Adams v. Madison Realty & Development, Inc.
| Decision Date | 27 June 1991 |
| Docket Number | No. 90-5918,90-5918 |
| Parties | , 15 UCC Rep.Serv.2d 1153 John M. ADAMS, Jr., Jacqueline Adams, Dennis R. Absher, Robert J. Absher, Harvey L. Alpern, Barbara Alpern, Pamela M. Anthony, Charles M. Aronson, Joy Aronson, Art Baer, Raymond L. Bille, Karla M. Bille, Milton M. Birnbaum, Davis Black, James E. Blum, Dorothy Blum, John M. Bollinger, Beverly Bollinger, M. Fred Brannock, John E. Brittain, III, Carol A. Brittain, Herbert Bronsten, Miriam Bronsten, John Burkey, Cynthia A. Burkey, Esequiel Campos, Elva M. Campos, Richard Caster, Nancy Caster, David Cee Cates, Lyn Cates, David H. Cauble, Darlos Cauble, Milton J. Chasin, John A. Collins, Lee Collins, Carole J. Conti, Christopher Crowe, Linda Crowe, Peter C. Cullen, David L. Cunningham, Berneice P. Cunningham, Donald W. Daymon, Lucille Daymon, Rene Del Re, Daycel B. Del Re, Joseph M. DeMarco, Louis Demorales, Kathe G. Demorales, E. Michael De Santis, William A. Dial, Joy A. Dial, Larry W. Drehs, Cynthia A. Drehs, David A. Drummond, Sylvia Drummond, Alain F. Du Puis, Yary Du Puis, William D. Edwards, John R. Elerding, S. Linda Andrieux Elerding, Gerd H. Ernst, Theodora Ernst, John J. Fitch, Sandra F. Fitch, Thomas M. Fontana, Susan Lewis Fontana, Richard E. Foringer, Warren H. Fox, Roberta H. Fox, William Francis, Leo Frischman, Suzanne Furst, Howard Furst, Edward F. Gill, Sylvelyn D. Gill, Marcel Goldfarb, Ruth Goldfarb, Lisa Goldman, Howard Goldman, Irvin Goodman, Dorothy Goodman, Richard H. Grey, Sallie V. Grey, Richard R. Grey, Catherine L. Grey, Karl G. Grothues, Mechtild Grothues, W. Halliday Randall, Charles T. Harris, Carolyn L. Harris, John R. Hartman, Barbara Hartman, John T. Hedgepeth, Jr., Mary W. Hedgepeth, Hanns Hederer, Angelika Hederer, Orville G. Hiepler, Florence L. Hiepler, William C. Holmes, Bonnie Holmes, Richard Huetter, Maria Luise Huetter, Carol A. Imle, John F. Imle, Jr., Charles W. Jackman, Yvonne I. Jackman, Rand L. Jackson, Martha Jackson, Donald D. Jeffries, Virginia J. Cypiers, Carlos Jimenez, M. Ricarmen Jimenez, Inde |
| Court | U.S. Court of Appeals — Third Circuit |
Marcus E. Crahan, Jr. (argued), Crahan, Javelera, Ven Halen & Aull, Los Angeles, Cal., for appellants.
Richard E. Moot (argued), Damon & Morey, Buffalo, N.Y., for appellee.
Before HUTCHINSON, COWEN and SEITZ, Circuit Judges.
This appeal raises the question whether investors who sign unconditional promissory notes can raise fraud in the inducement as a defense to enforcement of those notes by the Resolution Trust Corporation (the "RTC"), where the RTC acquired the notes by taking over a bank that purchased them on the secondary market. The district court granted summary judgment in favor of the RTC, holding that the investors were estopped under the federal common law D'Oench, Duhme doctrine and 12 U.S.C. Sec. 1823(e) from asserting their claims and defenses against the RTC. Because we agree that the investors cannot assert their claims or defenses against the RTC under 12 U.S.C. Sec. 1823(e) and the D'Oench, Duhme doctrine, we will affirm. 1
Plaintiff investors filed this suit against the promoters of allegedly fraudulent tax shelters in the United States District Court for the Central District of California on September 11, 1986, to rescind promissory notes they signed when they bought those tax shelters. The case was transferred on defendants' motion under 28 U.S.C. Sec. 1404(a) to the United States District Court for the District of New Jersey.
In our previous decision, we summarized the facts leading to this lawsuit.
Plaintiffs executed promissory notes in payment for investments in Madison Partnerships, a series of tax shelters formed to acquire and operate residential real estate properties. Each of the promissory notes were made payable to one of three originator banks: Tri-County Savings & Loan Association of New Jersey, Community Federal Savings & Loan Association of Connecticut, and First Northern Cooperative Bank of New Hampshire. After a...
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