Tyson Foods, Inc. v. Adams

TYSON FOODS, INC. v. Steve ADAMS

95-969                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
               Opinion delivered October 21, 1996


1.   Judgment -- summary judgment -- when granted. -- Summary
     judgment is to be granted by a trial court when it is clear
     that there is no genuine issue of material fact to be
     litigated; on review, the appellate court determines if the
     granting of summary judgment was appropriate based on whether
     the evidentiary items presented by the moving party in support
     of the motion leave a material question of fact unanswered;
     while the question of proximate cause is usually a question
     for the jury, when the evidence is such that reasonable minds
     cannot differ, the issue becomes a question of law to be
     determined by the trial court. 

2.   Judgment -- granting of summary judgment may be appropriate in
     malpractice suit -- summary judgment appropriate here. --  The
     granting of summary judgment can be appropriate in a legal
     malpractice suit; here, there was no question of material fact
     to be determined, and the evidence was such that reasonable
     minds could not differ about proximate cause; thus, the trial
     court correctly granted summary judgment.

3.   Banks & banking -- D'Oench, Duhme doctrine discussed -- common
     law rule of estoppel precluded borrower from asserting
     defenses based upon secret or unrecorded side agreements. -- 
     The D'Oench, Duhme  doctrine fashioned a common-law rule of
     estoppel that precluded a borrower from asserting defenses
     against the F.D.I.C. based upon secret or unrecorded "side
     agreements" that alter the terms of facially unqualified
     obligations; the doctrine was later expanded to protect the
     Federal Savings and Loan Insurance Corporation from
     undisclosed agreements and has been extended to the R.T.C. and
     evolved expansively to protect the F.D.I.C. against
     affirmative claims by third parties based upon unrecorded
     agreements; the rule applies outside the lender-borrower
     framework where the party seeking to recover must rely upon a
     scheme or arrangement likely to mislead bank examiners. 

4.   Judgment -- summary judgment proper -- appellant's argument
     meritless. -- Appellant's argument that the federal judge
     erred, and, consequently, the trial court erred in granting
     summary judgment because a material question of fact existed
     about whether the side agreement was a secret agreement or
     whether it was a subsequent modification by letter of the
     original agreement was without merit: first, there was
     testimony that the parties openly entered into the sale and
     leaseback with option to purchase and kept secret the side
     agreement in order to avoid disclosing violations of the usury
     law and violations of capital requirements to the poultry
     producer's bank and so that it could fully deduct the lease
     payments, rather than capitalizing them, for income-tax
     purposes; thus, reasonable minds could not differ; the side
     agreement was a secret side agreement and not merely a
     modification of the original agreement; second, the side
     agreement was not disclosed to the savings and loan; under
     these circumstances, appellant, as successor-in-interest was
     properly prevented by the doctrine from enjoying the benefits
     of the secret agreement that would have defeated a significant
     part of the savings and loan's and the R.T.C.'s security, at
     the expense of the public.

5.   Banks & banking -- D'Oench, Duhme doctrine applied to
     appellant -- application to third parties proper. --
     Appellant's contention that the federal court erred in
     applying the D'Oench, Duhme doctrine to it, since it was
     merely a third party, was without merit; first, the doctrine
     extends not only to knowing participants in schemes but also
     to parties that are ignorant or ill-informed of the
     transaction and who did not intend to deceive anyone; second,
     appellant knew the lease was a "finance-type lease" and that
     the option price was fixed on a "formula based on an interest
     rate calculation," rather than the fair market value; and
     third, appellant was the successor-in-interest of the original
     borrower and stood to gain by that borrower's misleading the
     lender.

6.   Banks & banking -- doctrine properly applied -- no dispute as
     to material fact existed. -- Appellant's argument that the
     federal judge erred in applying the doctrine because appellant
     was not notified by the lender that it held a mortgage on the
     leased property was without merit where the lender was led by
     the sale and leaseback and option agreement to believe that
     appellant, as successor-in-interest, was a lessee of the
     property; there was no dispute of material fact, and
     reasonable minds could not differ.

7.   Attorney & client -- doctrine applied prior to filing of
     quiet-title action -- appellee's negligence not proximate
     cause of appellant's damages. -- Where the facts that caused
     the application of the D'Oench, Duhme doctrine occurred before
     appellant employed appellee to file the quiet-title action,
     the attorney's negligence in prosecuting the action were not
     the proximate cause of damage to appellant.

