USCA1 Opinion
November 15, 1994
[NOT FOR PUBLICATION]
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 94-1555
JERRY BARROWS,
Plaintiff, Appellant,
v.
RESOLUTION TRUST CORPORATION, ET AL.,
Defendants, Appellees.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Joseph A. DiClerico, U.S. District Judge] ___________________
____________________
Before
Cyr, Circuit Judge, _____________
Bownes, Senior Circuit Judge, ____________________
and Boudin, Circuit Judge. _____________
____________________
Jerry Barrows on brief pro se. _____________
McLane, Graf, Raulerson & Middleton, Professional Association, _________________________________________________________________
Ralph F. Holmes and Suzanne M. Gorman on brief for appellee. _______________ _________________
____________________
____________________
Per Curiam. This appeal has its origin in a lender ___________
liability lawsuit brought by plaintiff-appellant Jerry
Barrows against First Northern Cooperative Bank in New
Hampshire state court. Before the case came to trial, the
bank failed and the Resolution Trust Corporation ("RTC") was
appointed as receiver. The RTC removed the suit to federal
district court and moved for summary judgment. The district
court granted summary judgment on thirteen out of the
fourteen counts of the first amended complaint. Following a
trial on the merits, judgment was entered in favor of
appellant on the sole remaining count. Barrows appeals pro ___
se from various interlocutory rulings of the district court, __
including the grant of partial summary judgment. We affirm.
I.
The history of this case is quite complicated, and we
recount only those facts necessary to an understanding of our
decision. On October 17, 1988, Barrows filed an eight count
complaint against First Northern Cooperative Bank in New
Hampshire state court alleging breach of contract, breach of
warranty, tortious interference with contractual relations,
and slander. While the lawsuit was pending in state court,
Barrows entered into bankruptcy and a trustee was appointed
for his estate. Although the trustee expressed his intent to
pursue the action, no formal substitution of the trustee as
plaintiff took place at that time, and the case continued to
be prosecuted by Barrows.
Following substitution of the RTC for the bank as
defendant and removal of the case to federal district court,
the RTC moved for a stay of court proceedings pending
exhaustion of administrative remedies. Barrows moved for
leave to amend his complaint. By order dated June 7, 1991,
Magistrate Judge Barry imposed a 180-day stay and granted
Barrows leave until July 8, 1991 to file an amended
complaint. On July 8, 1991, Barrows filed an amended
complaint which omitted his previous allegations of slander
and breach of warranty but added several counts, including
claims for negligence, breach of covenant of good faith and
fair dealing, negligent misrepresentation, and violation of
the Racketeer Influenced and Corrupt Organizations laws. The
amended complaint also added individual defendants.
Following the expiration of the 180-day period, the RTC filed
an amended answer on December 27, 1991.
On February 19, 1992, Magistrate Judge Arenas ordered
that the bankruptcy trustee be substituted as plaintiff.
Over the next several months, the action was dismissed with
respect to most of the individual defendants. On August 6,
1992, Magistrate Judge Arenas ordered plaintiff to show cause
within fifteen days why he should not recommend that the
action be dismissed with respect to certain remaining
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individual defendants. Sometime thereafter, the bankruptcy
trustee abandoned the action to Barrows. Neither the trustee
nor Barrows ever responded directly to the show cause order
by addressing why the action should continue against
remaining individual defendants. On October 6, 1992,
however, Barrows filed a second amended complaint.
On April 23, 1993, the RTC filed a motion for summary
judgment based on the first amended complaint. On June 11,
1993, the district court held a status conference to
determine, inter alia, which complaint was presently before _____ ____
the court. The court found that the first amended complaint
was the operative complaint, and that the second amended
complaint "was filed without court permission and without
consent of the parties" and, accordingly, had "no legal
effect pursuant to Fed. R. Civ. P. 15(a)." On August 19,
1993, the district court granted summary judgment to the RTC
on 13 out of the 14 counts in the first amended complaint on
the grounds that Barrows' claims failed to satisfy 12 U.S.C.
