National Credit Union Administration Board v. Jurcevic
867 F.3d 616
| 6th Cir. | 2017Background
- Stan and Bara Jurcevic opened joint accounts at St. Paul Croatian Federal Credit Union; Stan obtained over $1.5 million in share‑secured personal loans from 1996–2010 and owed about $1.7 million.
- Federal auditors uncovered a bribery and loan‑issuance scheme by St. Paul’s COO, revealing the credit union’s insolvency; the National Credit Union Administration Board (the Board) placed St. Paul in conservatorship and later liquidated it.
- The Board, as liquidating agent, sued Stan and Bara Jurcevic and Stack Container Service alleging fraud, conspiracy, conversion, loan defaults, and unjust enrichment; it obtained and twice renewed a preliminary asset freeze on the Jurcevics and Stack (except for living expenses).
- The district court dismissed the Board’s fraud, conspiracy, and conversion claims as time‑barred under 12 U.S.C. § 1787(b)(14) and dismissed unjust enrichment claims against Bara and Stack as inadequately pleaded; it left loan‑default and unjust enrichment claims against Stan.
- The Sixth Circuit affirmed the asset freeze, reversed the dismissal of unjust enrichment against Bara and Stack, and remanded the tort statute‑of‑limitations issue for the district court to address accrual under the discovery rule and Jurcevic’s burden to prove untimeliness.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of preliminary asset freeze under 12 U.S.C. § 1787(b)(2)(G) | Board: freeze permitted under §1787 and Rule 65 (as modified by statute) to preserve assets for recovery | Jurcevic: freeze abused discretion; requires showing of fraud or irreparable harm and denied evidentiary hearing | Affirmed: court properly balanced modified Rule 65 factors (likelihood of success, harm to Board, harm to defendant, public interest); hearing adequate; no statutory fraud requirement |
| Whether §1787(b)(14) statute of limitations barred fraud, conversion, conspiracy claims | Board: claims timely if accrual under discovery rule is after conservator appointment or within state period; burden on defendant to prove untimeliness | Jurcevic: claims time‑barred because filed more than 4 years after appointment of Board (date‑of‑appointment start) | Vacated dismissal on statute grounds and remanded: district court erred by only considering date‑of‑appointment and misplacing burden; must consider accrual (discovery rule) and defendant’s burden to prove untimeliness |
| Sufficiency of unjust enrichment claims against Bara Jurcevic and Stack Container | Board: complaint plausibly alleges benefit conferred, knowledge, unjust retention, and harm | Jurcevic/Stack: claims insufficiently pleaded as to Bara/Stack | Reversed dismissal: unjust enrichment adequately pleaded at pleading stage; claims survive |
| Effect of bankruptcy discharge on injunction/mootness | Jurcevic: bankruptcy discharge moots asset freeze and undermines Board’s claims | Board: discharge may not bar fraud‑based exceptions; appeal remains viable | Rejected mootness argument: appeal remains relevant; bankruptcy issues distinct and may depend on whether claims are fraud‑based |
Key Cases Cited
- Luis v. United States, 136 S. Ct. 1083 (2016) (concerning limits on pretrial restraints on assets and access to counsel)
- Brown v. Felsen, 442 U.S. 127 (1979) (bankruptcy discharge and exceptions for fraud)
- Flight Options, LLC v. Int’l Bd. of Teamsters, Local 1108, 863 F.3d 529 (6th Cir. 2017) (preliminary injunction factors are not strict prerequisites)
- Leary v. Daeschner, 228 F.3d 729 (6th Cir. 2000) (standards for preliminary injunction review)
- Washington v. Reno, 35 F.3d 1093 (6th Cir. 1994) (application of Rule 65 factors in similar contexts)
- Hunter v. Hamilton County Bd. of Elections, 635 F.3d 219 (6th Cir. 2011) (abuse‑of‑discretion review framework)
- FDIC v. Garner, 125 F.3d 1272 (9th Cir. 1997) (rejecting a requirement that injunctions under similar statutes be limited to fraud cases)
- Cataldo v. U.S. Steel Corp., 676 F.3d 542 (6th Cir. 2012) (burden on defendant to show claim are time‑barred at pleading stage)
- Andersons, Inc. v. Consol, Inc., 348 F.3d 496 (6th Cir. 2003) (elements of unjust enrichment claim)