Federal Deposit Ins. Corp. v. Arciero
741 F.3d 1111
10th Cir.2013Background
- In 2008 the Bank’s CEO, Paul Doughty, solicited several investors (Borrowers) to sign large loans (three $2.5M notes and one guaranty) to prop up Quartz Mountain Aerospace; loan files included a credit memorandum describing life‑settlement contracts as collateral.
- Borrowers allege Doughty orally assured them they would have no personal liability because the loans were fully collateralized by life‑settlement contracts.
- The Bank failed in July 2009; the FDIC became receiver and sued in 2011 to collect on the promissory notes. Borrowers admitted nonpayment but asserted fraud‑based defenses and counterclaims (fraud, breach of fiduciary duty, RICO, impairment of collateral, etc.).
- The FDIC moved for summary judgment, invoking 12 U.S.C. § 1823(e), which bars unwritten or unrecorded agreements that diminish FDIC’s interest unless strict written/board‑minute conditions are met. The district court granted summary judgment for the FDIC, concluding § 1823(e) barred Borrowers’ defenses and dismissing several counterclaims for procedural or legal reasons.
- After judgment, an Oklahoma securities investigation into whether the Bank or affiliate sold unregistered securities (including the life‑settlement contracts) opened; Borrowers moved for reconsideration based on that “new” evidence, which the district court denied as cumulative and not newly discovered admissible evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court abused its discretion by denying Rule 56(d) discovery | Borrowers: additional discovery likely would produce evidence (witnesses/docs) to show an agreement or other defense outside §1823(e) | FDIC: Borrowers identified no probable documentary evidence or minutes; speculation is insufficient to justify delay | Denied — court did not abuse discretion; Borrowers failed to show discovery would produce §1823(e)‑satisfying evidence |
| Whether oral assurances and credit memoranda can defeat FDIC collection under §1823(e) | Borrowers: Doughty’s assurances and credit memorandum show the loans were fully collateralized and that they had no personal liability | FDIC: §1823(e) requires any agreement diminishing FDIC’s interest be written, executed, board‑approved, and in official records; oral promises cannot defeat FDIC claim | Held that §1823(e) bars Borrowers’ oral‑promise defenses; summary judgment for FDIC on note enforcement |
| Whether the post‑judgment Oklahoma securities investigation is newly discovered admissible evidence to reopen judgment | Borrowers: the investigation shows the life‑settlement contracts may be unregistered securities, supporting defenses not governed by §1823(e) | FDIC: an investigation’s existence is not admissible evidence of wrongdoing; Borrowers already had the credit memo and FDIC materials alerting them to securities issues | Denied — investigation notice is not newly discovered admissible evidence and is cumulative; reconsideration properly denied |
| Validity/admissibility of counterclaims (prereceivership claims, impairment of collateral, RICO) | Borrowers: asserted multiple counterclaims against Bank, Doughty, and FDIC | FDIC: procedural bars (failure to administratively exhaust prereceivership claims), concession or law precluding impairment‑of‑collateral, and that federal agencies are not RICO defendants | Court dismissed counterclaims for the stated procedural and legal reasons; affirmed on appeal |
Key Cases Cited
- FDIC v. Oldenburg, 34 F.3d 1529 (10th Cir. 1994) (explains §1823(e) purpose and burden on party asserting an agreement limiting liability)
- Langley v. FDIC, 484 U.S. 86 (1987) (broadly interprets the term “agreement” under §1823(e))
- Trask v. Franco, 446 F.3d 1036 (10th Cir. 2006) (standards for Rule 56(d) requests to delay summary judgment for discovery)
- FDIC v. Giammettei, 34 F.3d 51 (2d Cir. 1994) (defenses based on federal securities violations still subject to §1823(e))
- Dendinger v. First Nat’l Corp., 16 F.3d 99 (5th Cir. 1994) (oral misrepresentations constitute unwritten agreements barred by §1823(e))
- FDIC v. Investors Assocs. X, Ltd., 775 F.2d 152 (6th Cir. 1985) (similar holding that unwritten agreements cannot bind the FDIC)