Langley v. Federal Deposit Insurance Corp.

In 1980, W.T. and Maryanne Langley (defendants) executed a promissory note to Planters Trust & Savings Bank in connection with a land purchase. The Langleys renewed the note in March 1982. After the Langleys missed a payment, Planters sued the Langleys in Louisiana state court. The Langleys removed the action to federal court, where the action was consolidated with an action by the Langleys against Planters. The Langleys asserted that the note was procured by fraud because Planters had misrepresented material details about the land. The documents signed by the Langleys did not contain Planters’s alleged representations, nor were the representations mentioned in Planters’s bank records or in meeting minutes from Planters’s board of directors or loan committee. The state subsequently closed Planters and appointed the Federal Deposit Insurance Corporation (FDIC) (plaintiff) as receiver. The FDIC arranged for another bank to assume Planters’s assets and liabilities. The FDIC paid the assuming bank nearly $37 million and received consideration including the Langleys’ March 1982 note. The FDIC was then substituted for Planters as plaintiff in the Langley litigation. The FDIC moved for summary judgment on the claim for payment of the note. Under 12 U.S.C. § 1823(e), no agreement that defeats the FDIC’s right or interest in an asset purchased by the FDIC may be asserted against the FDIC unless the agreement was (1) in writing; (2) executed by the bank and the person claiming an adverse interest; (3) approved by the bank’s board of directors or loan committee, as reflected in their meeting minutes; and (4) continuously kept as an official bank record. The Langleys claimed that § 1823(e) did not prevent them from asserting a fraud defense against the FDIC because Planters’s misrepresentations about the land were not a promise to perform a future act and thus were not an agreement under the statute. The district court granted the FDIC’s summary-judgment motion, and the appellate court affirmed. The United States Supreme Court granted certiorari.