PLACIDA PROFESSIONAL CENTER, LLC, Plaintiff-Cross Appellant-Appellee, v. FEDERAL DEPOSIT INSURANCE CORPORATION, Defendant-Cross Appellee-Appellant.
No. 12-12204.
United States Court of Appeals, Eleventh Circuit.
March 13, 2013.
512 F. App‘x 938
Third, we also reject Johnson‘s argument that he falls within any potential exception discussed in dicta in Moore.3 Here, Johnson‘s
In sum, because Johnson‘s advisory guidelines range was based on his career offender status, Johnson‘s sentence was not “based on” a subsequently lowered sentencing range, as required by
AFFIRMED.
Before MARCUS and MARTIN, Circuit Judges, and GOLD,* District Judge.
GOLD, District Judge:
This appeal involves repudiation of a Construction Loan Agreement by the Federal Deposit Insurance Corporation (“FDIC“), acting as receiver for Freedom Bank, and the denial of a Proof of Claim for repudiation damages filed by Placida Professional Center, LLC (“Placida“). After the FDIC denied its clаim, Placida filed suit seeking declaratory judgment that the FDIC‘s termination of the Construction Loan Agreement terminated the Agreement and other related agreements, and also seeking repudiation damages under
Appellant-Cross Appellee FDIC appeals the district court‘s setoff of repudiation damages against amounts owed the FDIC or its successors and the court‘s attorneys’ fees award.1 Appellee-Cross Appellant Placida appeals the district court‘s dismissal of its request for declaratory judgment and exclusion of portions of its experts proposed testimony without a Daubert hearing. See Daubert v. Merrell Dow Pharm., Inc. (“Daubert“), 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993).
We conclude the district court erred in dismissing Placida‘s request for declaratory relief regarding the Construction Loan Agreement, Commercial Loan Note (“Note“), and Mortgage and Security Agreement (“Mortgage“). Because Placida exhausted its claim for declaratory relief through the
A. Facts2
On February 28, 2007, Placida and Freedom Bank entered into a Construction Loan Agreement, Note, and Mortgage in which Freedom Bank agreed to loan Placida a total of $3,280,000.00 for the construction of a professional office center in Charlotte County, Florida. Sheryl A. Edwards and Michael B. Edwards are co-managing members of Placida and, in their individual capacities, guarantied the Note (“Guaranty“).
Under the Construction Loan Agreement, $240,000.00 of the principal amount was to be reserved for interest payments on the loan during construction and for a reasonable period of time upon completion. The Agreement provided that disbursements from the loan would be made upon submission of a draw request to the bank and after inspection by the bank‘s inspector. The Agreement further provided that upon substantial completion, all remaining funds from the Agreement would be disbursed to Placida.
Construction on the project proceeded according to schedule until October 15, 2008. During construction, interest only payments were automatically paid on the 28th of each month from the reserve held by Freedom Bank. As of October 30, 2008, Freedom Bank had disbursed, рursuant to monthly draw requests, $1,597,504.20 from the loan. The interest payment due on October 28, 2008 was paid on October 30, 2008. After the October 2008 interest payment, $1,682,495.68 remained in the loan account and, as of the end of October, the loan was in good standing in all respects and was not in default.
On October 31, 2008, the FDIC was appointed as receiver for Freedom Bank. Placida submitted a draw request on November 4, 2008, seeking $45,948.50 for payment of contractors for work performed in October 2008. On November 6, 2008, the FDIC notified Placida that it was exercising its right of repudiation of the Construction Loan Agreement under
On February 4, 2009, Placida submitted a Proof of Claim to the FDIC requesting, as compensatory damages for repudiation of the Construction Loan Agreement, a termination of all loan documents, including the Construction Loan Agreement, Note, Mortgage, and Guaranty, and, alternatively, requesting compensatory damages pursuant to a sales comparison or loss of market value approach.3 Placida‘s claim was signed by Sheryl A. Edwards as managing member of Placida, but neither Sheryl A. Edwards nor Michael B. Edwards submitted a claim on their own behalf.
