This appeal arises out of a dispute over a promissory note executed by appellant Sally Bobick in favor of First National Bank of Georgia (“First National”). Contending that Bobick had defaulted on her loan obligations, First National filed the present action against her for breach of the note, and she answered and asserted several counterclaims against the bank and its CEO. First National failed while the litigation was pending, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver for the bank. The FDIC assigned and transferred certain assets of First National to appellee Community & Southern Bank (“CSB”). The trial court subsequently granted summary judgment to CSB on the claims for breach of the note, dismissed Bobick’s counterclaims, and entered final judgment in favor of CSB.
On appeal, Bobick contends that the trial court erred in granting CSB’s motions to dismiss and for summary judgment because CSB was never properly substituted as the plaintiff and thus was never made a proper party to the suit. Bobick further contends that the trial court erred in granting CSB’s motion for summary judgment on the claim for breach of the promissory note because CSB was not a party to or an assignee of the note. Lastly, Bobick contends that the trial court erred in dismissing her counterclaims pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”), Pub. L. No. 101-73, 103 Stat. 183 (codified as amended in scattered sections of 12 USC). For the reasons discussed below, we affirm the trial court’s rulings.
Summary judgment is appropriate if the pleadings and evidence “show that there is no genuine issue as to any material fact and that
We also review de novo a trial court’s grant of a motion to dismiss. Ga. Dept. of Community Health v. Datalnquiry,
The record reflects that on January 15, 2008, First National made a loan to Bobick in the principal amount of $2,200,250. Bobick signed a promissory note for the principal sum of the loan plus interest with a maturity date of January 15, 2009. The note was secured by property that “include [d], but [was] not limited to,” 185,394 shares of stock that Bobick owned in WGNB Corporation, as reflected in a security agreement included with the note.
Bobick failed to fully pay the amount owed on the promissory note by the maturity date. On July 22, 2009, First National filed the present suit against Bobick for breach of the note in the State Court of Carroll County. First National sought to recover unpaid principal, interest, late fees, and attorney fees.
In January 2010, First National failed and was closed by the Office of the Comptroller of the Currency, and the FDIC was appointed as receiver for the failed bank. On January 29, 2010, the FDIC in its capacity as receiver transferred certain categories of assets of First National, including “Loans” owed to or held by the bank, to CSB pursuant to a “Purchase and Assumption Agreement.” The FDIC as receiver later executed an “Assignment of Security Instruments and other Loan Documents” (the “Assignment Agreement”) under which it assigned and transferred to CSB all
rights, title, and interests in and to all those certain Mortgages, Security Deeds, Deeds to Secure Debt, Deeds of Trust, Assignments of Rents and Leases, UCC-1 financing statements, judgment liens, and all such other instruments and security agreements securing loans ownedby First National... and held of record by First National... as of January 29, 2010 ... and all modifications, extensions, amendments and renewals thereto (collectively, the “Security Instruments”) [,] TOGETHER with all of the underlying debts described in such Security Instruments.
rights, title and interests in and to the promissory notes, loan documents and all other indebtedness secured by the Security Instruments, as evidenced by related promissory notes, any and all loan agreements, pledges, security agreements and UCC financing statements and all modifications, extensions, amendments and renewals to said documents and instruments together with any and all other loan documents, title policies and casualty insurance policies evidencing, securing or relating to any of the foregoing all of which have been delivered to . . . [CSB].
Based on these agreements that it had entered into with the FDIC, CSB came into possession of the promissory note and security agreement that had been executed by Bobick in favor of First National.
On March 8, 2010, Bobick answered the complaint filed by First National,
Bobick alleged in her counterclaims that First National’s failure was a direct and proximate result of mismanagement by Lipham and other bank officials, and that, as a result of the failure of the bank, her stock in WGNB Corporation, which she alleged was the “holding company” of First National, had been rendered worthless. Bobick further alleged that Lipham and other bank officials had represented to her that the promissory note would continue to be renewed in one-year increments until she was able to repay her loan to First National, and that her stock in WGNB Corporation would be sufficient collateral and would be adequate by itself to secure the loan’s repayment. Bobick alleged that despite these representations, when the note matured on January 15, 2009, First National requested additional collateral for the loan and refused to renew the note without additional collateral.
