Kessler v. Multibank 2009-1 CRE Venture LLC

The D'Oench Duhme doctrine provides that oral agreements between debtors and failed banks are not enforceable against the FDIC or its successors.

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

This Court granted an application filed by defendants Jay Kessler and Kenneth Seitz seeking interlocutory review of trial court orders granting a motion to sever certain cross-claims and third-party claims made in their defense. The motion to sever was filed by plaintiff Multibank 2009-1 CRE Venture, LLC “Multibank” in Multibank’s suit against the defendants on a guaranty of a note. After thorough consideration of the entire record, we conclude that the trial court did not abuse its discretion by granting the motion to sever. Accordingly, we find that the application for discretionary appeal was improvidently granted, and we dismiss the appeal.

The instant dispute is based on guaranties made by Kessler and Seitz in connection with a loan made by Multibank’s predecessor1 to Boden, LLC, a company formed to acquire and develop certain real property. After Boden defaulted on the loan, Multibank sued Boden, Delman Creviston a co-investor in Boden, Kessler, and Seitz to collect on their guaranties. In response, Seitz and Kessler answered and asserted counter-claims against Multibank, cross-claims against Creviston, and third party claims against other individuals and entities. Seitz and Kessler’s claims all stem from allegations that they were induced to invest in Boden and guaranty the loans as a result of fraud on the part of several people including their co-investors and Multibank. Specifically, they alleged that Creviston and others concealed the existence of an unrecorded easement that prevented the property from being developed as planned. They also argue that an employee of Multibank’s predecessor orally “vouched” for Creviston’s credibility, which helped persuade them to invest in Boden and enter into the guaranty.

Kessler v. Multibank 2009-1 CRE Venture LLC

The D'Oench Duhme doctrine provides that oral agreements between debtors and failed banks are not enforceable against the FDIC or its successors.

Share with Email

Thank you for sharing!

Trending Stories

More From ALM

Subscribe to Daily Report