First Gibraltar Bank, FSB v. Smith, 94-10385

• Decision Date: 30 August 1995
• Docket Number: No. 94-10385,94-10385
• Parties: FIRST GIBRALTAR BANK, FSB, Plaintiff-Counter Defendant-Appellee, v. Jimmy D. SMITH, et al., Defendants, Thomas A. Oddo, Defendant-Counter Plaintiff-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 133

62 F.3d 133

FIRST GIBRALTAR BANK, FSB, Plaintiff-Counter Defendant-Appellee, v. Jimmy D. SMITH, et al., Defendants, Thomas A. Oddo, Defendant-Counter Plaintiff-Appellant.

No. 94-10385.

United States Court of Appeals, Fifth Circuit.

Aug. 30, 1995.

Rehearing Denied Sept. 28, 1995.

Anthony A. Petrocchi, Christopher M. Weil, Weil & Petrocchi, Dallas, TX, for appellant.

Mark Curtis Taylor, Liddell, Sapp, Zivley, Hill & LaBoon, Dallas, TX, for appellee.

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

Before WISDOM, DUHE and BENAVIDES, Circuit Judges.

BENAVIDES, Circuit Judge:

Appellant Thomas A. Oddo ("Oddo") appeals both the district court's dismissal of his counterclaims under both the Texas Debt Collection Act, TEX.REV.CIV.STAT.ANN. art. 5069-11.01 et seq. and the Federal Fair Debt Collection Act, 15 U.S.C. Sec. 1692 et seq., and the court's calculation of damages owed to Appellee First Gibraltar Bank ("First Gibraltar") on the guaranty signed by Oddo. We affirm.

I.

On June 12, 1985 Oddo entered into a limited partnership with Jimmy D. Smith and others to acquire and develop property located in Dallas County, Texas, eventually known as Meadowcreek Village Apartments. The partnership borrowed $10,000,000.00 from First Texas Bank. Oddo executed a guaranty providing that:

Notwithstanding anything contained herein to the contrary, the liability of Guarantors shall be limited to an amount equal to (i) any and all principal due and owing on the Note up to but not exceeding $1,000,000.00, plus (ii) all accrued and unpaid interest on such amount plus (iii) ten percent (10%) of any and all amounts due and payable by Debtor in connection with the Note and any other instrument (the "Loan Documents") executed in connection with the lending transaction to which the Note relates, including, without limitation, accrued interest added to principal.

The underlying debt went into default and, in 1987, First Texas Bank filed suit in Texas state court. In 1988 First Texas Bank was declared insolvent and the Federal Savings and Loan Insurance Corporation was appointed as receiver. First Gibraltar subsequently purchased the assets of First Texas Bank. The state court entered an interlocutory summary judgment in favor of First Gibraltar on the guaranty signed by Oddo, ordering Oddo to pay First Gibraltar $2,189,644.40 plus attorneys' fees, costs and post-judgment interest.

After judgment was entered, the case was removed to federal court. The district court dismissed Oddo's state and federal consumer debt collection counterclaims, holding that the transaction was commercial rather than for personal or household use and that First Gibraltar was not a debt collector as contemplated by both the federal and state fair debt collection acts. The state court summary judgment award was left undisturbed.

II.

Oddo contends that the language of the guaranty limits his liability to $1,000,000.00. He argues that the state court's judgment of $2,189,644.40 exceeds the $1,000,000.00 cap provided in the guaranty and is not supported by summary judgment evidence.

Once a state case is removed to the federal court, we review any state court order as if it were a federal court order. Walker v. F.D.I.C., 970 F.2d 114, 121 (5th Cir.1992). Thus, "[w]e review the summary judgment award de novo, independently of the state or federal district court, and resolving all reasonable doubts and drawing all reasonable inferences in favor of the party opposing summary judgment." Id. (citations omitted).

Our review of the summary judgment evidence before the state court supports the court's award of $2,189,644.40. We find Oddo's allegation that the guaranty limits his liability to $1,000,000.00 contrary to the plain language of the guaranty itself. The guaranty specifically states that Oddo is liable for principal due up to $1,000,000.00, plus interest on that amount, plus ten percent of any and all amounts due and payable including interest. Reviewing the affidavits and other summary judgment evidence submitted to the state court in connection with the total amounts due on the $10,000,000.00 loan at the time the state court considered the motion, we conclude that the court's calculation of $2,189,644.40 is reasonable and supported by the record. The summary judgment evidence conclusively establishes that Oddo is liable for at least the amount awarded by the state court.

III.

Oddo next contends that the district court erred in dismissing his state and federal consumer debt collection claims because First Gibraltar is a debt collector under both the state and federal definitions. He argues that because First Gibraltar is not the first owner of the loan and guaranty, it is engaging in the collection of a debt for another.

The district court, after reviewing letter briefs submitted at its request,...