32 F.3d 905 | 5th Cir. | 1994
Lead Opinion
James Whatley, John Rowley, Philip Solomon, Myra Beth Whatley, and Dan Bensimon appeal the district court’s dismissal of their claims against Resolution Trust Corporation and Continental Savings, AFSLA, for lack of subject matter jurisdiction. For the reasons assigned we vacate and remand for further proceedings.
BACKGROUND
On December 17, 1990 the plaintiffs filed suit in state court in Travis County, Texas against Continental Savings, AFSLA for breach of fiduciary duty, breach of contract, and tortious interference with contractual relations. RTC, as conservator for Continental, intervened on January 16, 1991 and removed to federal court. The conservator was substituted as party defendant and requested and received a stay of proceedings pursuant to 12 U.S.C. § 1821(d)(12)(A)(i).
Six months later, on August 16, 1991, the Office of Thrift Supervision declared Continental insolvent and appointed RTC as receiver. RTC filed pleadings to reflect its capacity as receiver but did not request a stay of proceedings, although part (ii) of subsection 1821(d)(12)(A) permits of such.
RTC, obviously fully cognteant of the pending lawsuit, made no attempt whatsoever to communicate with plaintiffs or their counsel. Instead, on January 15,1992 — after the time for filing administrative claims had expired— RTC filed a motion to dismiss the plaintiffs’ complaint for failure to exhaust administrative remedies. In response the plaintiffs asserted that: (1) the administrative claims process of the Financial Institutions Reform and Recovery Enforcement Act of 1989 (FIRREA) does not apply to lawsuits filed before the appointment of the receiver; (2) the receiver’s failure to give the plaintiffs proper notice of the claims process exempted them from the exhaustion requirement; and (3) the plaintiffs notified the receiver of their claim by the September 1991 letter.
The district court initially denied RTC’s motion to dismiss. RTC then filed a motion for summary judgment contending that the plaintiffs’ unsecured claims were prudentially moot because the value of the secured claims exceeded the value of the bank’s assets. Before ruling on the summary judgment motion, however, the district court reversed its position on the motion to dismiss, vacated its prior orders, and dismissed the plaintiffs’ ease for lack of subject matter jurisdiction. The plaintiffs timely appealed.
ANALYSIS
We review dismissals for lack of subject matter jurisdiction de novo,
Pre- Versus Post-receivership Claims
We noted the differences between pre- and post-receivership claims in Carney v. Resolution Trust Corporation
By contrast, several sections of FIR-REA provide that federal jurisdiction over pre-receivership claims continues after the appointment of a receiver. Subsection 1821(d), which governs the powers and duties of a receiver, states:
Except as otherwise provided in this subsection,11 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*908 depository institution for which the Corporation has been appointed receiver ...; or
(ii) any claim relating to any act or omission of such institution or the Corporation as receiver.12
Paragraph (5)(F)(ii) of the subsection provides otherwise, stating that “[sjubject to paragraph (12), the filing of a claim with the receiver shall not prejudice any right of the claimant to continue any action which was filed before the appointment of the receiver.”
This circuit, and the others addressing the issue, have interpreted these and other paragraphs
Pre-receivership Claims and Exhaustion
There is an added odious dimension when the receiver, with full knowledge of the pending lawsuit, foregoes a request for a stay and waits until the time for the administrative claims process has expired to appear in court requesting dismissal because of the plaintiffs’ supposed failure to exhaust administrative remedies. In the eyes of the claimant — especially one who receives no actual notice of the administrative process — his lawsuit is awaiting disposition: the receiver, having intervened and been substituted as party defendant, ostensibly joins him in awaiting a hearing on the merits. In reality, however, the receiver lies in ambush, awaiting expiration of the administrative deadline so that it may dispose of the claim without consideration of its merits. We neither find nor assign any such intent to Congress in its enactment of FIRREA.
Congress created a separate scheme for the handling of pre-receivership actions, giving the receiver the privilege, but not the duty, to request a stay of judicial proceedings so that it might first consider the pending claim administratively. Neither a request for a stay nor the failure to request a stay deprives the district court of jurisdiction. Rather, if the receiver requests a stay, the court will defer action temporarily. If the receiver does not timely seek a stay, the judicial action will routinely proceed. This does not mean that the judicial process runs concurrently with the administrative remedy.
