UNITED STATES COURT OF APPEALS
                           FOR THE FIFTH CIRCUIT
                            ____________________

                               No. 97-10315
                               No. 97-10624
                           ____________________

                         SEARCY M. FERGUSON, JR.,

                                                      Plaintiff-Appellant,

                                  versus

         FEDERAL DEPOSIT INSURANCE CORPORATION, Etc., Et Al.,

                                                        Defendants,
            FEDERAL DEPOSIT INSURANCE CORPORATION, in its
               Corporate capacity as Liquidator of the
                          Union Bank & Trust,

                                                       Defendant-Appellee.


_________________________________________________________________

          Appeals from the United States District Court
                for the Northern District of Texas
_________________________________________________________________
                          January 6, 1999

Before HIGGINBOTHAM, DAVIS, and BARKSDALE, Circuit Judges.

RHESA HAWKINS BARKSDALE, Circuit Judge.

     As Appellant Searcy M. Ferguson, Jr. conceded at oral argument

for this appeal, the disposition of this case hinges on the

following    issue:     whether   the   agents   of   the   Federal   Deposit

Insurance Corporation dealing with Ferguson had authority to enter

into a global settlement of his indebtedness on numerous promissory

notes.    We AFFIRM.
                                  I.

     During the 1980s, Ferguson was a shareholder and officer of

Union Bank and Trust.   In 1986 and 1987, Ferguson borrowed several

million dollars from Union Bank pursuant to nine promissory notes

(the Nine Notes). Union Bank failed in 1988, and the FDIC was

appointed receiver.

     At that time, the Nine Notes were delinquent.       In May 1988,

the Nine Notes were transferred, pursuant to a contract of sale,

from the FDIC as receiver to the FDIC in its corporate capacity.

     In September 1988, Ferguson contacted Ronald Bieker, the FDIC

assistant account officer assigned to Ferguson’s account, regarding

a settlement of the Nine Notes.       The offer was rejected.

     Also in September 1988, Ferguson contracted to sell property

he owned in Kaufman County, Texas (the Kaufman Property), part of

which served as part or all of the collateral for seven of the Nine

Notes. Ferguson claims that he then offered to pay the FDIC $1.727

million from the Kaufman Property sale for a release of liens on

the Kaufman Property and a global settlement of the Nine Notes; and

that the FDIC accepted this offer.

     The FDIC counters that Ferguson offered to pay $1.365 million

(the principal and interest due on only one of the notes) in

exchange for a release of the liens on the Kaufman Property; and

that Ferguson also offered to pay the balances on two additional

notes, for a total of $1.727 million for the three notes.


                                  2
     On 14 November 1988, Ferguson’s escrow agent, by letter to the

FDIC, provided three checks payable to the FDIC (totaling $1.727

million), as well as seven standard Texas release of lien forms for

the Kaufman Property.          Each release of lien form contained a

covenant that the “holder of the note acknowledges its payment and

releases the property from the lien”.        The releases were forwarded

to Anna Croteau, Department Head of Commercial Loans at the FDIC

and a member of the Senior Credit Review Committee.           She executed

the releases.

     In     February   1989,     Ferguson   attempted    to   settle    the

indebtedness on the remaining notes.         The FDIC maintains that he

did so because he was aware that he had only settled as to three of

the notes. Ferguson, however, claims that he made the efforts only

after the FDIC surprised him by claiming that what he understood to

be a global settlement was instead only a settlement on three of

the notes and a release of the liens on the Kaufman Property. In

any event, these subsequent negotiations failed.

     In the fall of 1991, Ferguson filed this action in Texas state

court, seeking, inter alia, a declaratory judgment that the FDIC

received full payment through an accord and satisfaction or a

novation, or that the FDIC was precluded from recovery based on

estoppel,     ratification,      waiver,    release,    and   failure    of

consideration. The FDIC removed this action to federal court,




                                     3
denied liability on Ferguson’s claims, and counterclaimed for the

indebtedness on the remaining six notes.

     The FDIC moved for summary judgment on Ferguson’s affirmative

defenses of accord and satisfaction, novation, waiver, estoppel,

failure of consideration, fraud, and ratification, based, among

other things, on its contention that only the FDIC Credit Review

Committee had the authority to approve a global settlement. In

support of this claim, the FDIC submitted evidence that Bieker and

Croteau lacked such authority.

     On cross-motions for summary judgment, the district court

ruled that the evidence submitted by the FDIC was not rebutted by

Ferguson; and that it established that Bieker and Croteau did not

have authority to negotiate a global settlement or release a note.

