               IN THE UNITED STATES COURT OF APPEALS
                       FOR THE FIFTH CIRCUIT



                           No. 96-11578



     SOUTHMARK CORP.,

                                           Appellant,

                versus


     FEDERAL DEPOSIT INSURANCE CORPORATION,

                                           Appellee.



          Appeals from the United States District Court
                for the Northern District of Texas
                          (3:95-CV-482-X)


                          April 20, 1998

Before GARWOOD, DUHÉ and DeMOSS, Circuit Judges.*

GARWOOD, Circuit Judge:

     Plaintiff Harmon Envicon Associates (Harmon Envicon) brought

this adversary proceeding in bankruptcy court against debtor-

respondent-appellant Southmark Corporation (Southmark or Appellant)

during Southmark’s Chapter 11 bankruptcy, seeking a declaratory

judgment that Southmark was not entitled to the proceeds of a

particular   note.   Sometime   thereafter,   the   Resolution   Trust

Corporation (RTC) succeeded to Harmon Envicon’s interest, and the



*

Pursuant to 5TH CIR. R. 47.5 the Court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in 5TH CIR. R. 47.5.4.
bankruptcy court granted summary judgment in favor of the RTC. The

bankruptcy court held that Southmark had relinquished its right to

receive the      note     proceeds   when     it    entered   into      a   Settlement

Agreement in an unrelated suit that contained general release

language.       Pursuant to 28 U.S.C. § 158(a), Southmark appealed this

decision to the district court, which affirmed the bankruptcy

court’s grant of summary judgment.                 While the appeal was pending

before    the     district     court,     the      Federal    Deposit       Insurance

Corporation      (FDIC    or   Appellee)      succeeded      to   the   RTC’s   role.

Southmark now appeals to this Court, pursuant to 28 U.S.C. §

158(d).    We reverse and remand.

                          Facts and Proceedings Below

      This is a dispute over who holds the right to receive the

proceeds of a mortgage note.            In May 1981, Wilkeswood Associates,

Ltd. (Wilkeswood) issued its wraparound mortgage note (the Note)

for   $7,650,000     to    Unicorn   Insurance       Company,     Inc.      (Unicorn).

Wilkeswood was a New Jersey limited partnership, and executed the

note through its general partner, Berg Harquel Associates, a New

Jersey joint venture.          Berg Harquel Associates later became named

Harmon    Envicon    Associates      (Harmon        Envicon).        The     Note   was

nonrecourse and was secured by liens on an apartment complex

(Wilkeswood Apartments) located in Luzerne County, Pennsylvania,

and owned by Wilkeswood.             The Note provided it could not be

assigned or transferred without Wilkeswood’s written consent so

long as Wilkeswood owned the Wilkeswood Apartments.                          The Note

itself was held at all times by the original payee, Unicorn.


                                          2
Eventually, the property, encumbered by the Note, was sold and the

21.25% share of the Note net proceeds, belonging to either Harmon

Envicon or Southmark, was placed in escrow pending a determination

of the ownership of these funds.

     In July 1981, effective June 30, 1981, Unicorn granted an 85%

participation interest in “the Net Cash Flow” under the Note and

mortgage to Pennsylvania Realty Consultants Company (PRC), a New

Jersey partnership in which Harmon Envicon (then known as Berg

Harquel Associates) was a 50% partner (the other 50% partner in PRC

was Emil Stavriotis).1     Appellant and Appellee both agree that

Harmon Envicon “owned” 50% of PRC and was thus entitled to 42.5% of

the net cash flow from the mortgage Note.

1

This was accomplished     by a “Wraparound Mortgage Participation
Agreement” between PRC   and Unicorn, which included a recital that
“the parties wish to     establish the ownership of the Note and
Mortgage” and provided   in part as follows:

          “1. (a) As used in this document, the term ‘Net
     Cash Flow’ shall mean the difference between (i) the
     payments made to the holder of the Note and Mortgage or
     any replacement or extension thereof and (ii) any
     payments required to be made by the holder of the Note
     and Mortgage under the terms thereof to the holders of
     any prior liens on the property secured thereby.
               (b) As used in this document the term ‘Net Cash
     Flow’ shall also include any share of refinancing, or
     sale proceeds, prepayment premium, fire insurance or
     condemnation proceeds received by the holder of the Note
     or the New Note (as defined in subparagraph (c) hereof).
               (c) If the note and Mortgage is sold,
     transferred or assigned and a note or letter obligation
     (‘New Note’) is received by the holder thereof, then the
     term ‘Net Cash Flow’ shall also mean the difference
     between (i) the payments made to the holder of the New
     Note and (ii) any payments required to be made by the
     holder of the New Note, pursuant to the terms of the New
     Note on account of any prior lien upon any property
     securing the New Note.”

