Interface Kanner, LLC v. JP Morgan CHase Bank, N.A.
2013 U.S. App. LEXIS 715
11th Cir.2013Background
- Interface leased vacant Martin County property to WaMu, which failed and transferred assets to the FDIC; JPMorgan later acquired some WaMu assets under FIRREA via a P&A Agreement.
- P&A Agreement states it is for the exclusive benefit of the Receiver, the Corporation, and JPMorgan; it disclaims third-party beneficiaries except as otherwise provided.
- JPMorgan elected not to assume the Lease within ninety days; the FDIC retained the Lease as a liability and later disaffirmed it on March 23, 2009.
- Interface sued JPMorgan for breach/repudiation/abandonment of the Lease; the FDIC intervened with declaratory relief claims seeking to shield itself from liability and damages.
- District court granted JPMorgan summary judgment, denied Interface summary judgment, and granted FDIC declaratory relief; Interface appealed.
- This court vacates and remands with instructions to dismiss for lack of subject matter jurisdiction, holding Interface lacks standing as a federal common law non-party beneficiary and that the district court lacked jurisdiction for declaratory relief absent FIRREA exhaustion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Interface have standing to sue JPMorgan for breach of the Lease? | Interface is an intended third-party beneficiary of the P&A Agreement. | Interface lacks standing under federal common law; not an intended beneficiary. | Interface lacks standing; not an intended beneficiary; district court vacated and remanded for dismissal. |
| Can the district court grant declaratory relief against the FDIC without FIRREA exhaustion? | FDIC should be liable for damages, and declaratory relief is proper. | FIRREA exhaustion required before court could adjudicate post-receivership claims. | District court lacked jurisdiction to grant declaratory relief absent administrative exhaustion; vacated. |
Key Cases Cited
- National Parks Conservation Ass'n v. Norton, 324 F.3d 1229 (11th Cir. 2003) (vacate summary judgment when standing lacks jurisdiction)
- Bochese v. Town of Ponce Inlet, 405 F.3d 964 (11th Cir. 2005) (standing as threshold jurisdictional issue)
- GECCMC v. JPMorgan Chase Bank, N.A., 671 F.3d 1027 (9th Cir. 2012) (no enforceable rights for landlord absent clear intent to benefit third party)
- Montana v. United States, 124 F.3d 1269 (Fed. Cir. 1997) (beneficiary must be clearly intended to benefit to enforce contract)
- Beckett v. Air Line Pilots Ass’n, 995 F.2d 280 (D.C. Cir. 1993) (clear intent required for third-party beneficiary status)
- Wichita Falls Office Assocs. v. Banc One Corp., 40 F.3d 384 (5th Cir. 1994) (language about exceptions not sufficient to create intended beneficiary)