Based on its lack of authority ruling, the district court granted

summary judgment for the FDIC on Ferguson’s defenses of accord and

satisfaction, novation, waiver, estoppel, failure of consideration,

fraud, and ratification.

     Accordingly, only two issues were tried to the jury: (1) what

amount the FDIC was entitled to recover on the remaining six notes;

and (2) whether Ferguson established the affirmative defense that

the FDIC failed to pay the six notes in accordance with his

instructions. The jury found that Ferguson failed to prove this

defense and, among other things, awarded principal and interest due




                                 4
the FDIC.   The district court entered judgment for the FDIC for,

inter alia, $520,797.

                                    II.

     Ferguson challenges three rulings by the district court:           (1)

the partial summary judgment in favor of the FDIC on the issue of

authority; (2) the admission of parol evidence regarding the terms

of the releases; and (3) the admission of evidence concerning the

subsequent settlement negotiations.          At oral argument, Ferguson

conceded that, if he did not prevail on the authority issue, “the

other two   issues   are   really   moot”.     Accordingly,   because    we

conclude that Bieker and Croteau lacked authority to enter into a

global settlement, we need not address the other two issues.            (On

motion by the FDIC, its cross-appeal was dismissed.)

     For the authority issue, decided by summary judgment, we

conduct the requisite de novo review.         E.g., Thompson v. Georgia

Pacific Corp., 

, 1167 (5th Cir. 1993).           Viewing the

evidence in the light most favorable to the nonmovant, we will

affirm “when the pleadings and evidence illustrate that no genuine

issue exists as to any material fact and that the movant is

entitled to judgment or partial judgment as a matter of law”.

Burns v. Harris County Bail Bond Board, 

, 517-18 (5th

Cir. 1998); Hogan Systems, Inc. v. Cybresource Int’l, Inc., 

, 322 (5th Cir.), rehearing and suggestion for rehearing en

banc denied, ___ F.3d ___ (5th Cir. 1998); Pollock v. FDIC, 

798, 802 (5th Cir. 1994); see FED. R. CIV. P. 56.             “To win summary

judgment, the movant must show that the evidence in the record

would not permit the nonmovant to carry its burden of proof at

trial.”    Smith v. Brenoettsy, 

, 911 (5th Cir. 1998).

To rebut this, the nonmovant may then present evidence showing that

a material fact issue exists to be resolved at trial.               Id.; 

.

                                      A.

     Ferguson first contends that the district court erred in

applying   federal,   rather   than       Texas,   law   to   his   affirmative

defenses (accord and satisfaction, novation, waiver, estoppel,

failure of consideration, fraud, and ratification). Ferguson bases

this claim on O’Melveny & Myers v. FDIC, 

(1994), in

which the Supreme Court held that, in an action by the FDIC, acting

as receiver, in which the defendant raised the affirmative defense

of imputation, the State’s law controlled.                

86.

Reminding that “[t]here is no federal general common law”, 

(quoting Erie R. Co. v. Tompkins, 

, 78 (1938)), the

Court noted that the FDIC had not identified any “significant

conflict [between the use of state law and] some federal policy or

interest”,   

(quoting Wallis v. Pan American Petroleum

Corp., 

, 68 (1966)); and that the FDIC, because it was

acting as receiver, was asserting the rights of the failed bank,

rather than its own.    

                                      6
      In maintaining that O’Melveny requires the application of

Texas state law here, Ferguson relies upon FDIC v. Massingill, 

(5th Cir. 1994), and Davidson v. FDIC, 

, 250

(5th Cir. 1995), two post-O’Melveny decisions addressing similar

issues.    Further, Ferguson asserts that there is no conflicting

federal interest at stake to justify the use of federal law.

                                         1.

      The FDIC responds in part that Ferguson is precluded from

presenting this issue, claiming that he failed to raise it in

district court.     Needless to say, we “will not address an argument

raised by a party for the first time on appeal ... unless it meets

the plain error standard”.         Forbush v. J.C. Penney Co., 

, 822 (5th Cir. 1996).

      Obviously, Ferguson did not need to plead the applicability of

Texas law in order to preserve this choice of law question.                  Kucel

v. Walter E. Heller & Co., 

, 74 (5th Cir. 1987).              On the

other hand, he did have “an obligation to call the applicability of

another state’s law to the [district] court’s attention in time to

be properly considered”.         

  should    have       more   completely   presented    the

applicability-of-Texas-law-issue, Ferguson did raise it in district

court. Among other things, in his summary judgment motion, as well

as   in   his    response   to    the    FDIC’s,      Ferguson   supported    his

affirmative defenses with Texas law.


