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COTE D'AZUR HOMEOWNERS ASSN. v. VENTURE CORP.

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA


March 11, 1994

COTE d'AZUR HOMEOWNERS ASSOCIATION, Plaintiff,
v.
VENTURE CORPORATION, et al., Defendants.

The opinion of the court was delivered by: EUGENE F. LYNCH

MEMORANDUM OPINION AND ORDER DENYING SUMMARY JUDGMENT

 I. Introduction

 The motion before the Court is a motion for summary judgment brought by defendant Resolution Trust Corporation ("RTC") against plaintiff, Cote d'Azur Homeowner's Association, and defendant/crossclaimant, Venture Corporation. The RTC contends that the D'Oench, Duhme doctrine and its statutory counterpart 12 U.S.C. § 1823(e) bar the assertion of two alleged side agreements, a joint venture agreement and a settlement agreement, which are essential to both parties' claims against the RTC.

 For the reasons set forth in this Order, the Court holds that D'Oench, Duhme and 12 U.S.C. § 1823(e) do not bar the assertion of the two agreements at issue. Therefore the Court DENIES the RTC's motion for summary judgment.

 II. Background

 This action was brought by Cote d'Azur Homeowners Association ("Association") for negligence, strict liability, breach of warranties, fraudulent concealment, and breach of fiduciary duty in connection with alleged construction defects in the Cote d'Azur condominium development located in Sausalito, California. See, Fifth Amended Complaint. *fn1" Plaintiff has named, among others, the following defendants: (1) the joint venture which undertook the development and sale of the condominiums, Cote d'Azur Associates, and (2) the individual partners in the joint venture-- Venture Corporation, Cote d'Azur Developers, Inc., Gibraltar Savings, and Gibraltar Management of Properties, Inc. *fn2" Due to the insolvency of Gibraltar Savings and the dissolution of Gibraltar Management of Properties, the RTC has been substituted as defendant for both parties in its capacity as receiver.

 In addition to plaintiff's claims, this dispute contains an abundance of crossclaims and counterclaims, one of which is relevant to the pending motion for summary judgment: Venture Corporation has crossclaimed against Gibraltar Savings, Gibraltar Management of Properties and the RTC for equitable indemnity, comparative indemnity, contribution, and express contractual indemnity (solely against Gibraltar). See, Venture Corporation's Second Amended Cross Claim. Venture Corporation's claims allegedly arise from Gibraltar's status as a partner in the joint venture, as well as an express indemnification clause in a settlement agreement between Venture Corporation and Gibraltar.

 The facts relied on by the Court in deciding this motion are not in dispute. *fn3" In the late 1970s, Gibraltar Savings provided Daon Corporation with the initial construction financing for the conversion of the Cote d'Azur condominiums. Daon Corporation later abandoned the project. In 1982, Robert Eves and Eves Development Company (now known as Venture Corporation) decided to take over the development of the project with financing from Gibraltar Savings. On November 17, 1982, Venture Corporation and Gibraltar Savings entered into a joint venture agreement to convert the existing units into condominiums.

 Under the agreement, Venture Corporation was the managing partner and Gibraltar Savings was to provide the construction financing and receive a share of the profits; in addition, Gibraltar was to be involved in the major decisions concerning the project. Shortly after entering into the joint venture, Gibraltar assigned its interest to Gibraltar Management of Properties, Inc., a wholly owned subsidiary of Gibraltar Savings. Venture Corporation (Eves Development Company) assigned its interest to its subsidiary, Cote d'Azur Developers, Inc. The joint venture was known as Cote d'Azur Associates ("CDA"). The units were developed and sold to the public. *fn4"

 The events which occurred as Gibraltar Savings began to experience financial problems are difficult to follow. On March 30, 1989, the FSLIC became the conservator of Gibraltar Savings. On April 28, 1989, Gibraltar Savings and Gibraltar Management of Properties, Inc. filed suit against its joint venture partner, Venture Corporation, alleging breach of the joint venture agreement and requesting an accounting of the partnership funds. That litigation was settled pursuant to a settlement agreement dated September 27, 1989. *fn5" The settlement agreement assigned the assets and liabilities of Cote d'Azur Associates to the parties.

 The RTC was appointed conservator of the "old" Gibraltar Savings on October 30, 1989. Later that day, the Office of Thrift Supervision transferred certain assets to the "new" Gibraltar Savings. On October 31, 1989, Gibraltar Management of Properties was dissolved and all of its assets and liabilities were transferred to and assumed by the "old" Gibraltar Savings. Also on October 31, 1989, the RTC was appointed the conservator of the "new" Gibraltar Savings.

 Then, on March 30, 1990, plaintiff filed this action for construction deficiencies in Marin County Superior Court. On June 29, 1990, Gibraltar Savings was declared insolvent and the RTC was appointed its receiver. On May 14, 1992, the RTC appeared in this action and on May 15, 1992, removed the action to this Court.

