paid in cash by him and the promissory note. That right was "to
be exercised on or before a date seven (7) days from the end of
said two (2) year period by notice in writing delivered to the
Partnership by certified mail, return receipt requested."
Affidavit of Gary Friedland, January 4, 1991, Exhibit A.
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.
Furthermore, even if his oral request constituted a valid
exercise of his right to the return of the note, his action
would have no effect here because the agreement is not binding
on the FDIC. 12 U.S.C. § 1823(e) does not permit a side
agreement such as the May 10, 1984 agreement to defeat the
interest of the FDIC.*fn2 The alleged agreement was not
executed contemporaneously with the acquisition of the asset by
the depository institution, i.e. Bowery. It was not approved by
of Directors or Loan Committee of the depository institution.
It was not part of the official record of the depository
institution. 12 U.S.C. § 1823(e). Under the statute, failure to
meet any one of the conditions precludes an agreement from
binding the FDIC. It is uncontested that the three
aforementioned conditions have not been met. In FDIC v. Hoover
Morris Enterprises, 642 F.2d 785 (5th Cir. 1981), the Fifth
Circuit pointed out that the statutory language of 12 U.S.C. § 1823(e)
is all-encompassing in order to protect the FDIC from
fraud. The court held that unless a side agreement meets the
conditions of § 1823(e), it may not be asserted to defeat or
diminish the FDIC's interest in an asset. The Fifth Circuit's
analysis is persuasive. The May 10, 1984 agreement between
Marceca and Friedland as to the return of the note and
cancellation is a "side agreement" to which section 1823(e)
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 and
approved in accordance with the statute). See also, Federal
Deposit Insurance Corporation v. Investors Associates X., Ltd.,
775 F.2d 152 (6th Cir. 1985).
Since there is no dispute that the underlying debt of Marceca
is due, the plaintiff is entitled to enforce the promissory
note according to its tenor. D.S. Stern & Co., Inc. v. Pizitz,
240 App. Div. 509, 270 N.Y.S. 715, 716 (A.D. 1st Dep't 1934).
Defendant claims a triable issue of material fact exists
because plaintiff questions the existence of the May 10, 1984
agreement. This opinion assumes the existence of that
In view of the foregoing, plaintiff's motion for summary
judgment is granted. Plaintiff is directed to submit a proposed
judgment specifying the sum sought under the note and the other
relief it requests, within thirty days of the entry of this
Opinion and Order.
IT IS SO ORDERED.