                                         7
                                    2.

       As Ferguson correctly notes, in both Davidson and Massingill,

our court recognized the import of O’Melveny.        

, held that the defense of impairment of collateral in an

FDIC   collection   action   was   controlled   by   state,   rather   than

federal, law.    And 

, held that the state

statute of limitations applied to a deed of trust acquired by the

FDIC as receiver before the enactment of one of the provisions of

the Financial Institutions Reform, Recovery, and Enforcement Act of

1989, 12 U.S.C. § 1821(d)(2)(A)(i), Pub. L. No. 101-73, 103 Stat.

183 (1989).   Our court noted, based on O’Melveny, that the FDIC had

not advanced a significant federal interest warranting displacement

of state law through its argument that an adverse decision would

have a general impact on the public fisc; and that the FDIC was

acting in its capacity as a receiver when it acted, rather than in

its corporate capacity.      

252.

       Thus, we are faced with whether Texas or federal law should be

applied to the authority issue.          Although the district court

delineated alternative reasons why Ferguson’s affirmative defenses

failed, it stated that, as Ferguson concedes here, the authority

issue was controlling. We agree with the district court that

federal law applies to the authority issue.

       Although O’Melveny disclaimed again the existence of a general

federal common law and required the application of state law to


                                     8
claims made by or against the FDIC in its capacity as a receiver,

it did not purport to overrule case law holding that the Government

is not bound by the actions of agents acting outside the scope of

their authority.

           Whatever the form in which the Government
           functions, anyone entering into an arrangement
           with the Government takes the risk of having
           accurately ascertained that he who purports to
           act for the Government stays within the bounds
           of his authority....     And this is so even
           though, as here, the agent himself may have
           been unaware of the limitations upon his
           authority.

Federal Crop Ins. Corp. v. Merrill, 

, 384 (1947).

“[T]hose who deal with the Government are expected to know the law

and may not rely on the conduct of Government agents contrary to

law.”     Heckler v. Community Health Services, 

, 63

(1984).   Moreover, both the Supreme Court and our court have held

that, in most cases, the Government cannot be estopped based on

unauthorized representations made by its agents. See, e.g., Office

of Personnel Management v. Richmond, 

, 432-33 (1990)

(no estoppel against Government for payment of public funds);

United States v. Perez-Torres, 

, 407 (5th Cir. 1994)

(difficult    to   succeed          in     estopping       Government     based    on

representations    of    its     agents,           and   “change   in   position   in

reasonable    reliance         on        the       misrepresentation”      must    be

demonstrated); Fano v. O’Neill, 

, 1265 (5th Cir. 1987)




                                               9
(“party seeking     to   estop   the   government    bears   a   quite   heavy

burden”).

       Further, as stated in Davidson, “[t]he Supreme Court has

recently made clear [in O’Melveny] that the capacity in which the

FDIC acts may have a determinative impact on whether a state or

federal rule should control”.          

.         Here,

Bieker and Croteau were acting as agents of the FDIC-Corporate.

They   derived   their   authority     (if   any)   from   the   FDIC   in   its

corporate capacity, because the FDIC-Corporate purchased the Nine

Notes in May 1988, before any settlement negotiations between

Ferguson and the FDIC began.       See Beighley v. FDIC, 

,

779 n.7 (5th Cir. 1989) (FDIC as receiver sells assets of failed

bank to FDIC as insurer, acting in its corporate capacity, and

FDIC-Corporate then “attempts to collect on these assets to reduce

loss to the insurance fund”).

       This is unlike the situation in O’Melveny, in which the Court

noted that “[t]he rules of decision at issue here do not govern the

primary conduct of the United States or any of its agents or

contractors, but affect only the FDIC’s rights and liabilities, as

receiver, with respect to primary conduct on the part of private

actors that has already occurred”.            

(emphasis added).    Here, it is the action of the Government agents

and their authority to so act that is at issue, rather than the




                                       10
impact on the FDIC, acting as receiver, of imputing the prior acts

of agents of the failed bank.

     In 

, our court noted that applying

federal law to the appellant’s impairment of collateral defense

would require the creation of a substantive federal common law rule

of decision, which would run contrary to O’Melveny.   But here, the

rule that the Government is not liable for the unauthorized acts of

its agents has been long-established.