 III. Summary

 The RTC seeks summary judgment against both plaintiff and crossclaimant Venture Corporation based on the D'Oench, Duhme doctrine and its statutory counterpart 12 U.S.C. § 1823(e). In essence, the RTC contends that, whether separately or together, the D'Oench doctrine and § 1823(e) allow the RTC to rely exclusively on the records of the bank. Thus, any cause of action which relies on an agreement, such as the joint venture or settlement agreement, not meeting the recordation requirements of § 1823(e) cannot be asserted by plaintiff or crossclaimant against the RTC. *fn6"

 The Court disagrees. The Court holds that the D'Oench, Duhme doctrine and 12 U.S.C. § 1823(e) do not bar plaintiff's claims against the RTC, nor Venture Corporation's crossclaims for defense and indemnification. First, § 1823(e) does not bar either set of claims as there is no particular asset acquired by the RTC which the parties seek to diminish by asserting the respective agreements. The Court rejects the position advocated by the RTC that § 1823(e) applies whenever an asserted claim would diminish the general assets of the receivership.

  Second, the common law D'Oench, Duhme doctrine does not operate to bar the assertion of plaintiff's or Venture Corporation's claims because, first, both agreements are clear and explicit written agreements carried on the books of Gibraltar. Moreover, neither the Homeowner's Association nor Venture Corporation is an obligor seeking to assert a claim or defend against the effort of the RTC to collect on an obligation. The parties were not in a lending relationship with Gibraltar Savings. They are creditors of the receivership, not obligors. Though this distinction may be irrelevant for the application of the statute, D'Oench is a rule of equitable estoppel which has consistently been applied to those in a lending relationship with a bank. Disregarding this limitation on the application of the D'Oench doctrine would be an unwarranted extension of D'Oench's application.

 Lastly, D'Oench, Duhme and § 1823(e) do not together form a greater bar to the assertion of "side agreements" than each alone. Despite the breadth and admitted harshness of the bar created by D'Oench and its statutory counterpart, the bar is limited by both the terms of the statute and the scope of the common law doctrine. Section 1823(e) does not apply where there is no particular asset to be diminished; D'Oench, Duhme does not apply where the party asserting the claim is a creditor in a non-lending transaction. *fn7" This case presents the rare situation in which neither the Homeowner's Association nor Venture Corporation is an obligor of the bank, and the agreements they seek to assert do not affect the RTC's interest in a particular asset. The Court therefore declines to extend D'Oench and § 1823(e) to bar the assertion of the joint venture and settlement agreements at issue in this case.

 IV. Discussion

 A. Overview of D'Oench and 12 U.S.C. § 1823(e)

 At the outset, the Court notes that this case presents unusual facts in the context of the application of the D'Oench, Duhme doctrine and its statutory counterpart. Though the parties have argued the motion extensively, both orally and in their briefs, neither party has been able to point the Court to factually analogous cases in which D'Oench, Duhme and § 1823(e) were either held to bar claims such as plaintiff's or crossclaimant's, or held not to bar such claims. In addition, though the Court's own research has unearthed a large body of case law which discusses D'Oench and § 1823(e), very few cases provide guidance for their application to the two agreements at issue in this case: a joint venture agreement and a settlement agreement. Moreover, these classic D'Oench cases do not directly indicate whether the common law bar should apply against parties who are in no sense obligors of the bank and are not involved in a lending transaction. Given courts' expansive interpretation of D'Oench and § 1823(e), it is difficult to discern the true limits of the protection afforded the federal banking authorities. Therefore, prior to addressing the specific arguments relied on by the parties, the Court provides an overview of the D'Oench doctrine and § 1823(e).

 1. The D'Oench, Duhme Doctrine

 The D'Oench, Duhme doctrine is a federal common law rule of equitable estoppel which precludes obligors from asserting against the FDIC/RTC, as the basis for a defense or an affirmative claim, a secret, side agreement which is not reflected in the records of the bank and therefore may mislead bank examiners concerning the value of written loan obligations. Federal Deposit Ins. Corp. v. Zook Bros. Constr. Co., 973 F.2d 1448, 1450 (9th Cir. 1992). The doctrine originated in the namesake case of D'Oench, Duhme & Co. v. Federal Deposit Ins. Corp., 315 U.S. 447, 86 L. Ed. 956, 62 S. Ct. 676 (1942) in which the Supreme Court held that a borrower was precluded from defending against the FDIC on the basis that a secret, unrecorded side agreement allegedly altered the terms of an obligation carried on the books of the bank. 315 U.S. at 460.

