IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

________________________

No. 91-1822

(Summary Calendar)

________________________

Joe Rosas and Henry Perez, 

Individually and d/b/a Cleburne

Joint Venture No. One 

and Beatrice Rosas,

Plaintiffs-Appellants,

versus

The United States Small Business

Administration, Meadowbrook 

National Bank, Mel B. Wilde, and 

Ray Collins, Substitute Trustee,

Defendants-Appellees.

___________________________________________________

Appeal from the United States District Court

for the Northern District of Texas

___________________________________________________

(May 21, 1992)

Before JONES, DUHÉ, and WIENER, Circuit Judges.

Per Curiam:

Plaintiffs-Appellants, Joe Rosas and Henry Perez, individually

and doing business as Cleburne Joint Venture No. One, and Beatrice

Rosas (collectively "Appellants" or "the Joint Venture"), appeal

summary judgments in favor of the United States Small Business

Administration (the SBA), its substitute trustee Ray Collins

(Collins), Meadowbrook National Bank (Meadowbrook), and its

president Mel B. Wilde (Wilde). Finding no reversible error, we

affirm.
 

1There seems to be some disagreement with respect to whether

it was Rosas or Wilde who suggested that Meadowbrook consider

extending a loan to the Joint Venture. The discrepancy is not,

however, material to the summary judgment.

2

I.

FACTS AND PROCEEDINGS

In August of 1987, the Appellants obtained a $280,000 loan,

amortized over 20 years, from a third party bank, Independence

Mortgage (Independence), for permanent financing of a convenience

market to be constructed by the Joint Venture. The SBA provided an

85 percent guaranty for the loan. Another third party bank, the

First National Bank of Cleburne (First Bank) agreed to provide

interim funding and was given a first lien on the property. In

less than a year, the Joint Venture became delinquent on the First

Bank loan because, according to Rosas and Perez, the $280,000 ran

out before construction was completed. 

The Joint Venture then obtained a commitment from Independence

to increase the amount of the permanent mortgage loan by $30,000,

but First Bank refused to advance the additional funds. Even

without the additional funds, in July of 1988, Rosas and Perez

decided to open the market, despite incomplete construction and

lack of capital with which to purchase inventory. 

The next month, Rosas negotiated1 with Mel Wilde, president of

Meadowbrook National Bank, about providing the needed financing.

In early September, Meadowbrook issued a 60-day commitment to the

Joint Venture in which it agreed to fund a $400,000 loan amortized

over 20 years if the SBA agreed to an 80 percent guaranty. The
 

2Although Meadowbrook argues on appeal that the SBA would

only approve a 15 year payout, the guaranty application, made by

Wilde on behalf of Meadowbrook, requested only a 15 year payout. 

3

resulting SBA loan package, however, called for an amortization of

15 years instead of 20, and a guaranty of 85 percent instead of

80.2

Later in September, First Bank as the initial interim lender

posted the market property for foreclosure, and demanded turnover

of all equipment and inventory securing its loan.

In December, at the closing of the $400,000 loan, the

Appellants signed an SBA Authorization and Loan Agreement (the

Authorization), previously approved by the SBA, which reflected the

15 year amortization and 85 percent guaranty. The Authorization

specified the proportions of the $400,000 that were to be used for

the purchase of land, equipment, and inventory, and for

construction. The Appellants claim to have protested the 15 year

amortization, stating they were told by Wilde to sign the note as

is, and he would later modify the amortization to 20 years.

At the closing, Meadowbrook and the SBA also discovered that

several mechanics and materialmen's liens, aggregating $55,801.70,

for debts incurred by the Joint Venture in the initial construction

still stood against the market property. The Appellants contend

that the lien creditors had not performed their contracts in

accordance with specifications, and thus were not entitled to be

paid. Nevertheless, the title insurance company would not issue a

title policy unless the liens were released, so Meadowbrook

negotiated lien payoffs with most of the creditors, and agreed to
 

3It is not clear from the record whether this $25,000 is the

same $25,000 added to the original $400,000 to cover the payoff

of the creditors.