1823(e) and the common law D'Oench doctrine. On August 26, _______
1993, Barrows filed a motion to "alter or amend" the court's
summary judgment order. This motion was denied. On
September 15, 1993, Barrows filed a motion to enforce a
settlement agreement that he and First Northern Cooperative
Bank had allegedly entered into in January 1991, shortly
before the RTC was appointed as receiver. The district court
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denied this motion as untimely. Final judgment was entered
on February 24, 1994. This appeal followed.
II.
We begin by addressing some of the alleged procedural
errors. Contrary to the position taken by appellant, there
was no error in substituting the RTC as party-defendant.
Pursuant to 12 U.S.C. 1441a(b)(4) and 1821(d)(2), the RTC
succeeded to "all rights, titles, powers, and privileges" of
the failed bank. Fed. R. Civ. P. 25(c) gives the district
court discretion to substitute a party "[i]n case of any
transfer of interest." There are many cases in which the RTC
as receiver is substituted, as a matter of course, for a
failed bank. See, e.g., RTC v. Hallmark Builders, Inc., 996 ___ ____ ___ _______________________
F.2d 1144, 1147 (11th Cir. 1993) (substitution of RTC as
plaintiff); Pierce & Assoc. v. RTC, 987 F.2d 663, 664 (10th _______________ ___
Cir. 1993) (substitution of RTC as defendant); Payne v. _____
Security Sav. & Loan Ass'n, 924 F.2d 109, 110-11 (7th Cir. ___________________________
1991) (same). Appellant has advanced no plausible ground
why the RTC's motion for substitution in the instant case
should have been denied or why a hearing was necessary.
We also reject appellant's argument that the district
court erred in proceeding with the case after the RTC failed
to make a determination of his administrative claim within
180 days. The stay order, by its very terms, granted a stay
of only 180 days. Upon the expiration of this period, on
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December 4, 1991, the district court appropriately continued
with the case. Cf. Marquis v. FDIC, 965 F.2d 1148, 1155 (1st ___ _______ ____
Cir. 1992) (contemplating that once the FDIC steps in as
receiver, the district court would in the vast majority of
cases "hold pending litigation in abeyance until the
administrative review process has run its course, or 180 days
has passed, whichever first occurs").
We are also persuaded, for the reasons stated in the
district court's order dated June 11, 1993, that the court
did not err in finding that the first amended complaint was
the operative complaint. For the first time on appeal,
appellant argues that the first amended complaint, which was
filed on his behalf, could not be the operative complaint
because it was filed after the action had vested in the
bankruptcy trustee for the benefit of the estate but before
the trustee abandoned the action. This argument is waived
since it was not raised below. See United States v. Palmer, ___ _____________ ______
956 F.2d 3, 6 (1st Cir. 1992). Moreover, we note that at the
time the first amended complaint was filed, the trustee had
not yet been substituted as plaintiff. Under Fed. R. Civ. P.
25(c), it was proper, in the absence of such substitution, to
continue the action by Barrows. See United States v. ___ ______________
Transocean Air Lines, Inc., 356 F.2d 702, 704 (5th Cir. 1966) __________________________
(adjudication in bankruptcy of carrier did not, of itself,
substitute bankruptcy trustee as party to action); Liberty _______
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Broadcasting Sys., Inc. v. Albertson, 15 F.R.D. 121, 122 ________________________ _________
(W.D.N.Y. 1953) (where no motion was made to substitute
bankruptcy trustee as plaintiff, it was proper to continue
the action as originally instituted).
III.
We now turn to appellant's argument that the district
court erred in failing to enforce an alleged settlement
agreement that appellant and First Northern Cooperative Bank
entered into in January 1991, shortly before the RTC was
appointed as receiver. According to Barrows, the bank agreed
to provide him with various loans in exchange for his
dropping the lawsuit. Following its appointment as receiver,
however, the RTC allegedly refused to honor the agreement.