                                   3
      In June 1987, Southmark, a Georgia corporation, acquired all

the   shares   of    Southern       Ventures,   Inc.   (SVI),   a    New   Jersey

corporation.        SVI   was   a   fifty    percent   co-venturer    in    Harmon

Envicon, and thus Southmark, through SVI, obtained a fifty percent

interest in Harmon Envicon.            Southmark’s interest, however, was

subordinate to the interests of City Federal Savings Bank (City

Federal) and Empire of America Savings Bank through a Subordinated

Loan Participation and Purchase Agreement executed by Southmark.

      In July 1989, Southmark filed under Chapter 11 in bankruptcy

court in Georgia; in October 1989, the bankruptcy proceeding was

transferred to the Northern District of Texas.

      In late 1990, Southmark sold all its shares in SVI to Charles

Loccisano and Robert T. Harmon2 (Harmon/Loccisano), who thereby

purchased all of Southmark’s interest in Harmon Envicon.                   At this

time Harmon Envicon was still a partner in PRC and was thus

entitled to receive 42.5% of the Note net proceeds.                  However, as

consideration for the sale of SVI to Harmon/Loccisano, Harmon

Envicon, at approximately the same time, executed a “Partial

Assignment of Interest In Proceeds From A Promissory Note” dated

October 16, 1990, (the Assignment) conveying (“Assignor hereby

sells, assigns and conveys to Assignee a fifty percent (50%)

2

Robert T. Harmon, as general partner of Harquel Associates II, a
New Jersey limited partnership that was one of the joint venturers
in Berg Harquel Associates (later known as Harmon Envicon), had
executed (on behalf of Berg Harquel Associates as one of the two
PRC partners) the Wraparound Mortgage Participation Agreement
between PRC and Unicorn (see note 1, supra). Robert T. Harmon also
executed the December 1990 assignment from Harmon Envicon to
Southmark.

                                         4
interest in Assignor’s Note Proceeds,” defined to mean Assignor’s

interest   in   Note   net    cash    flow)   to    Southmark   50%    of   Harmon

Envicon’s 42.5% interest in the Note net cash flow free of liens,

interest    claims,    and    encumbrances——giving        Southmark    a    21.25%

interest in the Note net cash flow.            This Assignment however, was

expressly made subject to the superior security interests held by

City Federal, and other lenders, in Harmon Envicon’s partnership

interest in PRC (including the interest resulting therefrom in the

Note proceeds).

     On July 12, 1991, Southmark filed in its bankruptcy proceeding

a voidable transfer action against Harmon Envicon and several

affiliated partnerships.         The action was related to Southmark’s

initial    acquisition   of    SVI,    but    did   not   involve     either   the

subsequent sale of SVI to Harmon/Loccisano or the Assignment.                   On

December 6, 1991, Southmark and Harmon Envicon entered into a

Settlement Agreement and Mutual Release (the Release) in which

Southmark agreed to release certain funds that it held related to

various partnerships it and Harmon Envicon (and related entities)

had been involved in, including Wilkeswood.                 The Release also

contained a broad general mutual release in which the parties

released one another from “any and all debts, claims, liabilities,

obligations, causes of action and rights, whether known or unknown,

which each party now owns or holds . . . .”

     In March 1993, the Wilkeswood Apartments were sold.                       The

purchase price was apparently sufficient to pay off all liens on

the Wilkeswood Apartments, including the Note and lien securing it.


                                        5
The title company held in escrow the amount allowable to the 21.25%

interest covered by the October 1990 Assignment from Harmon Envicon

to Southmark.     Harmon Envicon then initiated the current adversary

action against Southmark.          In the bankruptcy court below, Harmon

Envicon sought a declaratory judgment that Southmark was not

entitled to any proceeds of the Wilkeswood sale since the interest

in 21.25% of the Note net cash flow that Southmark received through

the Assignment was later released when Southmark executed the broad

Release.    Southmark counterclaimed, and both parties filed motions

for summary judgment.

      The bankruptcy court entered summary judgment in favor of RTC,

which had by then replaced Harmon Envicon as plaintiff.                         The

bankruptcy    court      found    that   the   Assignment      had   conveyed    to

Southmark a contingent right to payment, not an ownership interest

in   the   Note   net    cash    flow,   and   because   the    interest   was   a

contingent right, it was released in the general Release that the

parties executed in conjunction with their settlement of the

voidable transfer action.          Accordingly, the bankruptcy court held

that Southmark had no claim to the funds from the Wilkeswood

Apartments sale.        On Southmark’s appeal to the district court, the

summary judgment was affirmed.