B. Procedural History
Upon denial of Placida‘s claim, Placida, Michael B. Edwards, and Sheryl A. Edwards brought suit in federal district court seeking (1) a declaratory judgment declaring that the FDIC‘s repudiation of the Construction Loan Agreement terminated both Placida and the FDIC‘s obligations under that Agreement, and declaring the Note, Mortgage, and Guaranty of no further force or effect, (2) repudiation damages against the FDIC, as receiver of Freedom Bank, as well as reasonable attorneys’ fees and costs, in favor of Placida, and (3) setoff of any damages awarded to plaintiffs against sums allegedly owed by the Edwards to Freedom Bank on a separate loan, referred to by the parties as the Fruitville loan.5
On February 9, 2010, three months after Placida commenced suit, the FDIC transferred the Placida loan and the Fruitville loan as part of a $799,171,415.14 pool of loans to Multibank 2009–1 CML ADC Venture, LLC (“Multibank“). The FDIC is owner of a 60% interest in Multibank.6
On November 2, 2010, the district court dismissed plaintiffs’ affirmative claim for setoff, concluding the claim was premature because setoff is a defensive claim to diminish liability, not an affirmative claim for relief. The district court also dismissed plaintiffs’ declaratory judgment count, concluding the requested relief was barred by FIRREA‘s anti-injunction provision,
The issue of the amount of repudiation damages proceeded to bench trial. The district court awarded $960,000.00 in damages in favor of Placida. The court also ordered that the damages be setoff against amounts owed by Placida to the FDIC or its successors, fixed and measured as of the date of the receivership. Finally, the district court concluded Placida was entitled to an award of attorneys’ fees and costs pursuant to the fee provisions in the Note and Mortgage, together with the reciprocal provisions of
As discussed above, both Placida and the FDIC appealed. Michael B. Edwards and Sheryl A. Edwards, individually, did not appeal.
II. STANDARDS OF REVIEW
Several standards of review govern this appeal. We review de novo the district court‘s interpretation and application of
III. DISCUSSION
A. Dismissal of Declaratory Judgment Count
We address first the district court‘s dismissal of Placida‘s request for declaratory judgment that the FDIC‘s repudiation of the Construction Loan Agreement terminated both Placida and the FDIC‘s obligations under the Construction Loan Agreement, and declaring the Note, Mortgage, and Guaranty of no further force or effect. We interpret and apply
As noted above, the district court dismissed plaintiffs’ declaratory judgment count, concluding the requested relief was barred by FIRREA‘s anti-injunction provision,
Except as provided in this section, no court may take any action, except at the request of the Board of Directors by
regulation or order, to restrain or affect the exercise of powers or functions of the Corporation as a conservator or a receiver.
We conclude the district court had subject matter jurisdiction over Placida‘s declaratory judgment claim under
Except as otherwise provided in this subsection, no court shall have jurisdiction over—
(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 Corporation has been appointed receiver, including assets which the Corporation may acquire from itself as such receiver; or
(ii) any claim relating to any act or omission of such institution or the Corporation as receiver.
Subsection (d), in turn, provides for de novo district court review of claims that have been exhausted through the administrative claims process.
Before the end of the 60-day period beginning on the earlier of—
(i) the end of the period described in paragraph (5)(A)(i) with respect to any claim against a depository institution for which the Corporation is receiver; or
(ii) the date of any notice of disallowance of such claim pursuant to paragraph (5)(A)(i),
the claimant may ... file suit on such claim ... in the district or territorial court of the United States for the district within which the depository institution‘s principal place of business is located ... (and such court shall have jurisdiction to hear such claim).
