Resolution Trust Corporation, As Receiver of Heritagefederal Savings Bank, Plaintiff-appellee, v. Dalton Smith, Defendant-appellant,andpatricia Smith, Defendant.resolution Trust Corporation, As Receiver of Heritagefederal Savings Bank, Plaintiff-appellee, v. Patricia Smith, Defendant-appellant,anddalton Smith, Defendant.resolution Trust Corporation, As Receiver of Heritagefederal Savings Bank, Plaintiff-appellant, v. Patricia Smith, Defendant-appellee,anddalton Smith, Defendant, 949 F.2d 396 (4th Cir. 1991)

While operating under a consent agreement with the Office of Thrift Supervision (OTS), United States Department of the Treasury, which required OTS approval of all agreements that modified or released any guaranty obligations, Heritage Savings Bank (Heritage Savings) entered into a settlement agreement with the appellants which contained the following language:

The following shall be conditions precedent to the effectiveness of this Agreement ...: 1. If necessary by law Heritage shall obtain authority from the Office of Thrift Supervision and any other necessary regulatory entity to enter into this agreement. Heritage is presently operating under a consent order, and Heritage shall use its best efforts to obtain regulatory approval and shall affirmatively request and recommend any and all necessary approvals from the Office of Thrift Supervision, which may be required prior to Heritage performing its obligations hereunder. Such approvals, if necessary, shall be obtained by Heritage within forty-five (45) days from the date hereof or within such other period as may be mutually agreed to by the parties.

The district court found that thirty-five days after the parties signed the settlement agreement, OTS issued a Federal Charter to Heritage Federal Savings Bank (Heritage Federal) to take over assets of Heritage Savings. Resolution Trust Corporation (RTC) was appointed as the Conservator and became the regulatory authority responsible for reviewing and approving or repudiating contracts. An employee of Heritage Savings had delivered one copy of the agreement to OTS for review and approval shortly after the agreement had been executed. On the day following take-over, the same Heritage Savings' employee delivered copies of the document to the managing agent of Heritage Federal who also was an RTC officer and to in-house counsel for RTC. The agreement, however, was approved by neither OTS nor by RTC.

The district court found that the above quoted language was a condition precedent to the contract and that, without approval, the settlement agreement never became effective.

Appellants have shown neither the district court's findings of facts nor legal conclusions to be erroneous. The judgment of the district court is, therefore, affirmed for the reasons stated in its memorandum of decision.

AFFIRMED.