      Southmark filed a timely notice of appeal to this Court.                   On

this appeal, Southmark raises two issues.            First, it contends that

the general language of the Release could not operate to release

Southmark’s unrelated rights under the Assignment, and second, the

Assignment passed an ownership interest of a kind which is not


                                         6
transferred by a mere release.



                            Discussion

     We review a summary judgment de novo, applying the same

criteria employed by the lower court.       Summary judgment is proper

if, viewing the evidence in light most favorable to the non-movant,

there is no genuine issue as to any material fact.        See Fed. R.

Civ. P. 56(c); Celotex Corp. v. Catrett, 106 S.Ct. 2548, 2554

(1986).   An issue is “material” if its resolution in favor of one

party will affect the outcome of the lawsuit; an issue is “genuine”

if a reasonable jury could return a verdict in favor of the non-

movant.   See Anderson v. Liberty Lobby, Inc., 106 S.Ct. 2505, 2510

(1986).

I.   Release

     Southmark first contends that regardless of the nature of its

interest in the Note proceeds that interest was unrelated to the

particular controversies giving rise to the Release and hence, not

being specifically mentioned, was not covered by that document’s

broad and general basket clause.       We disagree.

     Although general releases are narrowly construed, see Duncan

v. Cessna Aircraft Co., 665 S.W.2d 414, 422 (Tex. 1984), broadly

worded general releases are enforceable as long as the claim in

question is included within the wording of the release. See, e.g.,

Shelton v. Exxon, 921 F.2d 595, 602 (5th Cir. 1991); Ingram Corp.

v. J. Ray McDermott & Co., Inc., 698 F.2d 1295, 1310-12 (5th Cir.

1983) (all enforcing broadly worded general release); cf. Victoria


                                   7
Bank & Trust Co. v. Brady, 811 S.W.2d 931, 938 (Tex. 1991); Baker

v. City of Fort Worth, 210 S.W.2d 564, 567-68 (Tex. 1948); Vela v.

Pennzoil Producing Co., 723 S.W.2d 199, 204 (Tex. App.--San Antonio

1986, writ ref’d n.r.e.); Houston Oilers, Inc. v. Floyd, 518 S.W.2d

836, 838 (Tex. Civ. App.--Houston [1st Dist.] 1975, writ ref’d

n.r.e.) (all holding that a certain cause of action or occurrence

was outside the scope of the general release).3

     If a releasing instrument does not “mention” the claim, and

the claim is not within the subject matter of a release, it cannot

be discharged by a general release.   In Victoria Bank & Trust, 811

S.W.2d at 938, for example, the court found that a general release

discharging all claims or causes of action attributed to a certain

loan transaction did not discharge a claim related to a cattle

transaction. Similarly, in Vela, 723 S.W.2d at 204, the court held

that a general release related to the validity of an oil and gas

lease did not serve to discharge a cause of action for improperly

pooling the land in violation of the terms of the lease.

     However, a general release that is not limited to a specific

cause of action or occurrence, and broadly releases all claims and

causes of action between two parties, is valid and enforceable.   In


3

The parties have largely briefed this appeal without any explicit
discussion of choice of law issues, but apparently on the
assumption that Texas law controls (or that the law of whatever
other jurisdiction might control is not materially different). The
bankruptcy court made no clear choice of law determination. The
Release contains a clause stating it “shall be construed and
enforced in accordance with the United States Bankruptcy Code and
the laws of the State of Texas as applied to contracts made and to
be performed entirely within Texas.”

                                8
Ingram, 698 F.2d at 1312, this Court recognized that it must

enforce a release that discharges all, known or unknown, “past,

present, or future” claims.            And in White v. Grinfas, 809 F.2d

1157, 1159     (5th    Cir.   1987),     this    Court,    applying      Texas   law,

enforced a release in which the parties agreed to “release and

forever discharge any claims or causes of action of whatsoever

nature   which   may    exist    among    them    on     account   of   any     event,

occurrence, transaction, or happening prior to the date of this

Settlement Agreement and Mutual Release.”