Here, Placida timely filed a claim with the FDIC. Placida‘s claim (like its request for declaratory judgment) included a request for termination of all loan documents, including the Construction Loan Agreement, Note, Mortgage, and Guaranty. The FDIC issued a Notice of Disallowance of Claim on September 1, 2009, stating (incorrectly) that the loan had been in default sinсe October 2008 and instructing Placida of its right to file suit pursuant
Section
Moreover, our precedent in Bank of Am. v. Colonial Bank, 604 F.3d 1239 (11th Cir.2010), supports the conclusion that
On appeal, we concluded that
We expressly noted, however, “The operation of
Placida complied with the instructions we provided Bank of America. Placida pursued its claim for termination of the loan documents in the administrative claims process.9 Once that claim was denied, Placida timely sought judicial review. The district court therefore had jurisdiction over Placida‘s request for declaratory relief pursuant to
Our jurisprudence on
To hold otherwise would raise due process concerns. Cf. Bueford v. Resolution Trust Corp., 991 F.2d 481, 486 (8th Cir.1993) (“Since the language of [FIRREA] expressly provides for judicial review after exhaustion of the administrative procedures, [plaintiff] cannot prevail on her claim that FIRREA‘s administrative procedures deny her due process by making judicial review unavailable.“). We note that there is no binding precedent directly on point in this circuit or elsewhere, but we find the reasoning of our sister circuit in Freeman v. Federal Deposit Insurance Corp., 56 F.3d 1394 (D.C.Cir.1995), instructive. The District of Columbia Cirсuit evaluated a challenge of
On appeal, the court concluded that
Placida‘s posture fits squarely into Freeman‘s hypothetical. Placida exhausted its claim for declaratory relief through the administrative claims process. To prevent Placida from seeking relief pursuant to
We acknowledge that the Third Circuit Court of Appeals has suggested that barring jurisdiction over declaratory judgment actions not seeking a right to payment in both administrative proceedings and courts of law would not violate due process. See Nat‘l Union Fire Ins. Co., 28 F.3d at 389-391. Appellants National Union Insurance Company and Gulf Insurance Company sought declaratory judgment declaring they had the right to rescind certain insurance policies. Id. at 381. The district court dismissed the declaratory judgment count, concluding it lacked subject matter jurisdiction under
On appeal, the Third Circuit concluded appellants’ declaratory judgment action fеll within the plain language of
We need not reach today whether National Union‘s dicta is generally correct, as National Union explicitly did not reach Placida‘s due process concern, that is, the due process concern posed by barring judicial review of an administratively exhausted claim. See id. at 392 (“We do not reach the issue of whether National Union and Gulf‘s action could have qualified for the exception to the jurisdictional bar for claims that have been submitted through the administrative claims process had they filed a timely administrative claim.“). Moreover, the Third Circuit concluded, subsequent to National Union, that the administrative claims procedures of
Notwithstanding, we note that the Third Circuit‘s due process solution (permitting Placida to raise rescission as an affirmative defense in a suit to collect on the Note and Mortgage) is untenable for Placida. As the FDIC repeatedly noted in its briefs and at oral argument, the FDIC, after suit was commenced, sold the Note and Mortgage to Multibank. To deprive Placida of the opportunity to be heard in this proceeding, which was commenced after Placida administratively exhausted its claim and while the FDIC still owned the loan documents, does not comport with due process. See Fuentes v. Shevin, 407 U.S. 67, 80, 92 S.Ct. 1983, 1994, 32 L.Ed.2d 556 (1972) (“opportunity to be heard must be granted аt a meaningful time and in a meaningful manner“) (internal quotation and citation omitted).
Indeed, the National Union court itself recognized, “if and when the [FDIC] seeks to use
Having found subject matter jurisdiction, we still leave to the district court to address, in the first instance, under what circumstances Placida may proceed in this action with its declaratory judgment claim, given that, subsequent to commencement of the action, the FDIC apparently transferred the Note and Mortgage to Multibank. The district court dismissed Placida‘s declaratory judgment claim on a facial attack to subject matter jurisdiction, wherein the court considered the allegations of the complaint as true and did not go beyond the four corners of the complaint. The district court did not determine whether the declaratory judgment claim was barred because of the transfer to Multibank or whether Multibank is an indispensable party, and the parties, in their briefs on appeal, do not address the transfer in the context of the declaratory judgment claim.
Importantly, we cannot, on appeal, determine whether Placida‘s declaratory judgment claim is barred because of the transfer to Multibank, or whether Placida may proceed with the declaratory judgment claim against the FDIC under
B. Allowance of Setoff
We turn next to the district court‘s allowance of setoff and conclude the district court erred in allowing setoff because setoff violates the distribution scheme set forth in
Subject to
section 1815(e)(2)(C) of this title, amounts realized from the liquidation or other resolution of any insured depository institution by any receiver appointed for such institution shall be distributed to pay claims (other thansecured claims to the extent of any such security) in the following order of priority: (i) Administrative expenses of the receiver.
(ii) Any deposit liability of the institution.