 The Supreme Court based the rule of equitable estoppel upon the "federal policy to protect respondent [FDIC], and the public funds which it administers against misrepresentation as to the securities or other assets in the portfolios of banks which respondent insures or to which it makes loans." D'Oench, Duhme, 315 U.S. at 457; see also, Federal Sav. & Loan Ins. Corp. v. Gemini Management, 921 F.2d 241, 244 (9th Cir. 1990). The Court went on to note:

 

Plainly one who gives such a note to a bank with a secret agreement that it will not be enforced must be presumed to know that it will conceal the truth from the vigilant eyes of the bank examiners . . . The test is whether the note was designed to deceive the creditors or the public authority, or would tend to have that effect. It would be sufficient in this type of case that the maker lent himself to a scheme or arrangement whereby the banking authority on which [the FDIC] relied was likely to be misled.

 D'Oench, Duhme, 315 U.S. at 460.

 Thus, to invoke the D'Oench rule of equitable estoppel it is sufficient to show that the agreement relied upon was not within the bank's records, and that the party seeking to invoke the agreement lent himself to a scheme or arrangement likely to mislead the banking examiners. See, Federal Deposit Ins. Corp. v. Murphy, 93 C.D.O.S. 9096, 9098 (9th Cir. Dec. 10, 1993) (D'Oench requires a clear and explicit written obligation and that a party lend himself to a scheme by which banking authorities are likely to be misled); Gemini, 921 F.2d at 244 (banking authorities misled since agreement to fund project not in the files of bank; defendant lent himself to the agreement through failure to insist that agreement to fund be stated explicitly in loan documents).

 The purpose of the D'Oench doctrine's bar to the assertion of secret, side agreements, whether as the basis for a defense or a counterclaim, is threefold. First, D'Oench serves "'to allow federal and state bank examiners to rely on a bank's records in evaluating the worth of the bank's assets.'" Gemini, 921 F.2d at 245 (quoting Langley v. FDIC, 481 U.S. at 91); see also, Zook Bros., 973 F.2d at 1451. Second, D'Oench favors the "'interests of depositors and creditors of a failed bank, who cannot protect themselves . . . over the interests of borrowers who can.'" In re Century Centre Partners, 969 F.2d 835, 839 (9th Cir. 1992), cert. denied, 125 L. Ed. 2d 690, 113 S. Ct. 2997 (citing FDIC v. McCullough, 911 F.2d 593, 600 (11th Cir. 1990)). Since the party to an agreement can presumably ensure that the bank properly record all of the terms of the agreement, D'Oench ultimately penalizes the borrowers who are at fault rather than innocent creditors and depositors. See, e.g., Gemini, 921 F.2d at 245 (borrower's failure to insure that terms of loan were explicitly written on paper was negligent). *fn8" Third, D'Oench provides an incentive to bank officials to give mature consideration to unusual lending agreements in order to prevent fraudulent transactions. FDIC v. Murphy, 93 C.D.O.S. at 9098 (citing Langley v. FDIC, 484 U.S. 86, 91, 98 L. Ed. 2d 340, 108 S. Ct. 396 (1987)).

 Since the creation of the D'Oench rule of equitable estoppel, courts have continuously expanded the doctrine to protect the federal banking authorities, justifying the expansion as furthering the goals of the doctrine. First, courts consistently apply D'Oench to bar agreements asserted against the FSLIC as well as the FDIC, see, e.g., Gemini, 921 F.2d 241, and more recently the RTC. See, Resolution Trust Corp. v. Murray, 935 F.2d 89 (5th Cir. 1991). *fn9" Courts have found no reason to distinguish among these institutions when carrying out their statutory duties. Furthermore, the doctrine has been extended to bar claims against the FDIC in its capacity as receiver in addition to its corporate capacity, again because the policies behind the doctrine are equally impacted by the banking authorities acting in either capacity. See, e.g., Federal Deposit Ins. Corp. v. First National Finance, 587 F.2d 1009, 1012 (9th Cir. 1978).

 The more controversial extensions of the D'Oench doctrine have been on different fronts, however. First, many courts have held D'Oench to bar both counterclaims asserted against the FSLIC/FDIC as well as affirmative defenses to collection on a note held by the FSLIC/FDIC. See, FDIC v. Murphy, 93 C.D.O.S. at 9098 (citing Gemini, 921 F.2d 241 (9th Cir. 1990)). Courts reason that, logically, parties should not be permitted to assert a cause of action that would be barred if framed as an affirmative defense. See, e.g., Kilpatrick v. Riddle, 907 F.2d 1523 (5th Cir. 1990). Second, the doctrine has been held to bar affirmative claims sounding in tort as well as contract because tort claims, such as fraud, often relate to a secret, side agreement that would otherwise be barred as an unrecorded condition to some written obligation. See, e.g., Beighley v. Federal Deposit Ins. Corp., 868 F.2d 776, 783-84 (5th Cir. 1989) (D'Oench barred affirmative claims such as fraud arising out of alleged oral promise to finance future loans); see also, Vernon v. Resolution Trust Corp., 907 F.2d 1101, 1107 (11th Cir. 1990) (tort claim not barred by D'Oench where plaintiff not an obligor asserting a claim related to a specific obligation) ("Vernon I").

