The opinion of the court was delivered by: CHARLES R. RICHEY
On May 1, 1992, the Court issued a Memorandum Opinion in the above-captioned case, granting the defendant's Motion for Summary Judgment on the rescission claim. The Court held that the rescission claim was barred as a matter of law under 12 U.S.C. § 1823(e) and the case law interpreting that statute. Because of the unusual procedural posture of the case, the Court deferred ruling on defendant's Motion for Summary Judgment as it related to the other claims in the Complaint in this action.
See Mem. Op. filed May 1, 1992 at 1-2. The additional claims allege breach of contract, breach of fiduciary duty, negligence, and fraud.
Plaintiff has now had an opportunity to file an opposition to defendant's Motion for Summary Judgment as it relates to the breach of contract, breach of fiduciary duty, negligence, and fraud counts, and the defendant has filed a reply. Therefore the motion is ripe for resolution as it relates to those claims.
The Court has carefully considered the arguments raised by plaintiff in its opposition to the Motion for Summary Judgment as it relates to the remaining counts. In its Memorandum Opinion, the Court instructed the plaintiff to avoid relitigating the issues already decided and to offer any specific arguments as to why summary judgment would be inappropriate for the remaining counts in particular. Mem. Op. at 12-13. The plaintiff has made a number of arguments; however, these arguments fail to demonstrate that the Court's holding as to the rescission claim is inapplicable to the remaining counts. The Court concludes, therefore, that summary judgment must be entered in favor of the defendants for these counts.
The plaintiff makes two major arguments in its attempt to demonstrate that 12 U.S.C. § 1823(e) and the D'Oench, Duhme doctrine
do not bar the remaining claims.
Plaintiff contends that the conduct of the bank rose to the level of fraud in the factum, and, as such, is not barred under 12 U.S.C. § 1823(e) and Langley v. FDIC, 484 U.S. 86 (1987). Plaintiff also contends that its claims are based on the bank's violation of implied covenants and duties which are independant of any unwritten agreement. These arguments amount to attempts to relitigate the issues that the Court has already decided and which constitute the law of the case, despite the Court's instruction to avoid this tactic. The Court could dismiss these arguments out of hand. Giving the plaintiff the benefit of the doubt, and construing these issues on the merits, the Court sees no reason it should reconsider or depart from its prior holding with respect to the remaining claims.
Plaintiff argues that the bank, Baltimore Federal Financial, F.S.A. ("BFF"), engaged in conduct so egregious that it rises above the level of fraud in the inducement and constitutes fraud in the factum. The Supreme Court in Langley suggested that a defense (or claim) of fraud in the factum might not be barred under § 1823(e) because such a defense renders the instrument entirely void, whereas fraud in the inducement only renders the instrument voidable. Langley, 108 S. Ct. at 402 . As the Court noted in its prior decision, fraud in the factum "is the sort of fraud that procures a party's signature to an instrument without knowledge of its true nature or contents". Langley at 402 (citations omitted). The plaintiff does not allege that the wrong documents were signed or that it did not understand the contents thereof. In fact, it is undisputed that the plaintiff was represented by counsel in the negotiation of terms of the loan and at the loan closing and was fully aware of the contents of the Construction Loan Agreement, Deed of Trust and Deed of Trust Note. See Def.'s Statement of Facts Not in Dispute P 9; Pl.s Statement of Genuine Issues in Dispute P 1. While the plaintiff now suggests that fraud in the factum exists here because of the allegedly egregious nature of the alleged fraud, it presents no authority for the proposition that the extremity of the allegations converts a claim for fraud in the inducement into fraud in the factum, and this Court finds none. See Pl. Supp. Opp. at 19-20. Therefore there is no basis for a claim of fraud in the factum here that would prevent the application of § 1823(e) as to the remaining claims.
Plaintiff also contends that its claims are based on the BFF's violation of implied covenants and duties which are independent of any unwritten agreement, and therefore beyond the scope of § 1823(e) and D'Oench, Duhme. This Court addressed this argument, at least in part, in its prior Memorandum Opinion, where it found that a claim of the breach of the implied covenant of good faith and fair dealing is not barred by § 1823(e). Mem. Op. at 10-11. While the plaintiff has now presented cases to further support its position, none of these cases are directly on point; moreover, none are binding on this Court. See Texas Refrigeration Supply, Inc. v. FDIC, 953 F.2d 975, 980-983 (5th Cir. 1992) (involving claim of wrongful acceleration and unreasonable sale at foreclosure); Garrett v. Commonwealth Mtge. Corp., 938 F.2d 591, 594-95 (5th Cir. 1991) (finding dismissal under D'Oench, Duhme and § 1823(e) premature on a motion to dismiss); Tuxedo Beach Club Corp. v. City Federal Savings Bank, 749 F. Supp. 635, 642-43 (D.N.J. 1990) (finding dismissal under D'Oench, Duhme and § 1823(e) premature when there has not been an opportunity for discovery on whether an enforceable "agreement" exists); American Fed'n of State, County and Municipal Employees v. FDIC, Slip op, MF No. 90-1755 (March 11, 1992), at 49-50 (rejecting argument that § 1823(e) does not apply to alleged misrepresentations and omissions independent of an agreement).
Thus the Court finds that the plaintiff's remaining claims are barred under 12 U.S.C. § 1823(e) and the D'Oench, Duhme doctrine. The plaintiff has demonstrated no reason that the Court's holding with respect to the rescission claim in this case should not apply to the other claims contained in the Complaint.
Accordingly, it is, by the Court, this 26 day of June, 1992,
ORDERED that for the reasons stated herein and those set forth in the Court's Memorandum Opinion filed May 1, 1992, the defendant's Motion for Summary Judgment shall be, and hereby is, GRANTED with respect to the remaining counts of the Complaint (Counts I, II, III, and V) in the original Civil Action No. 90-3002; and it is
FURTHER ORDERED that the original Civil Action No. 90-3002 shall be, and hereby is, DISMISSED from the dockets of this Court; and it is
FURTHER ORDERED that this Order shall have no effect on the status of the other causes of action which were subsequently consolidated into Civil Action No. 90-3002.
UNITED STATES DISTRICT ...