      The Release at issue in this case, like the release in White

v. Grinfas, was broad and not limited to a specific transaction or

cause of action.        Paragraph 7 of the Release states that the

parties release one another from “any and all debts, claims,

liabilities, obligations, causes of action and rights, whether

known or unknown, which each party now owns or holds, or at any

time heretofore owned or held, by reason of any act, matter, cause

whatsoever.” (emphasis added).           Since the language of the Release

is not limited to the voidable transfer action that gave rise to

the   dispute,    we     hold,    as     a      matter    of   law,      that    this

Release——executed      by     sophisticated       businesses       represented     by

counsel——is enforceable as written and discharges all debts, claims,

liabilities,     obligations,       causes        of     actions,       and     rights

(collectively: released interests).              Although the language of the

Release is unambiguous in this respect and, in accordance with

standard rules of construction, should be construed and enforced as

written, it is ambiguous as to whether the interest in the Note net


                                         9
proceeds falls within one of the categories of released interests.

We hold that if the Assignment, as between the parties thereto,

transferred a present ownership interest, that such interest is not

within the interests which the Release releases and that the

Release did not retransfer that interest from Southmark back to

Harmon Envicon.     Obviously, “rights” as used in the Release does

not embrace——and appellee does not claim that it does——everything

Southmark then owned or, indeed, even everything Southmark had ever

acquired from Harmon Envicon (and still owned).

II.   Interest in the Note Proceeds

      Southmark contends that the Assignment conveyed an ownership

interest in the Note net proceeds, which could not have been

inadvertently   transferred    by     the    Settlement    Agreement.    The

bankruptcy court specifically held that Southmark did not obtain an

ownership interest in the Note because Southmark had no right to

collect   payment   directly   from    the    payor   of   the   Note.   The

bankruptcy court found that Southmark merely had a claim, and that

that claim was released in the broad “Mutual General Release” of

the Settlement Agreement. Because there are questions of fact

concerning the parties’ intent as to the exact nature of the

interest that was conveyed by the Assignment, we reverse the

bankruptcy court’s grant of summary judgment and remand the case

for further proceedings.

      The documentary evidence is not unambiguous as to what sort of

interest the      parties intended to pass.           The transaction was




                                      10
labeled an assignment; under Texas law4 an assignment passes the

whole interest held by the assignor to an assignee.            See Ditto

Investment Co. v. Ditto, 302 S.W.2d 692, 694 (Tex. Civ. App.--Fort

Worth 1957) rev’d on other grounds, 309 S.W.2d 219 (Tex. 1958).

However, merely labeling a transaction as an “assignment” does not

necessarily make it a true assignment.       The intent of the parties

is an essential element of an assignment and, at least as between

them, takes precedence over the label attached to the transaction.

     For   instance,   if   the   parties   merely   intend   to   pass   a

collateral security interest, but phrase the transaction in terms

of an absolute assignment, the interest passed will be governed by

their intent and will not be considered an assignment.        See, e.g.,

Olshan Lumber Co. v. Bullard, 395 S.W.2d 670 (Tex. Civ. App.--

Houston [1st Dist] 1965, n.w.h.); cf. 7 Tex. Jur. 3d § 24 (1997)


4

The Assignment was executed in Texas, and thus Texas law would
ordinarily control. See 7 Tex. Jur. 3d Assignments § 5 (1997).
However, the Assignment contains a provision stating:         “This
Assignment and the legal relations between the parties relating to
the transactions described in this Assignment shall be governed by,
and construed in accordance with, the laws of the State which
governs the Note.” We assume Pennsylvania law governs the Note, as
it is a nonrecourse note stating that it is secured by the
described real property in Pennsylvania. The “Wraparound Mortgage
Participation Agreement” contains a clause stating:           “This
agreement has been negotiated and entered into in the State of New
Jersey and shall be interpreted pursuant to the laws of the State
of New Jersey as to all matters, except title matters as to which
the law of the State of Pennsylvania shall apply.”
     The parties in their briefing on this appeal have not
explicitly addressed these choice of law provisions or cited us to
any New Jersey or Pennsylvania cases which are on point.        For
purposes of our disposition of this appeal, we will assume that
Texas law either controls or is not materially different from
either New Jersey or Pennsylvania law as to the relevant issues
concerning the Assignment.

                                    11
(“Intent is an essential element of an assignment and, thus, not

every     contract     involving      a    transfer     of    interests     is   an

assignment.”) (citing Thurber Const. Co. v. Kemplin, 81 S.W.2d 103

(Tex. Civ. App.--Austin 1935, writ dism’d)).                 The same is true for

an   equitable    assignment;      in      order   to   create       an   equitable

assignment, “the agreement must evidence an intent to transfer the

interest . . . .”       Pape Equipment Co. v. I.C.S., Inc., 737 S.W.2d

397, 402 (Tex. App.--Houston [14th Dist.] 1987, writ ref’d n.r.e.).