 Finally, courts have carved out exceptions to the D'Oench estoppel that also are consistent with the purposes of the doctrine. See, Vernon I, 907 F.2d at 1106, n.4 (only three situations where D'Oench fails to bar a defense). First, D'Oench has been held inapplicable where the borrower is completely innocent of any intentional or negligent wrongdoing. Federal Deposit Ins. Corp. v. Meo, 505 F.2d 790 (9th Cir. 1974) (purchaser of stock, unaware that stock order was improperly executed, not estopped by D'Oench). *fn10" Second, D'Oench does not bar the "assertion of defenses based on a bilateral obligation which appears in the bank's records." Gemini, 921 F.2d at 245 (quoting FDIC v. Two Rivers Assoc., 880 F.2d at 1275); see also, Howell v. Continental Credit Corp., 655 F.2d 743, 746-47 (7th Cir. 1981) (D'Oench not applicable if side agreement facially manifests bilateral obligations). Third, courts have developed a "no asset" exception to D'Oench, which applies where the borrower asserts that no asset exists or that the asset is invalid due to acts independent of any side agreement. See, Zook Bros., 973 F.2d at 1452-53 (discussing "no asset" exception to § 1823(e) and D'Oench).

 2. 12 U.S.C. Section 1823(e)

 Congress partially codified the D'Oench doctrine in the Federal Deposit Insurance Act of 1950, section 2[13](e), 12 U.S.C. section 1823(e). As amended, § 1823 (e) provides:

 

No agreement which tends to diminish or defeat the interest of the Corporation [FDIC] in any asset acquired by it under this section or section 1821 of this title, either as security for a loan or by purchase or as receiver of any insured depository institution, shall be valid against the Corporation unless such agreement--

 

(1) is in writing,

 

(2) was executed by the depository institution and any person claiming an adverse interest thereunder, including the obligor, contemporaneously with the acquisition of the asset by the depository institution,

 

(3) was approved by the board of directors of the depository institution or its loan committee, which approval shall be reflected in the minutes of said board or committee, and,

 

(4) has been, continuously, from the time of its execution, an official record of the depository institution. *fn11"

 Thus, § 1823(e) "'bars the use of extrinsic agreements to diminish or defeat the FDIC's interest in an asset, unless the documents meet specific requirements.'" Notrica v. Federal Deposit Ins. Corp., 2 F.3d 961, 964 (9th Cir. 1993) (quoting FDIC v. Zook Bros., 973 F.2d at 1450-51)). The purpose of the statute, like D'Oench is to allow federal and state bank examiners to rely on a bank's records when evaluating the worth of its assets either to determine fiscal soundness or, in the event of a bank failure, to decide whether to liquidate or provide financing for a purchase and assumption by another bank. Langley v. Federal Deposit Ins. Corp., 484 U.S. 86, 98 L. Ed. 2d 340, 108 S. Ct. 396 (1987). *fn12"

 Moreover, the requirements of § 1823(e) apply regardless of the borrower's conduct or participation in a scheme to deceive the banking authorities; "section 1823 is a statutory mandate that stands independent of the D'Oench Duhme equitable underpinnings." FDIC v. Murphy, 93 C.D.O.S. at 9098 (citing Hymanson, Borrower Beware: D'Oench, Duhme and Section 1823 Overprotect the Insurer When Banks Fail, 62 S. Cal. L. Rev. at 271-72). Thus, though § 1823(e) and D'Oench are often asserted simultaneously and serve to effectuate the same policy concerns, they are not identical. Murphy, 93 C.D.O.S. at 9098.

 B. Plaintiff's Claims: Summary of Argument

 With this overview in mind, the Court turns to the arguments set forth by the parties concerning the application of D'Oench, Duhme and § 1823(e) to plaintiff's claims. The RTC contends that plaintiff's causes of action are barred by both § 1823(e) and the D'Oench, Duhme doctrine. The RTC asserts that Gibraltar's liability for plaintiff's claims is dependent upon Gibraltar's status as a partner in the joint venture. Because the joint venture agreement was allegedly not recorded pursuant to the terms of § 1823(e), the RTC contends that the agreement cannot provide the basis of plaintiff's claims against the RTC. Thus, Gibraltar's involvement in the condominium development is reduced to that of a lender, thereby relieving Gibraltar of joint tortfeasor liability.

 Moreover, if § 1823(e) does not explicitly apply to the joint venture agreement, the RTC argues that the common law D'Oench, Duhme doctrine still bars the assertion of the agreement. *fn13" The RTC appears to rely on the common law doctrine and the statute at times separately and at times as though they have melded into one doctrine. According to the RTC, the essence of D'Oench and its statutory counterpart is that the banking authorities can rely exclusively on the official thrift records to set forth the rights and obligations of the financial institution; therefore, it argues, the joint venture agreement is barred unless recorded pursuant to § 1823(e).

