[PUBLISH] In the United States Court of Appeals For the Eleventh Circuit

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No. 20-13735 ____________________

LANDCASTLE ACQUISITION CORP., Plaintiff-Appellee, versus RENASANT BANK,

Defendant-Appellant.

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Appeal from the United States District Court for the Northern District of Georgia D.C. Docket No. 2:17-cv-00275-RWS ____________________ USCA11 Case: 20-13735 Document: 59-1 Date Filed: 01/12/2023 Page: 2 of 126

2 Opinion of the Court 20-13735

Before WILLIAM PRYOR, Chief Judge, GRANT, and HULL, Circuit Judges. HULL, Circuit Judge: This case arises out of the insolvency of the Crescent Bank and Trust Company (“Crescent”) and the conduct of its customer- lawyer Nathan Hardwick, a manager of his law firm, Morris Hardwick Schneider, LLC (“Hardwick law firm”). In 2009, Crescent, a Georgia bank, made Hardwick a loan for $631,276.71. Hardwick, as his law firm’s manager, signed a security agreement that pledged, as collateral, his law firm’s certificate of time deposit (“CD”) for $631,276.71. So far, all looked hunky-dory, or facially valid in legal speak. For five years, Hardwick’s loan remained current. When Crescent failed, the Federal Deposit Insurance Corporation (“FDIC”), as receiver, took over and sold Hardwick’s loan and CD collateral to Renasant Bank. Hardwick then made loan payments to Renasant, and Renasant held the CD collateral. When Hardwick defaulted in 2014, the security agreement permitted Renasant to liquidate the CD collateral to pay the loan balance, which Renasant did. Renasant notified the Hardwick law firm of the loan default and CD liquidation but received no response—much less any objection—from the law firm. Eventually, Hardwick’s and his law firm’s financial troubles caught up with them. The law firm filed for bankruptcy, and Hardwick was convicted of wire and financial fraud. See United USCA11 Case: 20-13735 Document: 59-1 Date Filed: 01/12/2023 Page: 3 of 126

20-13735 Opinion of the Court 3

States v. Maurya, 25 F.4th 829, 835 (11th Cir. 2022). The bankrupt law firm had countless creditors, including plaintiff Landcastle Acquisition Corporation (“Landcastle”), which was assigned the law firm’s potential claims against others. 1 In 2017, Landcastle sued Renasant (as successor to the FDIC and Crescent), claiming Renasant was liable for $631,276.71, the CD amount. Landcastle’s lawsuit seeks to invalidate the Hardwick law firm’s security agreement. That security agreement is unconditional and facially valid. But Landcastle alleges that Hardwick, the law firm’s agent and manager, lacked authority to pledge its CD as collateral. In its attempt to invalidate the security agreement, Landcastle introduces and relies on the law firm’s corporate records and testimony. Landcastle’s evidence thus comes from outside the failed bank’s records. This case requires us to apply federal law developed from a combination of federal common law and a statute, known collectively as the “D’Oench doctrine.” Se