4

add $25,000 to the loan package to accomplish the lien payoff.

Wilde claims that Rosas and Perez disputed only one of the liens,

for which Meadowbrook escrowed the payoff pending a resolution.

Once all of the settlement charges were paid, including lien

creditors and First Bank, there remained virtually no money for

completion of the market or purchase of inventory. Therefore, the

Appellants closed the market and began searching for additional

funding. After an aborted attempt to secure funding through

another bank, the Appellants returned to Meadowbrook. It agreed to

fund an additional $80,000 loan, again guaranteed by the SBA. This

time Meadowbrook retained $25,000 of the $80,000 to pay off an

interim loan,3 and used another $24,206.36 to service the $400,000

debt. Apparently, the Appellants received the remaining $30,000

for operating capital. 

The Appellants also maintained an operating account at

Meadowbrook into which they deposited all receipts of the market.

The Appellants contend that in June of 1989, Meadowbrook began to

dishonor some checks drawn against the operating account despite

the presence of sufficient funds to pay the checks. Meadowbrook

agrees that on at least one occasion it did refuse to honor a check

even though there were sufficient funds, justifying its action on

the ground that the Appellants were attempting to purchase

equipment in violation of the limitations set forth by the SBA's

Authorization and Loan Agreement for the $80,000.
5

Late in 1989, the Appellants again approached Meadowbrook for

additional funding. The Appellants were at least six months

delinquent on both the $400,000 note and the $80,000 note.

Meadowbrook refused the additional funding. In January of 1990

Meadowbrook requested that the SBA purchase its guaranties, which

it agreed to do. Thereafter, the SBA initiated foreclosure.

The Appellants brought suit in Texas state court against the

SBA and Ray Collins, the substitute trustee, for promissory

estoppel and to enjoin the SBA's foreclosure action. They also

brought actions against Meadowbrook and Wilde for breach of

contract, negligent misrepresentation, breach of duty of good faith

and fair dealing, duress, and breach of depository agreement. The

SBA removed the action to federal district court. After initially

denying motions to dismiss and motions for summary judgment filed

by the SBA and Collins, the court granted summary judgment to

Meadowbrook, Wilde the SBA, and Collins. 

In its memorandum order, the district court rejected the

Appellants' contention that the statements made by Wilde at the

December closing of the $400,000 loan were negligent

misrepresentations. Instead, the court found them to be

inadmissible under the parol evidence rule. The court also

rejected the Appellants' claim for breach of duty of good faith and

fair dealing, finding that Texas does not recognize such a duty

from lender to borrower. And the court rejected the duress claim

because it found that the Appellants' assertions were conclusory
 

4Walker v. Sears, Roebuck & Co., 853 F.2d 355, 358 (5th Cir.

1988).

 

5Baton Rouge Bldg. & Constr. Trades Council v. Jacobs

Constructors, Inc., 804 F.2d 879, 881 (5th Cir. 1986)(per

curiam)(citing Southmark Properties v. Charles House Corp., 742

F.2d 862, 873 (5th Cir. 1984)).

 

6Fed.R.Civ.P. 56(c).

 

7Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).

6

and unsupported by fact or authority. The court did not address

the breach of depository agreement claim. 

The Appellants timely appealed the district court's final

judgment.

II.

STANDARD OF REVIEW

This court reviews the grant of summary judgment motion de

novo, using the same criteria used by the district court in the

first instance.4 We "review the evidence and inferences to be

drawn therefrom in the light most favorable to the non-moving

party."5 Summary judgment is proper "if the pleadings,

depositions, answers to interrogatories, and admission on file

together with the affidavits, if any, show that there is no genuine

issue as to any material fact and that the moving party is entitled

to a judgment as a matter of law."6 Fed.R.Civ.P. 56(e) requires

that when a proper motion for summary judgment is made, the nonmoving party must set forth specific facts showing that there is a

genuine issue for trial.7 The mere existence of an alleged factual

dispute between the parties will not defeat an otherwise properly

supported motion for summary judgment. A dispute about a material
 

8Id. at 248.