  Plaintiff, on the other hand, asserts, first, that its claims are not dependent on the joint venture agreement but on Gibraltar Saving's status as a partner and on Gibraltar's conduct. *fn14" Second, plaintiff contends that § 1823(e) does not bar the assertion of the joint venture agreement as a basis for the RTC's liability because the agreement does not defeat or diminish the RTC's interest in a particular asset acquired by it. Third, plaintiff argues that D'Oench alone does not bar its claims for two reasons: (1) the joint venture agreement is in writing and (2) plaintiff is not an obligor of Gibraltar, seeking to avoid its obligation by asserting its claims. Finally, plaintiff argues that the common law doctrine should not be interpreted to incorporate the statute's recordation requirements, particularly where plaintiff is in no sense an obligor of the bank.

 1. § 1823(e) Does Not Bar The Assertion Of Plaintiff's Claims

 The Court holds that 12 U.S.C. § 1823(e) does not bar the assertion of the joint venture agreement as a basis for plaintiff's claims since the agreement does not diminish the RTC's interest in a particular asset. The RTC argues that § 1823(e) should bar the assertion of the joint venture agreement since (1) it is an agreement and (2) liability for plaintiff's claims will diminish the general assets of the receivership. *fn15" The Court rejects this argument.

 The Court notes that the joint venture agreement is without question an "agreement" within the definition of the statute. *fn16" However, the relevant issue here is whether in order to fall within § 1823(e) the agreement must diminish or defeat the RTC's interest in a particular asset acquired by the RTC, as opposed to the general assets of the receivership. The Court holds that it must.

 First, by its plain language, the section applies to an "agreement which tends to diminish or defeat the interest of the Corporation in any asset acquired by it . . ." 12 U.S.C. § 1823(e). In addition, § 1823(e)(2) states as one of the four conditions to an agreement's validity, that the agreement must have been executed by the depository institution contemporaneously with the acquisition of the asset. 12 U.S.C. § 1823(e)(2). This requirement would have little meaning if the agreement at issue did not affect a particular asset of the bank, as opposed to the assets in general. See, Thigpen v. Sparks, 983 F.2d 644, 647 (5th Cir. 1993) (warranty on sale of an asset is not an agreement barred by the section because no asset acquired by the FDIC); Agri Export Coop. v. Universal Sav. Ass'n, 767 F. Supp. 824, 833 (S.D. Tex. 1991) (requiring a particular identifiable asset in order to apply § 1823(e) under this analysis of the statute).

 Second, courts interpret § 1823(e) to require a separate, unrecorded agreement that diminishes the RTC's interest in the asset. See, Commerce Federal Sav. Bank v. Federal Deposit Ins. Corp., 872 F.2d 1240, 1244 (6th Cir. 1989) (§ 1823(e) applies to action or defense which is anchored to an agreement separate and collateral from the one the FDIC seeks to enforce); Grubb v. Federal Deposit Ins. Corp., 868 F.2d 1151, 1158-59 (10th Cir. 1989). In other words, for the section to apply, the RTC must have acquired a right, title or interest in an asset, and second, a party must assert a separate, unrecorded agreement as the basis of a claim. This unrecorded agreement then can be said to diminish or defeat the interest of the RTC in the asset which it acquired when taking over the bank. *fn17"

 The Ninth Circuit has not specifically addressed whether § 1823(e) requires (1) that the RTC have acquired a particular asset from the bank, and (2) the existence of a separate, side agreement which diminishes the RTC's interest in that particular asset. See, Murphy, 93 C.D.O.S. at 9100 (Norris, J. dissenting). However, the Ninth Circuit cases which construe the section do support this interpretation. This Circuit has consistently held that "section 1823(e) bars the use of extrinsic evidence to diminish or defeat the FDIC's interest in an asset, unless the documents meet specific requirements." Notrica, 2 F.3d at 964-65 (citing Zook Bros., 973 F.2d at 1450). *fn18"

 In addition, the Ninth Circuit cases decided under § 1823(e) apply the section to bar defenses or counterclaims which affect the banking authorities' interest in specific, identifiable assets. See, e.g., RTC v. Midwest Federal Sav., 4 F.3d 1490 (9th Cir. 1993) (reformation of loan documents to include nonrecourse provision upheld because side agreements satisfied recordation requirements of statute); Notrica, 2 F.3d at 964-66 (§ 1823(e) bars assertion that plaintiff's security interest in real property was senior to lien held by FDIC where loan documents did not provide for recourse to bank's assets); Zook Bros., 973 F.2d at 1452 (§ 1823(e) barred assertion of loan agreements to avoid obligation under guaranty which was in accord with section); In re Century Centre, 969 F.2d at 838 (applying § 1823(e) to notes held by the bank which were allegedly subject to unwritten conditions). These cases indicate that a prerequisite to the application of the statute is an identifiable asset affected by the unrecorded agreement.