As an initial matter, we agree with the district court
that the motion to enforce settlement agreement, which was
filed on September 15, 1993, was untimely. In so ruling, we
do not rely, as did the district court, in part, on the
timely filing requirement of Fed. R. Civ. P. 59(e).
Appellant's motion to enforce settlement could not properly
be treated as a motion to alter or amend judgment under Rule
59(e) because this rule applies only to final judgments.
See, e.g., Fayetteville Investors v. Commercial Builders, ___ ____ ______________________ ____________________
Inc., 936 F.2d 1462, 1472 (4th Cir. 1991). The partial ____
summary judgment which appellant sought to set aside was not
a final judgment. See Fed. R. Civ. P. 54. In our view, ___
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appellant's motion to enforce was untimely not because it was
filed more than ten days after the entry of summary judgment,
but rather because it was filed over two and a half years
after the date of the alleged agreement and after the case
was over with respect to all but appellant's one remaining
claim which survived summary judgment.
Moreover, the district court was precluded from
enforcing the agreement by 12 U.S.C. 1821(j), the anti-
injunction provision of the Financial Institutions Reform and
Recovery Act. Section 1821(j) provides that:
Except as provided in this section, no
court may take any action, except at the
request of the Board of Directors by
regulation or order, to restrain or
affect the exercise of powers or
functions of the [RTC] as a conservator
or a receiver.
12 U.S.C. 1821(j). In refusing to provide appellant with a
loan, the RTC was acting pursuant to its statutory power to
"preserve and conserve the assets and property" of the failed
institution. See 12 U.S.C. 1821(d)(2)(B). Under the ___
circumstances, the district court was without jurisdiction to
enforce the alleged agreement. Cf. Volges v. RTC, 32 F.3d ___ ______ ___
50, 52 (2d Cir. 1994) (section 1821(j) deprived district
court of jurisdiction to enjoin the RTC from auctioning off
mortgages owned by failed depository institution); Lloyd v. _____
FDIC, 22 F.3d 335, 336 (1st Cir. 1994) (holding that district ____
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court lacked jurisdiction to enjoin FDIC from foreclosing on
mortgaged property).
IV.
We next address appellant's argument that the district
court erred in granting partial summary judgment for the RTC.
"Summary judgment is appropriate where the record, viewed in
the light most favorable to the nonmoving party, reveals no
genuine issue as to any material fact, and the moving party
is entitled to judgment as a matter of law." Commercial __________
Union Ins. Co. v. Walbrook Ins. Co., 7 F.3d 1047, 1050 (1st _______________ __________________
Cir. 1993). The moving party bears the burden of showing
that there is no genuine, material factual issue. Snow v. ____
Harnischfeger Corp., 12 F.3d 1154, 1157 (1st Cir. 1993), ____________________
cert. denied, 115 S. Ct. 56 (1994). However, once the moving ____________
party has made a properly supported motion for summary
judgment, the adverse party "must set forth specific facts
showing there is a genuine issue for trial." Fed. R. Civ. P.
56(e); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 ________ ____________________
(1986). We review a grant of summary judgment de novo. __ ____
Snow, 12 F.3d at 1157. ____
Appellant argues that the district court should have
refrained from ruling on the summary judgment motion because
the RTC had yet to make a determination on his administrative
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claim. He also argues that a ruling on the summary judgment
motion was improper since he had reached a settlement
agreement with the bank. We pass the question whether these
arguments were properly preserved and reject them in light of
our previous discussion. The district court properly
proceeded with the case once the 180-day stay expired, and
the court was without jurisdiction to enforce the alleged
settlement agreement.
