Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-86-02236/USCOURTS-ca10-86-02236-0/pdf.json

Parties Involved:
Michael L. Doyle
Appellee
Federal National Mortgage Association
Not Party
STM Mortgage Company
Appellant
TSL Service Corporation
Appellant
Trinity Savings and Loan Association
Appellant

Document Text:

PUBLISH 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

MICHAEL L. DOYLE, ) 

) 

Plaintiff-Appellee, ) 

) 

v. ) 

) 

TRINITY SAVINGS AND LOAN ASSOCIATION, ) 

TSL SERVICE CORPORATION; STM MORTGAGE ) 

COMPANY, ) 

) 

Defendant-Appellant, ) 

) 

and ) 

) 

FEDERAL NATIONAL MORTGAGE ASSOCIATION, ) 

) 

Defendant. ) 

) 

MICHAEL L. DOYLE, ) 

) 

Plaintiff-Appellee, ) 

) 

v. ) 

) 

TRINITY SAVINGS AND LOAN ASSOCIATION, ) 

TSL SERVICE CORPORATION, STM MORTGAGE ) 

COMPANY, ) 

) 

Defendant-Appellee, ) 

) 

and ) 

) 

FEDERAL NATIONAL MORTGAGE ASSOCIATION, ) 

) 

Defendant-Appellant. ) 

OPINION ON REHEARING 

FILED 

United Stltft Court of Appeals 

Tenth Circuit 

JUL 2 6 1991 

ROBERT L. HOECKER 

Clerk 

No. 86-2236 

No. 86-2309 

Appellate Case: 86-2236 Document: 01019294874 Date Filed: 07/26/1991 Page: 1 
Appeal from the United States District Court 

for the Western District of Oklahoma 

(D.C. No. 83-1736-A) 

Submitted on the briefs: 

Jack s. Dawson and Janice M. Dansby, Miller, Dollarhide, Dawson & 

Shaw, Oklahoma City, Oklahoma, for Plaintiff-Appellee. 

Linda G. Scoggins and Jeffrey H. Contreras, Spradling, Alpern, 

Friot & Gum, Oklahoma City, Oklahoma, for Appellant Federal 

National Mortgage Association. 

Carl Hughes, Michael G. McGuire, and J.W. Coyle, III, Hughes & 

Nelson, Oklahoma City, Oklahoma, for Appellants Trinity Savings & 

Loan Association, TSL Service Corporation, and STM Mortgage 

Company. 

Before MCKAY, BARRETT, and SEYMOUR, Circuit Judges. 

SEYMOUR, Circuit Judge. 

In 1989, we affirmed judgments rendered in favor of 

Michael L. Doyle against Trinity Savings and Loan Association, now 

Bright Bane Savings Association, 1 against TSL Service Corporation 

and STM Mortgage Company, both now Bright Mortgage Company, 2 and 

against the Federal National Mortgage Association (FNMA). Doyle 

had sought damages and cancellation of a note and real estate 

1 We grant the motion of Resolution Trust Corporation, as 

receiver for Bright Bane, to substitute it as defendant in place 

of Trinity Savings. 

2 We grant the motion for Bright Mortgage Company, as successor 

by name change and merger to TSL and STM, to substitute it as real 

party in interest in place of TSL and STM. 

-2-

Appellate Case: 86-2236 Document: 01019294874 Date Filed: 07/26/1991 Page: 2 
mortgage because of fraudulent alteration of the note. See Doyle 

v. Trinity Sav. & Loan Ass'n, 869 F.2d 558 (lOth Cir. 1989). All 

parties petitioned for rehearing. In view of the grant of 

certiorari by the Oklahoma Supreme Court in Goss v. Trinity Sav. & 

Loan Ass'n, No. 67,298 (Okla. Ct. App. 1988), a case on which we 

had directly relied, we abated this case pending the Oklahoma 

Supreme Court's decision in Goss. For the reasons set out below, 

we now deny the petition for rehearing of Trinity Savings, TSL, 

and STM, and we grant in part the petition of FNMA. 

Trinity Savings, TSL, and STM filed a joint petition for 

rehearing contending that we had incorrectly held the alteration 

of the note to be material. In Goss v. Trinity Sav. & Loan Ass'n, 

P.2d ___ , 62 Okla. Bar J. 790, 792 (Okla. s. Ct. 1991), the 

Oklahoma Supreme Court settled this issue by declaring an 

analogous note alteration to be material as a matter of law. We 

therefore deny the petition for rehearing of these defendants. 

FNMA filed a petition for rehearing generally condemning our 

reliance on the Oklahoma Court of Appeals decision in Goss. The 

recent Oklahoma Supreme Court decision in Goss reversed the 

appeals court conclusion that the variable interest rate in the 

note rendered the note nonnegotiable. See Goss, ___ P.2d at ___ , 

62 Okla. Bar J. at 793-95. Because the note in Goss was declared 

negotiable under Oklahoma law, FNMA would be a holder in due 

course, entitled to enforce the note despite the unauthorized 

-3-

Appellate Case: 86-2236 Document: 01019294874 Date Filed: 07/26/1991 Page: 3 
alteration of the note, if it could establish that it took the 

note without notice of the defect. See Okla. Stat. tit. 12A, §§ 

3-302(1), 3-305 (1981); see also Goss, ___ P.2d ___ , 62 Okla. Bar 

J. at 793, 795-96. The court therefore remanded the case to 

enable the trial court to determine whether FNMA lacked notice of 

the unauthorized alteration. 

Goss controls our opinion on rehearing. We thus hold that 

the variable interest rate note in our case was negotiable. We 

decline Doyle's invitation to further hold that FNMA had notice of 

the alteration as a matter of law, and we remand for the trial 

court to make that determination in accordance with the opinion in 

Goss, ___ P.2d at ___ , 62 Okla. Bar J. at 796, as amended on 

rehearing, 62 Okla. Bar J. 1779 (Okla. s. Ct. 1991). 

-4-

Appellate Case: 86-2236 Document: 01019294874 Date Filed: 07/26/1991 Page: 4