FDIC v. ENVENTURE V
| Decision Date | 14 November 1994 |
| Docket Number | Civ. A. No. H-93-3125. |
| Citation | 868 F. Supp. 870 |
| Parties | FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for Western Bank — Westheimer, Plaintiff, v. ENVENTURE V, Allen B. Daniels and Don C. Horton, Defendants. |
| Court | U.S. District Court — Southern District of Texas |
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Leonard Sparks, III, Houston, TX, for plaintiff.
Allen B. Daniels, Daniels & Collins, Houston, TX, for defendants.
Don C. Horton, pro se.
Pending before the court are Plaintiff Federal Deposit Insurance Corporation's ("the FDIC") motion for summary judgment (Docket Entry # 17) and Defendants Enventure V ("Enventure"), Allen B. Daniels ("Daniels"), and Don C. Horton's ("Horton") (collectively "defendants") cross-motion for summary judgment (Docket Entry # 19). Having reviewed the motions, the submissions of the parties, the pleadings, and the applicable law, it is the opinion of the court that the FDIC's motion should be granted and the defendants' motion should be denied.
The FDIC was appointed receiver for Western Bank — Westheimer ("the bank") by the Banking Commissioner of Texas at 4:07 p.m. on October 1, 1987, upon his determination that the bank was insolvent. In its capacity as receiver, the FDIC has possession of the books, records, and loan files of the failed bank and is authorized to institute proceedings to collect on delinquent loans. The FDIC filed the instant lawsuit prior to 4:05:40 p.m. on October 1, 1993, within six years after its appointment as receiver for the bank. In this action, the FDIC is seeking to collect on a promissory note in the amount of $131,697.03, executed on July 15, 1986, by Jerry L. Chambers ("Chambers"), a general partner of Enventure, and on continuing guaranties of Enventure's indebtedness signed on June 1, 1982, by Daniels and Horton, two other general partners of Enventure.
In defense of this action, the defendants contend that Chambers was not authorized to execute the note on behalf of Enventure, that the guaranties do not apply to the note in question, and that this action is barred by the statute of limitations.
In order to prevail on summary judgment in this case with respect to the note and the guaranty agreements, the FDIC must establish that: (1) the note and the guaranty agreements exist and are valid; (2) the FDIC is the present holder or owner of the note and the guaranty agreements; (3) Enventure defaulted on the note; and (4) Daniels and Horton are liable under the guaranty agreements. FDIC v. Selaiden Builders, Inc., 973 F.2d 1249, 1254 (5th Cir. 1992), cert. denied, ___ U.S. ___, 113 S.Ct. 1944, 123 L.Ed.2d 650 (1993); RTC v. Marshall, 939 F.2d 274, 276 (5th Cir.1991).
Here, the defendants do not contest and have offered no summary judgment proof to rebut the FDIC's position that it is the present holder and owner of the instruments and that Enventure defaulted on the note. The unrefuted affidavits of Michael J. Lauer ("Lauer"), a credit specialist with the FDIC, establish that the originals of the note and the guaranties are in the files of the FDIC, that they were obtained from the files of the bank upon the FDIC's appointment as receiver, that they are business records of the bank and/or the FDIC, and that the FDIC has no written documents in its possession that would renew, extend, or alter the terms of the note. This is sufficient to satisfy the FDIC's burden to demonstrate that the instruments in question exist and that it is the owner or holder of them. See RTC v. Camp, 965 F.2d 25, 29 (5th Cir.1992); FDIC v. Staudinger, 797 F.2d 908, 910 (10th Cir. 1986); FDIC v. Armstrong, 784 F.2d 741, 745 (6th Cir.1986). The affidavits likewise establish that the note has matured pursuant to its own terms, that Enventure has failed and refused to pay the note, and that it is in default. The defendants offer no summary judgment evidence to contradict these assertions. The note, on its face, indicates that it matured on July 15, 1987, and the defendants make no suggestion that it was paid.
Moreover, the defendants do not challenge the authenticity of the signatures on the note or the guaranties. Under Texas law, unless a signatory to an instrument specifically denies the authenticity of his signature, the signature is admitted. TEX.BUS. & COM.CODE § 3.307 (Vernon 1968). When signatures are admitted or established, production of the instrument entitles a holder to recover on it unless the defendant establishes a defense. Id. Therefore, unless the defendants establish defenses that are viable against it, the FDIC is entitled to recover on the notes and the guaranties under Texas law. See RTC v. Marshall, 939 F.2d at 277; Whittenburg v. Cessna Fin. Corp., 536 S.W.2d 444, 445 (Tex.Civ.App. — Houston 14th Dist. 1976, writ ref'd n.r.e.); Hensley v. City Bank & Trust Co., 495 S.W.2d 282, 285 (Tex.Civ.App. — Tyler 1973, writ ref'd n.r.e.); Anderson v. Industrial State Bank, 478 S.W.2d 215, 217 (Tex.Civ.App. — Houston 14th Dist. 1972, writ ref'd n.r.e.).