(iii) Any other general or senior liability of the institution (which is not a liability in clause (iv) or clause (v)).
(iv) Any obligation subordinated to depositors or general creditors (which is not an obligation described in clause (v)).
(v) Any obligation to shareholders or members arising as a result of their status as shareholders or members (including any depository institution holding company or any shareholder or creditor of such company).
Section
In Battista v. Federal Deposit Insurance Corp., 195 F.3d 1113 (9th Cir.1999), applying
We concur with the Ninth Circuit‘s holding that repudiation damages are subject to the distribution scheme of
C. Attorneys’ Fee Award
We turn next to the district court‘s award of attorneys’ fees in favor of Placida. The district court concluded the loan documents should be construed together, and “[t]he attorney fee provisions of the note and mortgage, together with the reciprocal provisions of
The attorneys’ fee provisions in the Note and Mortgage are limited to actions to collect on the Note and Mortgage. The fee provision in the Note provides, “[I]n case this Note is collected by law or through an attorney at law, or under advice therefrom, the undersigned agrees to pay all costs of collection, including reasonable attorney‘s fees.” The fee provision in the Mortgage similarly provides:
In the event of default under the terms of this Mortgage, the Note, or any other loan documents executed in connection herewith ... Mortgagor shall pay all costs, expenses and reasonable attorneys’ fees incurred in the collection (whether by suit or otherwise) hereof, including those costs, expenses and reasonable attorneys’ fees incurred in appellate proceedings.
It is undisputеd that this is not an action to collect on the loan documents, and the fee provisions in the Note and Mortgage therefore do not apply to this action.17
Furthermore,
D. Exclusion of Expert Testimony
We turn finally to the district court‘s exclusion of a portion of the testimony of Placida‘s expert, Richard W. Bass. The district court struck the portion of Mr. Bass’ testimony relating to the Class II transaction-related discount, reasoning that the proposed testimony as to the Class II discount failed to meet the standards of admissibility of expert testimony under Daubert and
A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:
(a) the expert‘s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable prinсiples and methods; and
(d) the expert has reliably applied the principles and methods to the facts of the case.
(1) the expert is qualified to testify competently regarding the matters he intends to address; (2) the methodology by which the expert reaches his conclusions is sufficiently reliable as determined by the sort of inquiry mandated in Daubert; and (3) the testimony assists the trier of fact, through the application of scientific, technical, or specialized expertise, to understand the evidence or to determine a fact in issue.
Frazier, 387 F.3d at 1260 (citation omitted).
Importantly, “the burden of laying the proper foundation for the admission of expert testimony rests with its proponent.” Cook, 402 F.3d at 1113 (citation omitted). “[T]he proponent must demonstrate that the witness is quаlified to testify competently, that his opinions are based on sound methodology, and that his testimony will be helpful to the trier of fact.” Id. at 1107 (citation omitted).
Accordingly, it is Placida‘s burden to lay the proper foundation for the admission of Mr. Bass’ testimony. Placida first had the opportunity to meet this burden through Mr. Bass’ expert report, filed before Mr. Bass’ deposition. After the FDIC filed its Daubert motion, in which the FDIC argued Mr. Bass had “no market evidence for his opinion” regarding the Class II discount and “his 28% figure is nothing more than a number he picked out of thin air,” Placida was given and indeed availed itself of further opportunity to support Mr. Bass’ methodology. Placida submitted an affidavit from Mr. Bass in response to the FDIC‘s Daubert motion. The district court relied on this affidavit, in addition to Mr. Bass’ deposition testimony, in concluding Placida failed to adequately lay the foundation for Mr. Bass’ proposed testimony regarding the Class II discount.20 This was not a complicated case, Cook, 402 F.3d at 1113 (”Daubert hearings are not required, but may be helpful in ‘complicated cases involving multiple expert witnesses.‘“) (quoting City of Tuscaloosa v. Harcros Chems., Inc., 158 F.3d 548, 564 n. 21 (11th Cir.1998)), and the district court was under no obligation to conduct a Daubert hearing to provide Mr. Bass an additional opportunity to lay the foundation for his testimony. See Cook, 402 F.3d at 1113 (holding trial court did not abuse its discretion in excluding expert‘s testimony based on expert report and without Daubert hearing: “We recognize that a Daubert hearing before the trial court might have given Cook an additional opportunity to meet this burden, but we note that the trial court was under no obligation to hold one.“); Miller v. Baker Implement Co., 439 F.3d 407, 412 (8th Cir.2006) (holding district court did not abuse its discretion by failing to hold a Daubert hearing and party had adequate opportunity to present his arguments through legal memorandum addressing Daubert and affidavits detailing expected testimony); Oddi v. Ford Motor Co., 234 F.3d 136, 154 (3d Cir.2000) (holding district court did not abuse its discretion in failing to hold Daubert hearing where court already had before it expert reports, deposition testimony, and expert affidavit in response to summary judgment motions). In sum, we conclude Placida was given adequate opportunity to meet its burden under Rule 702 and simply failed tо do so. We accordingly affirm the district court‘s exclusion of Mr. Bass’ testimony as to the Class II discount.
