IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 16-60166

Summary Calendar

C&C INVESTMENT PROPERTIES, L.L.C.; GLEN L. COLLINS, 

 Plaintiffs - Appellants

v.

TRUSTMARK NATIONAL BANK, 

 Defendant-Third Party Plaintiff - Appellee

v.

CHARLOTTE D. COLLINS

 Third Party Defendant - Appellant

Appeal from the United States District Court 

for the Southern District of Mississippi

Before KING, DENNIS, and COSTA, Circuit Judges.

GREGG COSTA, Circuit Judge:

At the height of the savings & loan crisis, we considered a number of 

cases involving the D’Oench, Duhme doctrine. See, e.g., Resolution Trust Corp. 

v. Murray, 935 F.2d 89 (5th Cir. 1991); Fed. Sav. & Loan Ins. Corp. v. Cribbs, 

918 F.2d 557 (5th Cir. 1990); Fed. Sav. & Loan Ins. Corp. v. Murray, 853 F.2d 

1251 (5th Cir. 1988). That doctrine, which originated in the federal common 

United States Court of Appeals

Fifth Circuit

FILED

October 3, 2016

Lyle W. Cayce

Clerk

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law and is now codified at 12 U.S.C. § 1823(e), prevents borrowers from relying 

on oral agreements they allegedly had with a failed bank to defend against 

collection efforts of a federal receiver like the Federal Deposit Insurance 

Corporation (FDIC). D’Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 459–60 

(1942). The failure of a Mississippi bank in the aftermath of the 2008 financial 

crisis1 requires us to again consider the doctrine.

I.

In 2004, Glen and Charlotte Collins formed C&C Investment Properties, 

LLC to buy, rent, and flip real estate. Between 2006 and 2009, C&C bought

several foreclosed properties from Heritage Banking Group. C&C financed 

these purchases through promissory notes payable to Heritage, which were 

secured by deeds of trust encumbering the properties and guaranteed 

personally by the Collinses. According to the Collinses, the purchases were 

subject to the following side agreement: C&C would pay Heritage amounts 

equal to what Heritage paid for the properties at foreclosure and Heritage 

would later refinance the properties to account for their renovation value. 

C&C stopped making payments on the loans because Heritage 

purportedly did not live up to the side agreement. As a result, it defaulted on 

the notes and guaranties. In response, Heritage foreclosed on the properties. 

Aggrieved, Glen Collins and C&C sued Heritage for breach of contract and 

fraudulent inducement. 

While the suit was pending, Heritage was declared insolvent and the 

FDIC was appointed as receiver. That same day, the FDIC entered into a 

Purchase and Assumption Agreement with Trustmark National Bank, under 

 

1 More than four hundred FDIC-insured banks failed from 2008–2012. Only ten had 

failed in the five years prior to 2008. See FDIC: Failed Bank List, FEDERAL DEPOSIT 

INSURANCE CORPORATION, https://www.fdic.gov/bank/individual/failed/banklist.html (last 

updated Sept. 15, 2016).

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which it transferred to Trustmark various Heritage assets and liabilities, 

including the C&C notes and guaranties. 

Upon being substituted for Heritage as a defendant, the FDIC moved to 

dismiss the case. Before the court could rule on the motion, however, Mr. 

Collins and C&C sought and obtained leave to amend, adding Trustmark as a 

defendant. The FDIC thereafter renewed its motion, which was granted. 

Once added as a party, Trustmark pleaded section 1823(e) as a defense

and filed counterclaims against C&C and the Collinses (hereafter referred to 

jointly as the “borrowers”) for the amount still owing on the notes. Trustmark 

also sought reimbursement for its costs and expenses related to collection and 

enforcement of the loans. 

Trustmark filed a motion for summary judgment, arguing that because 

the claims against it and the defenses to its counterclaims are based on an 

unwritten side agreement between C&C and Heritage, section 1823(e) bars 

them. The borrowers objected, asserting that Trustmark either affirmatively 

or by being dilatory waived this defense. They further argued that, even if 

there was no waiver, there is a material fact dispute about whether the side 

agreement exists in a written form sufficient to overcome section 1823(e). The 

district court granted Trustmark’s motion. 

