CENTENNIAL BANK v. RISH JR

Filing 54

ORDER Pla's Motion for Summary Judgment (Case 5:11-cv-51, Doc. 49). Pla shall file a detailed itemization of attorneys' fees & costs not later than 12/28/2011. Signed by JUDGE RICHARD SMOAK on 12/8/2011. (sea)

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF FLORIDA
PANAMA CITY DIVISION
CENTENNIAL BANK, successor in
interest to Coastal Community Bank,
Plaintiff,
v.

CASE NO. 5:11-cv-49-RS-EMT

PINEY POINT PRESERVE, LLC;
WILLIAM J. RISH, JR.; TERRA PAR
MER, LLC; RALPH RISH, and
RANDALL McELHENEY,
Defendant.
_________________________________________/
ORDER
Before me is Plaintiff’s Motion for Summary Judgment (Case 5:11-cv-51, Doc.
49).
I. STANDARD OF REVIEW
The basic issue before the court on a motion for summary judgment is “whether
the evidence presents a sufficient disagreement to require submission to a jury or
whether it is so one-sided that one party must prevail as a matter of law.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 251, 106 S. Ct. 2505, 2512 (1986). The moving
party has the burden of showing the absence of a genuine issue as to any material fact,
and in deciding whether the movant has met this burden, the court must view the
movant’s evidence and all factual inferences arising from it in the light most favorable

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to the nonmoving party. Adickes v. S.H. Kress & Co., 398 U.S. 144 (1970);
Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993). Thus, if reasonable
minds could differ on the inferences arising from undisputed facts, then a court should
deny summary judgment. Miranda v. B & B Cash Grocery Store, Inc., 975 F.2d 1518,
1534 (11th Cir. 1992) (citing Mercantile Bank & Trust v. Fidelity & Deposit Co., 750
F.2d 838, 841 (11th Cir. 1985)). However, a mere ‘scintilla’ of evidence supporting
the nonmoving party's position will not suffice; there must be enough of a showing
that the jury could reasonably find for that party. Walker v. Darby, 911 F.2d 1573,
1577 (11th Cir. 1990) (citing Anderson, 477 U.S. at 251).
II. BACKGROUND
I accept the facts in the light most favorable to Plaintiff. See Galvez v. Bruce,
552 F.3d 1238, 1239 (11th Cir. 2008) (citing Vinyard v. Wilson, 311 F.3d 1340, 1343
n.1 (11th Cir. 2002)). “ ‘All reasonable doubts about the facts should be resolved in
favor of the non-movant.’ ” Id. (quoting Burton v. City of Belle Glade, 178 F.3d
1175, 1187 (11th Cir. 1999); Clemons v. Dougherty County, 684 F.2d 1365, 1368-69
(11th Cir. 1982).
Plaintiff filed this suit alleging breach of two different promissory notes and for
holding the respective guarantors jointly and severally liable. On September 30,
2009, Defendant Piney Point Preserve, LLC (“Piney Point”) executed and delivers the
first promissory note to Coastal Community Bank. In consideration for the loan,
Defendants William J. Rish, Jr., Ralph Rish, and Randall McElheney executed and
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delivered personal guaranties to Plaintiff to repay the obligation owed in the note in
the amounts stated in the guaranties. Terra Par Mer, LLC executed and delivered a
personal guaranty to Plaintiff to repay fifteen percent of the obligation owed in the
note.
On December 31, 2009, Defendant Piney Point executed and delivered a
promissory note to Coastal Community Bank modifying the original note, under
which additional monies were loaned and some of the terms of the original Note were
changed. In consideration for the loan, Defendants William J. Rish, Jr., Ralph Rish,
and Randall McElheney executed and delivered personal guaranties to Plaintiff to
repay the obligation owed in the modified note in the amounts stated in the guaranties.
Subsequent to the execution of the modified note by Defendant, Coastal Community
Bank and Defendant Piney Point entered into a note modification agreement where
the terms of the agreement were modified.
Centennial Bank (“Centennial”), an Arkansas banking corporation, is the
successor in interest to Coastal Community Bank by asset acquisition from the FDIC.
Defendants defaulted under the modified notes by failing to pay the entire balance
owed by the maturation date, which was May 15, 2010. Plaintiff contends that
Defendants Piney Point, William Rish, Jr., Ralph Rish, and Randall McElheny, jointly
and severally, owe Plaintiff the principal sum of $100,000.00. Additionally, Plaintiff
contends that Defendant Terra Par Mer, LLC, owes Plaintiff the principal sum of