8.   Appeal & error -- appellant's assertions not reached -- ruling
     of circuit court affirmed. -- Appellant's contentions that the
     federal judge erred by ruling in favor of the R.T.C. in the
     underlying foreclosure action and that the circuit court
     similarly erred in granting summary judgment were not reached
     because the supreme court affirmed the ruling of the circuit
     court on the applicability of the D'Oench, Duhme doctrine to
     both the quiet title and foreclosure actions, and appellee's
     negligence in those actions did not proximately cause damage
     to appellant.


     Appeal from Washington  Circuit Court; David Burnett, Judge;
affirmed.
     The Perroni Law Firm, P.A., by:  Samuel A. Perroni and Rita S.
Looney, for appellant.
     Davis, Cox & Wright, by:  Walter B. Cox and Tim E. Howell, for
appellee.

     Robert H. Dudley, Justice.
     This is another in the recent series of legal malpractice
suits.  In this one, Steve Adams, the attorney, agreed to represent
Tyson Foods, Inc., in two separate underlying actions:  one was to
quiet title to a tract of land in Pope County, and the other was to
defend a foreclosure action involving the same land.  Both cases
were removed to Federal District Courts for the Eastern District of
Arkansas, the quiet-title action to the court of District Judge
Henry Woods and the foreclosure action to the court of District
Judge Susan Wright.  Adams was negligent in his representation of
Tyson in both cases.  In the quiet-title action, he failed to
respond to motions for summary judgment and failed to notify Tyson
that judgment had been entered against it; in the foreclosure suit,
he failed to respond to motions and failed to notify his client
that the property was about to be sold.  Tyson subsequently filed
this malpractice action against Adams in the Circuit Court of
Washington County.  The Honorable David Burnett, circuit judge on
exchange, ruled on summary judgment that Adams was negligent, but
that such negligence was not the proximate cause of damage to
Tyson.  We affirm the ruling. 
     In 1982, Valmac Industries, Inc., a poultry producer, needed
a larger freezer facility to store its poultry products in
Russellville.  Valmac was short of capital because of its rapid
growth.  In addition, interest rates were high, approximately 15%,
and so Valmac decided to finance the expansion by using a sale and
leaseback with an option to purchase.  This way, Valmac could use
someone else's capital to build the facility.  Valmac reached
agreement with Satterfield Development, Inc., a Russellville
builder, for the sale and leaseback with an option to purchase.  In
performance of that agreement, Valmac deeded the land on which the
freezer was located to Satterfield Development.  The consideration
recited in the deed was $166,000, Valmac's book value, which was
considerably less than the facility's market value.  Satterfield
Development then leased the property back to Valmac and gave it an
option to purchase.  The consideration recited in the lease was
$49,000 per month through March 1, 1988, and, at that time, Valmac
had the option of purchasing the facility at its fair market value. 
Valmac employed an outside attorney to give an opinion on the
validity of the lease and option.  Upon review of the deed, lease,
and purchase agreement, the attorney gave his opinion that the
lease and option was a valid lease and was not voidable under the
then-existing usury laws.  Valmac's Board of Directors authorized
the transaction by resolutions dated August 19 and 23, 1982.  
     On August 30, four days after the lease and option were
executed, Valmac and Satterfield Development, through Blake Lovett,
president of Valmac, and George Satterfield, president of
Satterfield Development, signed a separate letter agreement. 
Lovett testified by deposition that the letter agreement was signed
as the result of a side agreement he and George Satterfield had
previously entered.  In the side agreement the option price was
fixed at $68,660, but was to be adjusted according to whether the
federal discount rate, plus 5%, averaged more or less than 17%
during the final thirty-six months of the term of the lease. 
Lovett explained that the agreement meant that the real option
price was the difference between the amount paid in monthly rentals
and the cost of construction plus the cost of interest, and that
the option price was never intended to be an amount equal to the
fair market value of the facility, as stated in the lease.  Lovett
testified that the side agreement was not disclosed so that Valmac
could deduct the lease payments according to the terms of the
original lease, rather than capitalizing them as required by tax
laws and generally accepted accounting principles, and so that
Valmac could avoid violation of the then-existing usury laws. 
Valmac also wanted to avoid disclosing the side option price
because it was in violation of covenants with its bank regarding