 

9Id.

 

10R & P Enterprises v. La Guarta, Gavrel & Kirk, Inc., 596

S.W.2d 517, 519 (Tex. 1980).

7

fact is genuine "if the evidence is such that a reasonable jury

could return a verdict for the nonmoving party."8 "Material facts"

are "facts that might affect the outcome of the suit under the

governing law."9

III.

ANALYSIS

A. Negligent Misrepresentation

The district court rejected the Appellants' contentions that

Wilde's statement at the closing, indicating that he would convert

the loan from a 15 to a 20 year payout if the Appellants would sign

the note, was a negligent misrepresentation. The court concluded

that the statement was inadmissible under the parol evidence rule.

We agree.

Even assuming the Appellants' allegations are true, Wilde's

alleged representations fall squarely within the ambit of the parol

evidence rule making such representations inadmissible evidence.

As a basic rule of Texas contract construction, if a contract is

clear and unambiguous on its face, courts will not consider oral

representations by the parties in interpreting the contract.10

Parol agreements, negotiations and representations are inadmissible
 

11Texas Export Development Corp. v. Schleder, 519 S.W.2d

134, 137 (Tex. Civ. App. - Dallas 1974).

 

12Town North National Bank v. Broaddus, 569 S.W.2d 489, 492

(Tex. 1978)(quoting Texas Export, 519 S.W.2d at 139).

 

13724 S.W.2d 102 (Tex. Civ. App. - Dallas 1987).

8

in Texas and cannot be used to alter the express terms of a written

contract.11

In an attempt to escape the parol evidence rule, the

Appellants maintain that they are not attempting to contradict the

terms of the $400,000 note, but are simply attempting to prove that

Wilde's representations induced them to execute a note containing

terms to which they did not agree. Such an assertion cannot save

the Appellants. Texas courts bind parties to the express terms of

the promissory notes they execute. As the Texas supreme court held

in a case involving a loan agreement,

A party to a written agreement (promissory note) is charged as

a matter of law with knowledge of its provisions and as a

matter of law cannot claim fraud when he is bound to the

provisions unless he can demonstrate he was tricked into its

execution.12

Therefore to fall within this exception to the parol evidence rule,

a party must prove that he was fraudulently induced to enter a

contract. Absent a showing by the Appellants that Wilde

fraudulently induced them to execute the $400,000 note, evidence of

representations and negotiations prior to execution of the note is

inadmissible.

In Simpson v. MBank Dallas, N.A.,

13 a guarantor attempted to

avoid liability on a note by claiming that the bank represented

prior to execution that his signature was a "mere technicality" and
 

14Id. at 108 (emphasis added). See also Town North, 569

S.W.2d at 492; Clark v. Dedina, 658 S.W.2d 293, 296 (Tex. App. -

Houston (1st Dist.) 1983). As the district court noted in the

present case, "[c]learly an action for negligent

misrepresentation could not, by definition, include evidence of

artifice or trickery necessary to meet the requirements of this

exception" to the parol evidence rule.

 

15Town North, 569 S.W.2d at 492.

9

that MBank would not attempt to enforce its guaranty. The court

upheld the trial court's grant of summary judgment for MBank,

stating:

The law is well settled that in order for [the guarantor] to

prove fraud in the inducement sufficiently to allow an

exception to the parol evidence rule to come into play, he

must show some type of trickery, artifice or device employed

by MBank in addition to showing that MBank represented to him

that he would not be liable on the guaranty.14

The Appellants have presented no evidence that the Meadowbrook or

Wilde employed any trickery, artifice or device other than Wilde's

alleged representation that he would restructure the loan from 15

to 20 years. In fact, the Appellants' evidence reflects that Wilde

and the Bank never engaged in a course of conduct calculated to

deceive the Appellants into believing that any alleged oral

agreement would also be honored on the note. 

