* This order and judgment is not binding precedent, e xcept under the

doctrines of law of the case, res judicata, and col lateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3 

## F I L E D United States Court of Appeals Tenth Circuit 

### DEC 10 1998 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

NATIONAL ENTERPRISES, INC.,

Plaintiff - Appellant, No. 98-2176

v. (D. New Mexico) FIRST WESTERN FINANCIAL CORPORATION, a New Mexico corporation; HOWARD T. VAN PELT; and JAMES E. HAWORTH,

Defendants - Appellees. (D.C. No. CIV-94-1012)

ORDER AND JUDGMENT *

Before ANDERSON , McKAY , and LUCERO , Circuit Judges.

After examining the briefs and appellate record, th is panel has determined unanimously that oral argument would not materiallyassist the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1.9. Th e case is therefore ordered submitted without oral argument.1 The action was originally commenced by the Resoluti on Trust Corporation

(“RTC”). After bringing the action, the RTC assign ed the note and guarantees to National which was then substituted as Plaintiff. By this action, National Enterprises, Inc. (“National”) seeks payment of a $100,000 promissory note (the “Note”), from the Not e maker, defendant First Western Financial Corporation (“First Western”), an d the Note guarantors, defendants Howard T. Van Pelt and James E. Haworth. 1 Following a bench trial, the district court entered judgment in favor of def endants (collectively “First Western”). National appeals, contending that the d istrict court erred by 1) improperly applying Texas contract law, and 2) c onsidering defenses based on unrecorded side agreements. We affirm.

BACKGROUND Briefly stated, resolution of whether First Westernis liable on the Note depends upon the interpretation of a prior compromi se and settlement agreement (the “Agreement”) between the Resolution Trust Corp oration (“RTC”) and the defendants. First Western contends that the Agreem ent released the defendants from any such liability, while National contends th at the Note was not included in the Agreement’s release. In a previous appeal foll owing the district court’s summary judgment in favor of the defendants, we con cluded that the Agreement contained a latent ambiguity, and, finding a genuin e dispute as to the parties’ intentions, we reversed the grant of summary judgme nt and remanded for further2 Some of these facts were disputed prior to trial. However, in this appeal,

National makes no claim that any of the district co urt’s findings are clearly erroneous, and, therefore, we consider such facts a s properly established and proven.

3 The grantor of the trust deed is designated as “Las Lomas Joint Venture, a Texas joint venture comprised of First Western Financial Corporation, a New Mexico corporation and VMH Partners, a New Mexico g eneral partnership.” Appellee’s Supp. App. at 10. The trust deed is sig ned by First Western and VMH Partners as the two joint venturers acting on behal f of Las Lomas Joint Venture. Id. at 39-40. - 3 - proceedings. National Enterprises, Inc. v. First W estern Financial , No. 96-2168, 1997 WL 642081 (10th Cir. Oct. 17, 1997) (“National I ”). On remand, the district court held a bench trial. The following facts are relevant to our review. 2 Sometime prior to March 1985, First Western and a general partnership formed by Van Pelt, Haworth, an d another individual (VMH Partners), entered into the Las Lomas Joint Venture (“Las Lomas”), to develop an apartment and day-care facility in El Paso, Texas ( the “Project”). To finance the Project, First Western, acting for Las Lomas, negot iated an $8.9 million loan (the “Loan”) from Sandia Federal Savings & Loan Associat ion (Sandia). Findings of Fact (“Finding”) 3, Appellant’s Br. Attach. at 2. The Loan was evidenced by an $8.9 million promissory note dated December 1, 1995 , and was guaranteed by Van Pelt and Haworth, and secured by a deed of trust onthe Project. 3 The trust deed provided that it would also secure “all other direc t and indirect indebtedness now or at any time in the future owing or to be owing b y Grantor to Beneficiaries,- 4 -

regardless of how evidenced or incurred, it being u nderstood that it is contemplated that Grantor will become further indeb ted to Beneficiaries in the future.” Appellee’s Supp. App. at 12. Sandia originally committed to participate in the p roject as an equity partner, but, before the loan was closed, it advise d Las Lomas that it could not honor that commitment. Therefore, the parties anti cipated the need for, and approvals of, additional loans to cover cash shortf alls. Finding 7. In fact, the project experienced a budget shortfall, and First W estern requested additional loans “in conjunction with financing” the Project. National I , 1997 WL 642081, at *1 (quoting from documents submitted); see also Finding 8. On July 16, 1986, Sandia loaned $100,000 to First Western, and Sandiatook the Note and guarantees which are the subject of this action. In 1988, Las Lomas defaulted on the $8.9 million lo an, and First Western defaulted on the Note. In 1989, Sandia failed. In July 1990, Las Lomas filed a lender liability action against the RTC which was t hen the receiver for Sandia. The complaint alleged that Sandia’s actions and omi ssions had caused the Project’s deficiencies and the resulting default, a nd it also alleged separate claims against the RTC. However, it did not specifically mention the $100,000 Note. In July 1992, the RTC, Las Lomas (as represented byFirst Western and the VMH general partnership), and the individual guarantors entered into a settlement- 5 -