asset and liability ratios.  The side agreement was not disclosed
to Valmac's independent counsel, its auditors, or its bank.  Lovett
testified that he "understood that if the agreement was disclosed
that there would be consequences that might arise from the
agreement." 
     Satterfield Development completed construction of the
expansion, and beginning in March 1983, Valmac paid monthly rent to
Satterfield Development.  Valmac treated the lease as such and
deducted the lease payments as made rather than capitalizing them. 
In October 1984, Tyson acquired approximately 80% of Valmac's
common stock and at about the same time, as the successor-in-
interest, began operating the freezer facility and making the
rental payments to Satterfield Development.  A formal merger of
Valmac and Tyson took place on July 1, 1987.  During meetings
leading up to the acquisition of Valmac by Tyson, Lovett disclosed
to Leland Tollett, president of Tyson, that the agreement with
Satterfield was a "finance-type lease."  Tollett, by deposition,
testified that Lovett told him there was an agreement by which
Valmac would obtain title to the property, and the formula for
calculation of price was "based on an interest rate calculation." 
     In 1985, George Satterfield decided to build a large sawmill
that was to be owned and operated by another of his corporations,
Satterfield Lumber Company.  Satterfield needed to borrow a
considerable amount of money to construct such a large mill.  On
December 10, 1985, Savers Federal Savings and Loan Association
extended a $1,600,000 loan to Satterfield and Satterfield Lumber
Company.  As part of the security for the loan, Satterfield, as
president of Satterfield Development, executed a mortgage on the
freezer property to Savers.  In obtaining the loan from Savers,
Satterfield provided Savers a copy of the lease and option
agreement with Valmac.  He did not disclose the side agreement to
Savers.  Satterfield constructed the sawmill and put it into
operation, but soon began to lose money and fell behind in his
payments to Savers.  Savers notified Satterfield that it was
considering its options, including foreclosing on the freezer
property.  The freezer property had a true market value of more
than $2,000,000, as it was appraised in 1982 as having a fair
market value of $2,900,000 and in 1990 as having a fair market
value of $2,700,000 without the lease and $2,060,000 with the
lease.  
     In 1988, Tyson attempted to exercise its option to purchase
the freezer according to the terms of the August 30, 1982, side
agreement, the one providing that the purchase price was $68,660,
with adjustments for construction costs and interest.  Ironically,
under this agreement, Satterfield Development owed Tyson upon
Tyson's exercise of the option to purchase.  Under the terms of the
side agreement, Satterfield owed Tyson $169,298, less the agreed
option price of $68,660, or a net of $100,638.  Satterfield
Development owed this amount because interest rates had fallen
dramatically during the term of the lease.  Satterfield eventually
disclosed to Tyson that Satterfield Development could not convey
clear title because the property had been mortgaged to Savers. 
Satterfield Development, Satterfield Lumber, and Tyson entered into
various agreements in attempts to clear title, but all failed. 
Tyson and Satterfield Development executed a lease extension on
June 1, 1988.  Shortly thereafter, the original lease and option
agreement, along with the lease extension, were recorded in the
records of Pope County.  During the late 1980's, Savers encountered
its own capital problems and was taken over by the Resolution Trust
Corporation under federal law.        
     Tyson employed Adams to file suit for specific performance of
the side agreement and to quiet title.  On May 19, 1989, Adams, on
behalf of Tyson, filed the suit in the Chancery Court of Pope
County against Satterfield Development, Satterfield Lumber, and
Savers.  The R.T.C. subsequently replaced Savers and caused the
action to be removed to United States District Court.  After
removal, the R.T.C. filed a motion for summary judgment.  Adams
failed to respond on behalf of Tyson, and District Judge Henry
Woods granted the motion dismissing the R.T.C., but not the other
defendants.  The primary basis of Judge Wood's ruling was that
Tyson and its predecessor in interest could not rely on the secret
side agreement under the D'Oench, Duhme doctrine.  Adams failed to
notify Tyson that the R.T.C. had been granted a summary judgment. 
     The R.T.C. initiated the foreclosure action against
Satterfield Development and others on July 22, 1991.  Tyson was
made a party because of its claim to the property.  Adams failed to
respond for Tyson.  The Honorable Susan Wright, United States
District Judge, ruled that the R.T.C.'s interest was prior to all
other interests in the property, including Tyson's, and entered a
decree of foreclosure in favor of the R.T.C.  Judge Wright relied
