Wells v. Federal Deposit Insurance Corporation
6:11-cv-01271
| D. Kan. | May 24, 2012Background
- Foreclosure on 400 Forest Ave, Salina, Kansas by Security Savings Bank, F.S.B. (SSB) in May 2008; SSB held first mortgage, CNB held second.
- Property was auctioned in November 2008; Lonnie Wilson/Lloyds of Kansas, LLC purchased the property.
- In February 2009, CNB assigned its redemption rights to the Wells; district court initially found redemption valid but then reconsidered and denied it; Wells appealed.
- FDIC became named receiver for SSB after FDIC was substituted in the appeal; Kansas Court of Appeals concluded it lacked jurisdiction due to substitution.
- Wells filed a federal action September 2, 2011 seeking relief under 12 U.S.C. § 1821(d)(6); FDIC issued a Notice of Disallowance of Claim July 5, 2011.
- Kansas Supreme Court later denied review; court below dismissed Wells’ federal action, holding res judicata and collateral estoppel apply and jurisdiction is lacking.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does res judicata bar Wells' federal action against Lloyds and Wilson? | Wells asserts a final merits judgment exists; claim should not be relitigated. | Lloyds/Wilson argue prior state court judgment precludes relitigation. | Partially; res judicata not bar Wells' claims against Lloyds and Wilson. |
| Does collateral estoppel bar Wells' claims against FDIC, Lloyds, and Wilson? | Wells contend no issue was actually decided in prior action. | Defendants argue prior state court decision resolved the relevant issue and is binding. | Yes; collateral estoppel bars Wells' claims against FDIC, Lloyds, and Wilson. |
| Is the case within federal subject-matter jurisdiction under § 1821(d)(6) or barred by Rooker-Feldman/other doctrines? | Plaintiff argues federal review of FDIC decision is proper; seeks judicial relief on redemption. | Court should not review state-court rulings; lacks jurisdiction; relief sought not within §1821(d)(6). | Court lacks jurisdiction; even if jurisdiction existed, collateral estoppel would bar the action. |
Key Cases Cited
- Allen v. McCurry, 449 U.S. 90 (1980) (elements of res judicata require final judgment on merits, same parties or privies, same cause of action)
- A v. C, not provided (not provided) (placeholder to maintain structure)
- Montana v. United States, 440 U.S. 147 (1979) (issue preclusion principles under collateral estoppel)
- Rooker v. Fid. Trust Co., 263 U.S. 413 (1923) (limits federal review of state court decisions)
- Dist. of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983) (Rooker-Feldman doctrine; no federal appellate review of state court decisions)