945 F.2d 853 (5th Cir. 1991), 90-1709, Federal Deposit Ins. Corp. v. Claycomb

Docket Nº:90-1709.
Citation:945 F.2d 853
Party Name:FEDERAL DEPOSIT INSURANCE CORPORATION as Manager of the FSLIC Resolution Fund, and as Receiver for Vernon Savings and Loan Association, FSA, Plaintiff-Appellee, v. L.L. CLAYCOMB, Defendant, SHWC, Inc., J.W. Heister, D.M. Wilson and E.L. Swanson, Defendants-Appellants.
Case Date:October 23, 1991
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

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945 F.2d 853 (5th Cir. 1991)


FSLIC Resolution Fund, and as Receiver for Vernon

Savings and Loan Association, FSA,



L.L. CLAYCOMB, Defendant,

SHWC, Inc., J.W. Heister, D.M. Wilson and E.L. Swanson,


No. 90-1709.

United States Court of Appeals, Fifth Circuit

October 23, 1991

Rehearing Denied Dec. 6, 1991.

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Camille R. McLeod, Mark E. MacDonald, Johnson & Gibbs, Dallas, Tex., for Hiester, Swanson and Wilson.

Christopher M. Weil, Anthony A. Petrocchi, Dallas, Tex., for SHWC, Inc.

Joe Horlen, Hugh D. Spears, Neil M. Sunkin, Arter & Hudden, Dallas, Tex., for FDIC as receiver of Vernon Sav.

J. Scott Watson, FDIC, Washington, D.C., for FDIC.

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

Before KING and DUHE, Circuit Judges, and SCHWARTZ, District Judge. 1

CHARLES SCHWARTZ, Jr., District Judge:

Defendants, SHWC, Inc., D.M. Wilson and E.L. Swanson [hereinafter referred to collectively as "SHWC"] appeal from a $2,359,891.28 judgment 2 against them, jointly and severally, in favor of the Federal Deposit Insurance Corporation ("FDIC"), as Receiver for Vernon Savings and Loan Association, FSA. SHWC argues on appeal that there exist material issues of fact concerning defendants' claim of usury and

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whether the loan documents at issue demonstrated the elements of partnership or joint venture under Texas law. SHWC further claims the district court erred in the calculation of the deficiency awarded to the FDIC. Finally, SHWC contends notwithstanding FIRREA amendments, that the district court did not have jurisdiction and should have dismissed or remanded the case.

We disagree with appellants SHWC's assignments of error and hold that the district court correctly applied Texas law and its grant of summary judgment was proper. Accordingly, the Court affirms.

I. Factual Background and Prior Proceedings.

On April 18, 1984, SHWC executed Deed of Trust Notes payable to Vernon Savings and Loan Association ("Old Vernon"): (1) the First Note was in the principal amount of $10 million; and (2) the Second Note was in the principal amount of $1.25 million. 3 Each of the Notes provided the following limitation of liability:

Limitation of Liability. Notwithstanding anything in this Note to the contrary, Maker shall have no personal or corporate liability for the payment of principal, interest or other amounts related to this Note which exceeds, in the aggregate, one-half the total of all such amounts which are outstanding from time to time.

The individual defendants guaranteed payment under both Notes to Old Vernon, likewise limiting their liability to one-half the total amount outstanding. Each Note was secured by a separate deed of trust on certain Dallas property. Neither the Notes, nor the unconditional guarantees contained any express language reflecting an agreement between SHWC and Old Vernon either to share in the losses on the project or that Old Vernon assume any liability on account of SHWC. Moreover, such sharing of losses and borrower's liability was expressly disavowed.

As part of the loan transaction, SHWC granted to Old Vernon a 50% profits interest in the Dallas property. The Profits Assignment provides at § 4.03:

No Member or Partner. By its acceptance of this Profits Assignment, Assignee does not become a member or a partner of or with Assignor. Consequently, in no event shall Assignee be liable for any of the debts, obligations or liabilities of Assignor or of its partners as a result of the execution of this Profits Assignment and in no event shall Assignee be liable for any contributions to Assignor. Assignee's only interest in Assignor shall be Assignee's right to receive interests granted to Assignee and assigned under this Profit Agreement. [emphasis supplied].

Essentially, the foregoing provision expressly disavows the existence of any partnership between the parties thereto, as well as any sharing of losses or liability of the SHWC or its partners.

Section 4.15 of the Loan Agreement itself states in pertinent part:

4.15 No Liability of Lender. Lender shall have no liability, obligation, or responsibility whatsoever with respect to the construction of Improvements except to advance the Loan and the Borrower's Deposit pursuant to this Loan Agreement....

