FEDERAL DEPOSIT INSURANCE CORPORATION as Receiver for R-G Premier Bank of Puerto Rico, Plaintiff, Appellee, v. Digno Emérito ESTRADA-RIVERA; Edith Delia Colón-Feliciano; Conjugal Partnership Estrada-Colón; Emérito Estrada Rivera-Isuzu De Puerto Rico, Inc., Defendants, Appellants.
Nos. 11-2113, 11-2433
United States Court of Appeals, First Circuit
July 3, 2013
The judgment of the district court is affirmed. So ordered.
Guillermo F. DeGuzmán, with whom DeGuzmán Law Offices was on brief, for appellants.
Kathleen V. Gunning, Counsel, Federal Deposit Insurance Corporation, with whom Colleen Boles, Assistant General Counsel,
Before TORRUELLA, LIPEZ, and THOMPSON, Circuit Judges.
LIPEZ, Circuit Judge.
Appellants challenge the district court‘s grant of summary judgment for the Federal Deposit Insurance Corporation (“FDIC“) in a collection action stemming from their default on a $700,000 loan. They contend that their lending bank—later taken over by the FDIC—caused the default by failing to follow through on a promised loan to a third-party. The district court also dismissed a counterclaim based on that contention for lack of subject matter jurisdiction. Although we adopt a different rationale for disposing of the counterclaim, we affirm both of the court‘s rulings.1
I.
It is unnecessary to describe the financial transactions underlying this case in detail, as both issues on appeal are controlled by well established legal principles. We thus briefly sketch the background of the dispute, with elaboration provided below as pertinent to our discussion.
In early 2008, appellant Digno Emérito Estrada-Rivera (“Estrada-Rivera“) signed a loan agreement with R-G Premier Bank of Puerto Rico (“the Bank“) for a $700,000 line of credit for his business, Emérito Estrada Rivera-Isuzu de Puerto Rico (“EER-IPR“). Less than a year later, Estrada-Rivera defaulted on the loan, and the Bank brought a collection action in commonwealth court against the four appellants in this appeal: Estrada-Rivera,
The FDIC subsequently took over the Bank as receiver, removed the litigation to federal court, and eventually obtained summary judgment in its favor on the collection action. The district court noted the absence of any dispute that the $700,000 debt was due and payable, and it found “nothing in the record that made Defendants’ payment under the note conditional upon [the Bank]‘s compliance with its obligation under the [third-party] financing agreement.” Hence, because “Defendants have breached their contractual obligations,” the court granted summary judgment for the FDIC. The court also dismissed appellants’ counterclaim, finding a lack of subject-matter jurisdiction on the ground that appellants had not taken the steps necessary, within the required time frame, to maintain an action against the FDIC. See
Appellants raise two issues on appeal. First, they contend that summary judgment was improperly granted on the collection action because factual disputes remain concerning the Bank‘s role in causing them to breach their loan agreement with the Bank and whether, as a result, appellants should be released from their obligations under that agreement. Second, appellants argue that the district court erred in rejecting their counterclaim on jurisdictional grounds. They assert that they met all applicable requirements for pursuing the claim and that, in any event, their action should not be barred because the FDIC gave them inadequate notice of the need to file a proof of claim.
We review an appeal from a grant of summary judgment de novo, Johnson v. Univ. of P.R., 714 F.3d 48, 52 (1st Cir.2013), and likewise apply de novo review to the court‘s dismissal of the counterclaim for lack of subject-matter jurisdiction, Alphas Co. v. Dan Tudor & Sons Sales, Inc., 679 F.3d 35, 38 (1st Cir.2012). In considering the propriety of the district court‘s rulings, we are not limited to the rationales it adopted but may affirm its judgment on any ground supported by the record. Miles v. Great N. Ins. Co., 634 F.3d 61, 65 n. 5 (1st Cir.2011).
A. The Collection Action
Appellants attempt to demonstrate that summary judgment was improperly granted against them by highlighting factual disputes related to the financing that the Bank had agreed to provide for the shopping plaza project. They state that the Bank structured the deal so that final payment to appellants would be withheld until after the Bank released additional funds to the buyer, Empresas Cerromonte Corp. (“ECC“), for construction.2 Appellants claim, however, that the Bank subsequently refused to disburse the additional
Appellants thus assert that their default on the line of credit was attributable to the Bank‘s breach of both the ECC financing deal and its obligations to appellants themselves. They argue that a factfinder must evaluate their contention that the Bank‘s culpability overrides their own breach, and they insist that the district court would be authorized to modify their obligations under the line of credit if the Bank is found to have acted in bad faith. Hence, because further development of the facts may show that the Bank bears responsibility for their default, appellants maintain that summary judgment for the FDIC on the collection claim was improper.
