NCNB Texas Nat. Bank v. Johnson

• Decision Date: 19 January 1994
• Docket Number: Nos. 92-5677,92-5678,s. 92-5677
• Citation: 11 F.3d 1260
• Parties: NCNB TEXAS NATIONAL BANK, et al., Plaintiffs, v. Ben JOHNSON, et al., Defendants. Fred ANDERSON, Defendant-Counter-Claimant-Appellant, v. FEDERAL DEPOSIT INSURANCE CORPORATION, in its Corporate Capacity for NCNB, Defendant-Appellee, and FDIC, as receiver of National Bank of Fort Sam Houston, Intervenor-Counter-Defendant-Appellee. FEDERAL DEPOSIT INSURANCE CORP., In its Corporate Capacity, Plaintiff-Appellee, v. Frank J. CORTE, et al., Defendants. Fred ANDERSON, Defendant-Counter-Claimant-Appellant, v. FDIC as Receiver of NCNB Texas National Bank and National Bank of Fort Sam Houston, Counter-Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1260

11 F.3d 1260

NCNB TEXAS NATIONAL BANK, et al., Plaintiffs, v. Ben JOHNSON, et al., Defendants.

Fred ANDERSON, Defendant-Counter-Claimant-Appellant, v. FEDERAL DEPOSIT INSURANCE CORPORATION, in its Corporate

Capacity for NCNB, Defendant-Appellee,

and

FDIC, as receiver of National Bank of Fort Sam Houston,

Intervenor-Counter-Defendant-Appellee.

FEDERAL DEPOSIT INSURANCE CORP., In its Corporate Capacity, Plaintiff-Appellee, v. Frank J. CORTE, et al., Defendants.

Fred ANDERSON, Defendant-Counter-Claimant-Appellant, v. FDIC as Receiver of NCNB Texas National Bank and National

Bank of Fort Sam Houston, Counter-Defendants-Appellees.

Nos. 92-5677, 92-5678.

United States Court of Appeals, Fifth Circuit.

Jan. 19, 1994.

Reba A. Eichelberger, Baytown, TX, for appellant.

John Alexander Huddleston, Andrew L. Kerr, Groce, Locke & Hebdon, San Antonio, TX, for appellee.

Jaclyn C. Taner, Colleen B. Bombardier, Washington, DC, for FDIC/Nat'l Bank of Fort Sam Houston in both cases.

John Alexander Huddleston and Andrew L. Kerr, Groce, Locke & Hebdon, San Antonio, TX, for FDIC in No. 92-5678.

Frank J. Corte, pro se.

Appeals from the United States District Court for the Western District of Texas.

Before SNEED, ¹ REYNALDO G. GARZA, and JOLLY, Circuit Judges.

REYNALDO G. GARZA, Circuit Judge:

These cases involve a bank's suit to collect from the guarantor of a defaulting borrower. The district court granted summary judgment against the defendant guarantor. Defendant appeals.

I. FACTS

On June 28, 1985, Quest Development, Inc. ("Quest") borrowed $1,828,000 from the National Bank of Fort Sam Houston ("Sam Houston Bank"). Quest's three shareholders were Frank Corte, Ben Johnson, and Fred Anderson. The bank obtained a security interest, evidenced by a deed of trust, in certain undeveloped land. Corte and Johnson signed a guaranty for this Quest loan. Anderson did not sign this guarantee.

On December 28, 1987, Quest borrowed $519,000 from Sam Houston Bank. On that date, Anderson signed a guaranty covering the note as well as all other indebtedness of "any kind and character" of Quest to Sam Houston Bank, which at the time included the existing outstanding balance on the $1.8 million note. The guaranty Anderson signed specified that it was to be "continuing, absolute, unconditional and unlimited as to all the indebtedness guaranteed."

On August 9, 1985, Quest borrowed an additional $700,000 from Sam Houston Bank. As part of this agreement, the bank obtained personal guaranties from Anderson, Corte, and Johnson. The bank also obtained a security interest in a mobile home park.

Subsequently, Sam Houston Bank became insolvent. The Federal Deposit Insurance Corporation ("FDIC"), as receiver, transferred the bank's assets, including the notes, deed of trust, and guaranties, to NCNB Texas National Bank ("NCNB") in late 1988.

Quest's fortunes were not much better. On August 7, 1990, Quest filed for reorganization under Chapter 11 of the United States Bankruptcy Code. Accordingly, NCNB sued Anderson, Corte, and Johnson in Texas state court to enforce the guaranty on the $1.8 million note. Johnson and Corte failed to answer the state court petition or to respond to the requests for admissions filed with the petition. As a result, the trial court entered a default judgment against Johnson and Corte and severed the judgment from the remaining claim against Anderson. NCNB filed a second state court action against the same three individuals to enforce their separate guaranties of the $700,000 note.

Anderson counterclaimed, accusing Sam Houston Bank of lying, state law fraud, and bad faith. The FDIC receiver intervened to contest Anderson's counterclaims, and removed the case to the United States District Court for the Western District of Texas. Acting in its corporate capacity, the FDIC then purchased the Quest notes and the associated guaranties from NCNB.