Parties to a promissory note are charged as a matter of law

with knowledge of its provisions, and as a matter of law cannot

claim fraud unless they demonstrate that they were tricked into its

execution.15 The Appellants executed the note with full knowledge

of the facts that they claim constituted fraud. They knew at the

time they signed the note that it required a 15 year payout and

that they were responsible for payment under that note. They
 

16Id.

10

cannot now be heard to complain that Wilde deceived them into

signing the note based on a promise to vary its terms in the

future.

If fraud could be predicated on a party's allegation of any

oral promise to vary the express terms of the note, then any

collateral parol agreement might be asserted to contradict, vary or

even abrogate any written contract. The result would destroy the

parol evidence rule altogether resulting in uncertainty and

confusion in the law of contracts in general and negotiable

instruments in particular.16

There is no genuine fact issue here, and it is clear that the

Appellees should prevail on the law. The Appellants signed the

loan documents at closing, agreeing to a 15 year payout under the

note, and cannot now avoid their contractual obligation based on an

alleged parol representation.

B. Duress

The district court concluded that the Appellants failed to

present any evidence of duress. The Appellants contend, however,

that their affidavits submitted in opposition to the summary

judgment motions illustrate the "extreme precarious financial

position" in which they found themselves at the time of the

December closing. Rosas stated that "[a]t the December Closing,

Wilde threatened that unless the Joint Venture accepted the terms

which had been negotiated, [First Bank] would foreclose on [its]
 

17Tower Contracting Co. v. Burden Brothers, Inc., 482 S.W.2d

330, 335 (Tex. Civ. App. - Dallas 1972); See also Palmer Barge

Line, Inc. v. Southern Petroleum Trading Co., 776 F.2d 502, 505

(5th Cir. 1985). 

 

18Tower Contracting, 482 S.W.2d at 335.

11

first lien." The Appellants also assert that the fact that the

disbursements planned for the $400,000 loan did not comply with the

SBA authorization is further evidence of duress. We fail to see,

however, how these statements can be deemed evidence of duress. 

Texas courts have held that there can be no duress unless (1)

there is a threat to do some act that the party threatening has no

legal right to do, (2) there is some illegal exaction or some fraud

or deception, and (3) the restraint must be so imminent as to

destroy a party's free agency without present means of protection.17

Neither the Appellants' complaint nor the affidavits allege any

action by Wilde that meets the elements set forth above. Simply

stated, the alleged acts constitute no threat to undertake an

unauthorized, deceptive, fraudulent or illegal act. Both the

"threat" not to fund the loan and the "threat" that First Bank

would foreclose on the Joint Venture alleges no illegal or

fraudulent act. Both scenarios were within the respective banks'

legal rights. 

The Appellants also failed to articulate how Wilde's alleged

threats destroyed the Appellants' free agency.18 Instead of

attempting to address each of the elements of a duress cause of

action, the entirety of the Appellants' arguments on the duress

issue focuses on the Joint Venture's "extreme precarious financial
 

19See Victoria Bank and Trust Company v. Brady, 779 S.W.2d

893, 902 (Tex. App. - Corpus Christi 1989), aff'd in part, rev'd

in part on other grounds, 811 S.W.2d 931 (1991).

 

20See Texas National Bank v. Sandia Mortgage Corp., 872 F.2d

692 (5th Cir. 1989).

12

position." The affidavits set forth no facts demonstrating that

Wilde, and not the Joint Venture's financial hardship, was

responsible for forcing the Appellants to execute the $400,000

note. The district court recognized that the Appellants' argument

"is supported by neither legal authority nor by any factual

clarification of Wilde's alleged threats." As a consequence of the

Appellants' failure to plead the elements of duress properly, there

is no issue whatsoever, either legal or factual. Therefore, the

district court was correct in rejecting the Appellants' claim of

duress.

