Federal Deposit Insurance Corporation v. Hadid

947 F.2d 1153 (1991)

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Nature of the Case

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Facts

P made a loan to Keystone Financial Corporation (Keystone) and P.S. Investment Co., Inc. (P.S. Investment) in 1986. P accepted two promissory notes. In August 1987, P demanded full repayment. The companies suggested the idea of a restructuring by using D, a well-known customer of P, as a guarantor and whose creditworthiness was known. P, therefore, accepted the proposal. The agreed terms for the restructuring of the loans were set forth in two written Renewal and Extension Agreements dated November 30, 1987. The Keystone loan was also secured by a pledge of common stock in McDowell Enterprises, Inc. (McDowell). The deal was completed but the companies eventually default. P sued D. D defended the claims against him by alleging that he should be released from his guarantees because P failed to release to him the McDowell stock that had been pledged to P. D alleged an oral agreement was reached when the Renewal and Extension Agreements were negotiated, that he would be given control over the stock and, if not, his guarantee would be null and void. P denied the accusations. The jury returned a verdict in his favor D. Before trial, P filed a motion in limine seeking a ruling that the parol evidence rule barred D from introducing evidence at trial that P had orally agreed to release the stock to him. P motioned for a judgment notwithstanding the verdict based on parol evidence. The district court granted P's motion finding: 1) that the Renewal and Extension Agreements were fully integrated agreements and 2) that the proffered oral agreement conflicted with the express terms of the written ones. D appealed. P was declared insolvent, and the FDIC was substituted into the action.