The problem for appellants is that, whatever the merits of their defense as a matter of contract or promissory estoppel, their contentions are unavailing against the FDIC. Enforcement against the FDIC of unwritten promises or agreements is barred by
No agreement which tends to diminish or defeat the interest of the [FDIC] in any asset acquired by it . . . as receiver of any insured depository institution, shall be valid against the [FDIC] unless such agreement—
(A) is in writing . . . [and]
(D) has been, continuously, from the time of its execution, an official record of the depository institution.
See also D‘Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed. 956 (1942) (establishing the common law “D‘Oench doctrine,” which “prevents plaintiffs from asserting as either a claim or defense against the FDIC oral agreements or ‘arrangements,‘” FDIC v. LeBlanc, 85 F.3d 815, 821 (1st Cir.1996) (internal quotation marks omitted)); McCullough v. FDIC, 987 F.2d 870, 874 n. 6 (1st Cir.1993) (describing
The district court found no written proof that appellants’ obligation to repay the line of credit was contingent on ECC‘s independent financing agreement with the Bank, and appellants point to no such explicit documentation. Instead, they rely on inferences to be drawn from the collection of documents executed by the Bank, ECC and themselves in connection with the sale of appellants’ property to ECC. Appellants depict an arrangement in which all parties understood that appellants’ partial self-financing of the ECC purchase would be short-term and that the Bank would soon provide the additional funds enabling ECC to pay off that debt. But such a de facto arrangement, although plausible as alleged, is not enough. Section
Because appellants have not produced any written evidence that their obligation to pay the line-of-credit debt was conditioned on the Bank‘s provision of financing to ECC, and they do not contest that their debt is due and payable,4 they
B. Counterclaim
The district court dismissed the counterclaim on the ground that appellants failed to follow the mandated administrative process for maintaining a court action against the FDIC. Although they filed a timely proof of claim with the agency, the district court found that they took no further action within the sixty-day period after the FDIC disallowed the claim. See
We find it unnecessary to delve into the parties’ arguments about appellants’ compliance, or lack thereof, with the statutory claims procedures. About a week after the district court issued its ruling on the counterclaim, the FDIC published notice of its determination that the Bank has insufficient assets to make any distribution on the claims of general unsecured creditors, a category that would include appellants if they prevailed on their counterclaim. The FDIC stated that, accordingly,
Moreover, as the FDIC observes, even if “some theoretical case or controversy exists,” dismissal of the counterclaim would still be warranted as a matter of prudential mootness. Numerous courts have reached that conclusion in equivalent circumstances. See, e.g., Henrichs v. Valley View Dev., 474 F.3d 609, 615 (9th Cir.2007); Maher v. FDIC, 441 F.3d 522, 525–26 (7th Cir.2006); First Ind. Fed. Sav. Bank v. FDIC, 964 F.2d 503, 507 (5th Cir.1992); Adams v. Resolution Trust Corp., 927 F.2d 348, 354 (8th Cir.1991); Wallis v. IndyMac Fed. Bank, 717 F.Supp.2d 1195, 1198–1200 (W.D.Wash.2010).
The district court therefore properly dismissed appellants’ counterclaim.
II.
For the reasons we have explained, the district court properly abbreviated this case. Appellants’ attempt to escape summary judgment on the collection action by positing a factual dispute over the Bank‘s conduct founders on the requirements of section
So ordered.
Notes
Moreover, appellants have repeatedly acknowledged EER-IPR‘s responsibility for the debt. For example, their opposition to the motion for summary judgment states that “[t]he loan . . . subject of this litigation, was granted to EER-IPR, but under the name of Mr. Digno Emérito Estrada Rivera at the behest of [the] Bank.” The opposition also states that “R-G Premier Bank effectively impeded EER-IPR from fulfilling its payment obligations under the credit facility subject of this lawsuit.” Appellants’ Opposing Statement of Material Facts reports that all payments on the loan were made by EER-IPR.
Colón-Feliciano‘s liability arises from her status as Estrada-Rivera‘s wife. See