Federal Deposit Ins. Corp. v. Hoover-Morris Enterprises, HOOVER-MORRIS

• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)
• Writing for the Court: Before FAY and HATCHETT; GROOMS
• Citation: 642 F.2d 785
• Parties: FEDERAL DEPOSIT INSURANCE CORPORATION, Plaintiff-Appellee, v.ENTERPRISES, Etc. et al., Defendants-Appellants. . Unit B
• Docket Number: No. 80-7308,HOOVER-MORRIS,80-7308
• Decision Date: 15 April 1981

Page 785

642 F.2d 785 FEDERAL DEPOSIT INSURANCE CORPORATION, Plaintiff-Appellee,
v.
HOOVER-MORRIS ENTERPRISES, Etc. et al., Defendants-Appellants. No. 80-7308. United States Court of Appeals,
Fifth Circuit.
Unit B April 15, 1981.

Page 786

Robertson, Williams, Duane, Lewis, Briggs & Ranson, John C. Briggs, Orlando, Fla., for defendants-appellants.

Hansell, Post, Brandon & Dorsey, Thomas E. Prior, Lowell H. Hughe, Atlanta, Ga., for plaintiff-appellee.

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

Before FAY and HATCHETT, Circuit Judges, and GROOMS, ^* District Judge.

GROOMS, District Judge:

This is an appeal from a summary judgment granted in favor of plaintiff Federal Deposit Insurance Corporation (FDIC) and against defendants Hoover-Morris Enterprises, a Georgia general partnership, Duane L. Hoover and Larry C. Morris. We affirm on all grounds.

On October 8, 1974, appellants executed a note secured by a deed of trust in favor of Hamilton Mortgage Corporation in the amount of $325,000, due and payable on May 1, 1975. The proceeds of the loan were used primarily to purchase 36.05 acres of land in Bexar County, Texas. Appellants defaulted.

In October 1975, Hamilton Mortgage conveyed an undivided 85.43% interest in the note and deed of trust to Hamilton National Bank of Chattanooga. Thereafter the Comptroller of the Currency declared the bank insolvent, and the FDIC as receiver sold its assets, including the note, to FDIC as liquidator. Four days later Hamilton Mortgage became a bankrupt, and its trustee transferred the remaining 14.57% interest in the note and deed of trust to FDIC.

After an appraisal, the land was sold at foreclosure to FDIC as the highest bidder, for $308,000.00. On October 18, 1978, FDIC filed suit in the Northern District of Georgia to recover the deficiency. The court granted FDIC's motion for summary judgment in the principal amount of $202,626.56, plus attorney's fees, interest and court costs.

The main question on appeal is whether appellants have a right to a hearing on the issue of market value of the land in Texas sold at foreclosure, where no such right exists in Texas. ¹

Appellants contend that no deficiency judgment can be had against them because the sale of the Texas property was not confirmed as required by Georgia Code Ann. § 67-1503.

On the issue of confirmation, Tally v. Atlanta National Real Estate Trust, 146 Ga.App. 585, 246 S.E.2d 700 (1978); Colodny v. Krause, 141 Ga.App. 134, 232 S.E.2d 597 (1977); and Goodman v. Nadler, 113 Ga.App. 493, 148 S.E.2d 480 (1966), control. The cases hold that confirmation is not required where the land is not in Georgia. Appellants' attempt to distinguish the holdings in those cases on that issue is not convincing. It is true that in Goodman, supra, there was an opportunity to relitigate the value of the foreign property, since the defendants there had not been personally served in the Florida foreclosure. Goodman holds that value could be shown, where it could be shown in Florida, the place where the foreclosure was held. As noted Texas law is different from the Florida law considered in Goodman. Therefore, the

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court was correct in holding that value was not an issue and that no confirmation hearing was necessary since the land was not in Georgia and the foreclosure was not held there.

Appellants also contend that the court erred in ruling that 12 U.S.C. § 1823(e) ² precluded them from asserting a settlement or an accord and satisfaction with the payee of the note, Hamilton Mortgage, by virtue of an agreement whereby the latter agreed not to seek a deficiency against them. This they urge presents a valid defense in a deficiency action brought by FDIC, the subsequent purchaser of the note.

Appellants admit in brief that the agreement was never specifically reduced to writing. While Hamilton Mortgage and appellants apparently did agree to a satisfaction of the indebtedness by deed in lieu of foreclosure, appellants never consummated the settlement by delivery of the deed to Hamilton Mortgage. Over four months after FDIC acquired Hamilton National Bank's interest in the note, appellants offered FDIC a deed to the Texas property. FDIC rejected the deed and returned it to...