on the ruling by Judge Woods in making her decision.   
     Tyson employed new counsel, David Duke, who filed motions for
reconsideration in both cases.  Both federal district judges denied
the motions, with Judge Wright stating that, in addition to other
reasons for her original ruling, Savers, and, in turn, the R.T.C.,
was a bona fide purchaser for value and was without notice of
Tyson's claim to the property.  Judge Wright also indicated that
Savers and the R.T.C. had no duty to inquire about Tyson's
possession since it was consistent with the lease and option
agreement submitted to Savers at the time the loan was made.  Judge
Wright also stated that Adams's negligence did not affect the
outcome of the case since it was determined by facts that took
place before Adams was employed.  Tyson appealed the judgment in
the foreclosure action and ultimately settled it by paying the
R.T.C. a sum of $600,000.  
     Tyson then filed this suit against Adams in the Circuit Court
of Washington County.  The circuit judge granted Adams's motion for
summary judgment, finding that there were no genuine issues of
material fact and that Adams's negligence was not a proximate cause
of damage to Tyson because Tyson could not have prevailed on the
underlying cases.  Tyson appeals from the granting of summary
judgment by the circuit court.
     Indubitably, Adams was negligent in his representation of
Tyson in both of the underlying suits.  As a result, all Tyson had
to prove in order to recover was that it was damaged and that
Adams's negligence was a proximate cause of those damages.  Anthony
v. Kaplan, 324 Ark. 52, 918 S.W.2d 174 (1996).  On summary
judgment, the circuit court ruled that Tyson could not have
prevailed on the underlying causes of action; therefore, it could
not prove proximate cause.  Tyson takes issue with both the
procedure and the substance of the ruling by the trial court.  
                          I. Procedure  
     Tyson questions the determination of proximate by means of
summary judgment.  Summary judgment is to be granted by a trial
court when it is clear that there is no genuine issue of material
fact to be litigated, and, on appellate review, the appellate court
determines if the granting of summary judgment was appropriate
based on whether the evidentiary items presented by the moving
party in support of the motion leave a material question of fact
unanswered.  Knowlton v. Ward, 318 Ark. 867, 889 S.W.2d 721 (1994). 
While the question of proximate cause is usually a question for the
jury, when the evidence is such that reasonable minds cannot
differ, the issue becomes a question of law to be determined by the
trial court.  Skinner v. R.J. Griffin & Co., 313 Ark. 430, 855 S.W.2d 913 (1993).  The granting of summary judgment can be
appropriate in a legal malpractice suit.  Anthony v. Kaplan, supra. 
Here, there was no question of material fact to be determined, and
the evidence was such that reasonable minds could not differ about
proximate cause.  Thus, the trial court correctly granted summary
judgment.
                       II. Substantive Law
   Tyson contends that the circuit judge erred in granting the
summary judgment because it could have prevailed in the underlying
causes of action.  In support of its argument it contends that: (1)
United States District Judge Woods erred in ruling on the quiet
title action and (2) United States District Judge Wright erred in
ruling on the foreclosure action.  
                               (1)
     Tyson argues that Judge Woods erroneously applied the D'Oench,
Duhme doctrine and that the circuit judge, by granting summary
judgment, failed to acknowledge the error.  In his memorandum
opinion and order, Judge Woods concluded that Tyson, the successor
to Valmac, was estopped from relying on the side agreement to
establish its right to the property against the R.T.C.  
     In 1942, the United States Supreme Court held that an
agreement that was not expressly reflected on the face of a loan
document was unenforceable against the Federal Deposit Insurance
Corporation.  The Court examined the statutory scheme that created
the F.D.I.C. and concluded that it evidenced a "federal policy to
protect...[the F.D.I.C.] and the public funds which it administers,
against misrepresentations as to...the assets in the portfolios of
the banks which...[the F.D.I.C.] insures or to which it makes
loans."  D'Oench, Duhme & Co. v. F.D.I.C., 315 U.S. 447, 457
(1942).  In order to give effect to this federal policy, the Court
fashioned a common law rule of estoppel that precludes a borrower
from asserting defenses against the F.D.I.C. based upon secret or
unrecorded "side agreements" that alter the terms of facially
unqualified obligations.  The doctrine was expanded to protect the
Federal Savings and Loan Insurance Corporation from undisclosed
agreements in Mainland Savings Ass'n v. Riverfront Associate, Ltd.,
872 F.2d 955, 956 (10th Cir. 1989), cert. denied, 493 U.S. 890