While the defendants do not contest the authenticity of the note, they contend that it is not enforceable because Chambers was not authorized to execute it. The defendants all admit, however, in their answers to the lawsuit, that Chambers was a general partner of Enventure. Under Section 10 of the Texas Uniform Limited Partnership Act, in effect at the time of these transactions, a general partner of a limited partnership has all the rights and powers and is subject to all the restrictions and liabilities of a partner in a partnership without limited partners. TEX. REV.CIV.STAT.ANN. art. 6132a, § 10(a) (Vernon 1970). Section 9 of the Texas Uniform Partnership Act, in effect at the time, provides, in turn, that "every partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument, for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership, unless the partner so acting has in fact no authority to act for the partnership in the particular matter, and the person with whom he is dealing has knowledge of the fact that he has no such authority." TEX.REV.CIV.STAT.ANN. art. 6132b, § 9(1) (Vernon 1970).
Thus, Enventure is bound by the note, unless Chambers had no authority to execute it on behalf of the limited partnership, and the bank, as well as the FDIC, had knowledge of his lack of authority. As a general rule, a third party doing business with a partnership may hold the partnership liable as a legal entity for any debts created in reliance on such partnership. Texaco, Inc. v. Wolfe, 601 S.W.2d 737, 740-41 (Tex.Civ. App. — Houston 1st Dist. 1980, writ ref'd n.r.e.). Moreover, as general partners of Enventure, Daniels and Horton are jointly and severally liable for partnership debt and may be sued without the joinder of the other partners. TEX.REV.CIV.STAT.ANN. art. 6132b, § 15 (Vernon 1970); In re Eden, 141 B.R. 121, 124 (W.D.Tex.1992); Rohdie v. Washington, 641 S.W.2d 317, 320 (Tex.App. — El Paso 1982, writ ref'd n.r.e.); Texaco, Inc. v. Wolfe, 601 S.W.2d at 741; Hawn v. Hawn, 574 S.W.2d 883, 886 (Tex.Civ.App. — Eastland 1979, writ ref'd n.r.e.); Key v. Davis, 554 S.W.2d 60, 65 (Tex.Civ.App. — Amarillo 1977, no writ).
The defendants contend, however, that the Agreement of Limited Partnership of Enventure V ("limited partnership agreement") demonstrates that Chambers, acting alone, did not have authority to execute the note. They assert that, under the limited partnership agreement, all of the general partners had to act collectively to bind the partnership. Thus, they argue that all four of the general partners were required to execute the note to make it enforceable against the partnership. The defendants append a copy of the limited partnership agreement to their response to the FDIC's motion for summary judgment. They also allege, in their response, that "at all times germane to this proceeding, Western Bank — Westheimer and subsequently, the Plaintiff had a copy of the AGREEMENT OF LIMITED PARTNERSHIP in its files." Neither this allegation nor the limited partnership agreement, however, constitutes proper summary judgment evidence in this proceeding, as neither is proven up through affidavits, admissions, or deposition excerpts. In contrast, the FDIC has presented adequate summary judgment evidence, through the affidavits of Lauer, that the limited partnership agreement is not in the possession of the FDIC and that it was not aware of its terms. Accordingly, the FDIC cannot be bound by its terms under Texas law.
Moreover, the defendants' efforts to defeat the FDIC's claim on the note by relying upon the terms of the limited partnership agreement are barred under federal law by the doctrine first enunciated in D'Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 458-59, 62 S.Ct. 676, 679-80, 86 L.Ed. 956 (1942). The D'Oench, Duhme decision and its progeny have developed a well-known federal common law doctrine immunizing the FDIC and the Resolution Trust Corporation ("RTC"), as receivers and conservators of defunct financial institutions, from claims and defenses based upon agreements not firmly established in the failed financial institution's official records. RTC v. Oaks Apartments Joint Venture, 966 F.2d 995, 998 (5th Cir. 1992); Bowen v. FDIC, 915 F.2d 1013, 1015-16 (5th Cir.1990); Beighley v. FDIC, 868 F.2d 776, 783-84 (5th Cir.1989). The D'Oench, Duhme doctrine applies to bar defenses or claims against federal regulators in those instances where a financial institution enters into an oral or secret agreement with a borrower that alters the terms of an existing unqualified obligation. D'Oench, Duhme & Co. v. FDIC, 315 U.S. at 460, 62 S.Ct. at 680-81...
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F.D.I.C. v. Enventure V, 94-20934
...Enventure's indebtedness on June 1, 1982. On July 15, 1987, Enventure defaulted on the promissory note. Federal Deposit Ins. Corp. v. Enventure V, 868 F.Supp. 870, 873 (S.D.Tex.1994). On October 1, 1987, the FDIC was appointed receiver for Western Bank after the bank was declared insolvent.......