Placida Professional Center, LLC v. Federal Deposit Insurance
512 F. App'x 938
11th Cir.2013Background
- FDIC, as receiver for Freedom Bank, repudiated Placida's Construction Loan Agreement under FIRREA §1821(e).
- Placida filed for declaratory relief and repudiation damages; district court dismissed declaratory relief under §1821(j), awarded damages and fees, and allowed setoff.
- FDIC appealed setoff and fees; Placida appealed dismissal of declaratory relief and Daubert-related expert exclusion.
- Contracted loan: $3.28M Construction Loan, Note, and Mortgage; interest reserve and draws; project completed; FDIC repudiated after receivership began (Oct–Nov 2008).
- FDIC later transferred the Placida loan (and Fruitville loan) to Multibank; suit proceeded in district court; court later held declaratory relief proper under §1821(d)(6), disallowed setoff against other debts under §1821(d)(11), and vacated fee award; expert testimony partially excluded.
- The panel remanded for proceedings consistent with its opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do Placida’s declaratory-judgment claims survive §1821(j) and fall within §1821(d)(6) review? | Placida exhausted claims administratively and seeks de novo review. | §1821(j) bars injunctive/declaratory relief; review must occur via administrative channel. | Yes; §1821(d)(6) provides de novo review and §1821(j) does not strip that jurisdiction. |
| Is the repudiation-damages setoff against other FDIC-recoveries permissible under FIRREA §1821(d)(11)? | Setoff should be permitted to equate damages with money owed. | Setoff would violate the statutory priority scheme for distributing receivership assets. | No; setoff violates the priority scheme of §1821(d)(11) and may not be used to pay damages in cash. |
| Are Placida’s contractual attorneys’ fees recoverable by §57.105(7) reciprocity or contract terms? | Fees should be recoverable under reciprocal statute and contract. | No prevailing-party fee provision in Note/Mortgage; §57.105(7) cannot broaden contract terms. | No; fees not recoverable under the Note/Mortgage provisions or reciprocal statute. |
| Did the district court abuse in excluding part of Placida’s expert testimony without a Daubert hearing? | Daubert hearing unnecessary; Placida had opportunity to lay foundation. | District court did not abuse discretion in excluding the discounted testimony. | No abuse; Placida had adequate opportunity to lay foundation and failed to do so. |
| Does transfer to Multibank affect Placida’s declaratory-judgment claim or require joinder/substitution? | Transfer status should not bar review; need clarity on successor liability. | Transfer may complicate or moot relief and implicates Rule 25 substitutions. | Remand to address transfer status and potential substitution/joining of Multibank. |
Key Cases Cited
- Bank of America v. Colonial Bank, 604 F.3d 1239 (11th Cir. 2010) (FDIC powers and §1821(j) issues; de novo review available under §1821(d)(6) when administrative claims exhausted)
- Freeman v. Federal Deposit Insurance Corp., 56 F.3d 1394 (D.C. Cir. 1995) (due process considerations in FIRREA; administrative review and de novo review can be compatible)
- Battista v. Federal Deposit Insurance Corp., 195 F.3d 1113 (9th Cir. 1999) (repudiation damages subject to FIRREA §1821(d)(11) distribution; receivership certificates as payment)
- RPM Investments, Inc. v. Resolution Trust Corp., 75 F.3d 618 (11th Cir. 1996) (broad scope of §1821(j) for equitable claims; administrative exhaustion context)
- Hudson United Bank v. Chase Manhattan Bank of Conn., 43 F.3d 843 (3d Cir. 1994) (concurrent scope of administrative claims procedures with 1821(d); jurisdictional considerations)
- National Union Fire Ins. Co. v. City Sav., F.S.B., 28 F.3d 376 (3d Cir. 1994) (declaratory relief and administrative claims procedures; concurrent jurisdictional framework)