USCA1 Opinion
NOT FOR PUBLICATION
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UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 96-1448
FEDERAL FINANCIAL GROUP, INC.,
Plaintiff, Appellee,
v.
CHARLES E. SERRA, JR.,
a/k/a CHARLES SERRA, JR.,
Defendant, Appellant.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Joyce L. Alexander, U.S. Magistrate Judge]
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Before
Boudin, Circuit Judge,
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Bownes, Senior Circuit Judge,
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and Skinner,* Senior District Judge.
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Robert H. Greene for appellant.
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Carolyn McAboy with whom John A. Doonan and Doonan & Graves were
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on brief for appellee.
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November 15, 1996
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*Of the District of Massachusetts, sitting by designation.
Per Curiam. Although the transactions underlying this
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appeal are complicated, the central events may be simply
described. In 1985, defendant in the district court, Charles
Serra, bought two trucks, borrowing the funds from the Bank
of New England and using the trucks as collateral. In
October 1986, in a transaction apparently conducted by
Serra's agent, who managed the trucks, the notes were rolled
over and new notes were issued with some changes in terms.
There was a default on the notes. Serra now claims that the
agent did not have authority to roll over the notes.
In the meantime, the trucks have been sold by the bank.
The present suit by a successor to the bank's interest is for
the deficiency. In the district court, the magistrate judge
granted summary judgment for the plaintiff. On appeal, Serra
claims that the action was time-barred, that he is not liable
on the assertedly unauthorized new notes, and that the sale
of the trucks was not commercially reasonable. Our review is
de novo, and we draw factual inferences in Serra's favor.
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Grenier v. Vermont Log Bldgs., Inc., 96 F.3d 559, 562 (1st
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Cir. 1996).
The statute of limitations claim is easily resolved.
The four-year statute of limitations relied upon by the
defendant does not apply to this promissory note secured by a
chattel mortgage, because it is not a transaction in goods.
See, e.g., Universal Underwriters Ins. Co. v. Ross, 1991
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Mass. App. Div. 23, 25 (Mass. Dist. Ct. 1991). As to whether
the six-year or twenty-year statutory period applies, we need
not decide the question because both cover the present claim.
Either one was still running when the FDIC assumed
receivership in January 1991, extending the limitations
period by an additional six years pursuant to 12 U.S.C.
1821(d)(14).
Turning to the validity of the new notes, Serra's denial
of his agent's authority to make them rests in some measure
on alleged unwritten limitations on the written power of
attorney used by the agent, which was presumably made
available to the bank at the time of refinancing. The
district court magistrate disregarded these limitations,
relying on D'Oench, Duhme & Co. v. FDIC, 315 U.S. 447 (1942)
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and its statutory counterpart, 12 U.S.C. 1823(e)(1).
We see no reason to pursue the interesting question of
whether and how far D'Oench, Duhme applies to secret
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agreements that were not made with a bank but which may
affect a document that the bank relied on. It is not at all
clear that the power of attorney authorized the agent to
execute both of the new notes. Thus, even if the written
power of attorney were read literally, without giving any
weight to the alleged unwritten limitations, it might not
show that Serra's agent did have authority to roll over both
notes.
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However, we see no need to remand for further
proceedings to determine the agent's actual authority or to
consider claims of apparent authority or estoppel, both of
which would require more factual development. If the notes
were rolled over by mistake or without authority, it is
nevertheless the case that Serra benefited directly because
the cancellation of the old notes discharged his debt. To
allow Serra to escape liability on the new notes would be a
patent case of unjust enrichment.
This principle is established in Massachusetts, and its
application to erroneous bank transactions is plain. See,
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e.g., FDIC v. Csongor, 464 N.E.2d 942, 945-46 (Mass. 1984);
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National Shawmut Bank of Boston v. Fidelity Mutual Life Ins.
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Co., 61 N.E.2d 18, 22 (Mass. 1945); see also Restatement of
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Restitution 1 (1937). Unjust enrichment was pleaded in the
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complaint and nothing in the record suggests any possible
answer to the claim. As the terms of the new notes are more
favorable to Serra, their enforcement--rather than any effort
to revive the original notes--works in Serra's favor.
Finally, it is true that deficiencies in notice required
the plaintiff to show, pursuant to Shawmut Bank, N.A. v.
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Chase, 609 N.E.2d 479, 483 (Mass. App. Ct.), aff'd, 624
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N.E.2d 541 (Mass. 1993), that the professionally conducted
auction at which the trucks were sold was commercially
reasonable. But we agree with the appraisal of the
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magistrate judge in concluding that such a showing had been
made. See Nadler v. Baybank Merrimack Valley, N.A., 733 F.2d
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182, 183-84 (1st Cir. 1984). Serra has been imaginatively
defended but his liability is clear.
Affirmed.
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