RESOLUTION TRUST CO. BY FDIC v. Clark
| Decision Date | 27 July 1990 |
| Docket Number | No. 89-8176-CIV-EPS.,89-8176-CIV-EPS. |
| Citation | 741 F. Supp. 896 |
| Parties | The RESOLUTION TRUST CORPORATION as Conservator of Royal Palm FS & LA, by the FEDERAL DEPOSIT & INSURANCE CORPORATION, Plaintiff, v. William C. CLARK, etc., Defendants. |
| Court | U.S. District Court — Southern District of Florida |
Claudia M. McKenna, W. Palm Beach, Fla., for plaintiff.
Carol M. Brewer, North Palm Beach, Fla., Kerry Schwencke, West Palm Beach, Fla., for defendants.
THIS CAUSE comes before the Court upon the Report and Recommendation of the United States Magistrate Peter Palermo that the Motion for Summary Judgment filed by Plaintiff, RESOLUTION TRUST CORPORATION (RTC) September 7, 1989 be granted. For the reasons stated below, the Court agrees with the Magistrate's Recommendation, and accordingly adopts and affirms.
In June 1985 Defendant Clark individually, and as trustee executed and delivered a promissory note and mortgage for a $5,438,587.01 loan. In 1988 it was modified to encumber some Palm Beach County property. Defendant John C. Bills was the guarantor. Interest accrued at a rate of 11.75% and then at a rate 25% after default. The Defendants failed to pay the principal and interest. The entire debt presently stands at over $8 million. Defendants assert that the agreement between themselves and Royal Palm Bank had been altered orally and that this issue constitutes a genuine issue of material fact precluding the possibility of summary judgment for Plaintiff.
The Defendants claim that the alleged oral agreement is evidenced by a March 1988 escrow agreement, attached to the Response to the Motion for Summary Judgment filed by Defendant John C. Bills, which provided a deed in lieu of foreclosure as "further security" for the mortgage. Plaintiff contends that nothing in the escrow agreement provides that the "deed in lieu" was to be the exclusive remedy available. However, Defendants contend that this is what "in lieu of" means in plain English. Additionally, Plaintiff contends that the fact that Defendants agreed to provide such a deed does not mean Plaintiff agreed to finally accept it.
Defendants also contend that the Parol Evidence Rule, which bars oral statements which would contradict the terms of a written contract, does not operate here, since Defendants are alleging fraud in the inducement. Finally, Plaintiff states that Bills is liable as a matter law, inasmuch as he testified at deposition that he knew that there was no written agreement releasing him from liability.
A motion for summary judgment may be granted only where, as a matter of law, there exists no issue of material fact as to any essential element of the case. Rule 56 Federal Rules of Civil Procedure. The party opposing a motion for summary judgement must identify specific facts which demonstrate that there is a genuine issue of fact for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Livernois v. Medical Disposables Inc., 837 F.2d 1018, 1022 (11th Cir.1988). Thus the non-moving party, to survive the motion for summary judgment, need only present evidence from which a jury might return a verdict in his favor. Anderson v. Liberty Lobby, 477 U.S. 242, 257, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986). Defendants have failed to do this, and Plaintiff is therefore entitled to summary judgment.
Plaintiff heavily relies on D'Oench, Duhme and Co. v. FDIC, 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed. 956 (1942), for the proposition that the maker of a note is estopped from asserting an oral agreement as a defense against the FDIC1. Defendants assert that the D'Oench doctrine should not apply here. Its stated purpose is to protect the FDIC from having to guess at the value of an institution's assets when it takes over as conservator. Because in this case the FDIC (and now the RTC) took over after Royal Palm Bank had brought this foreclosure action, it took over with knowledge of Defendants, defenses and therefore does not need such protection. However, Plaintiff has presented a Supreme Court opinion as authority for the position that knowledge of alleged defenses by the FDIC is irrelevant to the applicability of the D'Oench doctrine. Langley v. FDIC, 484 U.S. 86, 108 S.Ct. 396, 401 and 402, 98 L.Ed.2d 340 (1987).2
Defendants place much reliance on Llope v. FSLIC 558 So.2d 435 (Fla. 4th DCA 1990), in which a Florida appellate court reversed the trial court's summary judgment where an oral stipulation of settlement presented an issue of estoppel. The Magistrate Palermo found the case to be inapposite to the case at bar because here the escrow agreement was executed by the parties, whereas in the Llope case there was no executed written agreement. Here the alleged agreement was with the bank itself, whereas the stipulation in Llope was a settlement of a suit brought by the regulator, reached with the regulator's agent. Finally, here there is a question of whether the escrow agreement was even complied with.
Moreover, even if the D'Oench doctrine did...
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