Gravitt v. Bank of Ozarks
326 Ga. App. 461
Ga. Ct. App.2014Background
- CBC (a developer owned by Corners Communities, Gravitt, Smith) obtained an acquisition/development loan from Chestatee State Bank to build a mixed-use development; draws and construction advances occurred 2006–2010.
- Chestatee required personal guaranties (Corners Communities, Gravitt, Smith) in late 2008; CBC and related entities defaulted as market worsened.
- In Feb. 2010 Chestatee sent a restructuring letter promising a 24‑month extension and further construction funding; appellants relied on those representations and took further actions and loans.
- Chestatee was closed Dec. 17, 2010; FDIC became receiver and transferred assets to Bank of the Ozarks (BOZ), which declined to honor certain past oral promises and changed workout terms.
- BOZ declared defaults and sued to collect; appellants counterclaimed for breach of contract, promissory estoppel, unjust enrichment, and declaratory relief based on alleged modifications by Chestatee.
- Trial court granted summary judgment to BOZ, dismissing counterclaims on D’Oench/Duhem grounds and because appellants had not exhausted administrative remedies required by FIRREA (12 U.S.C. § 1821(d)(13)(D)).
Issues
| Issue | Plaintiff's Argument (Appellants) | Defendant's Argument (BOZ) | Held |
|---|---|---|---|
| Whether oral promises/side agreements with failed bank (Chestatee) can be used to defeat BOZ’s collection claims | The Feb. 2010 Letter and prior dealings created binding modifications/obligations that bar or reduce BOZ’s collection | D’Oench bars enforcement of unrecorded/secret agreements against the FDIC and its assignees; only properly recorded/board‑approved bank records bind successor | Court held D’Oench prevents reliance on those oral/unrecorded modifications; summary judgment for BOZ affirmed |
| Whether FIRREA’s administrative‑exhaustion provision deprives courts of jurisdiction over appellants’ counterclaims | Counterclaims are against BOZ’s own post‑acquisition conduct and thus not subject to FIRREA exhaustion | Counterclaims seek payment/determination of rights relating to assets of a failed bank and therefore fall within 12 U.S.C. § 1821(d)(13)(D) and require exhaustion | Court held the counterclaims fall within FIRREA’s scope and were not exhausted, so they were properly dismissed |
| Whether assertions styled as affirmative defenses avoid FIRREA exhaustion | Appellants: defenses (estoppel, failure of condition precedent) are independent and survive | Court: substance controls over labels; defenses rooted in alleged agreements with failed bank are claims requiring exhaustion and are barred by D’Oench as well | Court rejected appellants’ attempt to evade FIRREA/D’Oench; defenses barred |
| Whether factual disputes about what Chestatee promised preclude summary judgment | Appellants: genuine issues of fact exist about modifications and promises | BOZ: even if factual disputes exist, D’Oench makes those disputes immaterial with respect to a successor bank/FDIC | Court held factual disputes immaterial due to D’Oench; summary judgment appropriate |
Key Cases Cited
- D’Oench, Duhme & Co., Inc. v. FDIC, 315 U.S. 447 (bankruptcy doctrine barring enforcement of secret/undocumented agreements against FDIC receiver)
- Langley v. FDIC, 484 U.S. 86 (requirement that agreements be contemporaneously executed and approved to bind federal bank guarantors)
- Fed. Financial Co. v. Holden, 268 Ga. 73 (Ga. Supreme Court applying D’Oench protections to assignees)
- FDIC v. Hamilton, 939 F.2d 1225 (5th Cir.) (D’Oench bars claims based on unwritten banking customs/practices)
- Hewitt v. Community & Southern Bank, 324 Ga. App. 713 (Ga. Ct. App.) (D’Oench bars enforcement of alleged oral extensions against assignee bank)