     The case at hand is also distinguishable from 

, in which our court emphasized that the FDIC was acting

“in the limited capacity of receiver”.   Again, concerning the Nine

Notes, the FDIC was acting in its corporate capacity as the holder

of those notes.

     Thus, the district court correctly applied federal law to the

issue of whether Bieker and Croteau had authority to enter into a

global settlement.

                                 B.

     The district court held also that Bieker and Croteau lacked

authority to enter into a settlement.    We agree.

     On the cross-motions for summary judgment, the FDIC presented

evidence that all settlements had to be approved by the Credit

Review Committee.    Ferguson presented no evidence that Bieker or

Croteau were given the authority to enter into a global settlement,

but instead based his claims upon their actions.


                                 11
                                     1.

       Because Ferguson asserted affirmative defenses, he would have

had the burden of proving them at trial.           See, e.g., Crescent

Towing & Salvage Co., Inc. v. M/V Anax, 

, 744 (5th Cir.

1994); Fontenot v. Upjohn Co., 

, 1194 (5th Cir. 1986).

And, as stated, the Government is not bound by the unauthorized

acts    of   its   agents.   E.g.,    

(“Government could not be bound by the mistaken representations of

an agent unless it were clear that the representations were within

the scope of the agent’s authority”); 

(“Men

must turn square corners when they deal with the Government”

(quoting Rock Island, A. & L.R. Co. v. United States, 

,

143 (1920)); 

; Rosas v. United States

Small Business Admin., 

, 360 (5th Cir. 1992) (“It is a

familiar tenet of government contracts that the government cannot

be bound by the unauthorized acts of its agents”); United States v.

D’Apice, 

, 78 (5th Cir. 1981) (“It is well established

that the federal government will not be bound by a contract or

agreement entered into by one of its agents unless such agent is

acting within the limits of his actual authority”);Dresser Indus.,

Inc. v. United States, 

, 1236 (5th Cir. 1979); Hicks

v. Harris, 

, 68-69 (5th Cir. 1979); Robinson v. Vollert,

, 94 (5th Cir. 1979); United States v. State of Florida,




                                     12


, 210 (5th Cir. 1973); Posey v. United States, 

, 234 (5th Cir. 1971).

      Thus, to have succeeded at trial, Ferguson would have had to

prove that Bieker and Croteau acted with authority; but, as noted,

on summary judgment, he presented no evidence on this point.

Additionally, at least two other federal court decisions have

recognized that the Credit Review Committee is the only FDIC entity

that can approve settlements.       FDIC v. Royal Park No. 14, Ltd., 

, 641 (5th Cir. 1993) (affirming grant of summary judgment

and   noting   district   court’s   observation   that   Credit   Review

Committee is only entity with authority to approve settlements);

FDIC v. Spain, 

, 243 (W.D. Tex. 1992) (finding that

only Credit Review Committee had authority to settle).        Further,

summary judgment evidence presented by the FDIC shows that the

Credit Review Committee was solely responsible for the approval of

settlements and that it did not approve a global settlement.

                                    2.

      Ferguson also contends that, even if Bieker and Croteau lacked

actual authority to enter into a global settlement, they had

apparent authority to do so, citing Valley Ranch Dev. Co. v. FDIC,

, 554 (5th Cir. 1992), for the proposition that

apparent authority exists if a reasonable person, using diligence

and discretion, would have believed that Bieker and Croteau had the

authority to enter into a global settlement. In support of his


                                    13
apparent authority claim, Ferguson points to the actions of Bieker

and Croteau in negotiating settlements, Croteau’s signing the lien

releases when     the   cover    letter      required     the   signature   of   an

authorized representative, and the FDIC’s failure to communicate to

Ferguson the FDIC’s internal restrictions on the authority of

Bieker and Croteau.

     As discussed, those dealing with agents of the Government risk

that they have accurately determined that the agent is acting

within the bounds of his authority, 

.                Even

assuming   that   the    basis    for        Ferguson’s    apparent    authority

contention is correct as a matter of law, the contention still

fails; he did not present any evidence upon which we can conclude

that a reasonable person, exercising diligence and discretion,

would have believed that Bieker and Croteau had the authority to

enter into a global settlement.

                                    III.

     Because Ferguson conceded at oral argument that the authority

issue is dispositive, and because we conclude that Bieker and

Croteau did not have the requisite settlement authority, the

judgment is

                                                                    AFFIRMED.




                                        14