C. Breach of Good Faith and Fair Dealing

The district court also rejected the Appellants' claim that

the Bank and Wilde breached a duty of good faith and fair dealing

because Texas courts do not recognize such a duty from lender to

borrower.19 On appeal, the Appellants characterize this claim as

one for breach of the implied promise not to interfere or hinder

the Appellants' right to perform their contract.20 The Appellants

apparently base their argument on Meadowbrook's alleged deviation

from the guidelines set forth in the SBA authorizations with

respect to disbursement of the proceeds. In effect, they argue

that Meadowbrook disbursed the loan proceeds to benefit its
 

2113 C.F.R. § 122.5-5.

 

2213 C.F.R. § 120.202-5.

 

23Emphasis added.

13

position as mortgagee and not in accordance with the SBA's

authorizations. This argument is without merit. 

SBA regulations with respect to the purpose of the loan

authorization provide helpful guidance. Section 122.5-521 reads,

"[i]f SBA approves a loan request, a loan authorization is issued.

The authorization states the terms and conditions on which SBA is

willing to make, participate in or guarantee a loan but it is not

a contract to loan money." Section 120.202-522 provides that the

SBA shall be released from obligation to purchase its share of

the guaranteed loan unless the Lender has substantially

complied with all of the provisions of these regulations, the

Guaranty Agreement and the Loan Authorization, and has not

failed to disclose material facts, and had made no material

misrepresentations to SBA with respect to the loan; or upon

the happening of any one or more of the following events:

(a) Defective Closing. Failure of the Lender to close

and disburse the loan substantially in accordance with

the terms and requirements of the loan instructions

(including the loan authorization), or to service the

loan in a prudent manner, either of which may result in

a substantial loss on the loan.23

Read together, these regulations make clear that the loan

authorization is not a contract to lend. Rather, it is an

agreement between the SBA and the lending institution defining

under what conditions the SBA will honor its guaranty. The SBA is

obligated to perform only if the Bank substantially complies with

the conditions of the agreement. When the Joint Venture defaulted

on the notes, the SBA conducted a prepurchase review of

Meadowbrook's distribution of the loan funds prior to purchasing
 

24See also Klehm v. Grecian Chalet, Ltd., 164 Ill. App. 3d

610, 518 N.E.2d 187 (1987).

 

25Murdaugh Volkswagen, Inc. v. First National Bank, 741 F.2d

41, 44 (4th Cir. 1984).

14

its 85 percent guaranty. The SBA apparently concluded that the

distribution complied with the SBA's loan authorizations because it

honored its guaranty. We find it incongruous that Meadowbrook

could have both managed the loans in an inequitable manner and

comported with the SBA authorizations. The SBA's determination as

to whether the Bank's actions comport with its guidelines is

dispositive of the issue.24 

D. Breach of Depository Agreement

Although the Appellants claimed before the district court that

Meadowbrook breached its depository agreement and wrongfully

dishonored checks when there were sufficient funds in the operating

account, the district court made no mention of this claim in its

memorandum order. Instead, in its judgment, the court declared,

"for the reasons stated in the memorandum order of this date, it is

ordered that plaintiffs take nothing on their claims against

defendants in this case." Although the court's opinion does not

discuss the cause of action for breach of the depository agreement,

this in no way renders invalid the court's dismissal of that claim.

A court is not required, after disposing of all the issues in a

judgment, to explain its determination on each and every issue in

an attached memorandum.25 
 

26477 U.S. at 250. See also Miller v. Soliz, 648 S.W.2d

734, 737 (Tex. Civ. App. - Corpus Christi 1983); Westland Oil

Development Corp. v. Gulf Oil Corp., 637 S.W. 2d 903, 907 (Tex.

1982).