 The recent opinion in Murphy is the only Ninth Circuit case which arguably supports the RTC's argument that the agreement asserted need not diminish the RTC's interest in a specific asset in order to invoke the section. The Murphy court held that § 1823(e) barred the assertion of a letter of credit because the bank had violated a federal banking statute which prohibited the extension of credit to affiliates without collateral, and both the letter of credit and lack of collateral were concealed from the FDIC. FDIC v. Murphy, 93 C.D.O.S at 9099.

 The Murphy court rejected the FDIC's contention that all transactions not carried on the books in accordance with § 1823(e) are barred. However, the court found that the letters of credit had an adverse impact on the assets of the bank as required for invocation of § 1823(e) because they were issued in violation of the collateral requirements of federal banking statutes. Id. *fn19" The Murphy court concluded as follows:

 

"these letters of credit, and the absence of legally required collateral to back them up, were not properly approved or carried on the bank's records. The letters of credit have a palpable adverse impact on the assets of the bank as required for the invocation of § 1823(e)'s protection. The letters of credit issued in violation of the collateral requirements of federal law created obligations that could only be satisfied by assets of the bank acquired by the FDIC. Had the law been followed and collateral supplied, the remaining assets of the bank would not have been threatened. Section 1823(e) was passed to ensure that the FDIC does not have to honor such obligations." Id. at 9099.

 Based upon this language, the RTC argues that Murphy indicates that no specific asset is required for the invocation of § 1823(e). The Court disagrees. First, the agreement at issue here, i.e., the joint venture, is not illegal. Thus, the illegality which apparently triggers the application of § 1823(e) in Murphy is not present. Second, the court in Murphy specifically rejects the contention that all transactions must be carried on the records of the bank pursuant to § 1823(e). Murphy, 93 C.D.O.S. at 9099 (citing Agri Export, 767 F. Supp. at 834: "RTC could not avoid payment on an otherwise valid letter of credit that involved no side agreement pertaining to a particular asset"). Finally, the court is careful to limit its holding, even in the context of letters of credit, to the particular letters at issue in that case. It is unclear to this Court what implication Murphy has to the interpretation of § 1823(e) outside the specific context of the illegal issuance of letters of credit. Therefore, the Court does not find that Murphy supports holding that § 1823(e) bars agreements that do not diminish the RTC's interest in a particular asset.

 Lastly, the RTC argues that authority from other circuits supports the proposition that there need not be a specific asset to invoke § 1823(e). However, the first line of authority cited by the RTC is decided under D'Oench, not its statutory counterpart. See, OPS Shopping Center, Inc. v. Federal Deposit Ins. Corp., 992 F.2d 306 (11th Cir. 1993) (D'Oench barred suit against bank for nonpayment of letter of credit even though it did not relate to a specific asset of the bank and was a liability). *fn20" In addition, certain cases within this line of authority specifically hold that D'Oench is broader than § 1823(e), and therefore, unlike the statute, does not require that a specific asset be implicated by the side agreement. See, e.g., Hall v. Federal Deposit Ins. Corp., 920 F.2d 334 (6th Cir. 1990) (holding that unlike § 1823(e) the logic of D'Oench still may apply where there is no asset).

 The second line of authority the RTC relies upon holds that the statute applies regardless of whether the party asserting the agreement is a debtor or creditor and regardless of whether the party was in a lending relationship with the bank. See, North Arkansas Medical Center v. Barrett, 962 F.2d 780 (8th Cir. 1992) (agreement to pledge securities as collateral for jumbo certificates of deposit was barred by D'Oench and § 1823(e)); *fn21" but see, Thigpen v. Sparks, 983 F.2d 644 (§ 1823(e) does not apply to alleged warranty on the sale of an asset because there is no particular asset and the gist of the dispute is neither a loan transaction, actual or contemplated, between a borrower and lender nor a conventional banking transaction of any kind). *fn22" Whether or not North Arkansas is correct in disregarding the distinction between debtors and creditors in applying § 1823(e), the holding does not imply that the agreement barred by § 1823(e) need not diminish or defeat the RTC's interest in a particular asset. *fn23" Not only would this interpretation rewrite the statute, but it does not follow logically from either line of cases discussed above. See, Agri Export, 767 F. Supp. at 833 ("What the RTC and Universal Savings want is not a construction of a statute, but in effect, an enlargement of it").

 Therefore, the Court finds that because the joint venture agreement at issue does not diminish or defeat the interest of the RTC in any particular asset acquired by the RTC, § 1823(e) does not apply to bar the assertion of this agreement as a basis of plaintiff's claims.

 2. D'Oench, Duhme Does Not Bar The Assertion Of Plaintiff's Claims

 This brings the Court to the issue of whether D'Oench, Duhme operates to bar the assertion of the joint venture agreement. The RTC does not directly argue that the D'Oench doctrine alone would bar the assertion of the joint venture agreement. Instead, the RTC relies on both § 1823(e) and D'Oench, claiming that the two combined permit the RTC to rely exclusively on the books of the bank, and therefore bar the assertion of any agreement not recorded pursuant to § 1823(e). Plaintiff on the other hand contends, first, that the joint venture agreement is in writing and was on the books of the bank, and second, that D'Oench does not apply to bar these claims because plaintiff is not an obligor of the bank.

