Federal Deposit Insurance v. Kime
12 F. Supp. 3d 1113
S.D. Ind.2014Background
- FDIC sued as Receiver for Irwin Union Bank and Trust Co. and Irwin Union Bank, FSB for alleged negligent lending losses exceeding $42 million.
- Defendants were four bank officers who reportedly approved loans between 2003 and 2009.
- Alleged misconduct includes violations of lending policies, poor underwriting, and failure to obtain adequate collateral or review financial records.
- A Tolling Agreement extended statutes of limitations and the FDIC sought relief under FIRREA and Indiana law; Waters allegedly terminated tolling in 2013.
- FDIC filed the complaint on May 13, 2013, and moved under Rule 12(b)(6); the court denied the motion in part and proceeded with analysis.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FIRREA Extender Statute tolls the limitations period. | FDIC contends tolling agreement remains enforceable; equitable estoppel remains available. | Defendants argue FIRREA not tolled by contracts; tolling either invalid or not equitable. | Equitable estoppel prevents dismissal at this stage; tolling may apply, unresolved on summary judgment. |
| Whether any claims expired under Indiana law before FIRREA appointment. | FDIC argues accrual and discovery rules delay accrual date; tolling preserves claims. | Defendants contend state-law accrual bars some loans prior to appointment. | Accrual date is fact-specific; denial of dismissal on limitations grounds is appropriate; summary judgment needed for tolling specifics. |
| Whether Count II states a plausible gross-negligence claim under Indiana law. | FDIC plausibly alleges officers breached duties and acted with reckless disregard. | Defendants argue lack of plausible basis or misapplication of standard. | Count II plausibly states gross negligence under Indiana standard; survives Rule 12(b)(6). |
| Whether Count III for breach of fiduciary duties is plausible or duplicative of Count I. | FDIC pleads three alternatives; seeks relief under multiple theories. | Count III duplicates Count II and/or fails to plead unconscionable-advantage theory. | Count III plausibly pled as an alternative theory; not dismissible as duplicative at this stage. |
Key Cases Cited
- Wehling v. Citizens Nat'l Bank, 586 N.E.2d 840 (Ind. 1992) (injury and ascertainable damages timing; accrual requires identifiable injury)
- Shideler v. Dwyer, 275 Ind. 270, 417 N.E.2d 281 (Ind. 1981) (not clearly applicable; accrual timing fact-specific)
- Madlem v. Arko, 592 N.E.2d 686 (Ind. 1992) (disfavored Shideler extension; accrual tied to attempted foreclosure event)
- Barry Aviation, Inc. v. Land O’Lakes Mun. Airport Comm’n, 377 F.3d 682 (7th Cir. 2004) (statute of limitations issues on motion to dismiss)
- Brooks v. Ross, 578 F.3d 574 (7th Cir. 2009) (proper timing for addressing statute-of-limitations on a motion to dismiss)
- Cada v. Baxter Healthcare Corp., 920 F.2d 446 (7th Cir. 1990) (equitable estoppel under federal limitations context)