(1989).  The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 abolished the F.S.L.I.C. and created the
R.T.C. as receiver.  Pub. L. No. 101-73,  501, 103 Stat. 183, 363,
370 (1989).  The D'Oench, Duhme doctrine has been extended to the
R.T.C.  See Castleglen, Inc. v. Commonwealth Sav. Ass'n, 728 F. Supp. 656 (D. Utah 1989).  The doctrine has evolved expansively to
protect the F.D.I.C. against affirmative claims by third parties
based upon unrecorded agreements.  See Royal Bank of Canada v.
F.D.I.C., 733 F. Supp. 1091, 1096-97 (N.D. Tex. 1990).  "It is
entirely consonant with the Fifth Circuit's interpretation of
D'Oench, Duhme to apply the rule outside the lender-borrower
framework, so long as the party seeking to recover must rely upon
a scheme or arrangement likely to mislead bank examiners."  Id. at
1097; see also Bell & Murphy & Assocs., Inc. v. Interfirst Bank
Gateway, N.A., 894 F.2d 750, 753-54 (5th Cir. 1990).  
     In 1989, Congress enacted may of the provisions of the common
law doctrine.  The codification, in material part, provides:
No agreement which tends to diminish or defeat
the interest of the Corporation [R.T.C.] in
any asset acquired by it under this section or
section 1821 of this title, either as security
for a loan or by purchase or 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 the time of
its execution, an official record of the
depository institution.
12 U.S.C.  1823(e) (1984) (emphasis supplied).
Under the facts of this case it does not matter whether we decide
it under the common law doctrine or the statute enacted in 1989, a
point not argued.  See O'Melveny & Myers v. F.D.I.C., 114 S. Ct. 2048 (1994) (holding that court-made rules are preempted by
comprehensive, detailed statutory schemes); Murphy v. F.D.I.C., 61 F.3d 34 (D.C. Cir. 1995) (interpreting O'Melveny & Myers as
implicitly holding that FIRREA preempts the D'Oench, Duhme
doctrine).     
     In the quiet-title action, Judge Woods found:
          The undisputed facts establish that Valmac, and later
     Tyson, lent themselves to a scheme or arrangement whereby
     banking authorities were likely to be misled.  Without
     knowledge of the side agreement, Savers made a 1.6 million
     dollar loan to Satterfield Lumber Company and George
     Satterfield.  As part of the security for this loan,
     Satterfield Development, which held title to the freezer,
     provided Savers with a mortgage on the property.  It was not
     until Tyson expressed its intent to exercise its option to
     purchase the freezer for the sum set forth in the side
     agreement that Savers became aware of the agreement.  Tyson
     cannot now enjoy the benefit of this agreement because to do
     so would cause the RTC to lose a significant portion of the
     security supporting the 1.6 million dollar loan.  Thus, Tyson
     is estopped form litigating the validity of the agreement. 
After Tyson filed its motion for reconsideration, Judge Woods again
concluded that summary judgment was appropriate, as follows:
     The court has re-examined the order in light of the matters
     addressed in this motion.  Despite the assertions contained in
     the motion, the court finds that the disposition of the
     R.T.C.'s motion for summary judgment was correct.
     Tyson argues that Judge Woods erred, and, consequently, the
trial court erred in granting summary judgment because a material
question of fact existed about whether the side agreement was a
secret agreement or whether it was a subsequent modification by
letter of the original agreement.  The argument is without merit
for either of two reasons.  First, Lovett testified that he and
Satterfield openly entered into the sale and leaseback with option
to purchase, and kept secret the side agreement, in order to avoid
disclosing violations of the usury law and violations of capital
requirements to Valmac's bank and so that Valmac could fully deduct
the lease payments, rather than capitalizing them, for income tax
purposes.  Tollett acknowledged that Lovett disclosed that there
was a "finance-type lease" and that the option price was set by a
"formula based on an interest rate calculation."  Thus, reasonable
minds could not differ; the side agreement was a secret side
agreement and not merely a modification of the original agreement. 
Second, the side agreement was not disclosed to Savers.  Under
these circumstances, Valmac and its successor-in-interest, Tyson,
were properly prevented by the doctrine from enjoying the benefits
of the secret agreement that would have defeated a significant part
of Savers's and the R.T.C.'s security, at the expense of the
public. 
     Tyson next contends that Judge Woods erred in applying the
doctrine to it, since it was merely a third party.  This argument
is without merit for any of three reasons.  First, the doctrine
extends not only to knowing participants in schemes, but also to
parties that are ignorant or ill-informed of the transaction and
who did not intend to deceive anyone.  D'Oench, Duhme, 315 U.S. at
