Court Opinion

ID: 2964431
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:25:33.302216+00
Date Added: 2024-06-11T15:01:38.171061
License: Public Domain

USCA1 Opinion

	

                                 NOT FOR PUBLICATION
                                 ___________________
                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

        No. 96-1448

                            FEDERAL FINANCIAL GROUP, INC.,

                                 Plaintiff, Appellee,

                                          v.

                                CHARLES E. SERRA, JR.,
                              a/k/a CHARLES SERRA, JR.,

                                Defendant, Appellant.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                   [Hon. Joyce L. Alexander, U.S. Magistrate Judge]
                                             _____________________

                                 ____________________

                                        Before

                                Boudin, Circuit Judge,
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                            Bownes, Senior Circuit Judge,
                                    ____________________

                         and Skinner,* Senior District Judge.
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                                 ____________________

            Robert H. Greene for appellant.
            ________________
            Carolyn McAboy with whom John A.  Doonan and Doonan &  Graves were
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        on brief for appellee.

                                 ____________________

                                  November 15, 1996
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        ____________________

        *Of the District of Massachusetts, sitting by designation.

                 Per Curiam.   Although the transactions underlying  this
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            appeal  are complicated,  the  central events  may be  simply

            described.  In 1985, defendant in the district court, Charles

            Serra, bought  two trucks, borrowing the funds  from the Bank

            of  New England  and  using the  trucks  as collateral.    In

            October  1986,  in  a  transaction  apparently  conducted  by

            Serra's agent, who  managed the trucks, the notes were rolled

            over  and new notes were  issued with some  changes in terms.

            There was a default on the  notes.  Serra now claims that the

            agent did not have authority to roll over the notes.

                 In  the meantime, the trucks have been sold by the bank.

            The present suit by a successor to the bank's interest is for

            the deficiency.  In the district court, the magistrate  judge

            granted summary judgment for the plaintiff.  On appeal, Serra

            claims that the action was time-barred, that he is not liable

            on  the assertedly unauthorized new  notes, and that the sale

            of the trucks was not commercially reasonable.  Our review is

            de  novo, and  we draw  factual inferences in  Serra's favor.
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            Grenier  v. Vermont Log Bldgs.,  Inc., 96 F.3d  559, 562 (1st
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            Cir. 1996).

                 The  statute of  limitations claim  is easily  resolved.

            The  four-year  statute of  limitations  relied  upon by  the

            defendant does not apply to this promissory note secured by a

            chattel  mortgage, because it is not  a transaction in goods.

            See,  e.g., Universal  Underwriters  Ins. Co.  v. Ross,  1991
            ___   ____  _________________________________     ____

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            Mass. App. Div. 23, 25 (Mass. Dist. Ct. 1991).  As to whether

            the six-year or twenty-year statutory period applies, we need

            not decide the question because both cover the present claim.

            Either  one   was  still   running  when  the   FDIC  assumed

            receivership  in  January  1991,  extending  the  limitations

            period by an  additional six  years pursuant to  12 U.S.C.   

            1821(d)(14).

                 Turning to the validity of the new notes, Serra's denial

            of his agent's authority  to make them rests in  some measure

            on  alleged unwritten  limitations  on the  written power  of

            attorney  used  by  the  agent,  which  was  presumably  made

            available  to the  bank  at the  time  of refinancing.    The

            district  court  magistrate  disregarded  these  limitations,

            relying on D'Oench, Duhme & Co.  v. FDIC, 315 U.S. 447 (1942)
                       ____________________     ____

            and its statutory counterpart, 12 U.S.C.   1823(e)(1).

                 We  see no reason to  pursue the interesting question of

            whether  and  how  far   D'Oench,  Duhme  applies  to  secret
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            agreements  that  were not  made with  a  bank but  which may

            affect a document that the bank relied on.   It is not at all

            clear  that the  power of  attorney  authorized the  agent to

            execute both  of the new  notes.  Thus,  even if the  written

            power  of attorney  were read  literally, without  giving any

            weight  to the  alleged unwritten  limitations, it  might not

            show  that Serra's agent did have authority to roll over both

            notes.

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                 However,  we   see  no   need  to  remand   for  further

            proceedings to  determine the agent's actual  authority or to

            consider claims  of apparent  authority or estoppel,  both of

            which would  require more factual development.   If the notes

            were  rolled over  by  mistake or  without  authority, it  is

            nevertheless the  case that Serra benefited  directly because

            the  cancellation of the old  notes discharged his  debt.  To

            allow  Serra to escape liability on the  new notes would be a

            patent case of unjust enrichment.

                 This principle is established in Massachusetts, and  its

            application to  erroneous bank  transactions is plain.   See,
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            e.g., FDIC v.  Csongor, 464 N.E.2d 942,  945-46 (Mass. 1984);
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            National Shawmut Bank of Boston v. Fidelity Mutual Life  Ins.
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            Co., 61 N.E.2d 18,  22 (Mass. 1945); see also  Restatement of
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            Restitution   1 (1937).  Unjust enrichment was pleaded in the
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            complaint  and nothing  in the  record suggests  any possible

            answer  to the claim.  As the terms of the new notes are more

            favorable to Serra, their enforcement--rather than any effort

            to revive the original notes--works in Serra's favor.

                 Finally, it is true that deficiencies in notice required

            the  plaintiff to  show, pursuant  to Shawmut  Bank, N.A.  v.
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            Chase,  609  N.E.2d 479,  483  (Mass. App.  Ct.),  aff'd, 624
            _____                                              _____

            N.E.2d  541 (Mass. 1993),  that the  professionally conducted

            auction  at  which  the  trucks were  sold  was  commercially

            reasonable.    But   we  agree  with  the  appraisal  of  the

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            magistrate judge in concluding  that such a showing  had been

            made.  See Nadler v. Baybank Merrimack Valley, N.A., 733 F.2d
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            182, 183-84  (1st Cir. 1984).   Serra has  been imaginatively

            defended but his liability is clear. 

                 Affirmed.
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