In the Matter of The Liquidation for United American Bank of Knoxville, TN Security Pacific Equipment Leasing, Inc. v. Federal Deposit Insurance

Appellant leased equipment to United American Bank (“UAB”) for a seven year term. Three years into the lease, UAB was closed by the Tennessee Commissioner of Banking and FDIC FILED February 9, 2000 Cecil Crowson, Jr. Appellate Court Clerk 2 was appointed as receiver. Appellant filed a claim with FDIC seeking recovery of the full amount due on the lease. The Trial Court granted summary judgment to FDIC, thus upholding the constitutionality and applicability of T.C.A. § 45-2-1504(b), which provides that lessors can recover a maximum of two months’ lease payments after a Tennessee bank fails and is closed. In this appeal, lessor contends that T.C.A. § 45-2-1504(b) violates the Equal Protection Clauses of the U.S. and Tennessee Constitutions by treating lessors differently from other contract claimants and that the application of the statute results in an unconstitutional taking of its property without due process of law in violation of the Fourteenth Amendment to the U.S. Constitution and Article I, Section 21 of the Tennessee Constitution. For the reasons herein stated, we affirm the judgment of the Trial Court.