The opinion of the court was delivered by: Robert P. Patterson, Jr., District Judge.
Plaintiff Federal Deposit Insurance Corporation ("FDIC")
moves pursuant to Rule 56 of the Federal Rules of Civil
Procedure for summary judgment in the amount of the unpaid
balance of principal and interest due under a note for a
principal amount of $300,000.00 and attorney's fees, costs and
For the reasons stated below, the motion for summary judgment
On May 10, 1984, defendant Gary Friedland ("Friedland")
executed a promissory note in the principal amount of
$300,000.00, payable on May 10, 1986. He delivered the note to
Robert K. Marceca ("Marceca"), who is not a party in this
action, as part of the $400,000.00 purchase price for a 22%
partnership interest in 312 East 51st Associates, a cooperative
conversion venture which owned the premises at 312 East 51st
Street, New York, New York. The note provides that it "may not
be changed or terminated orally." Affidavit of John W.
O'Connell, December 10, 1990, Exhibit C. Thereafter, on May 31,
1984, Friedland executed an estoppel letter dated May 31, 1984
("the estoppel letter"), addressed to Bank Leumi Trust Company
of New York ("Bank Leumi"), which consented to the endorsement
of the note to Bank Leumi as collateral security for the bank's
extension of credit to Marceca, noting that the extension of
credit would benefit Friedland as an investor in 312 East 51st
Associates and also noting that the obligations of the note
were absolute and unconditional, subject, however, to the terms
and provisions of his investment agreement with Marceca and
another partner, dated May 10, 1984. Affidavit of Gary
Friedland, January 4, 1991, Exhibit D.
The estoppel letter was readdressed to the Bowery Savings
Bank ("Bowery") and it and Friedland's note for $300,000.00
were used by Marceca as collateral for a $675,000.00 loan from
Bowery on or around July 5, 1984.*fn1 Thereafter the FDIC
entered into an assistance transaction with Bowery. As part of
the assistance transaction, Bowery assigned Friedland's
promissory note to FDIC, who presently holds it. Defendant has
made no payments under the note. Marceca has defaulted on his
indebtedness to Bowery, a loan which was also assigned to FDIC,
on which over $800,000.00 in principal and interest is
outstanding, and has filed for bankruptcy. Affidavits of John
O'Connell, December 10, 1990, February 5, 1991; Affidavit of
Gary Friedland, January 4, 1991.
Friedland states that he became a partner in the partnership
and that he took occupancy in an apartment in the 312 East 51st
Street townhouse and uses it as his residence; that in early
1986 he advised the partnership through Marceca that he wanted
to cancel the transaction since there was no progress with
respect to conversion and for other reasons; that his request
for the return of his money was oral and that "Marceca told me
not to worry — everything would be resolved without a
problem." Friedland Affidavit.
Friedland argues that since the estoppel letter put Bowery on
notice that there were provisions in the May 10, 1984 agreement
which affected his absolute and unconditional obligations under
the note, and since he advised Marceca he wanted to cancel the
transaction early in 1986, Bowery and its assignee FDIC have no
right to enforce the note. He does not dispute that Bowery and
FDIC did not receive a copy of the May 10, 1984 agreement.
To grant a motion for summary judgment a court must find 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
because, after sufficient time for discovery, the non-moving
party has failed to make a sufficient showing of an essential
element of its case as to which it has the burden of proof.
Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91
L.Ed.2d 265 (1986). Summary judgment is appropriate if the
evidence offered demonstrates that "there is no genuine issue
as to any material fact and the moving party is entitled to
judgment as a matter of law." Anderson v. Liberty Lobby,
477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The Court must
view the facts in the light most favorable to the non-moving
party. Meiri v. Dacon, 759 F.2d 989, 997 (2d Cir. 1985), cert.
denied, 474 U.S. 829, 106 S.Ct. 91, 88 L.Ed.2d 74 (1985).
Assuming in the context of this motion that the May 10, 1984
agreement was validly made, the agreement of May 10, 1984, as
furnished by Friedland, by its terms required that he request
the return of the note on or before seven days from the end of
the two years following the date of the May 10, 1984 agreement,
"by written notice, delivered to the partnership by certified
mail, return receipt requested." Friedland Affidavit, Exhibit
A. Friedland acknowledges he did not comply with these
conditions and that whatever requests he made were oral.
Accordingly, Friedland did not exercise his right to the return
of the note as required by the agreement and the note remains
valid and outstanding.
Disclosure of the existence of the agreement of May 10, 1984
by the estoppel letter of May 31, 1984 is no defense to this
action, since it did not put Bowery or the FDIC on notice of
any right of plaintiff to the return of his note on proper
demand pursuant to the terms of the May 10, 1984 agreement or
disclose the terms of any conditions upon the obligation to
repay. See Langley v. Federal Deposit Insurance Corporation,
484 U.S. 86, 108 S.Ct. 396, 98 L.Ed.2d 340 (1987) (§ 1823(e)
does not contain an equitable exception for one who fails to
protect himself by ensuring his agreement is recorded ...