Qi v. Federal Deposit Insurance
755 F. Supp. 2d 195
| D.D.C. | 2010Background
- Qi, a pro se plaintiff, sued FDIC as WaMu's receiver for alleged breach of a commercial lease at 1747 Springfield Ave, Maplewood, NJ.
- Lease ran for 10 years starting July 15, 2006, with base rent scheduled per square foot and tenant obligations for maintenance, alterations, and improvements.
- WaMu allegedly demolished a mezzanine without Qi's written consent, potentially affecting the premises and value.
- WaMu failed to obtain Qi's approval for certain improvements per the Workletter; the tenant improvements were funded with a $15,000 allowance and contemplated landlord ownership of improvements at expiration.
- WaMu was closed September 25, 2008; FDIC appointed as receiver and later repudiated the lease on March 29, 2009; Qi's administrative claim for damages was disallowed on December 8, 2009.
- Qi sought various damages including unamortized broker commissions, unamortized tenant improvement credit, mezzanine restoration costs, vacancy damages, taxes during vacancy, and a proposed penalty for repudiation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FIRREA § 1821(e)(4) bars all damages claims. | Qi contends some damages survive as back rent under § 1821(e)(4). | FDIC argues only back rent is recoverable; future rent and non-rent damages are barred. | Covered claims limited to back rent; other damages barred. |
| Are the brokerage commission and tenant improvement credit recoverable as back rent or unpaid rent? | These costs constituted part of consideration for occupancy and thus back/ unpaid rent. | Brokerage and TI credit are not contractual or unpaid rent; they are contingent or non-rent payments. | Not recoverable as back rent or unpaid rent under FIRREA. |
| Can loss of income due to vacancy and property taxes during vacancy be recovered? | Vacancy damages and taxes were incurred due to repudiation and should be recoverable. | FIRREA precludes damages for future rent or lost opportunity; taxes during vacancy are not unpaid rent as of appointment. | Not recoverable under FIRREA. |
| Is the requested any penalty or restoration cost recoverable? | Seeks a property penalty and mezzanine restoration costs as damages. | Penalties are prohibited by § 1821(e)(4)(B)(ii); restoration costs are not back rent. | Penalty and mezzanine restoration costs not recoverable. |
Key Cases Cited
- First Bank Nat'l Ass'n v. FDIC, 79 F.3d 362 (3d Cir.1996) (limits on damages when FDIC repudiates a lease; back rent framework)
- Resolution Trust Corp. v. CedarMinn Bldg. Ltd. P'ship, 956 F.2d 1446 (8th Cir.1992) (broad discretion to disaffirm contracts; orderly administration)
- Ford Motor Credit Corp. v. Resolution Trust Corp., 30 F.3d 1384 (11th Cir.1994) (lessor damages limited to past rent; no future rent recovery)
- Howell v. FDIC, 986 F.2d 569 (1st Cir.1993) (lessor damages limited to past rent; reflects FIRREA limits)
- New Hampshire Assocs. Ltd. P'ship v. FDIC, 978 F.Supp. 650 (D. Md.1997) (FIRREA extinguishes claims except back rent)
- Unisys Fin. Corp. v. Resolution Trust Corp., 979 F.2d 609 (7th Cir.1992) (analysis of back rent vs other damages under FIRREA)
- Pioneer Bank and Trust v. Resolution Trust Corp., 793 F.Supp.828 (N.D. Ill.1992) (rehabilitation costs can be recovered if treated as rent)