The opinion of the court was delivered by: ROY
Elsijane T. Roy, United States District Judge
Before the Court are Motions for Summary Judgment filed by both parties. Extensive briefs have been filed over a period of several months, and the matter is now ripe for determination.
This case arises out of a dispute over the liability of defendant on certain promissory notes that were given to Corning Bank. FDIC contends that it acquired the indebtedness totaling $ 316,531.76 due the bank when the Corning Bank closed on June 15, 1984. FDIC also contends that prior to the closing of the Bank, Manatt had conveyed certain items of collateral to the Bank, which were liquidated and sold, either by the Bank or by the FDIC, and the proceeds received thereon were applied in partial satisfaction of Manatt's indebtedness.
In its supplemental brief, FDIC cites the recent Supreme Court case of Langley v. FDIC, 484 U.S. 86, 108 S. Ct. 396, 98 L. Ed. 2d 340 (1987) as being dispositive.
Manatt claims that he entered into a mutual agreement for liquidation of collateral on January 4, 1984, and that the execution of this document completely satisfied his indebtedness to the Bank. Manatt also raises issues of estoppel, res judicata and collateral estoppel, waiver and ratification.
In order for the agreement upon which defendant relies to be a valid defense in this case, the four requirements of 12 U.S.C. § 1823(e) must be met. This statute provides:
No agreement which tends to diminish or defeat the right, title, or interest of the Corporation in any asset acquired by it under this section, either as security for a loan or by purchase, shall be valid against the Corporation unless such agreement (1) shall be in writing, (2) shall have been executed by the bank and the person or persons claiming an adverse interest thereunder, including the obligor, contemporaneously with the acquisition of the asset by the bank, (3) shall have been approved by the board of directors of the bank or its loan committee, which approval shall be reflected in the minutes of said board or committee, and (4) shall have been, continuously, from the time of its execution, an official record of the bank.
If any one of the four requirements of § 1823(e) is shown to be unsatisfied, any side agreement between Manatt and the Bank is not enforceable against the FDIC. See FDIC v. Gardner, 606 F. Supp. 1484, 1488 (S.D.Miss. 1985). Section 1823 does not grant the court discretion to balance the equities in determining whether an agreement can be enforced. See FDIC v. TWT Exploration Co., 626 F. Supp. 149, 156 (W.D.Okla. 1985).
The agreement which Manatt claims acts as an accord and satisfaction appears to have been executed on January 4, 1984. Section 1823(e)(2) requires that any such writing be executed contemporaneously with the acquisition of the asset by the bank. The "asset" at issue in the instant case is Manatt's indebtedness evidenced by the seven promissory notes. These notes were executed as early as December 1980. Prior to the decision in Langley, supra, the FDIC was ready to concede that a fact issue existed on the issue of whether or not the requirements of § 1823(e) had been met. However, FDIC argues that the Court in Langley addressed the "contemporaneously" requirement, and thus resolved the issue in the case sub judice. In Langley, the Court stated that § 1823(e) requires:
the "agreement" not merely be on file in the bank's records at the time of an examination, but also have been executed and become a bank record "contemporaneously" with the making of the note . . . . Id., 108 S. Ct. at 401.
Manatt argues that § 1823(e) is not even applicable since an accord and satisfaction was reached prior to the FDIC acquiring the assets of the bank, citing FDIC v. Nemecek, 641 F. Supp. 740 (D.Kan. 1986). Therefore, it is argued that the obligation on the notes was extinguished, and these "assets" being sued upon in this case were non-existent. Manatt further argues that even if § 1823(e) is applicable, his agreement met the requirements of § 1823(e) because it was contemporaneous with the acquisition by the Corning Bank of the assets conveyed by defendant.
In Public Loan Company, Inc. v. FDIC, 803 F.2d 82 (3rd Cir. 1986) the Court held that plaintiffs could not successfully assert the defense of oral accord and satisfaction against the FDIC because it did not meet the statutory requirements of § 1823. Although this case involves the defense of written accord and satisfaction, it is clear that the statutory requirements of § 1823 must nevertheless be satisfied when the defense of accord and satisfaction are raised.
Even though defendant takes issue with the applicability of Langley to this case, the Court nevertheless finds the language persuasive. The Court in Langley clearly stated that the "agreement" must have been executed and become a bank record "contemporaneously" with the making of the note. As stated earlier, this requirement is to ensure mature consideration of unusual loan transactions by senior bank officials, and to prevent fraudulent insertion of new terms, with the collusion of bank ...