II.

We review a summary judgment ruling de novo. Davis v. Fort Bend Cty., 

765 F.3d 480, 484 (5th Cir. 2014). We interpret all facts and draw all 

reasonable inferences in favor of the nonmovant. Ion v. Chevron USA, Inc., 

731 F.3d 379, 389 (5th Cir. 2013). Summary judgment is appropriate only 

when the record reveals “no genuine dispute as to any material fact and the 

movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a).

D’Oench, Duhme bars parties from “rely[ing] on an oral agreement 

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between [a failed bank and its customer] as the basis for defenses or claims

against the FDIC.” Lemaire v. FDIC, 20 F.3d 654, 657 (5th Cir. 1994). Enacted 

in 1950, not long after the Supreme Court decided D’Oench, Duhme, section 

1823(e) codifies that common law ruling. Bowen v. FDIC, 915 F.2d 1013, 1015 

n.3 (5th Cir. 1990). The statute provides that any “agreement which tends to 

diminish or defeat the interest of the [FDIC] in any asset acquired by it under 

this section” shall not “be valid against the [FDIC] unless such agreement” is:

(1) in writing; (2) contemporaneously executed by the depository institution

and the person claiming an adverse interest; (3) approved by the board of 

directors of the depository institution and reflected in the minutes of the board;

and (4) continuously, from the time of its execution, an official record of the 

depository institution. 12 U.S.C. § 1823(e)(1). We have extended these 

protections to private parties, like Trustmark, that purchase the assets of 

insolvent banks from the FDIC. Porras v. Petroplex Sav. Ass’n, 903 F.2d 379, 

381 (5th Cir. 1990). 

There are two reasons for the D’Oench, Duhme rule. First, it “allow[s] 

federal and state bank examiners to rely on a bank’s records in evaluating the 

worth of the bank’s assets.” Langley v. FDIC, 484 U.S. 86, 91 (1987). Second, 

it “ensure[s] mature consideration of unusual loan transactions by senior bank 

officials, and prevent[s] fraudulent insertion of new terms, with the collusion 

of bank employees, when a bank appears headed for failure.” Id. at 92.

The borrowers do not dispute these general principles of section 1823(e)

or their applicability to this case. Instead, they attempt to avoid the defense 

in three ways. The first two involve waiver, as the borrowers contend that 

Trustmark substantively waived the defense in its agreement for the purchase 

of the Heritage assets and also procedurally waived the defense by asserting it 

too late in this lawsuit. 

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An affirmative waiver occurs when a party voluntarily or intentionally

surrenders a known right. Salzstein v. Bekins Van Lines Inc., 993 F.2d 1187, 

1191 (5th Cir. 1993). The borrowers maintain that Trustmark, through 

Section 2.1(n) of its Purchase and Assumption Agreement with the FDIC, did 

just that. Section 2.1(n) states: 

The Assuming Institution expressly assumes at Book Value (subject to 

adjustment pursuant to Article VIII) and agrees to pay, perform, and 

discharge, all of the following liabilities of the Failed Bank as of the Bank 

Closing Date, except as otherwise provided in this Agreement (such 

liabilities referred to as “Liabilities Assumed”); 

. . . 

(n) all asset-related offensive litigation liabilities and all asset-related 

defensive litigation liabilities, but only to the extent such liabilities 

relate to assets subject to a Shared-Loss Agreement, and provided that 

all other defensive litigation and any class actions with respect to credit 

card business are retained by the Receiver. 

This language, the borrowers assert, makes clear that Trustmark assumed 

liability on the subject loans free of any section 1823(e) defense. We disagree. 