We conclude the district court had subject matter jurisdiction, pursuant to
AFFIRMED IN PART, REVERSED IN PART, VACATED IN PART, AND REMANDED.
Nicholas Oldham, Dahil Dueno Goss, David Michael Leta, Lawrence R. Sommerfeld, Sally Yates, U.S. Attorney‘s Office, Atlanta, GA, for Plaintiff-Appellee.
Robert Howard Citronberg, Law Office of Robert Citronberg, Atlanta, GA, for Defendant-Appellant.
Todd Milton Ivery, Lovejoy, GA, pro se.
Before MARCUS, PRYOR and KRAVITCH, Circuit Judges.
PER CURIAM:
Robert Citronberg, appointed counsel for Todd Milton Ivery in this direct criminal appeal, has moved to withdraw from further representation of the appellant and filed a brief pursuant to Anders v. California, 386 U.S. 738, 87 S.Ct. 1396, 18 L.Ed.2d 493 (1967). Our independent review of the entire record reveals that counsel‘s assessment of the relative merit of the appeal is correct. Because independent examination of the entire record reveals no arguable issues of merit, counsel‘s motion to withdraw is GRANTED, and Ivery‘s conviction and sentence are AFFIRMED.
Notes
As its primary demand for damages, Placida seeks a termination of all Loan Documents, including the Note, Mortgage, Loan Agreement and Guaranties, since the Loan Documents, including the Loan Agreement, constitute a “single integrated transaction.” Thus when the FDIC repudiated the obligation of Freedоm to continue to fund Construction Draws, it likewise terminated both parties’ obligations under the Loan Documents, since the Loan Documents as a whole, constitute a “single, integrated transaction.” Therefore, as compensatory damages, Placida and the Principals demand cancellation and satisfaction of the Loan Documents, including the Note, Mortgage and Guaranties.
Id. at 1405 (citations omitted).We do not know, and cannot speculate, what the outcome would have been had the Freemans exhausted their administrative remedies. Nonetheless, one possible outcome gives us pause. If the complainant‘s administrative claims are disallowed and the complainant proceeds to seek de novo judicial review as prescribed in § 1821(d), then § 1821(j) on its face would appear to bar the district court from granting injunctive or declaratory relief, or rescission of the underlying agreement, at least to the extent the relief granted would “restrain” the FDIC from exercising its powers as receiver. In some circumstances this might so tie the reviewing court‘s hands that the court would be unable to grant meaningful рredeprivation relief, bringing the constitutional adequacy of the complainant‘s predeprivation review into question. But that certainly is not what actually transpired here, nor is there any reason to assume that if the Freemans had proceeded through the administrative claims process they would have faced such a problem. The Freemans might have won relief at the agency level. Even if they won no relief at that stage, the factual and legal issues might have appeared in a wholly different light by the time they sought judicial review. Finally, even if a constraint like the one we have described were to arise at the stage of judicial review, the reviewing court might construe the statute so as to avoid constitutional difficulties. We are in no position at this juncture to foretell whether such a case might ever arise, what it might look like, or how it might be resolved. It would be premature and beyond the scope of our Article III powers to read a judicially-crafted exemption into either § 1821(d) or § 1821(j) in anticipation of theoretically possible yet only dimly perceived due process concerns that are not squarely presented by the case before us.