According to CSB, after Bobick filed her answer and counterclaims, First National filed a motion to substitute CSB as the plaintiff
On May 25, 2012, CSB moved for summary judgment on the claim for breach of the promissory note. CSB argued that it had established its prima facie right to recover and that the burden then had shifted to Bobick to establish any affirmative defenses. CSB further argued that Bobick had failed to come forward with any evidence in support of her affirmative defenses or to raise a question of fact challenging the bank’s right to recover unpaid principal, interest, late fees, and attorney fees under the promissory note.
On May 30,2012, CSB filed a motion to dismiss Bobick’s counterclaims for lack of subject matter jurisdiction on the ground that Bobick had failed to exhaust her administrative remedies before the FDIC as required by FIRREA. CSB also argued that Bobick’s counterclaim seeking a declaratory judgment should be dismissed on the additional ground that it would improperly restrain the exercise of the powers of the FDIC as receiver under FIRREA. Furthermore, CSB argued that Bobick’s counterclaim for breach of fiduciary duty should be dismissed on the additional ground that it was a shareholder derivative claim that could only be asserted by the FDIC as receiver for First National under FIRREA.
After Bobick filed her responses opposing the two motions, the superior court heard oral argument. Following the hearing, the trial court entered its Final Judgment and Order granting summary judgment to “Plaintiff Community & Southern Bank” and entered judgment in favor of the bank for the unpaid principal due on the promissory note, interest, late fees, and contractual attorney fees. The superior court dismissed Bobick’s counterclaims in the same order. This appeal followed.
1. Bobick first contends that the superior court erred in granting CSB’s motions to dismiss and for summary judgment because CSB was never substituted as the plaintiff and thus was never made a proper party to the case. We disagree.
Neither the state court nor the superior court entered a separate order that expressly substituted CSB as the plaintiff in this suit. But
Superior court orders “are construed according to their substance and function and not merely by nomenclature,” and “[t]he goal is to give full effect to the totality of the [ruling that was] rendered rather than to read words in a vacuum.” (Citations and punctuation omitted.) Hedquist v. Merrill Lynch, Pierce, Fenner & Smith,
2. Bobick next contends that the trial court erred in granting summary judgment to CSB on the claim for breach of the promissory note because CSB was not a party to the note and CSB failed to establish that it had been assigned the note by the FDIC as receivér for First National. Again, we disagree.
The doctrine of privity of contract requires that only parties to a contract may bring suit to enforce it. Aparty may assign to another a contractual right to collect payment, including the right to sue to enforce the right [, and the] assignment must be in writing in order for the contractual right to be enforceable by the assignee.
(Citations, punctuation and emphasis omitted.) Arrow Financial Svcs. v. Wright,
It is undisputed that First National failed and that the FDIC was appointed as receiver for the bank. In connection with its motion for summary judgment, CSB submitted documents reflecting a complete chain of assignment for the promissory note at issue, including the note and security agreement executed by Bobick in favor of First National; the Purchase and Assumption Agreement entered between the FDIC and CSB, which listed the FDIC as receiver for First National and assigned the “Loans” of First National to CSB; and the
Furthermore, CSB submitted the affidavit of George Platt, who had been granted a limited power of attorney by the FDIC, as receiver for First National, authorizing him to execute assignment documents that evidenced the sale and transfer of assets of First National, including its loan portfolio, to CSB pursuant to the Purchase and Assumption Agreement. Platt executed the Assignment Agreement on behalf of the FDIC as receiver for First National, and he averred that the promissory note executed by Bobick on January 15,2008 was among the loan documents of First National that had been assigned and transferred to CSB pursuant to the Purchase and Assumption Agreement and the Assignment Agreement.
Finally, CSB submitted the affidavit of Patrick Dowling, vice president and special assets professional for CSB and the custodian of its business records. He averred that CSB had acquired from the FDIC the promissory note entered into by Bobick on January 15,2008 and that the note was currently in the possession of CSB.
