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Federal Deposit Insurance Corporation v. Harry Brown & Co., LLC

United States District Court, M.D. Alabama, Northern Division

March 2, 2015

THE FEDERAL DEPOSIT INSURANCE CORPORATION, Plaintiff,
v.
HARRY BROWN & CO., LLC; STEWARDSHIP INVESTMENTS, LLC; HARRY I. BROWN, JR.; and JOHN M. BROWN, as personal representative of the ESTATE OF HARRY I. BROWN, SR., Defendants. HARRY BROWN & CO., LLC; STEWARDSHIP INVESTMENTS, LLC; HARRY I. BROWN, JR.; and JOHN M. BROWN, as personal representative of the ESTATE OF HARRY I. BROWN, SR., Counterclaimants,
v.
THE FEDERAL DEPOSIT INSURANCE CORPORATION, Counterclaim-Defendant.

MEMORANDUM OPINION AND ORDER

W. HAROLD ALBRITTON, Senior District Judge.

I. INTRODUCTION

This cause is before the court on a Motion for Summary Judgment (Doc. #65), filed by the Plaintiff, the Federal Deposit Insurance Corporation ("FDIC"), and on a Motion to Unseal Document #59 (Doc. #99) filed by the Defendants.[1]

This case began in Alabama state court as a suit by Frontier Bank against Harry I. Brown, Jr. ("Brown, Jr."); Harry Brown & Company, LLC ("Brown & Co."); and Stewardship Investments, LLC. The FDIC became the Receiver for Frontier Bank, and removed the state case to federal court.

The Defendants in the removed case submitted counterclaims to FDIC administratively. FDIC then filed an Amended Complaint, adding John M. Brown as personal representative of the Estate of Harry I. Brown, Sr. ("Estate of Brown, Sr.").

The claims in the Amended Complaint are a claim for breach of contract based on Note 1, dated January 22, 2010 (967785) ("Note 1") against Brown & Co.; Brown, Jr.; and the Estate of Brown, Sr. (Count I); breach of contract based on Note 2, dated January 22, 2010 (967793) ("Note 2") against Brown & Co.; Brown, Jr.; and the Estate of Brown, Sr. (Count II); breach of contract on Note 3, dated December 19, 2005 ("Note 3") against Stewardship Investments, LLC and Brown, Jr. (Count III); ultra vires against the Brown, Sr. Estate (Count IV); lack of consideration against the Brown, Sr. Estate (Count V); and conspiracy to breach fiduciary duty and to commit fraud against the Brown, Sr. Estate, Brown, Jr.; and Brown & Co. (Count VI).

The Defendants Answered and Counterclaimed. The counterclaims include claims for specific performance as to the release of Brown, Sr. (Count One); breach of contract based on the release of Brown, Sr. (Count Two); breach of contract (Count Three); fraud (Count Four); lender liability (Count Five), breach of commitment to lend (Count Six); breach of implied covenant of good faith and fair dealing (Count Seven); economic duress (Count Eight); and declaratory judgment, Bank Owned Life Insurance (Count Nine) (Doc. #40).

Ruling on various motions, this court entered judgment as to FDIC on the counterclaims of Harry Brown & Co., LLC; Stewardship Investments, LLC; and Harry I. Brown, Jr. in claims Three, Four, Five, Six, Seven, and Eight, and the affirmative defenses which relate to those counterclaims. Remaining counterclaims in the case are Claim One for Specific Performance based on the Release of Harry I. Brown, Sr., Claim Two for breach of contract based on the Release of Harry I. Brown, Sr., and Claim Nine for a Declaratory Judgment as to Bank Owned Life Insurance. The Bank Owned Life Insurance ("BOLI") counterclaim is based on a life insurance policy on the life of Brown, Jr.

The court also ordered dismissed Counts IV and V of the Amended Complaint. Also by previous Order of this court (Doc. #100), summary judgment was denied as to

FDIC on the Stewardship Investments, LLC and Brown, Jr. debt, Note 3, and as to various affirmative defenses.

For reasons to be discussed, the Motion for Summary Judgment is due to be GRANTED in part and DENIED in part.

II. SUMMARY JUDGMENT STANDARD

Summary judgment is proper "if there is no genuine issue as to any material fact and... the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

The party asking for summary judgment "always bears the initial responsibility of informing the district court of the basis for its motion, @ relying on submissions Awhich it believes demonstrate the absence of a genuine issue of material fact." Id. at 323. Once the moving party has met its burden, the nonmoving party must Ago beyond the pleadings@ and show that there is a genuine issue for trial. Id. at 324.

Both the party Aasserting that a fact cannot be, @ and a party asserting that a fact is genuinely disputed, must support their assertions by Aciting to particular parts of materials in the record, @ or by Ashowing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.@ Fed.R.Civ.P. 56 (c)(1)(A), (B). Acceptable materials under Rule 56(c)(1)(A) include Adepositions, documents, electronically stored information, affidavits or ...


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