Professional Documents
Culture Documents
________
Christopher J. Bellotto, Counsel, with whom Ann S. Duross,
________________________
_____________
Assistant General
Counsel, Robert D.
McGillicuddy, Senior
_________________________
Counsel, A. Van C. Lanckton, Laurie A. Parrott, and Craig and
___________________
_________________
__________
Macauley Professional Corporation were on brief, for appellee
__________________________________
Federal Deposit Insurance Corporation.
_________________________
November 8, 1994
_________________________
SELYA,
SELYA,
Circuit Judge.
Circuit Judge.
_____________
in the context of
borrowers
who
complain that
they
agent
for the
now
Specifically, plaintiffs
were
the point
a group of
swindled, against
the
defunct Bank
for
Savings (the
to (1) claims
that
they
originally
brought
against
the
Bank,
and
(2)
on certain promissory
disposing of
length,
the matter,
see Vasapolli
___ _________
1994) [No.
Duhme doctrine
_____
and
U.S.C.
in
the
a belated effort to
factum
by
Maine
barred
cannot
to
the
by
inducement,
the D'Oench,
________
claims of
survive
scrutiny;
counterclaims
entitled to
are
benefit
state
court
in
court's central
fraudulent
plaintiffs is
issued
for
at some
(D. Mass.
1823(e); plaintiffs'
defenses
none of the
Supp. ___
claims
the Bank.
court wrote
___ F.
negligence are
affirmative
impuissant; and
an
and
and 12
fraud
plaintiffs'
from
v. Rostoff,
_______
plaintiffs'
misrepresentation,
duress
the district
92-11501-K], and we
conclusions:
notes payable to
BACKGROUND
BACKGROUND
2
related
proceeding.
R. Civ. P. 56,
we construct this
sketch, and limn the material facts, in the light most hospitable
to the appellants.
The myriad
together by what
error in
plaintiffs in
appears in
judgment:
retrospect to have
they all
borrowed money
are bound
been a
serious
from the
Bank in
entities controlled by
him.
Although
each
consistent
certain
bank
pattern
of
employees.
chicanery practiced
In
a typical
by
Rostoff
instance,
and
a plaintiff
on multiple misrepresentations
by
expenses during
abetted
the period
of
incur no out-of-pocket
his ownership.
these misrepresentations
in divers ways,
Bank
officials
including the
a string of high-pressure
night
were
they arrived at
the Bank.
offices,
Rostoff appeared
sometimes
to
opening the
have free
outer
run
door
of the
to let
Bank's
purchasers
enter.
Among
although
other
things,
the
plaintiffs
allege
that,
they
discovered
Rostoff's
cozenage,
the
mortgages;
eventually
group composed
and
federal
convicted) Rostoff
criminal charges.
action
and
While
and
foreclosed many
prosecutors
certain
the
indicted
Bank
(and
employees
on
brought a civil
other
defendants.2
In
negligence,
their
suit,
plaintiffs
sought
racketeering, deceptive
trade practices,
under their
promissory notes.
In
response
to the
____________________
1Eleven plaintiffs extended the terms of
subsequent written agreement with the Bank.
their loans
by
counterclaims,
defenses,
the
averring,
plaintiffs
among
asserted
other
numerous
things, that
affirmative
they
had
been
March of 1992.
States
FDIC stepped
United
In due
FDIC sought,
removed that
action
Bank in
to the
course, the
action,
The
judgment.
See
___
In essence, the
lower
of
court
found
that
plaintiffs'
claims
fraudulent
by the
______________
claims of economic duress
nugatory
a sufficient
by the
lack of
were rendered
factual predicate.
See
___
against
thirteen
the
the court
At
counterclaims
thereafter, permitted
which
FDIC.
the
in
the
then resolved
same
on the
time, the
FDIC's
favor,
court
and,
Finding no
The plaintiffs
asserting for the first
then
moved for
relief from
judgment,
a previous Maine
the motion.
This
appeal followed.
II.
II.
we
must steer.
A.
A.
Summary
56(c).
appropriate
when
the
record
is
For purposes of
Fed.
. ."
United States v.
_____________
200, 204
that the
law."
Id.
___
(quoting Anderson
________
suit under
v. Liberty Lobby,
_______________
judgment engenders de
__
Rivera-Muriente
_______________
1992).
granting summary
In
v. Agosto-Alicea,
_____________
performing
this chore,
959 F.2d
we
novo
____
349, 352
scrutinize the
(1st Cir.
summary
judgment
and we indulge
party's favor.
B.
B.
The
collapses.
assets; in
FDIC
As
two
separate
FDIC
failed
48 (1st
when the
bank
assumption of some
healthy bank.
roles
manages the
when
failed
bank
bank's
the failed
FDIC's options
the
assumes
receiver, the
bank's deposits.
for Sav.,
________
or,
or all
of its
assets and
If undue disruption is to
curiam).