Our sole case dealing with affirmative waivers in this context suggests 

the borrowers have not made a sufficient showing. In Tex. Refrigeration 

Supply, Inc. v. FDIC, 953 F.2d 975 (5th Cir. 1992), we remarked that the 

borrowers’ “most appealing argument” was that a purchaser of failed bank 

assets “waived any D’Oench, Duhme defenses to [the] claims [against it]”

through its “Purchase and Assumption Agreement” with the FDIC. 953 F.2d 

at 983–84. That agreement stated, in pertinent part, that the purchaser 

assumed certain “liabilities as shall be certified by the Receiver . . . whether or 

not they [we]re reflected on the books of the Failed Bank as of Bank Closing.” 

Id. (emphasis added) (internal quotation marks omitted). The borrowers 

argued that purchasing the assets irrespective of whether they were recorded 

on the books of the failed bank waived the D’Oench, Duhme rule that only 

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recorded agreements are enforceable. We found no waiver without having to 

interpret this provision, however, relying instead on the provision stating that 

the lender only assumed liability for claims certified as valid by the FDIC, 

which had not been done for the claims being asserted. Id.

Unlike the agreement in Texas Refrigeration, Trustmark’s agreement 

with the FDIC makes no mention of liabilities not reflected on the books of the 

failed bank. It merely addresses which Heritage asset-related litigation 

liabilities, assumed by the FDIC, were transferred to Trustmark. Nothing 

about it expressly or impliedly indicates a voluntary or intentional surrender 

by Trustmark of the section 1823(e) defense it inherited from the FDIC.

We also reject the borrowers’ assertion that Trustmark waived this

defense by raising it in a dilatory manner. Even when a party has failed to 

assert an affirmative defense in its answer, we may allow it to assert the 

defense “if it is raised at a pragmatically sufficient time and [the plaintiff] was 

not prejudiced in its ability to respond.” Arismendez v. Nightingale Home 

Health Care, Inc., 493 F.3d 602, 610 (5th Cir. 2007) (alteration in original) 

(internal quotations omitted); see also Rogers v. McDorman, 521 F.3d 381, 386–

87 (5th Cir. 2008) (finding no unfair surprise when, despite the defense not 

being pleaded, plaintiffs had notice in light of it being alluded to in the answer

and a pretrial brief, as well as during a pretrial hearing); Standard Waste Sys. 

Ltd. v. Mid-Continent Cas. Co., 612 F.3d 394, 398–99 (5th Cir. 2010) (finding 

the failure to plead an affirmative defense did not result in unfair surprise 

when defendant expressly mentioned it in denial letters, a joint status report, 

and the expert witness designation list).

Unlike the defendants in the cases just cited, Trustmark raised its 

section 1823(e) defense in its answer so there is no basis for the borrowers to 

argue unfair surprise. Indeed, they don’t do so. Instead, they argue Trustmark 

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was required to include the defense in a Rule 12 motion to dismiss, like the 

FDIC did. Trustmark’s failure to do so, according to the borrowers, caused an 

unnecessary continuation of the litigation that should preclude it from 

asserting the defense at the summary judgment stage. 

This argument reveals a basic misunderstanding of the rules of civil 

procedure. Rule 12(b)(6) provides a means by which a defendant may seek to 

dismiss a claim at the pleading stage; it does not require that a defense be 

asserted through that procedure. FED. R. CIV. P. 12(b) (“Every defense to a 

claim for relief must be asserted in the responsive pleading if one is required. 

But a party may assert the following defenses by motion . . . (6) failure to state 

a claim upon which relief can be granted.” (emphasis added)); FED. R. CIV. P.