 The Court agrees with plaintiff: D'Oench does not bar the assertion of the joint venture agreement as a basis of plaintiff's claims. To begin, the Court notes that D'Oench alone cannot bar the agreement because the joint venture agreement is a clear and explicit written obligation. See, e.g., Gemini, 921 F.2d at 245 (D'Oench requires a clear and explicit written obligation; agreement to loan which is not fully documented is barred). The RTC does not argue that the joint venture agreement was not on the books of Gibraltar Savings as required to survive the D'Oench doctrine; instead, the RTC contends that the lack of ratification by the board of directors is fatal to the assertion of the agreement.

 This is the crux of the RTC's position: that together D'Oench and § 1823(e) permit the RTC to rely exclusively on the records of the bank which are recorded pursuant to the statute's terms. For the following reasons, the Court rejects the RTC's position. First, though D'Oench has been extended to bar affirmative claims, whether tort or contract, and to protect the banking authorities, whether acting in their corporate or receivership capacity, it has not been held to incorporate the statutory requirements for recordation. See, FDIC v. Murphy, 93 C.D.O.S. at 9098-99 (holding that statute and D'Oench not identical and rejecting contention that the FDIC need not honor any transaction recorded pursuant to § 1823(e)).

 Second, though there may be situations where the common law doctrine and the statute combine to create a greater bar to the assertion of side agreements than each alone, an extension of the D'Oench estoppel is not warranted here. See, Alexandria Associates v. Mitchell Co., 2 F.3d 598, 603 n. 33 (5th Cir. 1993) (noting that prior extensions of D'Oench served to fill in the interstices in the relevant statutes, whereas the case at bar would include an unlimited and undefinable category of transactions). As the Court noted in its overview of the D'Oench doctrine, the common law rule precludes obligors from asserting side agreements which may mislead bank examiners as to the value of assets in its loan portfolio. Zook Bros., 973 F.2d at 1450. The Homeowner's Association is not an obligor of Gibraltar Savings nor of the RTC. *fn24" Moreover, the joint venture agreement, though apparently not ratified by the board of directors, is not an unwritten secret agreement. Finally, the agreement does not mislead the banking authorities as to the value of its assets. The agreement creates the asset-- the joint venture. *fn25"

 Third, though the common law doctrine and its statutory counterpart typically serve to bar the same agreements, the Court has found no case where D'Oench has been applied to bar an agreement not somehow intertwined with a lending transaction. See, Agri Export, 767 F. Supp. at 832 (D'Oench typically applies where a side agreement is inextricably entwined with a loan or other asset of the bank); see also, Vernon I, 907 F.2d at 1107 (in all cases save one the FDIC asserted or defended the validity of a particular debt or monetary obligation). To apply D'Oench and § 1823(e) in concert to bar the assertion of the joint venture agreement at issue here, would extend the doctrine far beyond estopping an obligor of the bank from asserting a side agreement which misleads the banking authorities concerning the value of its loan portfolio.

 Lastly, few courts have explicitly defined the outer limits of the D'Oench doctrine and § 1823(e). This Court finds the reasoning of the Fifth Circuit to be persuasive. In Thigpen v. Sparks the Fifth Circuit held that a breach of warranty claim by a purchaser of a trust company from the bank was not barred by § 1823(e) because "the gist of the dispute is neither a loan transaction, actual or contemplated, between a borrower and lender nor a conventional banking transaction of any kind, but rather the bank's sale of an asset to Sparks, an individual who on the record. had no other connection with the bank . . ." Thigpen, 983 F.2d at 647. After noting that § 1823(e) did not apply because the FDIC had acquired no asset, the court pointed out that if claims arising from any agreement were barred by the statute absurd consequences would result: essentially all creditors' claims would be barred. Id. at 649. *fn26"

  In Alexandria Associates v. Mitchell Co., 2 F.3d 598 (5th Cir. 1993), the Fifth Circuit again addressed the limits of the protection afforded the federal banking authorities, holding that D'Oench did not apply to non-banking transactions such as the ordinary commercial sale by a bank's sub-subsidiary of interests in real estate ventures. *fn27" The court noted that first, the sale of the real estate ventures were non-banking transactions; second, the purposes of the recordation requirement and approval requirements of the statute would not be furthered by requiring bank boards or loan committees to consider, approve and record every transaction entered into by a bank and its subsidiaries; and finally, the court seriously questioned whether a third party involved in a non-banking transaction-- particularly a transaction with subsidiaries-would be in a better position than depositors and creditors to protect itself. Id. at 603. Therefore the court found no reason to extend the common law D'Oench bar to the non-banking transaction at issue. Id. at 604.