This combined evidence was sufficient to establish a valid assignment of Bobick’s promissory note to CSB. See Heritage Constr. Corp. v. State Bank & Trust Co.,
3. Bobick further contends that the trial court erred in dismissing her counterclaims against First National. Bobick maintains that she was not required to exhaust administrative remedies under FIRREA before bringing her counterclaims, and that, as a result, the superior court had subject matter jurisdiction to hear those claims and should not have dismissed them.
FIRREA “was enacted to strengthen regulation of the nation’s financial system in the wake of the savings and loan crisis of the 1980s,” and “[i]t grants the FDIC broad powers under 12 USC § 1821 to manage the affairs of insolvent banks as receiver or conservator.” Iberiabank v. Beneva 41-1, LLC,
“In enacting FIRREA, Congress anticipated that, as a receiver for failed lending entities, the [FDIC] would face numerous claims from various parties.” Stamm,
Except as otherwise provided in this subsection, no court shall have jurisdiction over —
*862 (i) any claim or action for payment from, or any action seeking a determination of rights with respect to, the assets of any depository institution for which the [FDIC] has been appointed receiver, including assets which the [FDIC] may acquire from itself as such receiver; or
(ii) any claim relating to any act or omission of such institution or the [FDIC] as receiver.
We agree with the Eleventh Circuit’s construction ofl2USC§ 1821 (d) (13) (D) as broadly covering all
(1) claims for payment from assets of any depository institution for which the [FDIC] has been appointed Receiver;
(2) actions for payment from assets of such depository institutions;
(3) actions seeking a determination of rights with respect to the assets of such depository institutions; and
(4) . . . claim [s] relating to any act or omission of such institution or the [FDIC] as receiver.
American First Fed. v. Lake Forest Park, Inc.,
Furthermore, the Eleventh Circuit has construed the limitation on judicial review imposed by 12 USC § 1821 (d) (13) (D) as establishing an administrative exhaustion requirement, and we find its reasoning persuasive. See Interface Kanner, LLC v. JPMorgan Chase Bank, N.A.,
Bobick’s counterclaims against First National concern purported actions taken by that bank before it was closed and placed in receivership in January 2010, and, therefore, are “claim [s] relating to [an] act or omission of [an] institution” for which the FDIC was appointed as receiver. American First Fed.,
Bobick does not allege that she submitted an administrative claim to the FDIC. Rather, Bobick asserts that none of her counterclaims brought against First National fall within the scope of the administrative exhaustion requirement because the FDIC is not a party to this litigation; her counterclaims are “pre-receivership claims” and the FDIC never requested to stay the court proceedings; the FDIC never provided her with proper notice of the administrative claims process relating to First National; and there was no receivership in place at the time that First National filed its suit on the promissory note, the sole point in time at which Bobick alleges that subject matter jurisdiction should have been assessed. Bobick also maintains that her request for a declaratory judgment did not fall within the exhaustion requirement because it was in essence an affirmative defense rather than a counterclaim. We will address these arguments each in turn.
12 USC § 1821 (d) (13) (D) does not limit its jurisdictional bar to claims or counterclaims brought against the FDIC or the failed bank for which it was appointed as receiver. Rather, by its plain language, 12 USC § 1821 (d) (13) (D) refers to “any” claim or action and “does not make its application contingent upon whom the claim is against.” (Emphasis in original.) Aber-Shukofsky v. JPMorgan Chase & Co., 755 FSupp.2d 441, 447 (E.D. N.Y. 2010). Hence, “an entity [such as CSB] that purchases a failed lending institution’s assets from the FDIC acquires the administrative review protections afforded by section 1821 (d)” and is entitled to seek dismissal of a claim for failure to exhaust administrative remedies. Lazarre, 780 FSupp.2d at 1325. See American First Fed.,
(b) Bobick next asserts that none of her counterclaims fall within the administrative exhaustion requirement because her counterclaims are “pre-receivership claims” and the FDIC never intervened in the suit to request a stay of the court proceedings. Again, we are unpersuaded.
The Eleventh Circuit has construed FIRREA to provide two separate schemes for the disposition of pre-receivership and post-receivership claims. See Fed. Deposit Ins. Corp. v. Lacentra Trucking,
We need not decide which position we find more persuasive because all of Bobick’s counterclaims against First National were post-receivership claims and thus fell within the administrative exhaustion requirement under both lines of federal cases. Post-receivership claims include, but are not limited to, “claims related to conduct by the failed financial institution that the aggrieved party neglects to assert until after the [FDIC] assumes control over the lending entity.” Stamm,
(c) Bobick further asserts that none of her counterclaims fall within the administrative exhaustion requirement because the FDIC never provided her with proper notice of the administrative claims process relating to First National. We disagree.
