This litigation began as an interpleader action brought in state court by Houston Title Company (Houston Title), formerly known as Investors Title Company. Houston Title alleged that it possessed certain capital recovery charge receipts that were subject to conflicting claims of entitlement by the defendants-in-interpleader. These capital recovery charge receipts represented sewage capacity purchased from the city of Houston for commercial real estate that had been purchased by Laguarta. Houston Title, as escrow agent during the closing of the sale of the property to Laguarta, acquired the receipts, on which the sellers retained a first lien and Liberty Federal Savings and Loan Association (Liberty) a second lien. After the sellers claimed to have foreclosed on their security interest in the receipts, Houston Title, as stakeholder, brought the interpleader action to resolve the conflicting claims of the sellers, Laguarta, and the Federal Savings and Loan Insurance Corporation (FSLIC; Receiver), which, as Receiver of Liberty, had succeeded to its security interest. That portion of the litigation has been settled and is not involved in this appeal.

This appeal concerns a cross-claim filed against Laguarta by the FSLIC. This cross-claim, brought after the FSLIC had removed the case to federal court pursuant to 12 U.S.C. Sec. 1730(k)(1), ¹ alleged that Laguarta had defaulted on a promissory note to Liberty secured by the same real estate that was involved in the interpleader action.

On September 13, 1985, Laguarta purchased for development ² two tracts totalling 377 acres of commercial real estate south of Loop 610 on Highway 288 in Houston. He paid $940,500 as a down payment and executed two non-recourse promissory notes (Underlying Notes) totalling $6,610,438.94 to the sellers for the balance. ³ On the same day, he entered into a Land Acquisition Loan Agreement (Loan Agreement) with Liberty and executed a wraparound promissory note to it in the amount of $8,609,704.32. This note provided that it would mature on September 13, 1986. The principal sum of the wraparound note included the two Underlying Notes to the sellers, and an additional sum, which Liberty was to advance, of $1,999,265.38. ⁴ On June 17, 1986, Laguarta and Liberty executed a Modification Agreement, which modified the Loan Agreement to increase the principal amount from $8,609,704.32 to $9,895,000.00 and increase the sum to be advanced by Liberty from $1,999,265.38 to $3,284,561.06; ⁵ they also executed a Renewal Note in conjunction therewith, which modified the original promissory note accordingly. The Modification Agreement, though dated June 17, 1986, provided that it was effective as of September 13, 1986, but the Renewal Note, likewise dated June 17, 1986, provided that it was effective as of September 13, 1985. The Modification Agreement provided that the entire balance of the loan and all accrued, unpaid interest would be due one year from the date of execution of the Renewal Note. ⁶ The Renewal Note provided that the interest payments thereon would be due quarterly on the 13th of the following December, March, and September, with the first payment due on December 13, 1986. But the Renewal Note also specified that all principal and interest was due on September 13, 1986.

Under the original Loan Agreement, Laguarta was entitled to be advanced funds to meet his land acquisition costs, upon his request; the request had to tie the amount of money sought to the items listed in an approved budget. This provision was not altered by the Modification Agreement or Renewal Note. A budget was prepared in conjunction with the original $8,609,704.32 wrap-around note, but no budget appears to have been prepared for the Modification Agreement or Renewal Note. Laguarta claims to have made requests for advances by letter on at least two occasions: October 20, 1986 and November 29, 1986. Liberty did not advance the funds. Laguarta claims this forced him to default on the Underlying Notes, causing the sellers to repossess the land, and causing him to default on the Renewal Note. The record does not definitively indicate why Liberty failed to advance the funds. Laguarta argues that Liberty reneged on its funding obligations because it was instructed to do so by the FSLIC, ⁷ but the Receiver, while not directly denying these allegations, argues that Laguarta's failure to comply with various preconditions for advances excused Liberty from performance. ⁸

On April 24, 1987, the Federal Home Loan Bank Board appointed the FSLIC as sole receiver of Liberty pursuant to 12 U.S.C. Sec. 1464(d)(6)(A). On August 1, 1988, the FSLIC, as receiver of Liberty, succeeded by the FDIC, ⁹ cross-claimed against Laguarta on the Renewal Note. The Receiver subsequently moved for summary judgment, presenting in support an affidavit from a representative of the Receiver and a computer print-out of Laguarta's loan activity at Liberty to establish the balance due. Laguarta in his response objected to the affidavit and computer print-out as hearsay but did not directly contest the loan balance. He did, however, assert as an affirmative defense that Liberty had breached its funding obligations under the Loan Agreement, causing financial loss to him, the amount of which being an issue of material fact precluding summary judgment. Laguarta also raised other affirmative defenses which he does not press on appeal. ¹⁰

The Receiver's reply, filed in May 1989, argued that (1) the Renewal Note matured on September 13, 1986, before the funding requests were made, and not in 1987 as claimed by Laguarta; (2) the letters did not properly request funds under the loan agreement even if the loan had not already matured; and (3) the defense is barred by the federal common law doctrine of D'Oench, Duhme. The district court appears to have accepted each of these arguments in its brief November 2, 1989 order awarding summary judgment to the Receiver. ¹¹ The court awarded $2,041,971.46, representing the outstanding principal balance on the Renewal Note; $229,568.19, representing the amount of interest accrued as of the date of maturity, September 13, 1986; interest from September 14, 1986 until paid; $36,803.67, representing attorney's fees; ¹² and court costs.

Discussion

I. Standard of Review

Summary judgment is appropriate under Federal Rule of Civil Procedure 56 if the record discloses "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). This Court reviews the grant of a summary judgment motion de novo, using the same criteria used by the district court in the first instance. Walker v. Sears, Roebuck & Co., 853 F.2d 355, 358 (5th Cir.1988). The pleadings, depositions, admissions, and answers to interrogatories, together with affidavits, must demonstrate that no genuine issue of material fact remains. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). Accordingly, we "review the evidence and inferences to be drawn therefrom in the light most favorable to the non-moving party." Baton Rouge Bldg. & Constr. Trades Council AFL-CIO v. Jacobs Constructors, Inc., 804 F.2d 879, 881 (5th Cir.1986) (citing Southmark Properties, Inc. v. Charles House Corp., 742 F.2d 862, 873 (5th Cir.1984)). The standard for a grant of summary judgment in federal court "mirrors the standard for a directed verdict under Federal Rule of Civil Procedure 50(a), which is that the trial judge must direct a verdict if, under the governing law, there can be but one reasonable conclusion as to the verdict." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986); accord Professional Managers, Inc. v. Fawer, Brian, Hardy & Zatzkis, 799 F.2d 218, 223 (5th Cir.1986); see Boeing Co. v. Shipman, 411 F.2d 365, 374-75 (5th Cir.1969) (en banc).

II. Maturity Date

Laguarta argued below and argues on appeal that ambiguity as to the maturity date of the Renewal Note creates a genuine issue of material fact that precludes summary judgment. The district court determined, without elaboration, that the note matured on September 13, 1986; ¹³ Laguarta argues that it matured either on June 17, 1987 or on September 13, 1987. Although the Renewal Note appears to specify a maturity date of September 13, 1986, it is, we conclude, ambiguous on its face. It provides for interest payments beginning three months after the entire obligation falls due, which makes no sense. The Renewal Note is certainly ambiguous when read in conjunction with the Modification Agreement, which states that the note would mature one year from the date of execution, which would be June 17, 1987. ¹⁴ Also, the Renewal Note provided that it was a "renewal, extension and modification" (emphasis added) of the original promissory note. It may well be, as...