Griffor v. FDIC, as Receiver for CF Bancorp

Filing 96

ORDER regarding the issue unresolved by previous Order accepting in full the Magistrate Judge's Report and Recommendation granting defendant's MOTION for Summary Judgment 72 . Signed by District Judge George Caram Steeh (MBea)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
DAVID GRIFFOR,
Plaintiff/Counter-Defendant,
CASE NO. 10-cv-12383
vs.
HON. GEORGE CARAM STEEH
FEDERAL DEPOSIT INSURANCE
CORPORATION, as receiver for
CF BANCORP,
Defendant/Counter-Plaintiff.
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ORDER REGARDING THE ISSUE UNRESOLVED BY PREVIOUS
ORDER ACCEPTING IN FULL THE MAGISTRATE JUDGE’S
REPORT AND RECOMMENDATION GRANTING DEFENDANT’S
MOTION FOR SUMMARY JUDGMENT (DOC. #72)
For the second time before the court is Magistrate Judge R. Steven Whalen’s
report and recommendation (R&R) concerning the parties’ cross-motions for summary
judgment. Previously, the court accepted the R&R in part, and requested additional
information from the parties as to one issue. That briefing is now complete, and the
court now accepts and adopts the R&R of the magistrate judge as the findings of this
court in granting the defendant’s motion for summary judgment in full.
In its first ruling on March 27, 2013 (Document #91), the court found that the
plaintiff’s objections to the recommendation relating to his claim for a severance
package and for wrongful termination are without merit. As to the plaintiff’s last
remaining claim, unjust enrichment for the unpaid commissions for the “Gurne” and
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“McNeil” transactions, the court now adopts the R&R of the magistrate judge. Mr.
Griffor, the plaintiff, is not entitled to the commissions from those transactions because
he provides no evidence either transaction was substantiated by an agreement in
writing or reflected in the bank’s records.1
Mr. Griffor provides only two relevant pieces of evidence concerning his claim for
unpaid commissions: his employee change notice signed by Darryl Renaud, head of
the Special Assets group, and the letter of transfer, stating Mr. Griffor will receive
“applicable commissions from any Special Assets approve [sic] loans [he] originate[d].”
Mr. Griffor argues these entitle him to the commissions from the loans he originated
after the transfer. In response to the defendant’s argument that neither transaction was
approved by Mr. Renaud, Mr. Griffor argues he was told his commissions would be
approved by Robert McClellan or Randy Cutler, and that Mr. McClellan approved the
commission for the Gurne transaction and Mr. Cutler approved the commission in the
McNeil transaction. “Response to Defendant’s Brief in Response to Plaintiff’s
Objections/Response to Report and Recommendations” (Document #95).
Assuming that Mr. McClellan’s and Mr. Cutler’s approval was sufficient to create
an obligation for the bank to pay Mr. Griffor the commissions, Mr. Griffor puts forward no
evidence that either transaction was approved. He has no signed documents, no
testimony from either Mr. McClellan or Mr. Cutler, and no information from anyone
except his own allegations that the two men approved his loan commissions.

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Defendant argues the plaintiff’s objection to the report and recommendation was untimely because it was
filed more than 14 days after service. Because the court finds in favor of the defendant on other grounds
below, it will not address this issue.

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Further, the lack of any record evidence about commissions owed to Mr. Griffor
rendershis claim invalid against the FDIC. The D’Oench doctrine, codified in 12 U.S.C. §
1823(e), exists to protect the FDIC from undocumented agreements. See Federal
Deposit Ins. Corp. v. McCullough, 911 F.2d 593, 599, fn. 4 (11th Cir. 1990).
Agreements with the predecessor bank are not enforceable against the FDIC as
receiver for the bank unless the bank has a clear record of the agreements and the
obligations they create, because only with a clear record do bank examiners know the
true value of the bank’s assets. Abrams v. FDIC, 944 F.2d 307, 310 (6th Cir. 1991),
Langley v. Fed. Deposit Ins. Corp., 484 U.S. 86, 91 (1987) (“One purpose of § 1823(e)
is to allow federal and state bank examiners to rely on a bank's records in evaluating the
worth of the bank's assets”). The FDIC may assert the D’Oench doctrine as a defense
to actions brought against it. Hall v. Federal Deposit Insurance Corporation, 920 F.2d
334, 340 (6th Cir. 1990), cert. denied, 501 U.S. 1231(1991).
The R&R relied on the D’Oench doctrine to recommend this court enter judgment
for the defendant as to the remaining claim, because the magistrate judge found no
written agreement existed. Mr. Griffor argues a written agreement does exist: the
employee change notice and the letter of transfer. The two documents, however, are
still insufficient to overcome the doctrine. Neither lists the specific commissions to be
paid to Mr. Griffor. They could not, possibly, because by definition Mr. Griffor
transferred into the Special Assets group prior to securing promises for the allegedly
earned commissions. Because neither of the alleged Gurne/McNeil transactions appear
in the bank’s records, enforcing the agreement would defeat the purpose of the
D’Oench doctrine, requiring that the bank’s record reflect the true value of its assets.
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In addition, the written agreement fails to meet other requirements in the statute.
The statute reads, in pertinent part,
No agreement which tends to diminish or defeat the interest of the
Corporation [the FDIC] in any asset acquired by it . . . as receiver of any
insured depository institution, shall be valid against the Corporation unless
such agreement:
(A) Is in writing,
(B) 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,
(C) 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
(D) Has been, continuously, from time of its execution, an official
record of the depository institution.
12 U.S.C. § 1823(e)(1). The only writings in the record are the letter of transfer and the
employee change notice described above, which do not meet any of these
requirements. Because the documents were signed before the alleged Gurne/McNeil
transactions, they do not fulfill the “contemporaneously” requirement in (2). Even if the
commissions were approved by Mr. McClellan or Mr. Cutler, the minutes are not
reflected in any official document like the “minutes of said board or committee,” and Mr.
Griffor again provides no evidence that they are officially recorded in any way, as
required in (3) and (4). The notice of transfer agreement and the employee change
notice cannot entitle Mr. Griffor to the commissions he seeks from the FDIC, and Mr.
Griffor has provided no other information to substantiate his claim.

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In conclusion, the court now adopts in full the report and recommendation of the
magistrate judge as to all of Mr. Griffor’s claims. Reflected in the court’s previous order
on the report and recommendation, the court also adopts the magistrate judge’s
recommendation to deny plaintiff’s motion for summary judgment on the defendant’s
counterclaim. Therefore, the defendant’s counterclaims remain pending. The
defendants should contact the court to schedule further proceedings on those claims if
desired.
IT IS SO ORDERED.
Dated: August 6, 2013
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE
CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
August 6, 2013, by electronic and/or ordinary mail and also on
David Griffor, 2911 Conger Street, Port Huron, MI 48060.
s/Barbara Radke
Deputy Clerk

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