The unambiguous import of the foregoing language contained in the Loan Agreement is that Old Vernon undertook no obligation, liability or responsibility, whatsoever, with respect to the Dallas property which SHWC borrowed funds to develop. The corollary, that Old Vernon solely undertook the obligation to loan funds to SHWC, is further patent.

The language of the guaranty agreement further evidences the debtor-creditor relationship as between SHWC and Old Vernon, to wit:

Guarantor unconditionally and irrevocably and absolutely, jointly and severally, guarantees to 'Lender' payment, among

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other things, of the sums advanced under the Loan Agreement.

Unquestionably, the guarantors were, from the outset, personally liable for 50% of the loan.

The terms of both Notes provided that principal and accrued interest was due and payable on April 18, 1986. SHWC defaulted on the payment of both Notes. On December 7, 1986, original plaintiff Vernon Savings and Loan Association ("Old Vernon") 4 filed suit in Texas state court against defendants L.L. Claycomb 5, J.W. Heister, D.M. Wilson, L.E. Swanson ("guarantors"), and SHWC, Inc. ("SHWC"), on two deed of trust notes from SHWC to Old Vernon. The four individual defendants guaranteed the notes. During the pendency of the state court proceedings Old Vernon was declared insolvent and the Receiver FSLIC transferred its assets to Vernon Savings and Loan Association, FSA ("Vernon, FSA"), a federally chartered savings and loan.

On April 14, 1987, pursuant to instructions from Vernon, FSA, then duly appointed substitute trustee under the First Lien Deed of Trust posted the Dallas property for a trustee's sale. On May 5, 1987, the Substitute Trustee Sale of the Dallas Property was conducted. The proceeds from that sale were $8,200,000.00.

On December 16, 1987, FSLIC appointed by the Federal Home Loan Bank Board substituted as Receiver of Vernon, FSA and removed the case to United States District Court for the Northern District of Texas. By virtue of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), the FSLIC was abolished and all of the assets of the FSLIC as Receiver for Vernon, FSA were transferred to FDIC. On October 30, 1989, FDIC was substituted as party plaintiff.

On January 3, 1989, FDIC filed its Motion for Summary Judgment along with supporting documents and briefs. SHWC raised affirmative defenses, counterclaims, and claims of offset, to wit: failure of consideration, usury, breach of contract, fraud, misrepresentation and promissory estoppel. On June 29, 1989, the district court denied the FDIC's Motion for Summary Judgment. 6

On January 30, 1990, the FDIC moved for reconsideration of the district court's prior ruling, and filed its Second Motion for Summary Judgment, asserting that the D'Oench, Duhme and federal holder-in-due-course ["HIDC"] doctrines precluded partnership/joint venture and usury findings, and/or alternatively, that state law barred those defenses. On April 18, 1990, the district court by Memorandum Opinion and Order granted FDIC's Second Motion for Summary Judgment, holding SHWC's defenses barred as a matter of state law. Judgment was entered on May 29, 1990 against SHWC and the individual guarantors. 7

The district court reaffirmed its earlier ruling that the FDIC established its right to recover, under the express terms of the loan documents. Having disposed of the defense of partnership on the basis of Texas law, 8 the district court addressed the defense of usury under state law.

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Relying on Woodcrest Assocs., Ltd. v. Commonwealth Mortgage Corp., 775 S.W.2d 434, 439 (Tex.App.1989), writs denied, the district court held that the usury savings clause at issue in the present case eliminated the claim of usury, noting that the Texas Supreme Court in Woodcrest construed a savings clause essentially identical to that in the case at bar and so held.

It is from this summary judgment that defendants SHWC, Swanson, Wilson and Heister appeal. FDIC has cross-appealed and contends that it is unnecessary to examine the state law issues because SHWC's defenses and claims are barred by the federal common law D'Oench, Duhme doctrine and by 12 U.S.C. § 1823(e), and suggests in the alternative affirmance of the district court's decision on the basis of Texas law.

II. Discussion.

A. Jurisdiction.

At the outset some discussion of the jurisdictional issue raised on appeal appears to be in order. SHWC has raised the question of the authority of the FDIC to act in its capacity as receiver in this particular proceeding. The gravamen of SHWC's argument is that there exists no express provision in FIRREA which allows the FDIC to succeed the FSLIC as receiver for institutions placed into receivership prior to January 1, 1989.

The FSLIC was abolished pursuant to FIRREA's revamping the savings and loan regulatory structure. 9 In Carrollton-Farmers Branch v. Johnson &amp...

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