Vitko v. McQuade

• Court: District Court, D. New Hampshire
• Decided: June 1, 1993
• Docket: CV-91-731-B
• Status: Published

Opinion

Vitko v. McQuade CV-91-731-B 06/01/93

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE

Joseph E. Vitko, Jr.

v. Civil No. 91-731-B

Paul R. McQuade and EPIC, et al.

O R D E R

Before the court is the Federal Deposit Insurance

Corporation's ("FIDC") Motion for Summary Judgment relying upon

D'Oench Duhme & Co. v. EPIC, 315 U.S. 447 (1942) and 12 U.S.C. §

1823(e) .

I. FACTS

Plaintiff, Joseph E. Vitko, Jr., ("Vitko"), of VAM

Enterprises, Inc., ("VAM"), brought this action against Paul R.

McQuade of McQuade & McQuade Investments, Inc. ("McQuade Investments")a and the Federal Deposit Insurance Company ("FDIC")

seeking rescission of a real estate transaction and all attendant

security agreements, including notes, mortgages and conveyances

related to this transaction.

In October of 1990, a real estate transaction purportedly

occurred in which VAM purchased real estate known as Crosby

Commons, Lot 4B-2 from its financial advisor, McQuade

Investments. McQuade Investments owed certain obligations on the

property to the Durham Trust Company ("DTC"). Paul R. McQuade,

who was a shareholder of VAM as well as shareholder, officer and

director of McQuade Investments, executed the transaction and

transferred these obligations to VAM. Additionally, McQuade

provided DTC with additional security for the transaction in the

form of notes and mortgages on other assets belonging to VAM.

DTC subseguently failed and the FDIC became successor to VAM's

alleged obligations to DTC.

2 II. DISCUSSION1

In his objection to the motion, plaintiff succinctly

describes his claim as follows:

It is the plaintiff's position that because Paul R. McQuade was not duly authorized to act on behalf of VAM in the Crosby Commons transaction, there never was an agreement among VAM Enterprises, Inc., McQuade & McQuade Investments, Inc. and DTC concerning the Crosby Common transaction. In the simplest legal terms, there never was a meeting of the minds between VAM, McQuade & McQuade Investments, Inc. and DTC. Thus, there was never a contract; and any purported conveyances, notes, or mortgages are therefore, void.

If plaintiff succeeds in this claim, the agreements plaintiff

attacks will be declared void, not voidable as the FDIC contends

xIn ruling on this motion for summary judgment, I am guided by the following standards. Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The burden is upon the moving party to establish the lack of a genuine, material, factual issue, Finn v. Consolidated Rail Corp., 732 F.2d 13, 15 (1st Cir. 1986), and the court must view the record in the light most favorable to the non-movant, according the non-movant all beneficial inferences discernable from the evidence, Oliver v. Digital Equipment Corp., 846 F.2d 103, 105 (1st Cir. 1988). If a motion for summary judgment is properly supported, the burden shifts to the non­ movant to show that a genuine issue exists. Donovan v. Aqnew, 712 F .2d 1503, 1516 (1st Cir. 1983).

3 because VAM never became obligated to perform under the

agreements. See Calamari and Perillo, Contracts, §§ 1-11 (2nd

ed. 1970); see also Daniel Webster Council, Inc. v. St. James

A s s 'n ., Inc., 129 N.H. 681, 684 (1987); Taylor Trust v. Security

Trust Fed. Sav. & Loan Ass'n., Inc., 844 F.2d 337, 342 (6th Cir.

1988). Neither D 'Oench nor § 1823(e) bar claims and defenses

that would render an agreement void. Langley v. FDIC, 484 U.S.

86, 93-94 (1987); see also FDIC v. Braker and Rivera, Inc., 895

F.2d 824, 830 (6th Cir. 1990); FDIC v. Aetna Cas. & Sur. Co., 947

F .2d 196, 202 (6th Cir. 1991); Taylor Trust, 844 F.2d at 342-43.

Accordingly, the FDIC may not invoke either D 'Oench or § 1823 (e)

to obtain summary judgment in the present case.

The FDIC's Motion for Summary Judgment (document no. 40) is

denied.

SO ORDERED.

Paul Barbadoro United States District Judge June 1, 1993

cc: David Garfunkle, Esg. Deborah Reynolds, Esg.

4 Jennifer Rood, Esq. Malcolm McNeill, Esq. Douglas Gray, Esq. James Noucas, Esq.