458-59; Bell & Murphy & Assocs., Inc., supra.  Second, Tyson knew
the lease was a "finance-type lease" and that the option price was
fixed on a "formula based on an interest rate calculation," rather
than the fair market value.  Third, Tyson is the successor-in-
interest of Valmac and stood to gain by Valmac's misleading Savers.
     Tyson argues that Judge Woods erred in applying the doctrine
because Tyson was not notified by Savers that it held a mortgage on
the leased property.  The short answer to this argument is that
Savers was led by the sale and leaseback and option agreement to
believe that Valmac, and later Tyson, was a lessee of the property
owned by Satterfield Development.  Again, there was no dispute of
material fact, and reasonable minds could not differ.
     In summary, Judge Woods, and subsequently the circuit judge in
this action, ruled correctly in applying the D'Oench, Duhme
doctrine.  The facts that caused the application of the doctrine
occurred before Tyson employed Adams to file the quiet-title
action.  Thus, Adams's negligence in prosecuting the action were
not the proximate cause of damage to Tyson.
                               (2)
     Tyson contends that Judge Wright erred by ruling in favor of
the R.T.C. in the underlying foreclosure action and that the
circuit court similarly erred in granting summary judgment.  Judge
Wright ruled that the R.T.C.'s interest was superior to Tyson's
interest on the ground that Judge Woods had "held that this
interest could not be asserted to defeat the interest of the
R.T.C."  Tyson subsequently filed a Rule 60(b) motion for
reconsideration.  Judge Wright's comments in ruling on that motion
are abstracted in the supplemental abstract as follows:
          Therefore, I have reviewed parts of that file including
     Judge Woods's order, and I have looked, in other words, at the
     merits of the case, and I find that Judge Woods reached a
     correct conclusion in granting summary judgment and,
     therefore, I reached a correct conclusion granting summary
     judgment in the foreclosure decree.
          In my opinion, the failure of Mr. Adams to file a
     response to the respective motions for summary judgment did
     not result in anything worse for Tyson than happened
     anyway.  I do not think it would matter.  That is my
     opinion.  I think the result, even if he had filed a
     responsive pleading to that motion for summary judgment
     in my case or in Judge Woods's, the result would have
     been the same.  An let me tell you for the record that
     that's my opinion.
                              ...                                
          I have no opinion concerning why the side agreement
     was entered into.  I am not expressing whether I think
     that is a good idea or a bad idea.  I do note, however,
     that in the pleadings in Judge Woods's Court, Tyson says
     that it all along considered itself to be the owner of
     tract 7.  If it considered itself to be the owner of
     tract 7, by golly, it should have known to record its
     interests of record to protect itself from any bona fide
     purchasers, including Savers. 
          Any first year law student knows that if you claim
     an ownership interest in property, you need to record it
     to protect your interests against bona fide purchasers. 
     Tyson, for its own reasons, recorded neither agreement,
     neither the lease of August 27 nor the agreement of
     August 30.
          However, Satterfield, for reasons I think I know,
     showed Savers only the August 27 agreement which, of
     course, impaired no security interest at all because it
     provided for a purchase price at fair market value.  It
     is no impairment of the security whatsoever.  In fact, in
     some instances, it might be good to have something like
     that when you are reviewing loan papers in behalf of the
     creditor.
          And therefore, I find that Judge Woods was correct
     that failure on the part of Mr. Steve Adams to respond to
     the respective motions for summary judgment did not
     prejudice Tyson.  I do not know that Mr. Adams could have
     said in response to that motion that would change that.
     In opposition to the above comments, Tyson argues that Judge
Wright was additionally in error as a matter of law in applying the
bona fide purchaser doctrine and the doctrine of unclean hands, as
well as in her consideration of public policy.  We do not reach
those arguments because we affirm the ruling of the circuit court
on the applicability of the D'Oench, Duhme doctrine to both the
quiet title and foreclosure actions, and Adams's negligence in
those actions did not proximately cause damage to Tyson.   
     Affirmed.
     Special Chief Justice Ralph C. Murray, Special Justice Floyd
M. Thomas, Jr., and Special Justice Laurie A. Bridewell join in
this opinion.
     Jesson, C.J., and Newbern, Corbin, and Brown, JJ., not
participating.