     In this case, the parties’ intents concerning the assignment

are unclear.     The Assignment document in this respect is ambiguous

on its face and does not reveal what type of interest the parties

intended to pass.

     On    the   one    hand,   the       Note   proceeds     were    assigned   as

consideration for the sale of SVI to Harmon/Loccisano and, prior to

this dispute, all parties involved seem to have treated it as an

ownership interest.        But the fact that the proceeds would be

filtered through Harmon Envicon, which had already pledged the Note

proceeds as a security interest to City First, may suggest that the

interest was intended to be something less than an ownership

interest.     Although Southmark was to receive the Note proceeds

through Harmon Envicon, there was an unexercised provision in the

Assignment whereby Southmark could have directed Harmon Envicon to

direct PRC and the Note holder to pay the proceeds directly to

Southmark (though there is nothing said about directions to the

maker of the Note).         There is no evidence of how the parties

treated the Note’s “Net Cash Flow”——or, indeed, if there was any


                                          12
such——after the Release (or even after the Assignment) and prior to

the sale of the Wilkeswood Apartments.     There is nothing in the

record to indicate whether after the Assignment and before the

Release (or, indeed, before the Wilkeswood Apartments sale) there

was (or was not) ever any dispute as to the validity of the

Assignment, or as to what was transferred thereby, or as to whether

Harmon Envicon (or anyone else) had fulfilled all its obligations

thereunder.   There is nothing in the record to indicate whether or

not Harmon Envicon ever requested a return of the Assignment or a

reassignment. The case is further complicated by the fact that the

Note itself never changed hands and the original holder, Unicorn,

is uninvolved in these proceedings.

     Because of the inconclusive evidence concerning the intent of

the parties and nature of the assignment, we hold that Appellee has

not met its summary judgment burden of demonstrating there are no

genuine issues of material fact as to whether Southmark had an

ownership interest in the Note net proceeds.    For this reason we

remand the case to the bankruptcy court for further proceedings

concerning the intentions of the parties to the Assignment.   If it

is found that the parties to the Assignment intended to pass an

ownership interest, then, as between the parties, that intent will

control the nature of the interest for purposes of the Release, and

the Release will not extend to, or retransfer to Harmon Envicon,

the interest intended to be conveyed by the Assignment.5

5

We note that what is at issue here is not any claim by Southmark
that Harmon Envicon ever——either before or after the Release——failed

                                13
                               Conclusion

     We hold that, absent reformation or fraud (neither of which is

urged here), the parties’ intent as to the scope of an unambiguous

release is   irrelevant     and   the   release   should     be   enforced   as

written;   however,   the    parties’    intent    as   to    the   ambiguous

instrument (the Assignment) to which the release is claimed to

apply is relevant and dispositive.        The case is therefore remanded

so that the bankruptcy court can ascertain the intent of the

parties as to whether or not the Assignment was to convey all

ownership interest (legal or equitable).6




to pay Southmark any amounts that Southmark was (or claimed to be)
entitled to under the Assignment. Rather, the sole question is
whether the amounts currently (and apparently properly) held in
escrow by the title company which are attributable to the 21.25%
interest which was the subject of the Assignment are the property
of Southmark or of Harmon Envicon.
     We observe in passing that there might be a question whether
Harmon Envicon, which was only a partner in PRC, could pass to
Southmark an interest in partnership property (the 85% interest in
Net Cash Flow of the Note). However, none of the parties have
raised this issue on appeal, and all have assumed that the
Assignment was valid and transferred to Southmark all it purports
to. Moreover, even if the issue had been raised and the Assignment
held invalid on that basis, nevertheless if Harmon Envicon and
Southmark in the Assignment treated it as conveying an ownership
interest then, absent some later dispute about that at or prior to
the Release, it would appear that it should be treated as such, as
between those two parties, for purposes of the Release.
6

The FDIC is the sole plaintiff-appellee, as it ultimately was
below.   The FDIC apparently has other claims to the disputed
escrowed funds that do not depend on the Release.       Neither the
bankruptcy court nor the district court ruled on such other claims,
and nothing in this opinion speaks to them.        On remand, the
bankruptcy court, if it finds the FDIC is entitled to such funds
other than by virtue of the Release, may proceed on that basis
(subject, of course, to ultimate review on appeal) rather than by
determining the issue covered by our above remand.

                                    14
     REVERSED and REMANDED




15
