Tellado v. IndyMac Mortgage Services
2013 U.S. App. LEXIS 2817
| 3rd Cir. | 2013Background
- IndyMac Bank, FSB loaned to Jose and Maria Tellado; closing conducted with English documents while Tellados’ communications were Spanish.
- IndyMac later failed and FDIC became receiver; loan transferred to OneWest Bank under a Master Purchase Agreement.
- Tellados notified IndyMac/OneWest of cancellation in August 2009, asserting UTPCPL due to language mismatch between English documents and Spanish oral discussions.
- District Court held UTPCPL governed the transaction and that cancellation could be effective because IndyMac failed to provide Spanish-language notice; ordered OneWest to refund payments and terminate the lien.
- District Court later imposed a $10,000 penalty under Rule 16(f)(1)(C) for OneWest’s CEO not appearing at trial; penalty imposed without separate notice or hearing.
- OneWest appeals challenging subject-matter jurisdiction and the penalty order; Tellados seek reversal of the district court’s rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FIRREA bars jurisdiction over Tellados’ claim against OneWest | Tellados contend OneWest is liable for IndyMac’s act; FIRREA blocks claims against the FDIC receiver’s purchases. | OneWest argues the claim is relation to IndyMac’s act and is barred under 12 U.S.C. §1821(d)(13)(D)(ii). | Yes; FIRREA bars jurisdiction over the claim against OneWest as functionally against the failed bank. |
| Whether the $10,000 penalty was proper given lack of notice | Penalty tied to CEO’s absence; district court had jurisdiction to sanction. | Penalties require notice and a hearing; no notice/hearing on penalty. | Penalty must be reversed due to lack of due process; cannot stand. |
Key Cases Cited
- Benson v. JPMorgan Chase Bank, N.A., 673 F.3d 1207 (9th Cir. 2012) (FIRREA exhaustion and claims against FDIC receivership)
- Nat. Union Fire Ins. Co. of Pittsburgh v. City Savings, F.S.B., 28 F.3d 376 (3d Cir. 1994) (statutory exhaustion under FIRREA §1821(d)(13)(D))
- Rosa v. Resolution Trust Corp., 938 F.2d 383 (3d Cir. 1991) (interpretation of 1821(d)(13)(D) exhaustion)
- Village of Oakwood v. State Bank & Trust Co., 539 F.3d 373 (6th Cir. 2008) (claims against purchasing bank related to FDIC acts barred by FIRREA)
- American National Insurance Co. v. FDIC, 642 F.3d 1137 (D.C. Cir. 2011) (claims against purchasing bank barred by FIRREA)
- Willy v. Coastal Corp., 503 U.S. 131 (1992) (distinguishes civil contempt from Rule 11 sanctions in jurisdictional contexts)
- In re Orthopedic “Bone Screw” Prod. Liab. Litig., 132 F.3d 152 (3d Cir. 1997) (sanctions proceedings in absence of jurisdiction; docket control)
- Newton v. A.C. & S., Inc., 918 F.2d 1121 (3d Cir. 1990) (due process in civil contempt sanctions)
- Olcott v. Delaware Flood Co., 76 F.3d 1538 (10th Cir. 1996) (sanctions under Rule 16 similar to Rule 11 sanctions)