[T]he FDIC’s failure to provide proper notice does not relieve the claimant of the obligation to exhaust administrative remedies, because [FIRREA] does not provide for a waiver or exception under those circumstances. The only exception to the strict requirement of exhaustion of remedies [ ] is where the claimant does not receive notice of the appointment of the receiver in time to file his claim.
Bobick does not contend that she lacked notice of the FDIC’s appointment as receiver for First National within the time frame for filing an administrative claim, and admitted during her deposition that she was aware “[w]hen that bank was eventually closed by the FDIC” because “[t]his is. a small town.” Accordingly, Bobick’s assertion that she was not required to exhaust her administrative remedies because of lack of proper notice from the FDIC is without merit. See Haith,
(d) Bobick asserts that none of her counterclaims fall within the administrative exhaustion requirement because there was no receivership in place at the time that First National filed its lawsuit, the sole point in time when she alleges that subject matter jurisdiction should be evaluated. We do not agree.
It is true that subject matter jurisdiction is assessed at the time of the filing of a suit and is not lost by the occurrence of subsequent developments. See Ga. Dept. of Community Health,
As explained supra in Division 3 (b), FIRREA provides that counterclaims filed post-receivership are subject to the administrative exhaustion requirement imposed by 12 USC § 1821 (d) (13) (D) and must be dismissed for lack of jurisdiction if the claimant failed to first exhaust the administrative claims process before the FDIC. Hence, because Bobick asserted her counterclaims after the appointment of the FDIC as receiver and failed to exhaust her administrative remedies pertaining to those claims, the jurisdiction of the superior court must yield to federal law, and Bobick’s counterclaims were properly dismissed. See Thomas v. Fed. Deposit Ins. Corp.,
(e) Lastly, Bobick argues that even if her other counterclaims against First National were subject to dismissal pursuant to the administrative exhaustion requirement imposed by 12 USC § 1821
Unlike counterclaims, affirmative defenses generally do not fall within the administrative exhaustion requirement. See American First Fed.,
[A] court must look beyond the nomenclature of a request for relief to ascertain whether it is a true affirmative defense or is, in actuality, a claim requiring exhaustion as a prerequisite to jurisdiction. Whether a request for relief is titled an affirmative defense or a counterclaim is not dispositive to the question of subject matter jurisdiction. The germane question is whether the remedy sought by a party, regardless of its label, is encompassedby Section 1821 (d) (13) (D)[.]
American First Fed.,
Bobick labeled her request for a declaratory judgment against First National as a counterclaim. In seeking declaratory relief, Bobick alleged that First National had represented to her that the promissory note would continue to be renewed until she was able to repay her loan to First National, and that her stock in WGNB Corporation would be sufficient collateral for her loan and its renewal. Bobick asked the superior court to declare pursuant to the Declaratory Judgments Act, OCGA § 9-4-1 et seq., that First National’s alleged representations regarding the renewal of the note and the sufficiency of the collateral created a “new contract” that “constitute [d] a novation of the prior agreement between the parties” and was binding on First National.
Bobick’s request for a declaratory judgment is properly characterized as a counterclaim rather than an affirmative defense. Bobick did not merely seek to prevent First National from recovering on the promissory note; rather, she sought affirmative relief declaring that a “new contract” had been formed that would remain binding on the parties until the loan from First National was repaid. As such, the claim sought “a determination of rights with respect to the assets of [a] depository institution[ ]” for which the FDIC had been appointed as receiver and therefore fell within the contours of the administrative exhaustion requirement imposed by 12 USC § 1821 (d) (13) (D)
4. Bobick separately contends that the superior court erred in dismissing her counterclaim for breach of fiduciary duty against First National due to lack of standing. Bobick argues that she was not required to bring her counterclaim as a shareholder derivative claim, and, therefore, that the claim could be asserted by her rather than by the FDIC as receiver.
