Court Opinion

ID: 4649581
Source: CourtListenerOpinion
Date Created: 2021-01-07 01:00:19.150601+00
Date Added: 2024-06-11T08:01:26.088663
License: Public Domain

Case: 20-30315    Document: 00515695784       Page: 1    Date Filed: 01/06/2021

          United States Court of Appeals
               for the Fifth Circuit                                United States Court of Appeals
                                                                             Fifth Circuit

                                                                           FILED
                                                                     January 6, 2021
                               No. 20-30315
                             Summary Calendar                         Lyle W. Cayce
                                                                           Clerk

   Douglas Mendoza,

                                 Plaintiff—Intervenor Defendant—Appellant,

   Sugacane’s Blues & Barbeque,

                                                        Plaintiff—Appellant,

                                    versus

   Federal Deposit Insurance Corporation, as Receiver for
   First NBC Bank,

                                                        Defendant—Appellee,

   Hancock Whitney Bank,

                                               Intervenor Plaintiff—Appellee.

                 Appeal from the United States District Court
                     for the Middle District of Louisiana
                           USDC No. 3:17-CV-437

   Before Wiener, Southwick, and Duncan, Circuit Judges.
Case: 20-30315     Document: 00515695784           Page: 2   Date Filed: 01/06/2021

                                    No. 20-30315

   Per Curiam:*
          Douglas Mendoza sued multiple defendants after he executed a
   promissory note for $300,000 to invest in a restaurant that was never built.
   The district court granted summary judgment in favor of the receiver of the
   bank that issued the note, as well as the current holder of the note, and then
   denied Mendoza’s motion for reconsideration. We affirm.
                                         I.
          Mendoza took out a loan from First NBC Bank (“FNBC”) to invest
   with Jason Doyle and Doyle International in the construction and operation
   of a Baton Rouge restaurant, “La Crepe Nanou.” The planned restaurant,
   however, was never completed. Mendoza sued Doyle International, Doyle,
   Doyle’s business partners, and FNBC for fraud in Louisiana state court. He
   eventually obtained a judgment against Doyle, who pleaded guilty to fraud,
   and a settlement with another business partner. The loan was another matter.
   It was purchased from FNBC by Hancock Whitney. Shortly thereafter,
   FNBC ceased operations and the Federal Deposit Insurance Commission
   (“FDIC”) became FNBC’s receiver. The FDIC removed this suit to federal
   court and moved to dismiss all Mendoza’s claims against it. Hancock
   Whitney intervened as the holder of the note to protect its interest in
   enforcing the note. The district court granted the FDIC’s motion in part but
   allowed Mendoza’s claims for intentional misrepresentation, fraudulent
   inducement, and annulment of contract to go forward.
          All parties moved for summary judgment. The district court ruled in
   favor of the FDIC, reasoning that (1) Mendoza had not shown that FNBC
   had a duty to him to disclose information regarding Doyle’s track record of
   questionable   activity;   (2) Mendoza     had     not    shown   intentional

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.

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Case: 20-30315        Document: 00515695784              Page: 3       Date Filed: 01/06/2021

                                          No. 20-30315

   misrepresentation by anyone at FNBC, nor that anyone at FNBC had
   influenced his decision to execute the note; and (3) because Mendoza had not
   established fraud, his annulment of contract claim failed as well. The court
   also granted Hancock Whitney’s motion for summary judgment, agreeing
   that Mendoza had not shown any factual disputes as to the enforceability of
   the promissory note Mendoza had executed in order to obtain the loan.
           Mendoza moved for reconsideration, which was opposed by both
   Hancock Whitney and the FDIC. He contended that the district court failed
   to address his argument that the note was a nullity due to a want of
   consideration or, alternately, a failure of consideration. He also argued that
   summary judgment was improper because FNBC breached its contractual
   duty by failing to comply with the stated purpose of the loan, that is, to fund
   the restaurant. Further, he asserted that as the assignee of FNBC, Hancock
   Whitney was also bound by the agreement. The district court denied the
   motion. The court held that lack of consideration and failure of consideration
   are affirmative defenses that Mendoza had failed to plead in his answer. It
   also concluded that the breach of contract claim was an “attempted improper
   expansion of [Mendoza’s] pleadings.” A Rule 59(e) motion “serves the
   narrow purpose of allowing a party to correct manifest errors of law or fact or
   to present newly discovered evidence.” Edionwe v. Bailey, 860 F.3d 287, 294–
   95 (5th Cir. 2017) (cleaned up). The court ruled that Mendoza had not met
   this standard.
           Mendoza now appeals. 1