The
include liquidating
the
purchase
liabilities by
and
be avoided, a purchase
to
therefore,
take
that both
regarding
in
failed
deciding what
bank
and
course
of
thereafter
in
rely
confidently
on
bank's
records
as
an
be able
accurate
this reality,
more than
half a century ago acted to protect the FDIC and the public funds
it
See
___
administers by
formulating a
v. FDIC,
____
upon
secret
pacts
special doctrine
315 U.S.
of estoppel.
447 (1942).
The
or unrecorded
side
agreements
to
attempting to
and
kindred
instruments
Borrowers' claims
under the
particular
acquired
from
doctrine.
pertinence
See
___
to
Timberland, 932
__________
this
case,
the
failed
bank.3
F.2d at
secret
49-50.
Of
agreements
in the future.
See, e.g.,
___
U.S.
86, 92,
96 (1987)
conditions to payment of
____
(holding that
_______
____
the doctrine
extends to
of express
____________________
12 U.S.C.A.
1823(e) (West 1989). It remains an open question
whether the judicially created doctrine
and its statutory
counterpart are coterminous. See Bateman v. FDIC, 970 F.2d 924,
___ _______
____
926-27 (1st Cir. 1992). This appeal does not require us to probe
the point. Accordingly, we shall use phrases like "the D'Oench,
________
Duhme doctrine" to refer indiscriminately both to the judicially
_____
spawned doctrine and to its statutory reincarnation.
8
warranties).
III.
III.
ANALYSIS
ANALYSIS
a reviewing
should not
an eminently correct
write at
So it is here.
for substantially
opinion.
that
We
the reasons
add only
We,
exceptional
See, e.g.,
___ ____
In re
_____
38 (1st
articulated in the
a few observations,
lower court's
largely parallel
to
It
misrepresentation and
is settled
that both
within D'Oench,
________
Cir. 1993);
beyond peradventure
1992).
Undaunted,
appraisals
that
form
part
of
that
the
Bank's
official
as much,4 this
set of circumstances
Duhme doctrine
_____
comes into
play to pretermit
still
The D'Oench,
________
many transactional
claims against the FDIC even when due diligence could easily have
unmasked the fraud
bank's records.
In this
that is itself
case, however,
a specific
contractual provision
Bank's records.
It follows
or assurance contained
in the
district court
to
the
FDIC
despite
the
plaintiffs'
claims
of
Conventional
wisdom
holds that
or
claims
See, e.g.,
___ ____
Newton v.
______
that duress renders an agreement voidable, not void, and that the
D'Oench, Duhme rule
_______________
applies to
agreements that
are voidable);
894
of economic
____________________
4We hasten to add that, given Rostoff's wiliness,
assumption seems something of a stretch.
10
this
duress
is
irrelevant to
rule), cert.
_____
denied, 498
______
suggested that,
v.
FDIC,
____
Cir.
(1990).
D'Oench, Duhme
______________
A few courts
circumstances, claims of
Supp.
829,
duress in
the
798 F.
(distinguishing between
operation of
U.S. 895
in certain
the
the
836-39
have
duress can
See, e.g.,
___ ____
(D. Mass.
1992)
negotiating process
and
former); see also RTC v. Ruggiero, 977 F.2d 309, 314 (7th
___ ____ ___
________
1992) (declining
covered
by D'Oench);
_______
to reach
FDIC v.
____
question of
Morley, 867
______
whether duress
F.2d 1381,
is
1385 n.5
on both sides
cf. RTC
___ ___
v. North Bridge Assocs., Inc., 22 F.3d 1198, 1208 (1st Cir. 1994)
__________________________
that
their case
exemplifies
the invitation.
the
sort of
"external
We decline
to
embark on
viewed most
cannot support a
finding of duress.
Under Massachusetts
prevail
if he
shows
that (1)
law, a
"he
party claiming
has been
the
duress can
victim of
11
was "compelled
to make
a disproportionate exchange
Alternatively,
of values."
showing:
This is simply
the authorities
are consentient
lack of
law credits.
stuff of duress.
that the
presence of
profit motive negates the coercion or fear that is a sine qua non
____ ___ ___
for a finding of duress.
the Law of Contracts
_____________________
Since any
pressure that
potentially
profitable
A Treatise on
_____________
also Coveney v.
____ _______
permeated the
closings
business
opportunity,
their
claim
on a
of
duress is a mirage.
fear, the
threat, at
worst, was
have to
deposits, not
that the
concur with
the lower
12
bring
a legal
deposits
action to
would be
recover their
lost altogether.
We
court,
___
F.
Supp.
at ___
[slip
op.
at
12-15],
that the
circumstances of the
to
could
the
duress.
plaintiffs,
See,
___
not
e.g., Ismert,
____ ______
constitute
801 F.2d at
legally
cognizable
549-50; International
_____________
Hence,
case
held that the D'Oench, Duhme rule does not prohibit claims
______________
negligent impairment of the
plaintiffs assign
plaintiffs'
claims for
Though we eschew
negligent misrepresentation
comment on the
are barred.
involved guarantors
who alleged
the operations
Id. at
___
of the company
207 n.1.
