Federal Deposit Insurance v. US Titles, Inc.
939 F. Supp. 2d 30
D.D.C.2013Background
- FDIC, as AmTrust Bank’s receiver, sues US Titles for breach of Closing Instructions in a DC real estate closing.
- Closing Instructions required Closing Agent to detect and report fraud, ensure funds traceability, and disclose material facts.
- US Titles allegedly ignored these duties, allowed a sham Salazar loan closing to proceed, and misrepresented the HUD-1.
- Salazar’s loan closed in DC; AmTrust funded most of loan; FDIC became receiver after AmTrust’s failure.
- Closing occurred via a third-party purchaser/escrow arrangement; FDIC alleges causal link between breach and loan losses.
- FDIC filed December 2012 suit; US Titles moved to dismiss for lack of jurisdiction, timeliness, and failure to state a claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court has specific personal jurisdiction over US Titles | FDIC contends contract- and transaction-based contacts with DC allow jurisdiction | US Titles argues insufficient DC contacts tied to claim | Yes, specific jurisdiction found under DC long-arm statute and due process |
| Whether the statute of limitations bars the FDIC claim | FDIC argues 6-year limit under 12 U.S.C. § 1821(d)(14) applies | 3-year limitation for breach of contract applicable | No; 6-year accrual from receiver appointment applies, timely |
| Whether FDIC sufficiently states a claim for breach of contract | Closing Instructions created enforceable contract benefiting lender AmTrust | Closing Instructions lack consideration; closing instructions cannot Congress contract | Yes; allegations show consideration/benefit to lender and causation to damages |
Key Cases Cited
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (purposeful availment and connection to forum must exist for jurisdiction)
- McGee v. International Life Ins. Co., 355 U.S. 220 (1957) (substantial connection may satisfy due process in contract cases)
- Helmer v. Doletskaya, 393 F.3d 201 (D.C. Cir. 2004) (place of contracting is not controlling; negotiations and performance matter)
- Creighton Ltd. v. Gov’t of Qatar, 181 F.3d 118 (D.C. Cir. 1999) (place of contracting and performance inform jurisdictional analysis)
- Mouzavires v. Baxter, 434 A.2d 988 (D.C. 1981) (transacting business within DC sufficient for long-arm scope)