           1
             We review de novo a grant of summary judgment, and “to the extent that a [Rule
   59(e)] ruling was a reconsideration of a question of law, the standard of review is de novo”
   as well. Lamb v. Ashford Place Apartments L.L.C., 914 F.3d 940, 943 (5th Cir. 2019).

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                                    No. 20-30315

                                        II.
          The parties dispute whether Mendoza waived the affirmative
   defenses of lack and failure of consideration by failing to timely raise them.
   Yet even assuming they are not waived, the defenses are meritless. The gist
   of Mendoza’s argument is that no consideration was given for the promissory
   note because FNBC never funded the loan and instead took Mendoza’s
   check and disbursed it to other, overdrawn accounts. He asserts that
   “FNBC’s conduct in diverting the funds to other FNBC accounts was
   equivalent to never funding the loan.” Alternately, he contends that if
   consideration did exist when the bank issued the check, it failed when FNBC
   disbursed some of the funds to other accounts.
          When an individual who executes a promissory note challenges its
   validity, the note is presumed valid if the holder can produce it. LSREF2
   Baron, L.L.C. v. Tauch, 751 F.3d 394, 399 (5th Cir. 2014) (“The promissory
   note produced by the [holder] constitutes prima facie proof of [the maker’s]
   indebtedness to [the holder].”) (citation omitted). Once produced, the
   burden shifts to the maker of the note to show that the debt is unenforceable.
   “Under Louisiana law, in a suit on a promissory note by the [holder] against
   the maker, the [holder] is entitled to the presumption that the instrument was
   given for value received” but “the presumption is rebutted if the maker casts
   doubt upon the consideration.” Sonnier v. Gordon, 52,650, p. 4 (La. App. 2.
   Cir. 5/22/19); 273 So.3d 629, 632. “The defense of failure of consideration
   concedes that there was consideration for the instrument in its inception, but
   alleges that the consideration has wholly or partially ceased to exist.” Smith
   v. Louisiana Bank & Trust Co., 52096, 52113, p. 6 (La. 1973); 272 So.2d 678,
   683. Here, Mendoza has not cast doubt upon the initial issuance of the check.
   He received a check for $300,000 in exchange for the promissory note. He
   endorsed the note and returned it to FNBC to deliver to Doyle. FNBC did
   so, albeit to Doyle International rather than Doyle personally. There is no

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                                    No. 20-30315

   question that Mendoza received valid consideration for the note. Moreover,
   the manner in which the funds were used after he endorsed the check does
   not alter the fact that the funds existed and constituted valid consideration.
   Accordingly, we reject both his lack-of-consideration and his failure-of-
   consideration arguments.
          Finally, we decline to consider Mendoza’s breach-of-contract claim
   because he failed to timely present it to the district court. Although Mendoza
   maintains that he raised the claim by mentioning it in various pleadings and
   the pre-trial order, he cannot shoehorn a new claim into the complaint by
   “merely intimat[ing] the argument during the proceedings before the district
   court.” FDIC v. Mijalis, 15 F.3d 1314, 1327 (5th Cir. 1994). “Because this
   argument was never presented to the district court, we will not address it on
   appeal.” Martinez v. Pompeo, 977 F.3d 457, 460 (5th Cir. 2020) (quotation
   omitted). A Rule 59(e) motion for reconsideration “is not the proper vehicle
   for rehashing evidence, legal theories, or arguments that could have been
   offered or raised before the entry of the judgment.” Templet v. HydroChem
   Inc., 367 F.3d 473, 479 (5th Cir. 2004) (citation omitted)).
          AFFIRMED.

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