Lehman v. Revolution Portfolio L.L.C.
United States Court of Appeals for the First Circuit
166 F.3d 389 (1st Cir. 1999)
Barry Lehman (plaintiff) and Stuart A. Roffman were beneficial-interest holders in the Farm Street Trust (the Trust). The Trust took out a $2.8 million loan from First Mutual Bank for Savings (the Bank) (defendant) and defaulted. Roffman and Lehman had guaranteed the loan, and Lehman put up property as collateral. The Bank foreclosed on the property. Lehman sued for rescission in state court, arguing that the Bank had negligently made the loan based on Roffman’s fraud. Later, the Bank went under. The Bank’s insurer, the Federal Deposit Insurance Corporation (FDIC), removed the case to federal court and was substituted as the defendant. The FDIC amended its answer and counterclaimed against Lehman, with the court’s permission because six months had elapsed. The FDIC counterclaimed against Lehman, as guarantor, for the balance of the loan. The FDIC also filed a third-party complaint against Roffman, seeking indemnification and contribution and asserting a claim on the loan. After Roffman filed his answer, the FDIC requested summary judgment. Roffman moved to strike the complaint against him. Then Lehman entered bankruptcy proceedings and requested a stay; the lawsuit was dismissed without prejudice. The FDIC asked for a decision on its summary judgment motion. The court reinstated the third-party complaint, denied Roffman’s motion to strike, dismissed the claims for indemnity and contribution without prejudice, and granted the FDIC summary judgment. The FDIC moved to have Revolution Portfolio LLC (RP) substituted as the real party in interest, as the Bank’s assignee, and the court granted the request. Roffman objected to the substitution and also moved for relief from the summary judgment order. The motion was denied. Roffman appealed to the United States Court of Appeals for the First Circuit.
Rule of Law
Holding and Reasoning (Selya, J.)
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