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$7,800.00. All Defendants owe interest of $6,670.11 through October 6, 2011, with an
interest per diem thereafter of $11.81. (Case 5:11-cv-51, Doc. 50).
The second promissory note in question was executed and delivered to Coastal
Community Bank by Defendant Piney Point on October 29, 2007. In consideration
for the loan, Defendants William J. Rish, Jr., Ralph Rish, and Randall McElheney
executed and delivered personal guaranties to Plaintiff to repay the obligation owed in
the note. Terra Par Mer, LLC executed and delivered a personal guaranty to Plaintiff
to repay a portion of the obligation owed in the note.
Subsequent to the execution of the note, Coastal Community Bank and Piney
Point entered into two separate note modification agreements under which the terms
and conditions of the note were modified. On March 31, 2011, Plaintiff advanced
$66,833.49 for the payment of ad valorem property taxes, and this amount was added
to the principal balance.
Centennial then became the successor in interest to Coastal Community Bank.
Defendants defaulted under the modified notes by failing to pay the entire balance
owed by the maturation date, which was also May 15, 2010. Plaintiff contends that
Defendants Piney Point, William Rish, Jr., Ralph Rish, and Randall McElheny, jointly
and severally, owe Plaintiff the principal sum of $1,771,833.49. Additionally,
Plaintiff contends that Defendant Terra Par Mer, LLC, owes Plaintiff the principal
sum of $306,000.00. All Defendants owe interest of $114,880.24 through October 6,

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2011 and late charges of $2,728.13, with an interest per diem thereafter of $209.17.
(Case 5:11-cv-51, Doc. 50).
Plaintiff now brings this motion for summary judgment as to all counts of the
amended complaint, including pre-judgment interest, attorneys’ fees, and costs, jointly
and severally, against all Defendants.
III. ANALYSIS
The issue in this case arises from an settlement agreement of the existing loan
agreement with Coastal Community Bank. This agreement was sent to the
Defendants by the bank, but was never executed. Defendants argue that this
agreement is enforceable because it was provided by Coastal Community Bank via
email and “would have been executed but for the wrongful change to the proposed
renewal Note.” (Case 5:11-cv-51, Doc. 58).
Plaintiff argues that Defendants’ argument is barred by the D’Oench doctrine,
“which prohibits the enforcement of any alleged ‘side agreement’ that diminishes the
interests of the FDIC or its successors in assets acquired from failed banks, unless that
agreement is clearly set forth in the loan documents.” First Union Nat’l Bank of Fla.
v. Hall, 123 F.3d 1374, 1377 (11th Cir. 1997). The D’Oenchi doctrine provides that:
In a suit over the enforcement of an agreement originally executed between
an insured depository institution and a private party, a private party may not
enforce against a federal deposit insurer any obligation not specifically
memorialized in a written document such that the agency would be aware of
the obligation when conducting an examination of the institution’s records.

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Baumann v. Savers Fed. Sav. & Loan Ass’n, 934 F.2d 1506, 1515 (11th Cir. 1991).
“A banking agency would not normally be aware of any obligation contained in any
written document that purports to be an agreement between the failed bank and the
borrower unless that document is executed-that is, signed-by the failed bank.” Hall,
123 F.3d at 1380 (citing Twin Constr., Inc. v. Boca Raton, Inc., 925 F.2d 378, 383-84
(11th Cir. 1991).
The statutory embodiment of the D’Oench doctrine is set forth in 12. U.S.C. §
1823(e).
This statute precludes enforcement against the FDIC any ‘agreement’ that is
adverse to the interests of the FDIC unless the agreement is in writing, was
executed by the relevant parties at the same time as the loan, is approved in
the minutes of the lender’s board of directors or appropriate loan committee,
and has continuously appeared in the lender’s official records of the loan.
Savers Fed. Sav. & Loan Ass’n v. Amberley Huntsville, Ltd., 934 F.2d 1201, 1206
(11th Cir. 1991). The Supreme Court has held that “[w]hile the borrower who has
relied upon an erroneous or even fraudulent unrecorded representation has some claim
to consideration, so do those who are harmed by his failure to protect himself by
assuring that his agreement is approved and recorded in accordance with the statute.”
Langley v. FDIC, 484 U.S. 86, 94 (1987).
In this case, the settlement agreement was not executed by any party.
Defendants argue that it was never executed because of the wrongdoing of Coastal
Community Bank; however, Langley makes it clear that wrongdoing on the part of the
failed bank does not make unexecuted agreements enforceable. Id.
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Additionally, Defendants rely on email communications as well as the
prepared—but unexecuted—loan documents as evidence that the agreement was in
the bank’s official records. Again, the unexecuted documents fail to meet the
requirements of the doctrine and the statute, and just because “a document is written
and in the bank’s records is not enough to bring the case outside D’Oench and section
1823(e).” Twin Constr., 925 F.2d at 383-84. If unsigned loan documents prepared by
the bank cannot be included in the bank’s official records, then email communications
certainly cannot either.
IV. CONCLUSION
Plaintiff’s Motion for Summary Judgment is GRANTED. Plaintiff shall file a
detailed itemization of attorneys’ fees and costs in accordance with N.D. Fla. Loc. R.
54.1 not later than December 28, 2011.

ORDERED on December 8, 2011.
/s/ Richard Smoak
RICHARD SMOAK
UNITED STATES DISTRICT JUDGE

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