The
whose loans
case at hand is
had
readily
____________________
___ ______
F.2d 628, 633-34
______
(2d Cir. 1982), cert.
_____
By accepting the funds and failing
distinguishable,
for the
plaintiffs' claims
the bank.
are fundamentally
of negligence
are
In this
sense, then,
different from
plaintiffs'
those asserted
in New
___
Connecticut Bank.
________________
Moreover, negligent
aimed.
simple expedient of
plaintiffs cannot
987
D'Oench, Duhme
______________
evade the
Each partakes of
F.2d
at
873
of negligence.
(extending
rule by
the
essentially
See generally
___ _________
1823(e) to
cover
misrepresentation by
omission so
avoid the
___ (1st
("[M]erely
calling
Cir. 1994)
a
[No.
dandelion
an
93-2373, slip
orchid does
op. at
not
12]
make
it
defy common
than
claims,
plaintiffs' claims
rehash
the district
motion for
brevis
______
of
their
court
of negligence
pretermitted
appropriately
disposition
of those
are nothing
misrepresentation
granted
claims.
the
FDIC's
See,
___
e.g.,
____
The plaintiffs
See
___
attempt to squeeze
14
exception.
Despite their
no adequate showing
We explain briefly.
an instrument without
contents.
See
___
id. at
___
93.
knowledge of
Thus, to
F.2d at
in the
cases).
nature or
constitute fraud
its terms.
person signs a
its true
to believe that
if a
it is
of fraud
in the factum.
Here, the plaintiffs allege
of fraud in
the factum
they were
signing
We
agree with the district court, see Vasapolli, ___ F. Supp. at ___
___ _________
[slip
op.
at
20], that
transactional terms,
Since
it
signing
is not
this
alleged
not to the
very nature of
disputed that
promissory
notes,
disparity
the
the
plaintiffs knew
Bank's
the
the agreements.
conduct,
goes to
they were
even
if
Accordingly,
under Fed.
judgment.
R.
The district
Civ.
P.
60(b)(6)
for
relief
from
the
a motion to
15
alter
or amend
agree
both
with the
district
recharacterization.
court is
If circumstances
taxonomy
court's
In addressing
Civ. P.
approach and
post-judgment
warrant, the
and reclassify
Fed. R.
as its
We
with
its
motion, a
fastens to it.
the motion
59(e).
the movant's
substance suggests.
1992).
That
their
with
amounts due on
Maine.6
The
motion,
the
use
the
plaintiffs
of Massachusetts
also made
hinted
law
to
at
some
calculate
certain properties in
more specific
claim
in
need
not
See 28 U.S.C.
___
reach
1738 (1988).
questions
and credit
of
whether
Maine
or
of deficiency amounts,
benefit of
the errors
review
committed in the
course of
denying a Rule
We
59(e) motion to
____________________
alter or amend a
discretion, see
___
Appeal of Sun Pipe Line Co., 831 F.2d 22, 24-25 (1st Cir. 1987),
____________________________
cert. denied, 486 U.S. 1055 (1988), and we discern no hint of any
_____ ______
such abuse in this instance.
It is crystal clear that
the earlier
Maine actions at
summary judgment.
motion for
of
the FDIC
between
the entry
of
final
judgment
period
that lasted
over
to request that
one
year
the
Maine
argument.
court ruled
against the
final judgment.
plaintiffs have
offered no
By
pertinent
state-law
plaintiffs
have no
unwillingness
judgment.
(1st
for
object to the
amounts claimed
all
basis
in
terms
of
for condemning
to take a second
See
___
1076, 1095
or to
plausible reason
the district
look after it
Massachusetts
law,
court's
(explaining that
courts will
F.2d
hold
the Emperor
Nero,
litigants cannot
fiddle as
17
Rome burns.
withholds potentially
relevant
information,
allows
his
opponent
to
configure
the
say
that
the
In
district
court's
plaintiffs'
post-judgment
discretion.
n.3
the information
unknown nor
on which
denied, 114
______
an
abuse
the
of
F.3d 88, 90
S. Ct.
relied was
neither
to summary judgment
2133 (1994);
Fragoso v.
_______
991 F.2d 878, 887-88 (1st Cir. 1993) (explaining that the
the movant
filed), cert.
_____
Lopez,
_____
the
constituted
grant
where
was
motion
refusal to
on previously undisclosed
motion that
movant knew of
a timeous manner); FDIC v. World Univ. Inc., 978 F.2d 10, 16 (1st
____
________________
Cir. 1992)
deny a
(holding that
has discretion
to
should, have
omitted).8
____________________
IV.
IV.
CONCLUSION
CONCLUSION
We need go
no further.
Hence, the
In the
end, the
plaintiffs'
not err in
concluding
no error
in holding
Affirmed.
Affirmed.
________
By
as counterdefendants,
19