Appellant's sole challenge to the merits of the district
court's summary judgment ruling is with respect to Counts I -
III of the first amended complaint. In these counts, Barrows
alleged that the bank had agreed to issue an "unconditional"
letter of credit, and that it breached this agreement (Count
1), was negligent (Count 2), and intentionally interfered
with his contractual relationship with a seller (Count 3), by
issuing a standby letter of credit. In its motion for
summary judgment, the RTC argued that these claims failed to
satisfy 12 U.S.C. 1823(e) and the D'Oench doctrine.1 The _______
____________________
1. The district court's summary judgment order contains a
thorough discussion of the D'Oench doctrine, and its _______
statutory counterpart, 12 U.S.C. 1823(e). The D'Oench _______
doctrine has its origins in D'Oench, Duhme & Co. v. FDIC, 315 ____________________ ____
U.S. 447 (1942). The evolved doctrine bars defenses and
affirmative claims against the RTC, following its appointment
as conservator or receiver to a failed institution, as long
as those claims arise out of an unrecorded agreement. See ___
McCullough v. FDIC, 987 F.2d 870, 874 (1st Cir. 1993) __________ ____
(observing that D'Oench doctrine bars affirmative claims _______
whether cloaked in terms of contract or tort, as long as
those claims arise out of an alleged "secret" agreement).
Section 1823(e) bars claims or defenses asserted against the
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district court agreed, and found, in particular, that
appellant had "failed to show a dispute of material fact
exist[ed] concerning whether the letter of credit contract
was approved by the Bank's board of directors or loan
committee." See 12 U.S.C. 1823(e)(3). ___
Appellant argues that 1823(e) does not bar his claims
in Counts I-III because the alleged agreement related to a
bank liability, not an asset. See Agri Export Coop. v. ___ __________________
Universal Sav. Assoc'n, 767 F. Supp. 824, 833 (S.D.Tex. 1991) ______________________
(observing that a letter of credit is a bank obligation and
not an asset). This argument was not properly preserved in
the district court, and, hence, is waived. Moreover, even if
we were to reach the issue, we would affirm the judgment
below. The D'Oench doctrine is in certain respects broader _______
than 1823(e) and is not constrained by any requirement that
____________________
RTC based on any agreement "which tends to diminish or defeat
the interest of the [RTC] in any asset acquired by it" from a
failed institution unless such agreement:
(1) is in writing,
(2) was executed by the depository institution and
any person claiming an adverse interest thereunder,
including the obligor, contemporaneously with the
acquisition of the asset by the depository
institution,
(3) was approved by the board of directors of the
depository institution or its loan committee, which
approval shall be reflected in the minutes of said
board or committee, and
(4) has been, continuously, from the time of its
execution, an official record of the depository
institution.
12 U.S.C. 1823(e).
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the agreement relate to a specific asset. See Hall v. FDIC, ___ ____ ____
920 F.2d 334, 339 (6th Cir. 1990), cert. denied, 501 U.S. _____________
1231 (1991); Winterbrook Realty, Inc. v. FDIC, 820 F. Supp. _________________________ ____
27, 30-31 (D.N.H. 1993). Since there is no evidence that the
alleged agreement to issue an "unconditional" letter of
credit was recorded in bank records, the D'Oench doctrine, _______
independently of 1823(e), bars appellant's claims arising
out of this agreement.2 See Nutro Prods. Corp. v. NCNB ___ ___________________ ____
Texas Nat'l Bank, 1994 WL 530166, at *4 (5th Cir. Oct. 17, _________________
1994) (holding that D'Oench doctrine precluded consideration _______
of unrecorded agreement to extend expiration date in letter
of credit); Timberland Design, Inc. v. First Serv. Bank For ________________________ _____________________
Sav., 932 F.2d 46 (1st Cir. 1991) (holding that D'Oench ____ _______
doctrine barred claim based on unrecorded agreement to
provide a future loan).
V.
We have carefully considered appellant's remaining
arguments and are persuaded that they are without merit.
Affirmed. ________
____________________
2. Appellant, in an apparent attempt to prove that the
alleged agreement was recorded, includes copies of bank
records in his reply brief. Since these records were not
filed as exhibits in the district court, they are not part of
the record on appeal and cannot inform our decision. See ___
Fed. R. App. P. 10(a). We note, however, that these records
tend to show that the bank agreed to issue a standby letter
of credit and not the "unconditional" letter of credit
appellant claims he was promised.
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