 The Court agrees with the reasoning of both Thigpen and Alexandria Associates. The cases which have disregarded this transactional limitation on the application of D'Oench doctrine are decided under § 1823(e), not D'Oench. See, North Arkansas Medical, 962 F.2d at 788 (§ 1823(e) applies to bar secured creditor's claim because it affects FDIC's interest in jumbo certificate of deposit); Belsky v. First Nat. Life Ins. Co., 653 F. Supp. 80, 85 (D. Neb. 1986), aff'd on other grounds 818 F.2d 661 (8th Cir. 1987) (§ 1823(e) barred assertion of former vice president's claims that he had an interest in a life insurance policy). *fn28" These cases rely on the existence of an asset under § 1823(e), such as the life insurance policy in Belsky. The RTC cannot on the one hand rely on the recordation requirements of the statute, even though no asset is at issue, and on the other hand rely on the broad policies of D'Oench, even though the plaintiff is not an obligor involved in a lending transaction with the bank. *fn29"

 The Court finds that what RTC seeks is an enlargement of § 1823(e) to further the goals of both D'Oench and § 1823(e). Though it is true that barring the joint venture agreement would further the goal of protecting the assets of the receivership, it would do so at the expense of the language of the statute and the remaining goals of D'Oench. See, Agri Export, 767 F. Supp. at 833. The Court agrees with the RTC that the most important purpose of D'Oench and § 1823(e) is to allow the bank examiners to rely exclusively on the books of the bank. Zook Bros., 973 F.2d at 1451 ("it is beyond question that § 1823(e) and D'Oench allow the FDIC to rely on official bank records to the exclusion of extrinsic matters"). This does not mean however that D'Oench should be interpreted to include the statute's recordation requirements. The Court agrees with both Thigpen and Alexandria Associates that to apply § 1823(e) and D'Oench without limitation would include an unlimited and undefinable category of transactions which would be barred the statute and common law doctrine working together.

 Therefore, the Court holds that § 1823(e) and D'Oench do not raise a greater bar to the assertion of an agreement than each alone, where plaintiff is in no sense an obligor of Gibraltar Savings, and the agreement asserted is in no sense intertwined with a lending transaction. Plaintiff therefore is not barred from asserting the joint venture agreement to show that Gibraltar Savings and Gibraltar Management of Properties were partners in Cote d'Azur Associates.

 C. Venture Corporation's Crossclaims

 Regarding Venture Corporation's crossclaim, RTC also asserts that D'Oench, Duhme and § 1823(e) bar Venture Corporation's crossclaim for defense and indemnification, whether based upon Gibraltar's status as a partner in the joint venture or the settlement agreement. RTC argues that because neither the settlement agreement nor the joint venture agreement was recorded in accordance with § 1823(e), Venture Corporation cannot assert a claim against the RTC which depends upon either agreement. The RTC also contends that the common law rule of D'Oench, Duhme is a bar to the assertion of the claims for defense and indemnification under the settlement agreement.

 For the same reasons as discussed above, the Court rejects the RTC's position. First, the settlement agreement does not diminish or defeat the RTC's interest in a particular asset as required by § 1823(e). Rather, the agreement settles disputed claims to the assets of the joint venture. Second, the agreement is a clear and explicit written obligation that was carried on the books of the bank. The only dispute is whether the board, which was not in existence due to the FSLIC conservatorship, ratified the agreement. Third, the settlement agreement is on its face a bilateral agreement and thus comes within the bilateral agreement exception to both D'Oench and § 1823(e). See, Gemini, 921 F.2d at 245 ("D'Oench, Duhme does not bar the assertion of defenses based on a bilateral obligation which appears in the bank's records"). Fourth, Venture Corporation is not an obligor of the bank: it is a former partner in the joint venture and as such it asserts claims for equitable indemnity. Moreover, as a party to the settlement agreement it asserts its claim for express indemnity.

 Finally, the Court will not combine the disparate elements of § 1823(e) and D'Oench, Duhme in order to protect the general assets of the RTC's receivership, again at the expense of both the statute's language and the common law doctrine's limitations. Therefore, the Court holds that D'Oench, Duhme and § 1823(e) do not bar the assertion of the joint venture agreement or the settlement agreement as a basis for Venture Corporation's crossclaims for indemnity.

 V. Conclusion

 For the above reasons, the Court DENIES defendant RTC's motion for summary judgment based upon D'Oench, Duhme and its statutory counterpart 12 U.S.C. § 1823(e). The Court finds that the statute does not bar the assertion of either the joint venture agreement or the settlement agreement, since neither agreement diminishes the RTC's interest in a particular asset it acquired when it took over the bank. D'Oench alone does not bar the assertion of either agreement because both agreements are clear and explicit written obligations which were on the records of the bank. Finally, the Court declines to extend the common law doctrine and its statutory counterpart beyond the language of the statute and the limitations-- broad though they are-- of the doctrine in this case. *fn30"

 IT IS SO ORDERED.

 DATED: March 11, 1994.

 EUGENE F. LYNCH

 United States District Judge


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