568 B.R. 543
D.D.C.2016Background
- Wesley Snyder ran a Ponzi scheme through six businesses; homeowners refinanced mortgages and payments were funneled to Snyder; Washington Mutual (WaMu) issued some of those mortgages.
- Snyder’s businesses filed Chapter 7 on September 18, 2007; Lynn Feldman was appointed Chapter 7 trustee the next day.
- WaMu was closed and the FDIC was appointed receiver on September 25, 2008; FDIC published notice and set a December 30, 2008 claims bar date.
- Feldman sent a letter to a former WaMu executive on October 8, 2008 but did not file an administrative claim with the FDIC until August 3, 2009; FDIC disallowed the claim as untimely on September 18, 2009.
- Feldman sued the FDIC in district court on November 16, 2009 asserting avoidance and recovery claims under the Bankruptcy Code; the FDIC moved to dismiss for lack of subject-matter jurisdiction and other grounds.
- The court dismissed for lack of jurisdiction, holding Feldman failed to exhaust FIRREA’s mandatory administrative-claims process and that the late-filing exception did not apply; it also found the bankruptcy-avoidance claims time-barred if tolling did not apply.
Issues
| Issue | Feldman’s Argument | FDIC’s Argument | Held |
|---|---|---|---|
| Whether FIRREA’s administrative-claims process is jurisdictional and requires timely filing before judicial review | Feldman invoked FIRREA to seek de novo review but contended her late-filed claim fit an exception | FDIC argued FIRREA bars judicial review absent timely administrative filing | FIRREA’s process is jurisdictional; timely administrative filing is required prior to district-court review |
| Whether Feldman’s late claim falls within FIRREA’s late-filed-claims exception (12 U.S.C. §1821(d)(5)(C)(ii)) | Feldman argued she was an identifiable claimant entitled to mailed notice (her Oct. 8, 2008 letter) and that she lacked required notice | FDIC argued only publication notice was required here and Feldman was not on the bank’s books or otherwise identified to trigger mailed notice | Exception did not apply: Feldman was not entitled to mailed notice and did not show she lacked actual or inquiry notice; her late claim therefore is disallowed |
| Whether filing the untimely administrative claim tolled the Bankruptcy Code’s limitations (11 U.S.C. §546) | Feldman argued her August 3, 2009 FDIC proof of claim tolled §546 under FIRREA’s tolling provision | FDIC argued tolling only applies if the administrative claim was timely filed | Court held untimely claim cannot toll §546; avoidance claims would be time-barred absent valid tolling |
| Whether trustee’s §550 recovery claim survives without timely avoidance under §§544/547/548 | Feldman maintained §550 permits recovery of avoided transfers | FDIC argued §550 depends on a successful avoidance under other bankruptcy avoidance sections and would fail if those are time-barred | Court: §550 fails if avoidance under §§544/547/548 is untimely; since those are time-barred, §550 claim also fails |
Key Cases Cited
- Freeman v. FDIC, 56 F.3d 1394 (D.C. Cir. 1995) (FIRREA requires exhaustion of administrative claims and untimely claims forfeit judicial review)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (plaintiff bears burden to establish jurisdictional facts)
- Jerome Stevens Pharm., Inc. v. FDA, 402 F.3d 1249 (D.C. Cir. 2005) (court may consider materials outside pleadings on factual jurisdictional challenge)
- Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36 (D.C. Cir. 2000) (distinction between facial and factual Rule 12(b)(1) challenges)
- Al-Zahrani v. Rodriguez, 669 F.3d 315 (D.C. Cir. 2012) (federal courts have limited jurisdiction and must act within statutory grants)
- Nikols v. FDIC, 9 F. Supp. 2d 137 (D. Conn. 1998) (untimely administrative claim does not toll statutes of limitations under FIRREA)