
USCA1 Opinion

	




          July 6, 1995          [NOT FOR PUBLICATION]                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________          No. 95-1025                             SUNSHINE DEVELOPMENT, INC.,                                      Appellant,                                          v.                        FEDERAL DEPOSIT INSURANCE CORPORATION,                                       Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF NEW HAMPSHIRE                    [Hon. Paul J. Barbadoro, U.S. District Judge]                                             ___________________                                 ____________________                                        Before                          Boudin and Lynch, Circuit Judges,                                            ______________                        and Schwarzer,* Senior District Judge.                                        _____________________                                _____________________               William  E.  Aivalikles, with  whom  Law  Office of  William               _______________________              _______________________          Aivalikles was on brief for appellant.          __________               Daniel  H. Kurtenbach,  Counsel,  with whom  Ann S.  Duross,               _____________________                        ______________          Assistant General  Counsel, and Richard J.  Osterman, Jr., Senior                                          _________________________          Counsel, Federal Deposit Insurance Corporation, were on brief for          appellee.                                 ____________________                                        ____________________          *     Of  the  District   of  Northern  California,   sitting  by          designation.                                 ____________________                    SCHWARZER,  District Judge.  Sunshine Development, Inc.                    SCHWARZER,  District Judge                                ______________          ("Sunshine")  appeals  from  a  judgment  of  the  United  States          District Court for the District of New Hampshire which affirmed a          judgment  of the United States  Bankruptcy Court for the District          of New  Hampshire.  We have  jurisdiction of the appeal  under 28          U.S.C.    1291.  We affirm largely  for the reasons stated in the          thoughtful opinion by the district court and add the following.                    This  appeal  grows  out of  two  actions  consolidated          below.  The  first was filed  by First Service  Bank for  Savings          ("Bank")  against Sunshine  in the New  Hampshire state  court to          collect  loans  made by  the Bank  to Sunshine  and to  obtain an          attachment on  property pledged by  Sunshine as security  for the          loans.  The second  was filed by Sunshine  in the district  court          against the  Bank  for breach  of contract,  breach of  fiduciary          duties,  negligence,  interference  with  contractual  relations,          conversion, and violation of the Racketeer Influenced and Corrupt          Organizations Act (18 U.S.C.    1961 et seq.).  When  the Federal                                               _______          Deposit Insurance Corporation  ("FDIC") was appointed liquidating          agent  for the  Bank,  it was  substituted  in both  actions  and          removed  the state  court  action to  the  district court.    The          district court had jurisdiction over the removed action  under 12          U.S.C.     1819(b)(1)  and (b)(2)(A)  and 28  U.S.C.     1331 and          1345.  It had jurisdiction over Sunshine's action under 18 U.S.C.            1964 and  28 U.S.C.    1331 and 1332.   When Sunshine filed for          protection under chapter 11 of the  bankruptcy code, the district                                         -2-          court referred both  actions to the  bankruptcy court where  they          were consolidated.                    With  the consent of the parties, a jury trial was held          in  the bankruptcy court in  both actions.   In the Bank s action          against  Sunshine to collect the amounts due under the loans, the          jury  ruled for  Sunshine  and awarded  nothing.   In  Sunshine s          action against the  Bank, the  jury awarded $2,000,000.   On  the          FDIC s motion, the bankruptcy  court, in a 21 page  opinion, held          that the jury's verdict in both cases was "manifestly against the          clear  weight of the evidence." (R. 11,  21, 30).  It vacated the          jury's verdict, dismissed Sunshine's complaint,  entered judgment          for  FDIC  in  the  amount of  $2,727,856.12,  and  conditionally          granted a new trial.  (Id.)                                 __                    Sunshine appealed to the district court under 28 U.S.C.            158(a).  In a sixteen page opinion, the district court affirmed          the judgment  of the  bankruptcy court  (R. 32,  47).   The court          acknowledged  that its review of the bankruptcy court's order was          plenary and  that the reversal of the jury's verdict could not be          sustained   "unless  the   evidence   points  so   strongly   and          overwhelmingly in  favor of the  moving party that  no reasonable          jury could  have  returned  a  verdict adverse  to  that  party."          Keisling v. Ser-Jobs For Progress, Inc., 19 F.3d 755, 759-60 (1st          ________    ___________________________          Cir. 1994) (R. 34).   Examining the  evidence "in the light  most          favorable to  the non-moving party,"  (Id.), it reached  the same                                                 __          conclusions as the bankruptcy court.                                         -3-                    For  the  reasons stated  by  the  District Court,  our          review too is  plenary and  we can sustain  the judgment only  if          there  is no evidence  on the  basis of  which a  reasonable jury          could  have found  for  Sunshine.   We  agree with  the  district          court's analysis that the burden  of establishing payment was  on          Sunshine  and that it could not  support a jury verdict merely by          pointing  to deficiencies in the  Bank s records (R.  36-37).  At          oral argument,  counsel was unable to  point to any facts  on the          basis of which a jury could have found that an  additional credit          in  the amount  of $1,016,000,  or any  other amount, was  due as          claimed by Sunshine.  As the court below cogently pointed out, to          accept  Sunshine s claim would require the jury to find both that          the Bank's records  were incorrect in  showing the $1,016,000  as          overfunding of another loan yet correct as reflecting a repayment          by Sunshine of $1,016,000 (R. 38-39).  No evidence was offered to          support such a strained inference.                    With respect  to Sunshine's claim against  the Bank for          breach   of  its  duty  of  good  faith  and  fair  dealing,  the          uncontradicted evidence established that one of its loans had  an          overdue  balance of  over  $500,000 and  that  the notes'  cross-          default  clauses  triggered  defaults in  all  outstanding loans,          justifying  the attachment on the property put up as security and          the  acceleration  of  the notes  (R.  42-43).    And it  further          established  that  the Bank,  in  obtaining  the attachment,  had          deemed itself to be  insecure because a current  appraisal showed          the  wholesale  value  of  the  security  for  the  loans  to  be                                         -4-          substantially below the amount of Sunshine's outstanding debt and          an  FDIC  examination  report  classified all  of  the  loans  as          "substandard," "doubtful," or "loss."  (R. 44).                    To refute this evidence  reflecting that the Bank acted          in  a commercially  reasonable manner,  Sunshine argued  that the          appraiser s report showed the retail value of the Bank s security          to be greater than the amount due on the loans,  but it presented          no evidence  that the  Bank s reliance on  wholesale rather  than          retail  value  was unreasonable.   It  also  pointed to  a report          prepared by a  former Bank official  months after the  attachment          was  obtained indicating optimism that  the Bank will  be able to          work  out of these loans.   But after-the-fact  evidence does not          establish the lack of good faith of the decisions at  the time of          the  attachment and  acceleration.   Sunshine s  evidence is  not          sufficient  to permit a reasonable jury to conclude that the Bank          acted unreasonably in deeming itself to be insecure and obtaining          the attachment,  and  on  appeal,  counsel  have  pointed  to  no          evidence that would support their claim.                    The judgment is AFFIRMED.                                    AFFIRMED                                         -5-