agreement (the “Agreement”) “to compromise doubtful and disputed claims, avoid litigation and buy peace.” Appellant’s App. at 51. As consideration for the settlement, Las Lomas consented to the foreclosure of the Project and paid more than $300,000 to the RTC. Appellant’s App. at 48-5 0; Appellee’s Supp. App. at 44. Las Lomas and the guarantors also released the RTC from all claims, “whether known or unknown, present or future, relat ing to or in any way arising out of the Note, the Loan Documents, the Property and the Suit . . . .” Appellant’s App. at 49. In return, the RTC agreed, “for itself and its successors and assigns, [to] RELEASE, ACQUIT and FOREVER DISCH ARGE Borrower and Guarantors . . . from any and all claims, deman ds, obligations, and causes of action of any nature whatsoever relating to or in a ny way arising out of the Note and the Loan Documents.” Id. at 49-50. The RTC, however, did not “waive any rights it may have against any person not a party h ereto.” Id. at 52. Miscellaneous terms included an integration clause and a provision requiring the agreement to be interpreted under Texas law. Id. at 51-52. Van Pelt, as president of general partner First Western, and Haworth, as p artner of general partner VMH Partners, signed the Agreement on behalf of Las Lom as. Haworth and Van Pelt also signed as guarantors. See id. at 53. According to National, the Note was not related to the Project. Moreover, it contends that the defendants may not argue any r elationship, since such a- 6 -

defense would depend upon a secret agreement which deliberately obfuscated the relationship in order to hide the fact that the Pro ject was more expensive than anticipated. National thus contends that the Agree ment did not discharge the Note. By contrast, First Western contends that the parties always understood and agreed that the $100,000 Note was related to the Pr oject and its financing, the underlying documents manifested that understanding and agreement, and, when they executed the Agreement, the parties intended t o and did discharge the Note. In National I we observed that “[t]he circumstances surrounding the execution of the agreement suggest two reasonable m eanings,” and, therefore, we concluded that the district court needed to resolve disputed questions of material fact before it could determine whether the Agreemen t discharged First Western from liability on the $100,000 Note. National I , 1997 WL 642081, at *3. On remand, the district court found the defendants’ ve rsion of the circumstances more credible than National’s, and it concluded that the Agreement served to release the obligation of the $100,000 Note along w ith the obligation of the $8.9 million loan. In reaching that conclusion, the district court mad e the following specific findings: (1) The RTC, by and through its agents, knew that the $100,000 Note was related to the Project and the Project indebted ness (Findings 14, 15); (2) specific actions of the RTC support the conclusion that it understood that the- 7 -

Note was to be included in the settlement (Findings 18(a), (b)); and (3) correspondence from First Western and responses from the RTC support the conclusion that, as finally drafted, the Agreement compromised all the RTC’s Project-related claims against the defendants (Find ings 18(c), (d)). From the bench, the district court also opined that, even if a different understanding may have been held by the RTC agents responsible for fi nally drafting the Agreement (who apparently did not have the complete RTC file) , that narrower understanding was “not the defendant’s fault.” Appellant’s ReplyBr. at 4 (quoting Transcript at 172). National now appeals, contending that the district court misapplied the law to the facts.

DISCUSSION “‘If a contract’s construction depends upon extrins ic facts and circumstances, then its terms become questions of f act.’” Northwest Cent. Pipeline Corp. v. JER Partnership , 943 F.2d 1219, 1228 (10th Cir. 1991) (quoting Amoco Production Co. v. Western Slope Gas Co. , 754 F.2d 303, 309 (10th Cir. 1985)); accordWatkins v. Petro-Search, Inc. , 689 F.2d 537, 538 (5th Cir. 1982) (applying Texas law). While we review the districtcourt’s findings of fact for clear error, we review de novo its application of t he law to those facts. See LDL4 As we noted in National I , D’Oench, Duhme & Co., Inc. v. FDIC , 315 U.S.

