FDIC v. Monterrey, Inc.
| Decision Date | 16 March 1994 |
| Docket Number | Civ. No. 86-0130 (RLA). |
| Citation | 847 F. Supp. 997 |
| Parties | FEDERAL DEPOSIT INSURANCE CORPORATION, Plaintiff, v. MONTERREY, INC., et al., Defendants. |
| Court | U.S. District Court — District of Puerto Rico |
Gustavo A. Gelpi, Feldstein, Gelpi, Hernandez & Gotay, Old San Juan, PR, for plaintiff.
John M. Garcia, Garcia & Fernandez, Hato Rey, PR, for defendants.
Plaintiff, FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC), instituted these collection proceedings in its corporate capacity seeking payment on a promissory note in the principal amount of $170,000.00. Named defendants are: MONTERREY, INC. (MONTERREY), ANTONIO POU, JR. (POU), his wife ILBA MAIDA ESTAPE, and the conjugal partnership constituted by them. We have before us cross motions for summary judgment. Defendants have denied liability claiming that they do not owe any monies, that the FDIC is not a "bona fide" purchaser and that there have been violations to the Truth-In-Lending Act. Further, they claim that MRS. POU and the conjugal partnership cannot be held responsible for any amounts as a result of the underlying transactions.
The note subject of these proceedings was executed by POU and delivered to GIROD TRUST CORPORATION (GTC) as evidence of loan # XX-XX-XX-XXX in the amount of $170,000.00 together with a Continuing Guaranty Without Collateral, in the same principal amount. These credits were subsequently acquired by the FDIC when GTC failed in August 1984,1 in accordance with existing provisions of the Federal Deposit Insurance Act, particularly, 12 U.S.C. § 1823(e) (1979), which authorized the Corporation to purchase certain assets from the receiver of a failed bank.2
Defendants contend that issues of fact preclude summary judgment or, in the alternative, the purportedly uncontested facts require that summary judgment be entered in their favor. As the basis for their request, defendants allude to the alleged circumstances under which POU subscribed to the obligation sought to be collected, such as signing the loan documents "in blank". They also claim that neither MRS. POU nor the conjugal partnership may be held liable for the obligation because she did not sign the note and Guaranty and they derived no benefit from the transaction. As to MONTERREY, they contend that it did not profit from the transaction; the documents were signed in blank and a corporate resolution authorizing POU to bind the corporation did not exist. Finally, they argue that there is an issue as to "whether or not Mr. Antonio Pou, Jr. was required to assert written defenses or objection to the obligations object of this action prior to when he did in fact object therein." Defendants' Statement of Material Facts in Dispute ¶ 11.
The Court, having reviewed the motions as well as all documents filed by the parties, hereby finds that the following material facts are not in dispute:
1. At all times pertinent to the transactions involved in this action, POU was married to ILBA MAIDA ESTAPE.
2. At all relevant times, POU was the president of MONTERREY, a non-incorporated entity,3 owned by him and his spouse ILBA MAIDA ESTAPE.
3. On July 2, 1984, POU executed a loan application on behalf of MONTERREY where he also agreed to become a joint obligor for said loan. The loan was assigned # XX-XX-XXXXX-X by GTC.
4. As evidence of said loan, POU executed and delivered to GTC a note in the principal amount of $170,000.00, payable on demand, with interest at a rate of "Citibank Prime". The note and a Continuing Guaranty Without Collateral (Guaranty) were signed by POU, both as president of MONTERREY and personally, as joint obligor together with MONTERREY.
5. As of the date GTC ceased operations, neither POU nor anyone else acting on behalf of MONTERREY had notified GTC, in writing, of any defense or factual or legal objection to MONTERREY's obligation pursuant to loan # XX-XX-XXXXX-X or to POU's obligation as joint obligor under the note and Guaranty.
5. The first time POU asserted any defense or objection to the obligation of MONTERREY or to the Guaranty was after receiving a collection letter from FDIC.
6. Neither GTC nor FDIC have received any payment on account of the principal or interest on the loan subject of these proceedings.
7. According to the GTC records, the proceeds of the loan to MONTERREY were disbursed on July 5, 1984. Part of these monies were credited to an outstanding indebtedness of "Mi Tacita Coffee Break" ("MI TACITA") and the balance was used to pay a personal obligation of POU with GTC.
8. At all relevant times, POU was the president and sole stockholder of "MI TACITA" and he and his wife were the officers and directors thereof.
The purpose behind the summary judgment procedure is to avoid unnecessary trials. Fed.R.Civ.P. 56(c) provides for the rendering of judgment if the moving papers and pleadings "show that there is no genuine issue as to a material fact and that the moving party is entitled to judgment as a matter of law". Not all factual disputes will preclude summary judgment. Only those that are "material" will operate as a bar, that is, "only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).
