Beighley v. Federal Deposit Ins. Corp., Civ. A. No. CA-5-85-324.

• Decision Date: 30 December 1987
• Docket Number: Civ. A. No. CA-5-85-324.
• Citation: 676 F. Supp. 130
• Parties: Harold V. BEIGHLEY and wife Mary Beighley, and El Rancho Pinoso, Inc., a corporation, Plaintiffs, v. FEDERAL DEPOSIT INSURANCE CORPORATION, Receiver of Moncor Bank, N.A., Hobbs, New Mexico, Defendant.
• Court: U.S. District Court — Northern District of Texas

676 F. Supp. 130

Harold V. BEIGHLEY and wife Mary Beighley, and El Rancho Pinoso, Inc., a corporation, Plaintiffs, v. FEDERAL DEPOSIT INSURANCE CORPORATION, Receiver of Moncor Bank, N.A., Hobbs, New Mexico, Defendant.

Civ. A. No. CA-5-85-324.

United States District Court, N.D. Texas, Lubbock Division.

December 30, 1987.

Johnny Roy Phillips, Seminole, Tex., Thomas W. George, Lee Vickers, Austin, Tex., for plaintiffs.

Harold H. Pigg, Brock, Morton & Pigg, Lubbock, Tex., for defendant.

ORDER

WOODWARD, Senior District Judge.

Following upon a loan transaction the details of which are here disputed, Plaintiffs began this action in state court charging Moncor Bank, N.A., Hobbs, New Mexico (Moncor), with breach of contract, common law fraud, fraud under Tex.Bus. & Com.Code Ann. § 27.01; breach of fiduciary duty, promissory estoppel, and breach of agency contract. In the alternative to money damages, plaintiffs asked for equitable relief placing them in the position they were in prior to defendant's acts.

After default judgment was entered in favor of plaintiffs, the Federal Deposit Insurance Corporation (FDIC) filed Notice of Substitution declaring that it was the proper party to defend the action since it had been appointed receiver for Moncor. Following removal to this court, defendant's motions for relief from judgment and for new trial were granted, and defendant raised as counterclaim the original promissory note.

The case was scheduled for trial when the United States Supreme Court held in Langley v. FDIC, ___ U.S. ___, 108 S.Ct. 396, 98 L.Ed.2d 340 (U.S. Dec. 1, 1987), that even a fraudulent misrepresentation of which FDIC has knowledge constitutes an agreement for purposes of 12 U.S.C. § 1823(e), and neither fraud in the inducement nor the FDIC's knowledge thereof can act as a defense to a claim on the note. Because Langley seemed to deal with some of the issues raised in the instant case, trial was stayed pending supplemental briefs discussing whether Langley would be dispositive of defendant's motion for summary judgment (which was being carried through trial).

The court has now received and reviewed those briefs. The court has also reviewed the trial briefs as well as defendant's motion for summary judgment and the reply and surreply thereto. After considering the arguments and authorities cited, the evidence submitted, and the applicable law, the court intends to and will enter judgment for defendant FDIC depending only on plaintiffs' ability to satisfy the precise terms of 12 U.S.C. § 1823(e).

Plaintiffs acknowledge that Langley vitiates one of their defenses to the counterclaim (that the FDIC cannot rely upon 12 U.S.C. 1823(e) "because it purchased the asset with knowledge of the defense," Plaintiffs' Supplemental Trial Brief at 8). Plaintiffs deny, however, that Langley has any bearing on any of their other defenses or on their affirmative claims. On the surface, plaintiffs seem correct. Langley does not specifically deal with the other defenses plaintiffs seek to raise against FDIC's counterclaim. Nor does Langley directly address the question of affirmative relief against the FDIC for actions of a bank of which it has become a receiver.

The essential holding of Langley is that the FDIC should not be prohibited from pursuing a claim except when the very narrow terms of 12 U.S.C. § 1823(e) are satisfied exactly. To contend, as plaintiffs do, that the holding is not applicable to their affirmative claims against the FDIC is, while technically defensible, to misunderstand Langley's import. To allow a claim against the FDIC asserting the very grounds that could not be used as a defense to a claim by the FDIC is to let technicality stand in the way of principle. Moreover, the effect of such an approach would be to reduce actions Congress has allowed the FDIC to pursue to nullities since defendants could counterclaim and recover what they lost.

"One purpose of § 1823(e) is to allow federal and state bank examiners to rely on a bank's records in evaluating the worth of the bank's assets." Id. at ___ U.S. at ___, 108 S.Ct. at 401. Allowing plaintiffs' affirmative claim in the face of § 1823(e) would undermine that purpose. Plaintiffs' affirmative claim is only as good as their defenses to FDIC's counterclaim.

Plaintiffs also raise other defenses to FDIC's counterclaim. They assert that FDIC in its corporate capacity is not a party to this action and cannot, therefore, maintain a counterclaim. They assert that 12 U.S.C. § 1823(e) unconstitutionally violates their rights to due process and equal protection under the fifth amendment. And they assert that they have actually "produced documents from January 1984 and from November 1984 and subsequently which satisfy 12 U.S.C. § 1823(e)." Plaintiffs' Supplemental Trial Brief at 8.

Plaintiffs' first claim is simply wrong. They originally raised the claim in their Brief in Support of Opposition to Motion for Leave to Amend Answer and Counterclaim of Federal Deposit Insurance Corporation, filed October 23, 1987. In that brief, plaintiffs objected to the counterclaim on the grounds that FDIC had substituted into the case in its capacity as receiver and that it could not, more than a year later, assert that it held the note in its corporate capacity and was counterclaiming in that role.

Whatever merit there might otherwise be to such an argument, there can be none where, as here, plaintiffs simply have their facts wrong. As early as August 22, 1986, more than one year before plaintiffs claim to have been surprised that FDIC in its corporate capacity either held the note or might seek to be a party to this action, FDIC filed its first Answer and Counterclaim. The counterclaim includes the assertions that (1) FDIC "brings the following action in its corporate capacity," Answer and Counterclaim of Federal Deposit Insurance Corporation at 5, and (2) "FDIC, in its corporate capacity ..., purchased from the Receiver certain assets of the Bank. Among these assets ... are the promissory...