Olde Towne Tyrone, LLC v. Multibank 2009-1 CRE Venture, LLC
326 Ga. App. 322
| Ga. Ct. App. | 2014Background
- Olde Towne Tyrone, LLC took a $6,140,000 commercial loan from Integrity Bank (note due Jan. 5, 2009); Jeffery V. Curtis guaranteed the loan.
- Olde Towne stopped interest payments in Jan. 2008 and defaulted; Integrity failed Aug. 29, 2008 and the FDIC was appointed receiver.
- FDIC, as receiver, assigned Integrity’s loan portfolio (including Olde Towne’s loan) to Multibank under a Loan Contribution and Sale Agreement.
- Multibank sued Olde Towne and Curtis for breach of the promissory note and guaranty seeking roughly $7.29 million plus fees; defendants raised defenses and sought to add counterclaims tied to Integrity’s conduct.
- Multibank moved for summary judgment, arguing defendants’ defenses/counterclaims were barred by FIRREA’s administrative-exhaustion provision (12 U.S.C. § 1821(d)(13)(D)); the trial court granted summary judgment and denied the motion to add counterclaims.
- On appeal, the court affirmed, holding defendants’ claims/defenses arising from Integrity’s acts were subject to FIRREA exhaustion, that defendants had notice of receivership in time to file administrative claims, and that the Loan Agreement did not bar Multibank from asserting the exhaustion defense.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FIRREA §1821(d)(13)(D) bars defendants’ affirmative defenses and proposed counterclaims arising from Integrity’s conduct | Multibank: defenses/counterclaims arise from Integrity/FIDC acts and thus are jurisdictionally barred unless exhausted administratively | Appellants: defenses are not subject to FIRREA because FDIC failed to give proper notice and Loan Agreement precludes Multibank from invoking §1821(d) | Court: FIRREA imposes an exhaustion/jurisdictional prerequisite; defendants’ claims arise from Integrity’s acts and are barred for failure to exhaust |
| Whether lack of FDIC notice to defendants excuses exhaustion | Multibank: record shows defendants received notice of FDIC receivership in time to file claims | Appellants: they lacked proper notice of the administrative claims process, so exhaustion shouldn't apply | Court: uncontroverted evidence (e.g., an Oct. 1, 2008 FDIC default letter to Curtis) shows timely notice; the exception applies only if claimant didn’t receive notice in time; here it does not |
| Whether the Loan Agreement’s Section 4.15 prevents Multibank from invoking FIRREA exhaustion | Multibank: §1821(d)(13)(D) is a jurisdictional limit courts must enforce regardless of contract language | Appellants: FDIC reserved “rights, powers or privileges” in §4.15 and did not assign them, so Multibank cannot invoke FIRREA protections | Court: §1821(d)(13)(D) is a jurisdictional rule (not an assignable FDIC privilege); contractual reservation does not negate the statute’s effect |
| Whether the trial court erred in denying leave to add counterclaims | Multibank: counterclaims are barred by FIRREA and otherwise fail on the merits | Appellants: should be allowed to add counterclaims tied to Integrity’s conduct | Court: denial affirmed because proposed counterclaims are barred by FIRREA (and, alternatively, lacked merit) |
Key Cases Cited
- Bobick v. Community & Southern Bank, 321 Ga. App. 855 (recognizes FIRREA §1821(d)(13)(D) functions as administrative-exhaustion/ jurisdictional limit and purchasers of failed-bank assets may invoke it)
- Brine v. Shipp, 291 Ga. 376 (explaining subject-matter jurisdiction cannot be conferred by agreement)
- Latin American Property & Cas. Ins. Co. v. Hi-Lift Marina, Inc., 887 F.2d 1477 (11th Cir.) (subject-matter jurisdiction principles)
- Flynt v. Life of the South Ins. Co., 312 Ga. App. 430 (contract should not be construed to render provisions meaningless)