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FEDERAL DEPOSIT INS. CORP. v. HARDT

October 23, 1986

FEDERAL DEPOSIT INSURANCE CORPORATION, IN ITS CORPORATE CAPACITY, PLAINTIFF,
v.
THEODORE HARDT, DEFENDANT.



The opinion of the court was delivered by: Mills, District Judge:

OPINION ORDER

Is the guarantor discharged from liability where the creditor fails to perfect its security interest in the collateral?

No.

Summary judgment for Plaintiff.

This suit is brought by the Federal Deposit Insurance Corporation (FDIC), in its corporate capacity. The FDIC seeks to collect on a note and related guaranty which it purchased from the receiver of an insolvent bank. Dennis Hardt is the maker of the note and Theodore Hardt is the guarantor of the note. The first count seeks collection against the maker and the second count predicates liability on the guaranty agreement. This Court has since dismissed Count I for failure to serve process on Defendant Dennis Hardt.

The matter is now before the Court on cross motions for summary judgment as to Count II. Because the FDIC appears in its corporate capacity, jurisdiction is properly based on 12 U.S.C. § 1819 (1982). See Federal Deposit Ins. Corp. v. Braemoor Associates, 686 F.2d 550 (7th Cir. 1982). The issue raised on the cross motions is whether the guarantor is discharged from the liability on the guaranty agreement due to the creditor's failure to perfect a security interest in collateral securing the underlying obligation.

Facts

The facts are not in dispute. Dennis Hardt signed and executed a promissory note payable to First National Bank of Danvers on April 28, 1983. The note was to be secured by a Ford van. In connection with the note, Theodore Hardt entered into a guaranty agreement with the bank on April 20, 1983. He agreed to guarantee repayment of the obligation up to $18,000. The bank failed to perfect a security interest in the Ford van.

On or about August 5, 1983, the Comptroller of the Currency determined that the bank was insolvent, ordered the bank closed, and tendered to FDIC the appointment as Receiver of the bank. FDIC, as receiver, solicited bids and sold certain assets and liabilities of the bank. FDIC, in its corporate capacity, purchased the note and guaranty in question. FDIC made a demand for payment upon both the maker and the guarantor and both parties defaulted on the respective agreements. We are now concerned only with the liability of the personal guaranty of Theodore Hardt.

I.

Summary judgment is proper only when "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Cross motions for summary judgment require no less careful scrutiny of the factual allegations. Lac Courte Oreilles Band of Lake Superior Chippewa Indians v. Voight, 700 F.2d 341, 349 (7th Cir. 1983).

In determining whether such undisputed facts entitle one of the parties to judgment in their favor, the Court's inquiry "unavoidably asks whether reasonable jurors could find by a preponderance of the evidence that the [moving party] is entitled to a verdict — `whether there is [evidence] upon which a jury can properly proceed to find a verdict for the party producing it, upon whom the onus of proof is imposed.'" Anderson v. Liberty Lobby, Inc., ___ U.S. ___, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (quoting Improvement Co. v. Munson, 14 Wall. 442, 448 (1872) (emphasis in original)).

The parties are essentially in agreement as to the facts that are necessary to resolve the issues presented by the motions now before the Court. The entry of ...


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