447 (1942), held that borrowers and guarantors are estopped from using unrecorded side agreements to defend against effort s by the FDIC or its assignees to collect on promissory notes acquired from a fail ed banking institution. National I , 1997 WL 642081, at *3 n.3; see also 12 U.S.C. § 1823(e) (codifying the doctrine). - 8 - Research & Dev. II, Ltd. v. Commissioner , 124 F.3d 1338, 1342 (10th Cir. 1997); see also Fed. R. Civ. P. 52(a). Although it does not argue that the court’s finding s are clearly erroneous, National contends that the district court’s judgment must be reversed for two reasons. First, National argues that the facts do not support an accord under Texas law. Second, it argues that any finding of arelationship between the Note and the Project violates the D’Oenchdoctrine. 4

A. Accord National argues that we should reverse because the court improperly construed Texas law to conclude that the facts, as found, establish an accord and satisfaction. In support, National points out thatTexas law on accord requires that the terms of the accord be clearly communicate d, and that the parties “unmistakabl[y]” agree that “acceptance [of less th an the full amount due] will constitute satisfaction of the underlying obligatio n.” Appellant’s Br. at 8 (quoting Flowers v. Diamond Shamrock Corp. , 693 F.2d 1146, 1151 (5th Cir. 1982)).5 Essentially, National argues that, notwithstanding any knowledge which

other RTC agents might have had while preliminary n egotiations were occurring, the RTC and its successor may rely upon the lack of knowledge of the final Agreement drafters. However, National cites no Tex as law for such a proposition, and our review of the cases that Natio nal cites on other points suggests a contrary result. “‘[I]f the creditor is to be held to have surrendered his claim against the debtor, it must be shown that he understood or should have understoodthat he was doing so when he received the consider ation claimed therefor.’” Flowers , 693 F.2d at 1152 (quoting Call of Houston, Inc. v . Mulvey , 343 S.W.2d 522, 524 (Tex. Civ. App. 1961) (emphasis added)). - 9 - National contends that, notwithstanding the broad l anguage by which the RTC agreed to “RELEASE, ACQUIT and FOREVER DISCHARGE Bo rrower and Guarantors . . . from any and all claims, demands, obligations, and causes of action of any nature whatsoever relating to or in a ny way arising out of the Note and the Loan Documents,” the fact that the final dr after was unaware of the $100,000 Note precludes its inclusion, absent expre ss mention. 5 National attempts to buttress its position with the undisput ed fact that, in the final negotiating stages, the RTC expressly refused to g ive a blanket release. Thus, National contends that the RTC clearly rejected any accord which covered anything other than the $8.9 million loan. While it is true that the RTC refused to give a bla nket release, it did agree to release any claims resulting from the “transacti on,” Finding 18(c), and, moreover, the release it ultimately gave covered any claim “relating to or in any6 The “Loan Documents” consisted of the $8.9 million note, deed of trust,

guaranty agreements, assignment of leases and rents , financing statements, and “any and all other documents, instruments and agree ments executed in connection with or to secure the Note.” Appellant’s App. at 4 6-47. - 10 - way arising out of” the $8.9 million Note and assoc iated Loan Documents, 6 Appellant’s App. at 50. Thus, for purposes of sati sfying the communication required under Texas law, the RTC clearly agreed to release any claims related to the transaction or Project. Accordingly, the distr ict court’s findings that the $100,000 was related to the Project compel the conc lusion that the Note was released.

B. D’Oench Doctrine As its second claim of error, National contends that D’Oench, Duhme & Co., Inc. v. FDIC , 315 U.S. 447 (1942), prevents First Western from raising any defense based on a secret relationship between the Note and the Project. In this case, the district court found that the RTC knew ab out the relationship between the Note and the Project when it entered into the A greement. That finding is not7Although we observed, in passing, in the prior appe al that a D’Oench

analysis might apply to a specific argument which t he defendants had raised during the summary judgment stage, following remand , the defendants abandoned that argument. National I , 1997 WL 642081, at *3 n.3 (noting “that an analys is of the doctrine may become necessary on remand if the defendants continue to argue that the note was to be ‘repaid, if at all, only fr om the project’s positive cash flow or from the ultimate sale of the apartments from pr oceeds in excess of the first mortgage balance’”). As the district court’s findi ng that the Note was related to the Project does not depend on any such secret limi ting agreement, our prior caveat does not apply.

8 Under the circumstances, even assuming, arguendo, that the RTC might have been able to claim the benefit of the D’Oench doctrine in its earlier negotiations, it waived any such claim when it nego tiated a settlement which included the Note. Moreover, it is not clear that the D’Oenchdoctrine would have applied in any event, since even before the RT C became involved, Sandia documents, such as the Note renewal documentation, stated the relationship. See , e.g. , Appellee’s Supp. App. at 5. - 11 - clearly erroneous. 7Accordingly, the Agreement extinguished the Note, along with any claims which may have been based on D’Oenc h

. 8
AFFIRMED. ENTERED FOR THE COURT

Stephen H. Anderson Circuit Judge