(holding that a general partner's signature on an "agreement" failed to satisfy § 1823(e) in a suit brought by the limited partners because the general partner's authority to bind the partnership was found in the partnership agreement, which was a separate "agreement" that also failed to satisfy § 1823(e)). Even if Mr. Meltzer had such authority, it could be based only on an "agreement" that would not satisfy § 1823(e). Defendants also claim that the requirement is satisfied because Mr. Meltzer assigned the contract to Phase IV two weeks after he signed it. Defendants, however, advance no authority in support of this proposition.
Second, the contract was not executed by "the depository institution." The depository institutions are Whitestone and Nassau; the contract was executed by HPA. The requirement is not satisfied by virtue of the fact that Old Whitestone and Old Nassau, through their ownership of Whitestone Equities and Nassau Equities, together held a one-half interest in HPA. See Levy v. FDIC, 7 F.3d 1054, 1057 (1st Cir. 1993) (refusing, on similar facts, to disregard the corporate form of a failed bank's wholly owned subsidiary and impute the subsidiary's execution to the bank for purpose of § 1823(e)). Even if the Court considered HPA's signature to be an execution by a depository institution, that execution was not "contemporaneously [made] with the acquisition of the asset by the depository institution." The contract was signed on April 8, 1987; Old Whitestone and Old Nassau acquired the note and the mortgage by the mortgage assignment, dated June 20, 1988; and Whitestone and Nassau, the depository institutions for which the RTC brought this action as receiver, acquired the note and the mortgage by the purchase and assumption transactions, dated March 16, 1990.
Third, there is no evidence that the contract "was approved by the board of directors of [Whitestone or Nassau] or [either of their] loan committee[s], which approval shall be reflected in the minutes of said board or committee." Defendants do advance the minutes of Old Whitestone and Old Nassau board meetings that reflect discussion of the sale or potential sale of the premises by HPA, see Defendant's Exhs. HH, II, but this showing falls short of establishing approval by either board of directors. See Giammettei, 34 F.3d at 56-57 (holding that a reference to an "agreement" in a failed bank's board minutes was insufficient to satisfy § 1823(e), even where the "agreement" was part of a transaction that was in fact approved by the board of the bank).
Finally, defendants fail to establish that the contract "has been, continuously, from the time of its execution, an official record of [Whitestone or Nassau]." Defendants, on this point, do no more than offer their attorney's "best recollection" that the contents of a production of documents, which were contained in the files of Old Whitestone and Old Nassau, included the note, the mortgage, and the contract. Affidavit of Richard Gabriele P 27. This evidence does not establish a genuine issue.
Viewing the evidence in a light most favorable to defendants, the Court determines that the contract does not satisfy the requirements of § 1823(e). Because the contract's successful traverse of § 1823(e) is an essential element of defendants' fourth and fifth affirmative defenses, those defenses must fall.
B. Second Affirmative Defense
Defendants urge the Court to abstain from the instant action under Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 47 L. Ed. 2d 483, 96 S. Ct. 1236 (1976), because an action between HPA and Phase IV, which is pending in state court, raises the same issue that defendants raise in the fifth affirmative defense. A district court has a "virtually unflagging obligation" to exercise its jurisdiction, and should abstain under Colorado River only where state and federal proceedings are "concurrent" and "exceptional circumstances" exist. See Colorado River, 424 U.S. at 813; see also Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 16, 74 L. Ed. 2d 765, 103 S. Ct. 927 (1983); Sheerbonnet, Ltd. v. American Express Bank, Ltd, 17 F.3d 46, 47 (2d Cir.), cert. denied, 115 S. Ct. 67, 130 L. Ed. 2d 23 (1994). Where the proceedings are concurrent, a court should determine whether "exceptional circumstances" exist by examining six factors: (1) assumption of jurisdiction over a res; (2) inconvenience of the federal forum; (3) avoidance of piecemeal litigation; (4) order in which the actions were filed; (5) the law that provides the rule of decision in the federal case; and (6) protection of the federal plaintiff's rights. See Moses H. Cone, 460 U.S. at 16-19; De Cisneros v. Younger, 871 F.2d 305, 307 (2d Cir. 1989).
In the instant action, defendants have offered no proof indicating that the state and federal proceedings are actually "concurrent," see Sheerbonnet, 17 F.3d at 49-50 (declining to abstain solely because actions were not "concurrent"). In addition, defendants do not allege that the parties have proceeded further in state court than they have in the instant action, see Moses H. Cone, 460 U.S. at 21 (explaining that "priority" under the fourth factor should be determined "in terms of how much progress has been made in the two actions"), or that the federal forum is inconvenient. Even if a threat of piecemeal litigation exists, the fifth and sixth factors tip the balance decidedly in favor of exercising jurisdiction because issues of federal law are involved and the federal plaintiff's rights will not be adequately protected in state court. See id. at 26 (stating that "the presence of federal-law issues must always be a major consideration weighing against surrender"); see also Langley, 484 U.S. at 91-92 (articulating the important function served by § 1823(e) to federal banking authorities); Giammettei, 34 F.3d at 54-57 (same).
The Court, viewing the evidence in the light most favorable to defendant, is not convinced that abstention is appropriate. Defendants' second affirmative defense, therefore, does not withstand plaintiff's motion for summary judgment.
C. Defendants' Cross-Motion
Defendants move for an order, pursuant to Rule 37(c)(1) of the FRCP, precluding plaintiff from moving to strike defendants' affirmative defenses. Defendants allege that the RTC did not cooperate and disclose information in discovery. Rule 37(c)(1) prohibits a party, who has failed to disclose evidence that it was required to disclose, from using that evidence to its advantage. See Fed. R. Civ. P. 37(c)(1). Defendants' allege that plaintiff as failed to disclose bank documents as required. Even if this allegation is correct, the RTC has not attempted to use documents in support of its motion for summary judgment that were not disclosed to defendants. Thus, Rule 37(c)(1) does not apply. Nevertheless, the Court is not convinced that plaintiff has acted improperly.
In the alternative, defendants move for an order, pursuant to Rule 56(f) of the FRCP, staying resolution of plaintiff's motion for summary judgment until additional discovery can be taken. This case was commenced in July 1992. Discovery began soon thereafter and continued through November 1994. Defendants application for further time to complete discovery was denied by Magistrate Judge Arlene R. Lindsay, by order dated September 19, 1994. To date, plaintiff has produced more than 30 boxes of documents for defendants to examine. There comes a point in time when discovery must end. Because the Court determines that defendants had ample time for discovery, the Court declines to stay resolution of plaintiff's motion under Rule 56(f).
For the above reasons, defendants have not produced sufficient evidence to establish a genuine issue of material fact for trial. As such, plaintiff's motion for an order granting summary judgment against Phase IV and Solgar is granted. The Clerk of the Court is directed to enter judgment for plaintiff upon a determination of the judgment amount. To that end, Christopher M. Redmond, Esq., 160 Fourth Avenue, Brentwood, New York 11717, is appointed referee, pursuant to Rule 53(a) of the FRCP and Section 1321 of the New York Real Property Actions and Proceedings Law to ascertain and compute the amount due to plaintiff under the note and the mortgage and to report whether the premises should be sold in one parcel.
LEONARD D. WEXLER
UNITED STATES DISTRICT JUDGE
Dated: Hauppauge, New York
January 31, 1995