15

Clearly, the district court dismissed the Appellants' claim

because they failed to present the requisite testimony and

documentary evidence to raise a fact issue in response to the

motions for summary judgment filed by Meadowbrook and Wilde. The

Appellants' affidavits fail to meet the requirements for

specificity to raise a fact issue and thereby defeat summary

judgment under the standard set forth by Anderson v. Liberty Lobby,

Inc. There, the Supreme Court held that, "when a properly

supported motion for summary judgment is made, the adverse party

must set forth specific facts showing that there is a genuine issue

for trial."26 

Rosas and Perez submitted the following affidavit testimony in

response to the motions for summary judgment:

Rosas:

Meadowbrook did deposit some loan funds in the operating

account which the Joint Venture maintained, but often refused

to honor checks, even though the Joint Venture account balance

wa much greater than the face amount of the check. Attached

hereto as Exhibit "K" are true and correct copies of return

check notices sent to the Joint Venture by Meadowbrook, which

show that Meadowbrook dishonored checks despite there being

sufficient funds in the Joint Venture Account.

Perez:

Meadowbrook did deposit funds in the operating account which

the Joint Venture maintained, but often refused to honor

checks, even though the Joint Venture account balance was much

greater than the fact amount of the check.
 

27They show that on two different dates, the balance in the

account was $11,334.69 and $19,028.07. The legend indicates that

the balance in the account was insufficient to pay the items

listed. The documents also purport to show that three of the

four checks were returned, and one was paid. But this was done

by hand-lining through the word "paid" so that only the word

"returned" remained.

16

To bolster this testimony, the Appellants attached two

document pages listing four checks totaling $350. The documents,

however, are vague and are not self-explanatory.27 

In Wilde's affidavit in support of his motion for summary

judgment, he averred that 

There were several occasions in which Meadowbrook denied

payment on Cleburne Joint Venture checks written on a

Operating Account at Meadowbrook due to Cleburne Joint Venture

maintaining insufficient funds in the account. Only once did

Meadowbrook refuse payment on a check despite sufficient funds

existing in the account. This occurred when Cleburne Joint

Venture attempted to purchase approximately $600.00 of

equipment not authorized by the SBA in the Authorization and

Loan Agreement.

There is no genuine issue with respect to the fact that checks were

dishonored even though there were sufficient funds in the account

to cover them. The Appellants presented no evidence, however, to

counter Wilde's statement that the checks were for unauthorized

purchases. In fact, the Appellants have never explained what the

checks were for. 

Moreover, the Appellants have never asserted the specific

damages they might have suffered. Tex. Bus. & Comm. Code § 4.402

provides in pertinent part, "A payor bank is liable to its customer

for damages proximately caused by the wrongful dishonor of an

item....Whether any consequential damages are proximately caused by

the wrongful dishonor is a question of fact to be determined in
 

28Tex. Bus. & Comm. Code Ann. § 4.402 (Vernon 1968).

17

each case."28 An element of a cause of action under this section

is that the customer suffer damages. The Appellants made the

conclusory statement in their response to the summary judgment

motions that "damages for loss of credit, loss of time, loss of

money, loss of use of money and mental anguish" were genuine issues

of material fact. But the Appellants have done nothing to place

those "facts" in issue. Such unsupported statements are wholly

insufficient to defeat summary judgment.

E. The SBA and Collins

In the district court the Appellants asserted claims of breach

of contract and promissory estoppel against the SBA and Collins

based on the SBA's alleged promises to the Appellants to purchase

and service the promissory notes from Meadowbrook. Before the SBA

responded to the Appellants' discovery requests, the district court

granted summary judgment in favor of the SBA and Collins,

concluding that as a matter of law the Appellants could not invoke

estoppel against the government, and that any agreement, even had

it existed, could not be enforced against the government. On

appeal, the Appellants contend that the district court erred in

ruling on the summary judgment motion before discovery was

complete. We disagree.

