problem, Menas could not borrow any more money from the bank. In the interim, they recommended that Wilson apply for a $ 250,000 loan in his name only, with Menas cosigning. They also assured Wilson that once the bookkeeping problem was resolved, the loan would be reissued in both partners' names.
The $ 350,000 was soon exhausted. Concerned over Menas' borrowing, Action officials convinced Wilson to consolidate the partnership's prior loans with an additional $ 400,000 loan, into a single $ 1.1 million loan in Wilson's name only. Action officials assured Wilson, both orally and in a letter dated February 23, 1990 from Joseph M. Skowronski, Executive Vice President of Action, that he would only be responsible for 50% of the loan (the "Skowronski letter").
Wilson alleges that Action S&L officials at this time knew and failed to disclose that (1) Menas had exceeded the $ 5 million dollar single borrower limits, placing Menas' other non-partnership development projects at risk, and (2) that the construction loan amount exceeded the market value of the building.
Shortly thereafter, Action S&L and Menas' non-partnership development projects both collapsed. On November 15, 1990, Action S&L was declared insolvent by the Office of Thrift Supervision, and Resolution Trust Corporation ("RTC") was appointed as receiver of the Failed Thrift. On that same date, a separate institution, Action Federal Savings Bank (the "New Thrift") was established and RTC was appointed as its conservator. A purchase and assumption agreement was entered into between the New Thrift and RTC as the receiver of the Failed Thrift. Pursuant to the terms of that agreement, certain assets of the Failed Thrift were transferred to the New Thrift including the Note and Mortgage. As a result, RTC as conservator of the New Thrift became the sole holder of the Note and Mortgage as of November 15, 1990.
On October 25, 1991, the New Thrift went into receivership and RTC was appointed as its receiver.
On July 22, 1991, RTC as receiver of the New Thrift filed a complaint in the United States District Court against Wilson, Menas, and others. The original complaint contained four counts. Counts one and two sought foreclosure of the Mortgage and possession of the mortgaged property. Counts three and four sought foreclosure of an assignment of leases and security interests in personal property, respectively.
Defaults as to the four counts of the complaint were entered as to Wilson and certain other defendants who failed to answer the complaint. On December 16, 1991, RTC filed an amended complaint, adding a fifth count which stated a claim for money judgment against Wilson on the Note.
On June 22, 1992, Wilson filed and served an answer to the second amended complaint, a counterclaim, and a third party complaint against a number of third party defendants. In his answer, Wilson raised the defense of fraud to RTC's claim for money damages. In his counterclaim and third party complaint, Wilson asserted New Jersey racketeering and tort claims.
On October 26, 1992, RTC moved to dismiss Wilson's counterclaim and third-party complaint against it as the receiver of the Failed Thrift, based on lack of subject matter jurisdiction. RTC alleged that Wilson filed his counterclaim and third party complaint prematurely, before the statutorily-mandated administrative claims process had expired. During the pendency of that motion, RTC moved on December 28, 1992 for summary judgment dismissing Wilson's counterclaim and third party complaint against RTC and for money damages as to Count V of the Amended Complaint. On September 30, 1993, this court dismissed Wilson's counterclaim and third-party complaint for lack of subject matter jurisdiction, with leave to refile, and denied RTC's motion for summary judgment without prejudice.
Wilson subsequently refiled his counterclaim and third-party complaint, and RTC renewed its motion for summary judgment.
A. Summary Judgment Standard
The standard for granting summary judgment is a stringent one. A court may grant summary judgment only when the materials of record "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see Hersh v. Allen Prods. Co., 789 F.2d 230, 232 (3d Cir. 1986); Lang v. New York Life Ins. Co., 721 F.2d 118, 119 (3d Cir. 1983). In deciding whether there is a disputed issue of material fact the court must view all doubt in favor of the non-moving party. Meyer v. Riegel Prods. Corp., 720 F.2d 303, 307 n.2 (3d Cir. 1983), cert. denied, 465 U.S. 1091, 79 L. Ed. 2d 910, 104 S. Ct. 2144 (1984); Smith v. Pittsburgh Gage & Supply Co., 464 F.2d 870, 874 (3d Cir. 1972). The threshold inquiry is whether there are "any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).
Supreme Court decisions mandate that "a motion for summary judgment must be granted unless the party opposing the motion can produce evidence which, when considered in light of that party's burden of proof at trial, could be the basis for a jury finding in that party's favor." J.E. Mamiye & Sons, Inc. v. Fidelity Bank, 813 F.2d 610, 618 (3d Cir. 1987) (Becker, J., concurring) (citing Anderson, 477 U.S. 242, 91 L. Ed. 2d 202, 106 S. Ct. 2505, and Celotex Corp. v. Catrett, 477 U.S. 317, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986)). Moreover, once the moving party has carried its burden of establishing the absence of a genuine issue of material fact, "its opponent must do more than simply show that there is some metaphysical doubt as to material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986). Thus, if the non-movant's evidence is merely "colorable" or is "not significantly probative," the court may grant summary judgment. Anderson, 477 U.S. at 249-50.
B. Count V of the Amended Complaint
RTC seeks summary judgment as to Count V of the amended complaint for money damages. RTC argues that the fraud defenses raised by Wilson are barred by the D'Oench Duhme and holder in due course doctrines.
1. D'Oench Duhme Doctrine
Under the D'Oench Duhme doctrine, see D'Oench Duhme & Co. v. FDIC, 315 U.S. 447, 86 L. Ed. 956, 62 S. Ct. 676 (1942) and its statutory counterpart, 12 U.S.C. § 1823(e),
undocumented side agreements with a failed institution taken over by the FDIC are legally inadmissible to diminish or defeat the interests of the FDIC. . . . The policy rationale behind the doctrine and section 1823(e) is that regulators assessing a financial institution's safety and soundness will not be aware of a bank's oral undertakings.