Court Opinion

ID: 9760386
Source: CourtListenerOpinion
Date Created: 2023-08-29 00:51:29.301101+00
Date Added: 2024-06-11T07:29:11.433586
License: Public Domain

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dissenting.
I respectfully dissent. I believe a duty of commercial reasonableness obtained in this case, and that whether FDIC breached that duty by undue delay in foreclosing is a question of fact for a jury to decide.
The majority states that “[t]he principal issue ... is whether, under the circumstances of this case, a secured creditor’s failure to foreclose its lien promptly ... is a breach of any duty of good faith or fair dealing.” 795 S.W.2d at 707. With all due respect, that is not the true issue presented in this case. A careful reading of the *711record shows that Coleman and Powell pled and argued this case on a theory of “commercial reasonableness”, see Frederick v. United States, 386 F.2d 481 (5th Cir.1967); Mack Financial Corp. v. Scott, 100 Idaho 889, 606 P.2d 993 (1980), not on a theory of good faith and fair dealing of the type recognized in Aranda v. Insurance Co. of N. Amer., 748 S.W.2d 210 (Tex.1988), Arnold v. Nat. County Mut. Fire Ins. Co., 725 S.W.2d 165 (Tex.1987), and Manges v. Guerra, 673 S.W.2d 180 (Tex.1984). Coleman and Powell argued before the trial court that FDIC was under a duty “to dispose of all collateral ... in a commercially reasonable manner,” and that FDIC breached that duty because it was intentionally or negligently dilatory in liquidating the collateral. Coleman and Powell then presented sufficient summary judgment proof to put the issue before a jury. As explained by the court of appeals:
There is sufficient unimpeached summary judgment evidence in the record before us in support of [respondents’] theory to reach a jury. In response to interrogatories, [FDIC’s] answers demonstrate an awareness, over time, that the fair market value of the real estate collateral in issue was declining. In response to Interrogatory Sixteen, [FDIC] replied that the appraisers’ values on the dates indicated, were as follows:
03/30/84 Clyde Lytle $550,000.00
05/01/84 Croissen Dannis, Inc. $568,000.00
01/28/85 American Appraisal Associates $450,000.00
03/06/85 Bob Jones & Co. $390,000.00
Then, too, in the same set of interrogatories, it was admitted that the FDIC’s Commercial and Other Loan Credit Manual prescribes a four-month delinquency on a loan as appropriate for foreclosure, absent unusual circumstances. [FDIC] argues that the property was subject to the stay of bankruptcy. But when [FDIC] did renew efforts for relief from stay, its effort resulted in an agreed order a month later on August 15, 1984- From its pleadings, it appears FDIC took charge on October 4, 1983. The property was not sold until June 7, 1985.
[Respondents] also point to [their] letter of November 16, 1983, to [FDIC], urging some action be taken and reciting as of that time, “[t]he property is worth approximately the amount of the balance due on the note.”' Bob Hurt, an account officer of [FDIC] who had “worked that asset” while assigned to Midland, testified on cross by deposition that he was “cognizant of declining property prices in the surrounding geographic area.” Assuming the existence of a duty of [commercial reasonableness], from our review of [respondents’] summary judgment proof, we believe that a material issue of fact bearing on that issue was present.
762 S.W.2d at 244 (emphasis added).
The guaranty contract in question expressly stated that “[t]he creditor shall not be required to pursue any other remedies before invoking the benefits of this guaranty; especially it shall not be required to exhaust its remedies against endorsers, collateral and other security.” Plainly, then, FDIC was not required to proceed against the collateral in question before invoking the guaranty agreement. Nevertheless, on August 15, 1984, by an agreed order, FDIC undertook to proceed immediately against the collateral. In that undertaking, I would hold, FDIC was obligated to act in a commercially reasonable manner. “If the creditor undertakes to do that which he need not do, since what he does must affect the surety, it is reasonable to hold that the surety is discharged to the extent of whatever loss results from the creditor’s failure to use ordinary diligence.” L. Simpson, Law of Suretyship § 75 at 382-383 (1950).
Finally, the majority argues that “Coleman and Powell were fully able to protect themselves from any increased liability resulting from a decline in the market value *712of the property securing Judico’s debt.” 795 S.W.2d at 709. This is a legitimate subject of inquiry for FDIC to pursue, and for a jury to consider in determining whether FDIC acted in a commercially reasonable manner.
For these reasons, I would affirm the judgment of the court of appeals and remand the cause to the trial court so that a jury may decide the disputed issues of fact.
SPEARS and RAY, JJ., join in this dissenting opinion.