[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
MARCH 17, 2011
No. 10-12615
JOHN LEY
________________________ CLERK
D. C. Docket No. 2:08-cv-00681-CEH-DNF
OCEAN BANK,
a Florida state banking corporation,
Plaintiff-Counter-
Defendant-Appellee,
versus
FIRST FLORIDA BANK,
a Florida state banking corporation,
Defendant-Counter-
Claimant-Appellant.
ROYAL PALM BANK OF FLORIDA,
a Florida state banking corporation,
Defendant-Counter-
Claimant.
________________________
No. 10-12616
________________________
D. C. Docket No. 2:08-cv-00681-CEH-DNF
OCEAN BANK,
a Florida state banking corporation,
Plaintiff-Counter-
Defendant-Appellee,
versus
FIRST FLORIDA BANK,
a Florida state banking corporation,
Defendant-Counter-
Claimant,
ROYAL PALM BANK OF FLORIDA,
a Florida state banking corporation,
Defendant-Counter-
Claimant-Appellant.
________________________
Appeals from the United States District Court
for the Middle District of Florida
_________________________
(March 17, 2011)
Before MARCUS and ANDERSON, Circuit Judges, and ALBRITTON,* District
Judge.
PER CURIAM:
_______________
*Honorable William Harold Albritton III, United States Senior District Judge for the Middle
District of Alabama, sitting by designation.
2
After oral argument, and careful consideration, we conclude that the
judgment of the district court is due to be affirmed, although perhaps upon grounds
somewhat different from those relied upon by the district court.
Most importantly, we conclude that the parties’ Participation Agreements
confer priority payment rights to Ocean Bank, and that these rights apply to the
distribution of proceeds from the sale of the property by the participating banks
following their repossession thereof. The Participation Agreements expressly
provide in Section 8C that principal payments—“either during the term of the Loan
or during any post-maturity period” (emphasis added)—shall be subject to Ocean
Bank’s priority rights. The position that Ocean Bank retains its priority rights even
after the property is repossessed by foreclosure is bolstered by paragraph 9(C) of
the same Participation Agreements, which provides: “[T]he proceeds of all
collateral directly securing payment of the Loan . . . shall be applied to the full
payment of the Loan as provided in Section 8 above.”
Even if there were some ambiguity with respect to the foregoing
Participation Agreements, the record evidence of the parties’ conduct provides
overwhelming proof that the parties understood that the priority rights of Ocean
Bank continued past repossession and applied to the proceeds of the sale of the
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property.1 The Appellants argue that the record contains disputed issues of
material fact, but their argument fails for lack of evidence. The deposition
testimony to which the Appellants cite neither denies that Ocean Bank maintained
its priority after a foreclosure, nor denies that the other two banks confirmed this
understanding to Ocean Bank. The stricken affidavits upon which Appellants
would like to rely were properly rejected as conclusory by the district court, and
likewise provide no grounds for reversal.
Appellants also argue that no equitable lien could arise on the property
unless the Appellant banks owed a debt to Ocean Bank.2 However, Appellants cite
no cases for the proposition that parties who are competing for priority must owe
debts to one another before any one of them may claim a lien on the collateral. A
debt was clearly owed to Ocean Bank as the unpaid lender in the underlying
transaction, just as a debt was owed to the Appellant banks. The fact that the
property was collateral for the loan makes it proper for Ocean Bank to claim an
equitable lien. Accordingly, Appellants have no good argument against the
1
Any issues with respect to whether or not Ocean Bank had the right to sell the
repossessed property are moot. Appellants raised the issue only with respect to whether the oral
agreement relied upon by the district court allowed for a sale, and we do not rely upon this oral
agreement.
2
Appellants’ argument that no equitable lien could arise without a written
agreement is moot because we find that the written Participation Agreements provided the basis
for a lien.
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imposition of the lien.
Because we do not rely on the district court’s theory that there was a new
oral agreement, Appellants’ arguments that the relief exceeded the pleadings and
that there was no consideration to support the formation of a new agreement are
moot.
For the foregoing reasons, the judgment of the district court is
AFFIRMED.
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