Under FIRREA, when the FDIC is appointed as the receiver of a failed bank, it succeeds to “all rights, titles, powers, and privileges of the insured depository institution, and of any stockholder ... of such institution with respect to the institution and the assets of the institution.” 12 USC § 1821 (d) (2) (A) (i). We, like several federal courts, construe this provision as granting the FDIC “ownership over all shareholder derivative claims” brought by a shareholder on behalf of the failed bank against its officers and directors. Lubin v. Skow,
(a) “Where a shareholder alleges devaluation of shares due to corporate mismanagement,” the action must be brought as a shareholder derivative action. Lubin,
(b) Bobick’s counterclaim also alleged that First National breached the fiduciary duty that it owed to Bobick as her lender and owed her damages for “failing to honor the agreement [that it had with her] to renew the loan.” This allegation clearly was not a shareholder derivative claim, and thus did not belong to the FDIC as receiver.
5. Bobick also asserted several counterclaims against Lipham that the superior court dismissed in its Final Order and Judgment. She enumerates as error the superior court’s dismissal of these counterclaims, but Bobick made no effort in her appellate brief to differentiate between Lipham and CSB for purposes of her argument on appeal. Hence, any legal arguments that Bobick could have made separately on Lipham’s behalf differentiating the counterclaims brought against him from those brought against the bank are hereby deemed abandoned. See Court of Appeals Rule 25 (c) (2); Rolleston v. Estate of Sims,
Judgment affirmed.
Notes
First National previously had moved for entry of a default judgment against Bobick, but Bobick had opposed the motion on the ground that she had never been properly served with process. The state court denied First National’s motion and ordered that Bobick be properly served. Bobick then was served with process on February 5, 2010.
Bobick asserts that a motion to substitute was never filed. At the hearing in the superior court on the motions to dismiss and for summary judgment, counsel for CSB stated in his place that a motion to substitute had been filed in state court before the case had been transferred, and he provided a copy of the motion to the superior court for its review. However, the motion to substitute was not entered as an exhibit at the hearing and does not otherwise appear in the appellate record.
Apart from the assignment issue, Bobick does not challenge on appeal the other rulings necessarily made by the superior court in granting summary judgment to CSB on the claim for breach of the promissory note, including that Bobick had failed to come forward with any evidence in support of her affirmative defenses or to raise a question of fact regarding the amount she owed in unpaid principal, interest, late fees, and attorney fees under the note.
Amotion to dismiss for lack of subject matter jurisdiction under OCGA § 9-11-12 (b) (1) “can allege either a facial challenge, in which the court accepts as true the allegations on the face of the complaint [or counterclaim], or a factual challenge, which requires consideration of evidence beyond the face of the complaint [or counterclaim].” (Citation and punctuation omitted.) Pinnacle Banning v. Clark Realty Capital,
The decisions of the United States Court of Appeals for the Eleventh Circuit are not binding on this Court, even on questions of federal law, but they are persuasive authority. See Deen v. Stevens,
Judicial review in federal court is available after the FDIC makes a determination regarding a party’s claim as part of its administrative claims process. See 12 USC § 1821 (d) (6) (authorizing filing suit in certain federal courts after the FDIC’s initial determination to allow or disallow a claim); 12 USC § 1821 (d) (7) (A) (authorizing judicial review of the FDIC’s final administrative determination).
We also note that under 12 USC § 1821 (j), “no court may take any action... to restrain or affect the exercise of powers or functions of the [FDIC] as a conservator or a receiver.” “This provision has been interpreted broadly to bar judicial intervention whenever the FDIC is acting in its capacity as a receiver or conservator!.]” Bank of America Nat. Assn. v. Colonial Bank,
In a shareholder derivative action,
as a practical matter, the corporation is initially named as a defendant. In this way the stockholder insures the presence of the corporation as an indispensable party. Once joined and present before the court, the corporation is then realigned, if necessary, according to its real interests.
Kilburn v. Young,
We express no opinion regarding whether or to what extent First National actually owed a fiduciary duty to Bobick as her lender under the circumstances of this case; rather, our discussion is limited to whether such a claim constituted a shareholder derivative claim and whether it was subject to the administrative exhaustion requirement imposed by FIRREA.