Meritage Homes of Nevada, Inc. v. Federal Deposit Insurance
2014 U.S. App. LEXIS 6963
| 9th Cir. | 2014Background
- Meritage filed an administrative claim with the FDIC as receiver for First National Bank of Nevada for services related to Inca and First National; the claim was disallowed for lack of guaranteed obligation documentation.
- Meritage then sued in district court, alleging breach of agreements by First National (via Inca) and that the FDIC, as receiver, was liable for good-faith and debt obligations.
- A default judgment was entered against the FDIC and Inca for $436,357.12 plus interest, stating the FDIC as receiver assumed First National’s liabilities but not specifying payment form.
- The FDIC provided a receiver’s certificate to Meritage in satisfaction of the judgment; Meritage moved to strike the Satisfaction, or in the alternative seek cash payment or summons to third parties Rescon and Stearns; the district court denied these motions, and Meritage appealed.
- The Ninth Circuit affirmed, holding the receiver’s certificate could satisfy the judgment and, under Nevada law NR.S. 17.030, the district court did not clearly err in denying summons to Rescon and Stearns; standards of review were clarified for abuse of discretion and clear error.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the receiver’s certificate satisfied the judgment against the FDIC | Meritage argues cash payment, not a certificate, is required | FDIC argues certificate properly satisfies judgment per controlling precedent | Yes; certificate satisfied the judgment |
| Standards of review for Meritage’s Motion to Strike | Meritage disputes the correct standard and seeks cash or summons | FDIC contends motion is governed by abuse of discretion as amended judgment | Abuse of discretion applies (motion to strike is effectively a review to amend the judgment) |
| Standards of review for denying summons to Rescon and Stearns | Meritage relied on NR.S. § 17.030 to compel summons | District court had discretion; no mandatory summons | District court did not commit clear error; summons not mandatory |
| Whether Sharpe controls on this case | Sharpe requires different treatment due to pre-receivership contract breach | Sharpe not controlling because Meritage was a creditor of the FDIC here | Sharpe not controlling; district court correct on this point |
Key Cases Cited
- Battista v. FDIC, 195 F.3d 1113 (9th Cir. 1999) (FDIC may pay creditors with receiver’s certificates, not cash)
- Resolution Trust Corp. v. Titan Financial Corp., 36 F.3d 891 (9th Cir. 1994) (A recipient may be paid with a receiver’s certificate, not cash)
- Midlantic Nat’l Bank/North v. Fed. Reserve Bank of N.Y., 814 F. Supp. 1195 (S.D.N.Y. 1993) (Money judgment; receiver’s certificate equals full amount; aids equitable distribution)
- Sharpe v. FDIC, 126 F.3d 1147 (9th Cir. 1997) (Plaintiffs not creditors when pre-receivership breach; not controlling here)
- McCarthy v. FDIC, 348 F.3d 1075 (9th Cir. 2003) (Confirms Sharpe limited scope;Sharpe not controlling in this case)
- United States v. Jose, 131 F.3d 1325 (9th Cir. 1997) (IRS summons; standard of review for summons enforcement)