It is "the established law of this Circuit that a plaintiff's

entitlement to discovery prior to a ruling on a summary judgment

motion may be cut off when, within the trial court's discretion,
 

29Fisher v. Metropolitan Life Ins. Co., 895 F.2d 1073, 1978

(5th Cir. 1990).

 

30See Heckler v. Community Health Services, Inc., 467 U.S.

51, 60 (1984). See also Schweiker v. Hansen, 450 U.S. 785, 789

(1981)(Government will not be estopped in civil litigation

without a showing that government agents engaged in affirmative

misconduct.)

 

31110 S.Ct. 2465 (1990).

 

32Id. at 2470.

 

33Id. at 2473.

18

the record indicates that further discovery will not likely produce

facts necessary to defeat the motion."29 As the issues to be

decided by the district court were purely legal in nature, the

court did not abuse its discretion in deciding the summary judgment

motion prior to completion of discovery. 

Although the Supreme Court has not completely foreclosed the

possibility that an estoppel claim might lie against the

government, it has noted that its use is severely restricted.30 In

fact, recently in OPM v. Richmond31 the Court noted that it has

reversed every circuit court finding of estoppel against the

government that it has reviewed.32 Particularly, the Court declared

that "claims for estoppel cannot be entertained where public money

is at stake."33

The Appellants argue that their estoppel claim is not a claim

for payment of money from the public treasury, but instead seeks to

enforce the SBA's alleged promise to service the promissory notes.

The Appellants fail to recognize, however, that public monies are

indeed at stake. They borrowed a half a million dollars secured by
 

34Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384

(1947).

 

35661 F.2d 433 (5th Cir. 1981).

 

36Id. at 434.

19

the guaranty of the SBA. When the loan went into default, the SBA

honored its guaranty with payments from the federal treasury.

Estopping the government by enforcing a promise to service the

notes would bar further proper and legitimate attempts to recover

that money. Therefore, estoppel will not lie against the

government.

The Appellants' claim of breach of contract against the SBA

also must fail. It is a familiar tenet of government contracts

that the government cannot be bound by the unauthorized acts of its

agents.34 In U.S. v. R & D One Stop Records, Inc.35 we held that the

representation of certain SBA officials that no individual recourse

would be taken against the guarantors was outside the authority of

the SBA agents, and the government was entitled to summary judgment

as a matter of law. The same is true in this case. Any

representation made by an SBA official that the SBA would purchase

and service the promissory notes clearly exceeded the official's

scope of authority. As we expressed in 

R & D One Stop, 

The possible misrepresentations by SBA representatives are of

no help to guarantors in their defense of fraud or mutual

mistake. Even assuming such misrepresentations were made, the

United States is not bound by actions of its agents exceeding

their scope of authority.36
 

37Merrill, 332 U.S. at 384. See also U.S. v. Lowell, 557

F.2d 70, 72 (6th Cir. 1977).

20

Furthermore, it was incumbent upon the Appellants to ascertain

whether the officials with whom they dealt acted within the scope

of their authority.37 Not having done so, they cannot now be heard

to complain that the officials exceeded that scope. 

IV.

CONCLUSION

The Appellants were victims of a faltering economy and an

unfortunate set of difficulties in the construction of their

market, not the least of which were their apparent lack of

experience and judgment. They were not, however, victims of

Meadowbrook, Wilde, or the SBA. The Appellants were unable to

demonstrate to the district court that there were any genuine

issues of material fact sufficient to overcome the Defendants'

motions for summary judgment, or that the actions taken by Wilde

and Meadowbrook constituted negligent misrepresentation, placed the

Appellants under duress, breached any duty, or breached the

depository agreement. In addition, the Appellants failed to show

that they could prevail on any claim against the SBA and Collins.

Therefore, the district court committed no reversible error in

granting summary judgment in favor of the Defendants. For the

foregoing reasons, we AFFIRM.
21