Srsb-iv, Ltd., et al., Plaintiffs, Counter-defendants, v. Continental Savings Association, et al., Defendants,counter-plaintiffs, 3rd Party Plaintiffs.gerald Brown and Burton Sterman, Defendants in Intervention,appellants, v. Federal Deposit Insurance Corporation, Intervenor/receiver, Appellee, 979 F.2d 39 (5th Cir. 1992)Annotate this Case
Eugene B. Wilshire, Jr., Wilshire, Scott & Dyer, Houston, Tex., for appellants.
E. Whitney Drake, F.D.I.C., Washington, D.C., Taylor M. Hicks, Andrews & Kurth, Houston, Tex., for appellee.
Appeal from the United States District Court for the Southern District of Texas.
Before HIGGINBOTHAM, SMITH and DeMOSS, Circuit Judges.
The Federal Deposit Insurance Corporation ("FDIC"), receiver of Mainland Savings Association, as appellee in the above referenced case, has moved the Court to remand the case to the U.S. District Court, in order to permit it to create a better record on appeal regarding the issue as to whether the actions taken by the original creditor in foreclosing on 1,000 shares of stock of a closely held corporation, put up as collateral for the original indebtedness herein were conducted in a commercially reasonable fashion. Such motion recognizes, inferentially at least, that the Trial Judge's determination that the burden of proof was on the guarantors ("appellants" herein) to prove that the foreclosure process was not commercially reasonable, was erroneous in light of the holding of the Supreme Court of Texas in Greathouse v. Charter National Bank-Southwest, 35 Tex.Sup.Ct.J. 1017, 1992 WL 379408 (July 1992) which was handed down some five months after the Trial Court's ruling in the present case. The appellants, hoping that they had found a bird's nest on the ground, opposed the motion to remand and call on us to reverse the Trial Court's Judgment and render judgment in their favor relying on a recent decision of another panel of this Court in Federal Deposit Insurance Corporation v. Payne, 973 F.2d 403 (5th Cir. 1992). We believe, however, that Payne is factually distinguishable from the present case. In Payne, the FDIC neither specially pleaded the commercial reasonableness of the disposition of the diamond ring, nor generally pleaded that all requirements for the effective disposition of collateral had been met; and there was no notice of any kind to the debtor regarding the sale of the diamond ring. Whereas, in the instant case, there were pleadings on both sides of the issue and evidence of some actual notice to the debtor, but the dispute was as to the "reasonableness or not" of such notice.
Accordingly, we REVERSE the final judgment entered by the Trial Court in this cause under date of March 2, 1992, (including all interlocutory and preliminary judgments on liability and/or damages upon which the final judgment rests) and REMAND this case to the Trial Court for a new trial in accordance with the pleading and proof requirements established by the Supreme Court of Texas in Greathouse.
All other motions of either party are DENIED as moot.