2015 IL App (1st) 132245
Ill. App. Ct.2015Background
- Perik maintained a Chase account governed by a 2006 arbitration agreement that required binding arbitration of all account-related claims, including those arising before account closure.
- WaMu failed on September 25, 2008; the FDIC was appointed receiver and sold assets/liabilities to Chase that same day.
- Perik sued in state court alleging libel per se arising from WaMu’s prereceivership conduct; she later amended to assert the claim against Chase as WaMu’s successor. Chase moved to compel arbitration; the trial court stayed the case and Perik’s appeal (Perik I) affirmed arbitrability.
- Perik filed for arbitration with the AAA against Chase as WaMu’s successor. The arbitrator dismissed the successor claim, concluding FIRREA barred adjudication because Perik had not submitted the prereceivership claim to the FDIC before the FDIC’s bar date.
- Perik moved in circuit court to vacate the arbitration dismissal, arguing (1) AAA improperly appointed the arbitrator and (2) the arbitrator exceeded authority by dismissing under FIRREA. The trial court denied the motion; Perik appealed.
- The appellate court held that because Perik never submitted her prereceivership claim to the FDIC (and the FDIC’s bar date had passed), FIRREA’s administrative-exhaustion and jurisdictional bar deprived the trial court of subject-matter jurisdiction to hear her motion; the court remanded with directions to vacate the judgment and dismiss for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the AAA exceed authority in appointing the arbitrator? | Perik: AAA violated its procedures and ignored her objections to the appointee. | Chase: AAA followed its rules; appointment proper. | Court: Perik failed to prove AAA rule violation; not dispositive because court lacked jurisdiction under FIRREA. |
| Could the arbitrator dismiss the successor claim based on FIRREA? | Perik: Arbitrator lacked authority to dismiss under FIRREA; arbitration directive (Perik I) required proceeding. | Chase: FIRREA bars any forum from adjudicating prereceivership claims not filed with FDIC; dismissal appropriate. | Court: Did not decide arbitrator’s independent authority; held trial court lacked jurisdiction to review because Perik failed FIRREA exhaustion. |
| Could the trial court consider Perik’s motion to vacate despite FIRREA? | Perik: Trial court retained jurisdiction to review arbitration award and AAA proceedings. | Chase: FIRREA deprives courts of jurisdiction over prereceivership claims not presented to FDIC; court must dismiss. | Court: FIRREA’s exhaustion and jurisdictional bar applied; trial court lacked subject-matter jurisdiction and must dismiss. |
| Does Perik I’s affirmance of arbitrability preclude FIRREA jurisdictional defense (law of the case)? | Perik: Perik I implicitly found jurisdiction; law of the case prevents relitigation. | Chase: Perik I decided only arbitrability; it did not decide FIRREA jurisdictional issue. | Court: Perik I did not decide FIRREA issue; law-of-the-case does not bar resolving jurisdiction now (and any implication otherwise would be palpably erroneous). |
Key Cases Cited
- Miller v. Federal Deposit Insurance Corp., 738 F.3d 836 (7th Cir. 2013) (describing FIRREA’s administrative-exhaustion scheme and bar date mechanics)
- Farnik v. Federal Deposit Insurance Corp., 707 F.3d 717 (7th Cir. 2013) (holding FIRREA bars judicial review of claims relating to a failed bank absent exhaustion)
- Benson v. JPMorgan Chase Bank, N.A., 673 F.3d 1207 (9th Cir. 2012) (claims against a successor based on failed bank’s prereceivership acts must be exhausted under FIRREA)
- Interface Kanner, LLC v. JPMorgan Chase Bank, N.A., 704 F.3d 927 (11th Cir. 2013) (remanding for dismissal where FIRREA exhaustion absent and jurisdiction lacking)
- American Nat’l Ins. Co. v. Federal Deposit Insurance Corp., 642 F.3d 1137 (D.C. Cir. 2011) (FIRREA applies to functionally equivalent claims against purchasers of failed-bank assets)
- Armstrong v. Resolution Trust Corp., 157 Ill.2d 49 (Ill. 1993) (Illinois precedent recognizing FIRREA does not preclude all pre-receiver judicial review and explaining limits on state-court jurisdiction)