GECCMC 2005-C1 Plummer Street Office Ltd. Partnership v. JPMorgan Chase Bank
2012 U.S. App. LEXIS 1866
9th Cir.2012Background
- WaMu failed in September 2008; FDIC appointed receiver under FIRREA.
- P&A Agreement with Chase memorialized transfer of WaMu assets and liabilities, including leases.
- GE, as current landlord of Oakdale and Plummer Leases, claims Chase assumed leases under P&A.
- Chase notified GE of non-assumption for Plummer; no clear notice for Oakdale initially.
- FDIC disaffirmed both leases; GE sued Chase for breach and sought enforcement under P&A.
- District court dismissed GE for lack of standing as a non-party; GE appealed with FDIC intervention.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is GE an intended third-party beneficiary of the P&A Agreement? | GE argues 13.5 and 2.1 create rights for GE. | Chase/FDIC contend 13.5 prohibits third-party rights; 2.1 not specific enough. | GE is not an intended third-party beneficiary. |
| What governing law applies to contract interpretation? | California law should apply as chosen by contract terms, given no federal focus on GE. | Federal common law applies for contracts under federal statutes and FACE purpose. | Federal common law applies. |
| Does 13.5's no third-party beneficiary clause bar GE despite 2.1? | Opening clause creates exception to no-third-party limitation via 2.1. | No clear intent to confer GE rights; 2.1 does not specify GE rights. | No, GE lacks enforceable third-party rights. |
| Does FIRREA framework affect GE's ability to enforce rights under P&A? | GE's position would not disrupt FIRREA's objectives. | Allowing GE to sue would impede FIRREA's efficiency and asset preservation. | FIRREA objectives support denial of GE rights under P&A. |
| What is GE's available remedy for losses linked to the failed bank? | GE should be able to recover under P&A as landlord. | Remedies against FDIC in D.C. district court are proper; not under P&A. | Remedies against FDIC, not GE's claims under P&A. |
Key Cases Cited
- Chickaloon-Moose Creek Native Ass'n, Inc. v. Norton, 360 F.3d 972 (9th Cir. 2004) (federal law governs federal-contract interpretation when federal party is involved)
- Smith v. Cent. Ariz. Water Conservation Dist., 418 F.3d 1028 (9th Cir. 2005) (strong 'clear intent' requirement for government-contract third-party beneficiaries)
- Klamath Water Users Prot. Assoc. v. Patterson, 204 F.3d 1206 (9th Cir. 1999) (beneficiaries must show clear intent beyond incidental benefit)
- Orff v. United States, 358 F.3d 1137 (9th Cir. 2004) (government contracts require a strict showing of intended beneficiaries)
- Cnty. of Santa Clara v. Astra USA, Inc., 588 F.3d 1237 (9th Cir. 2009) (federal-policy-aligned contract interpretation in government contexts)
- Astra USA, Inc. v. Santa Clara Cnty., 131 S. Ct. 1342 (2011) (Supreme Court framing of government-contract beneficiaries)
- National Union Fire Ins. Co. of Pittsburgh, Pa. v. City Sav., F.S.B., 28 F.3d 376 (3d Cir. 1994) (implications of FIRREA on third-party beneficiary disputes)
- McCarthy v. FDIC, 348 F.3d 1075 (9th Cir. 2003) (FDIC powers under FIRREA and efficiency in resolution)
- Ins. Co. of North Am. v. Fed. Express Corp., 189 F.3d 914 (9th Cir. 1999) (federal common law tethered to federal policy)