Upon removal, the district court adopted the state court order on the $700,000 note and entered summary judgment against Anderson. The district court then entered summary judgment against Anderson on the $1.8 million note and dismissed his counterclaims. Anderson appeals, contending that he did not guarantee the $1.8 million dollar Quest note, that the FDIC failed to prove that it owns that note, that Quest's reorganization proceeding bars any action against its guarantors, that certain modifications made to the note during Quest's reorganization were improper, and that dismissal of his counterclaim under the D'Oench, Duhme doctrine was in error.

Anderson's appeal from both orders have been consolidated for purposes of judicial economy since similar issues permeate both suits. ²

II. JURISDICTION

The district court had jurisdiction through 12 U.S.C. Sec. 1819(b)(2) (Supp.IV 1992), which allows the FDIC to remove any suit to federal court within ninety days of becoming a party to that suit. The FDIC may invoke section 1819(b)(2) removal even where, as here, the state court has already entered judgment. Matter of Meyerland Co., 960 F.2d 512, 516-19 (5th Cir.1992) (en banc), cert. denied, --- U.S. ----, 113 S.Ct.

967, 122 L.Ed.2d 123 (1993). This court has appellate jurisdiction under 28 U.S.C. Sec. 1291 (1988).

At the outset, Anderson raises three challenges to our appellate jurisdiction. All three are without merit. First, Anderson notes that the district court's order of summary judgment on the $700,000 note names him, but not the other guarantors. He argues that the district court order is thus not "final" because it does not dispose of all the parties to the suit. However, the district court's order also expressly incorporates the order entered by the state court, which names all three defendants. The district court's subsequent reference to Anderson alone, while somewhat unusual, is fully consistent with the guaranty agreement and with the state court judgment, which both provide for joint and several liability among the coguarantors. ³

Anderson next argues that the district court, in granting partial summary judgment on the $700,000 note, failed to properly credit him for rental income allegedly received by NCNB from Quest's collateral, and for new collateral obtained by NCNB as part of Quest's reorganization. He contends that the order fails to dispose of all the issues in the suit, and is therefore not final. This argument merely restates Anderson's arguments on the merits. In granting summary judgment, the state and district courts implicitly rejected Anderson's contentions, thereby disposing of these issues and making the judgment final. ⁴

Finally, Anderson asserts that the district court could not enter summary judgment on the $700,000 note because no motion for summary judgment was made. His discussion on this point, however, merely contests the merits of the district court's decision, and does not go to jurisdiction. In any event, the district court complied with this circuit's procedure for claims removed by the FDIC after a state court renders judgment: namely, "the district court [should] take the state judgment as it finds it, prepare the record as required for appeal, and forward the case to a federal appellate court for review." Meyerland, 960 F.2d at 520. NCNB moved for and obtained summary judgment in state court. There was no need for it, or for its successor, the FDIC, to renew the motion upon removal to federal court. "A case removed from state court simply comes into the federal system in the same condition in which it left the state system." Id. Judicial economy is promoted by allowing for proceedings initiating in state court to have full force and effect in federal court, so that pleadings filed in state court need not be duplicated upon removal. Id.

III. STANDARD OF REVIEW

We review the district court's grant of summary judgment de novo. FDIC v. Selaiden Builders, Inc., 973 F.2d 1249, 1253 (5th Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct. 1944, 123 L.Ed.2d 650 (1993). Summary judgment is appropriate if the movant demonstrates that there are no genuine issues of material fact. Id. This court has observed that "suits on promissory notes provide fit grist for the summary judgment mill." Id.

IV. DISCUSSION

In order to recover on the guaranties, the FDIC must establish that: (1) the defendant signed the guaranty agreement; (2) the FDIC-Receiver is the present holder or owner of the note; and (3) the note is in default. Selaiden Builders, 973 F.2d at 1254.

A. Did Anderson Guarantee the $1.8 Million Quest Note?

The initial contention of the guarantor is that he did not sign a guaranty for the $1.8 million note and that he is thus not liable as a guarantor for that note. He asserts that the 1987 guaranty agreement contemplated that the guaranty would extend and apply only to the 1987 transaction involving the $519,000 loan. This argument is unpersuasive; the language of the instrument belies such a contention. The guaranty, although issued in conjunction with a different debt, expressly covers "all other indebtedness of any kind and character" of Quest to Sam Houston Bank. It thus encompasses Quest's $1.8 million note to Sam Houston. See FDIC v. Cardinal Oil Well Servicing Co., Inc., 837 F.2d 1369, 1371 (5th Cir.1988) (enforcing similar all-indebtedness guaranty according to its unequivocal terms). In the face of such explicit and unequivocal language, free of any ambiguity, we may not look to extraneous evidence of intent. Id.

Examining the language of the agreement, we find nothing to indicate that the guaranty was limited to a single note transaction. The guarantor is liable under the express terms of the agreement he signed.

B. Did the FDIC Prove that It Owned the Quest Note?

As previously discussed, the FDIC obtained the Quest note from NCNB, which in turn acquired it from the FDIC receiver for Sam Houston Bank, the original lender. Anderson argues that the purchase agreement transferring the note from the FDIC receiver to NCNB...