A genuine issue exists when there is evidence sufficient to support rational resolution of the point in favor of either party. A genuinely disputed issue concerns a material fact if the fact carries with it the potential to affect the outcome of the suit under the applicable law.
Nereida-González v. Tirado-Delgado, 990 F.2d 701, 703 (1st Cir.1993) (citations omitted).
Once FDIC submitted its duly supported motion for summary judgment, the burden shifted to the defendants to come forth with evidence to substantiate the existence of a factual dispute as would preclude summary judgment. Conclusory allegations are not sufficient to meet this burden. FDIC v. Anchor Properties, 13 F.3d 27 (1st Cir.1994).
FDIC has established that POU signed the note personally and on behalf of MONTERREY; that the loan proceeds as evidenced by the GTC records were applied to pay-off POU's personal and MI TACITA's preexisting indebtedness with GTC; that at all pertinent times POU was married to ILBA MAIDA ESTAPE and had established with her a conjugal partnership, and that prior to the closing of the GTC operations and the acquisition of this asset by FDIC, POU had consented without objection to allowing GTC to retain the signed note and Guaranty and to carry and maintain these as a valid obligation.
We find that neither defendants' statement of disputed facts nor POU's affidavit set forth any material facts or circumstances which raise a genuine issue regarding defendants' obligations and the amount due. The factual issues suggested by defendants are predicated on either conclusory statements or inadmissible evidence, or are otherwise immaterial to the determination of defendants' liability. POU's affidavit and other pleadings on record do not proffer facts which substantiate factual issues that could potentially affect the outcome of the litigation. Therefore, defendants have not met the requirements of Rule 56(e) in their response to plaintiff's summary judgment request.
Based on the record, we find that the factual issues asserted by defendants are insufficient under Fed.R.Civ.P. 56(c) to defeat FDIC's motion. Further, the undisputed facts do not support a finding of summary judgment in defendants' favor.
The present action was brought by FDIC, in its corporate capacity, to collect on an asset acquired from a failed bank. Under the Federal Deposit Insurance Act, "all suits of a civil nature to which the Corporation shall be a party shall be deemed to arise under the laws of the United States ..." 12 U.S.C. § 1819 (1976)4. Given the choice of law prescribed by Congress, resolution of the claim before us is governed basically by federal statute5 and common law, D'Oench, Duhme & Co., Inc. v. FDIC, 315 U.S. 447, 456, 62 S.Ct. 676, 679 86 L.Ed. 956 (1942). This choice of federal substantive law has been followed in both pre-FIRREA and post-FIRREA litigation in this Circuit. FDIC v. Longley I Realty Trust, 988 F.2d 270, 272-74 (1st Cir.1993); FDIC v. World Univ., Inc., 978 F.2d 10, 13 (1st Cir.1992); FDIC v. O'Melveny & Meyers, 969 F.2d 744, 751 (9th Cir.1992), cert. granted, ___ U.S. ___, 114 S.Ct. 543, 126 L.Ed.2d 445 (1993); Baumann v. Savers Fed. Sav. & Loan Assoc., 934 F.2d 1506, 1514-15 (11th Cir.1991), cert. den., ___ U.S. ___, 112 S.Ct. 1936, 118 L.Ed.2d 543 (1992); FDIC v. Municipality of Ponce, 904 F.2d 740, 745 (1st Cir.1990); FDIC v. De Jesús Vélez, 678 F.2d 371, 374-75 (1st Cir. 1982); Santoni v. FDIC, 677 F.2d 174, 178 (1st Cir.1982).
As we will further discuss below, the defenses asserted by defendants fail under applicable federal law.
Defendants contend that FDIC is not a holder in due course because of the alleged circumstances under which the loan, as well as the note and Guaranty evidencing the same were executed. They challenged the "good faith" of the FDIC in the purchase of the note as their third affirmative defense in the answer to the complaint. Apart from the fact that this particular matter was not pressed or argued further in the case, the good faith of the FDIC in the purchase of assets of insolvent banks has been judicially recognized. FDIC v. de Jesús Vélez, 678 F.2d at 374; Gunter v. Hutcheson, 674 F.2d 862, 874 n. 16 (11th Cir.) cert. den., 459 U.S. 826, 103 S.Ct. 60, 74 L.Ed.2d 63 (1982); Gilman v. FDIC, 660 F.2d 688, 694-95 (6th Cir.1981); FDIC v. Ashley, 585 F.2d 157, 160-62 (6th Cir.1978); FDIC v. Godshall, 558 F.2d 220, 222-23 (4th Cir.1977).
When assets are acquired from a failed bank pursuant to a purchase and...
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