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Diamond v. Union Bank and Trust

United States District Court, N.D. Oklahoma
Aug 30, 1991
776 F. Supp. 542 (N.D. Okla. 1991)

Summary

holding that an ECOA violation does not render an instrument void

Summary of this case from Best Vinyl, LLC v. Homeland Vinyl Prods., Inc.

Opinion

No. 90-C-921-C.

August 30, 1991.

Stephen B. Riley, Chapel, Riggs, Abney, Neal Turpen and Stephanie Theban and Chapel Riggs, Tulsa, Okl., for plaintiffs.

T.P. Howell, Ricki Sonders, Cherrilynn McLane, Edwards Sonders Propester, Oklahoma City, Okl., for defendants.

David B. King, Brewer, Worten, Robinett, Johnson, Worten King, Bartlesville, Okl., for third-party defendants.


ORDER


Before the Court is the motion of defendant Federal Deposit Insurance Corporation (FDIC) for summary judgment against plaintiffs and against third-party defendant.

This action began in state court, with plaintiffs seeking to have various financial instruments which plaintiffs executed declared void.

Plaintiffs asserted that Union Bank and Trust of Bartlesville (Union Bank) violated 12 U.S.C. § 1972, which prohibits a bank from conditioning extension of credit or continuation of extension of credit upon a customer's assuming debts held by the bank. Plaintiffs also alleged economic duress on Union Bank's part.

The essence of these defenses is an alleged agreement whereby Union Bank would not renew J.L. Diamond's line of credit unless he assumed liability for a note under which R.A. Alexander was liable to Union Bank. On October 30, 1990, the FDIC removed the action pursuant to 12 U.S.C. § 1819(b). FDIC-Corporate asserted counterclaims seeking judgment on the financial instruments at issue. FDIC-Corporate also asserted a third-party complaint against Tom Berry, a lessee of certain property of plaintiffs. On July 5, 1991, plaintiffs filed a First Amended Complaint and a First Amended Answer to Counterclaim, asserting additionally a violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. § 1691, et seq.

Defendant FDIC has not expressly reasserted its motion for summary judgment after the filing of the Amended Complaint. However, the Court finds no prejudice to plaintiffs in considering the motion. See Graham v. Oklahoma City, 859 F.2d 142, 144-45 (10th Cir. 1988).

In their response to the pending motion, plaintiffs only address the issue of the ECOA. Apparently, the other two issues previously raised are now abandoned. Nevertheless, the Court has independently reviewed the record to determine if a genuine issue of material fact exists under Rule 56(c) F.R.Cv.P. Assuming arguendo the truth of the plaintiffs' allegations of an anti-tying claim, it is undisputed that the claim involves an unwritten agreement. Accordingly, under 12 U.S.C. § 1823(e) it is unenforceable against the FDIC. See FDIC v. Eagle Properties, Ltd., 664 F. Supp. 1027, 1054 n. 5 (W.D.Tex. 1985). As for economic duress, even if true, such a claim renders an instrument voidable, not void. See Eash v. Pence, 121 Okl. 7, 246 P. 1091, 1093 (1926). Voidable title is sufficient to trigger the FDIC's rights under § 1823(e). See Langley v. FDIC, 484 U.S. 86, 93-94, 108 S.Ct. 396, 402, 98 L.Ed.2d 340 (1987).

Remaining to be considered is plaintiffs' ECOA claim. The essence of this defense is that Union Bank allegedly required J.L. Diamond to obtain Gretna Diamond's signature on a note, an agreement and on mortgages which secured the debts, even though she was not a joint applicant with J.L. Diamond, and she had no intention of borrowing funds from Union Bank. It has been stated that the purpose of the ECOA is to eradicate credit discrimination against women, especially married women ( e.g., requiring husbands' signatures for credit). See Anderson v. United Finance Co., 666 F.2d 1274, 1277 (9th Cir. 1982). First, the Court notes that the two-year statute of limitation of 15 U.S.C. § 1691e(f) has expired. The most recent execution of documents involving Mrs. Diamond occurred on October 17, 1986. This action began on October 15, 1990. Further, there is no authority, in statutory language or case law, for the proposition that a violation of the ECOA renders an instrument void. Under Langley, supra, the FDIC is entitled to judgment. Cf. Circle v. Jim Walter Homes, Inc., 535 F.2d 583, 586-87 (10th Cir. 1976).

Third-party defendant Berry has not responded to the pending motion. The Court has independently reviewed the record, and concludes that judgment is appropriate against him as well.

It is the Order of the Court that the motion of the defendant Federal Deposit Insurance Corporation for summary judgment is hereby granted. Defendant is granted ten days in which to submit a form of Judgment.

IT IS SO ORDERED.


Summaries of

Diamond v. Union Bank and Trust

United States District Court, N.D. Oklahoma
Aug 30, 1991
776 F. Supp. 542 (N.D. Okla. 1991)

holding that an ECOA violation does not render an instrument void

Summary of this case from Best Vinyl, LLC v. Homeland Vinyl Prods., Inc.

holding that ECOA statute of limitations barred assertion of defense based on a violation of Regulation B

Summary of this case from Citgo Petroleum Corporation v. Bulk Petroleum Corp.

holding no authority in statutory language or case law, for the proposition that a violation of the ECOA renders an instrument void

Summary of this case from Rodgers v. First Union Nat. Bank

finding the statute of limitations barred a declaratory judgment claim that a contract was void because of an ECOA violation

Summary of this case from Garrett v. Branson Commerce Park Cmty. Improvement Dist.

finding that "there is no authority, in statutory or case law, for the proposition that a violation of the ECOA renders an instrument void."

Summary of this case from Boone National Savings v. Crouch

noting that the majority of courts have held that an ECOA violation, even if proved, does not provide a basis for voiding the underlying obligation

Summary of this case from Champion Bank v. Regional Development, LLC

In Diamond v. Union Bank and Trust of Bartlesville, 776 F. Supp. 542 (N.D.Okl. 1991), FDIC sought to enforce certain notes against some customers of a failed bank who alleged as defenses economic duress and anti-tying violations by the failed bank.

Summary of this case from Gustin v. F.D.I.C.

anti-tying claim under 12 U.S.C. § 1972

Summary of this case from Jobin v. Resolution Trust Corp.

In Diamond v. United Bank Trust, 776 F. Supp. 542 (N.D.Okla. 1991), a borrower and his wife claimed that their lender had violated the ECOA by requiring the wife's signature on a note which the FDIC thereafter attempted to collect.

Summary of this case from Riggs Nat. Bank of Wash., D.C. v. Linch

In Diamond v. United Bank Trust, 776 F. Supp. 542 (N.D.Okla. 1991), a borrower and his wife claimed that their lender had violated the ECOA by requiring the wife's signature on a note which the FDIC thereafter attempted to recover.

Summary of this case from CMF Virginia Land, L.P. v. Brinson

admitting § 1823(e) as a defense to a claim under 12 U.S.C. § 1972

Summary of this case from Brandt v. FDIC (In re Equip. Acquisition Res., Inc.)

stating "there is no authority, in statutory language or case law, for the proposition that a violation of the ECOA renders an instrument void"

Summary of this case from Bank of the West v. Kline
Case details for

Diamond v. Union Bank and Trust

Case Details

Full title:J.L. DIAMOND and Gretna Diamond, Plaintiffs, v. UNION BANK AND TRUST OF…

Court:United States District Court, N.D. Oklahoma

Date published: Aug 30, 1991

Citations

776 F. Supp. 542 (N.D. Okla. 1991)

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