12(h)(1) (omitting a Rule 12(b)(6) defense from the defenses that may be subject 

to waiver by failure to assert at the Rule 12 stage). Rule 12 expressly provides 

that a defendant not pursuing a Rule 12(b)(6) defense at the pleading stage 

may raise it later in the litigation, including at trial. FED. R. CIV. P. 12(h)(2)(C) 

(stating that “failure to state a claim upon which relief can be granted . . . may 

be raised . . . at trial”). And it is common that affirmative defenses sometimes 

raised in Rule 12(b)(6) motions, take a limitations defense as but one example, 

may also be raised via a summary judgment motion. See e.g., FDIC v. Dawson, 

4 F.3d 1303, 1306 (5th Cir. 1993). One obvious reason a defendant may wait 

is that a Rule 12(b)(6) motion typically cannot rely on evidence outside the 

complaint. See Brand Coupon Network, LLC v. Catalina Mktg. Corp., 748 F.3d 

631, 635 (5th Cir. 2014). But even when there is no apparent reason for doing 

so, the rules allow a defendant to assert an affirmative defense that may have 

been suitable for Rule 12(b)(6) disposition at the summary judgment stage. 

As for the efficiency concerns the borrowers raise, a plaintiff desiring 

early resolution of an affirmative defense may seek to strike it under Federal 

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Rule of Civil Procedure 12(f). See 5C CHARLES ALAN WRIGHT & ARTHUR R.

MILLER, FEDERAL PRACTICE & PROCEDURE § 1381 (3d. ed. 2004) (explaining 

that the “insufficient defense” language in Rule 12(f) had been read to allow a 

challenge to the legal sufficiency of an affirmative defense). Or the parties can 

agree to file an early summary judgment motion without the need for full 

discovery. But there is nothing that barred Trustmark from pursuing the

section 1823(e) defense, asserted in its answer, at the summary judgment stage

after discovery concluded. 

Apart from their unsuccessful waiver arguments, the borrowers argue 

that a material fact dispute exists that should have precluded summary 

judgment: whether the side agreement is in a written form sufficient to 

overcome section 1823(e). They point to the testimony of a Heritage division 

president who, when asked whether something in writing described the 

arrangement between C&C and Heritage, replied, “there may have been—well, 

I would have . . . gotten—and I can’t remember whether it was an e-mail or 

something from Tim Leitaker saying it was okay for me to do that.” The

executive was then asked whether there was something in writing other than 

the email, to which he replied, “I don’t remember the exact communication, 

but, yeah . . . I guess I’m positive that it was communicated in writing. If not, 

it still had to be signed off on every time I turned a loan in for it.” 

Even viewing the executive’s testimony about the purported side 

agreement in favor of the borrowers, there is no evidence from which a jury 

might conclude that all of the conditions necessary to overcome section 1823(e) 

are present. At most, the statements are evidence of communications 

describing the purported side agreement. We have doubts whether such 

writings would meet even the first requirement: that the “agreement” itself be 

in writing—not other communications referring to it. 12 U.S.C. § 1823(e)(1)(A). 

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That the agreement be in writing, however, is only one requirement of section 

1823(e). The written agreement must also meet the three other non-secrecy 

requirements. 12 U.S.C. § 1823 (e)(1)(B)–(D). The bank executive does not 

state that the communication was signed by Heritage and the borrowers, 

approved by Heritage’s Board of Directors, or continuously kept as an official 

Heritage record. Nor do the borrowers point to any other evidence supporting 

these additional statutory requirements. See Resolution Trust Corp. v. 

McCrory, 951 F.2d 68, 72 (5th Cir. 1992) (holding that a copy of an agreement 

executed by an insolvent bank found in the draft documents of the bank’s

attorney did not satisfy section 1823(e)’s requirements because it was not an 

official record of the failed bank); Twin Constr., Inc. v. Boca Raton, Inc., 925 

F.2d 378, 383–84 (11th Cir. 1991) (holding that a written form, despite 

outlining the obligations of both parties and existing in the insolvent bank’s 

records, did not meet section 1823(e)’s requirements because it had not been 

executed by the failed bank); FDIC v. Gardner, 606 F. Supp. 1484, 1488 (S.D. 

Miss. 1985) (finding that a written agreement executed by a failed bank

president could not be enforced against the FDIC because it was not

specifically approved by the board).

* * * 

The judgment of the district court is AFFIRMED.

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