As in any case of statutory interpretation, we look to the plain language of the statute, reading it as a whole and mindful of the linguistic choices made by Congress. The language of subsection 1821(d) is clear: “The Corporation may, as receiver, determine claims in accordance with the requirements of this subsection.”
The language of subsection 1821(d), and its legislative history, lends support to our conclusion. Absent a request for a stay pursuant to paragraph (12)(A)(ii), no provision of the subsection exists by which the judicial proceeding may be stayed. As congressional goals of efficiency and expediency would be prejudiced if administrative and judicial processes were allowed to proceed simultaneously,
Finally, the purposes of FIRREA and basic notions of fair play militate against the procedure followed by the receiver — awaiting expiration of the time allowed for initiating claims and then moving to dismiss the pending judicial actions. FIRREA seeks the efficient and expedient handling of claims.
We therefore hold that with regard to actions filed before the receivership, the receiver may opt either for the judicial route, by allowing the action to continue, or it may choose the administrative process, by moving for a stay within 90 days of its appointment.
The decision of the district court is VACATED and the case is REMANDED for further proceedings consistent herewith.
. "After the appointment of a conservator ... for an insured depository institution, the conservator ... may request a stay for a period not to exceed — (i) 45 days, in the case of any conservator, ... in any judicial action or proceeding to which such institution is or becomes a party." 12 U.S.C. § 1821(d)(12)(A)(i).
. "After the appointment of a ... receiver for an insured depository institution, the ... receiver may request a stay for a period not to exceed ... (ii) 90 days, in the case of any receiver, in any judicial action or proceeding to which such institution is or becomes a party." 12 U.S.C. § 1821(d)(12)(A)(ii).
.See 12 U.S.C. § 1821(d)(3)(B), requiring that such notice be published.
. The receiver shall mail a notice similar to the notice published under [subsection B] at the time of such publication to any creditor shown on the institution’s books—
(i) at the creditor’s last address appearing in such books; or
(ii) upon the discovery of the name and address of a claimant not appearing on the institution’s books within 30 days after the discovery of such name and address.
12 U.S.C. § 1821(d)(3)(C) (emphasis added).
. Matter of Bradley, 989 F.2d 802 (5th Cir.1993).
. 19 F.3d 950 (5th Cir.1994).
. Carney.
. See Rosa v. Resolution Trust Corp., 938 F.2d 383 (3d Cir.), cert. denied, - U.S. -, 112 S.Ct. 582, 116 L.Ed.2d 608 (1991); see also Praxis Properties, Inc. v. Colonial Sav. Bank, S.L.A., 947 F.2d 49 (3d Cir.1991).
. 952 F.2d 879 (5th Cir.1992).
. Id. at 882.
. "This subsection” refers to section 1821(d) as a whole. Marquis v. F.D.I.C., 965 F.2d 1148 (1st Cir.1992) (en banc).
. 12 U.S.C. § 1821(d)(13)(D).
. 12 U.S.C. § 1821(d)(5)(F)(ii).
. 12 U.S.C. § 1821 (d)( 12)(A)(ii).
. For example, paragraphs (6)(A) and (8)(C) permit a claimant to continue a suit filed before the appointment of a receiver after its administrative claim has been disallowed. 12 U.S.C. § 1821(d)(6)(A) and (8)(C).
. See Brady Development Co. v. Resolution Trust Corp., 14 F.3d 998 (4th Cir.1994); Carney; Marquis; Praxis; Rosa; see also F.D.I.C. v. Glynn, 1993 WL 413958 (N.D.Ill. October 15, 1993); Lahigan v. Resolution Trust Corp., 1992 WL 130075 (N.D.Ill. June 9, 1992); Guidry v. Resolution Trust Corp., 790 F.Supp. 651 (E.D.La.1992); Coston v. Gold Coast Graphics, Inc., 782 F.Supp. 1532 (S.D.Fla.1992).
. See Carney (allowing simultaneous pursuit of administrative and judicial remedies thwarts the congressional purpose for enacting FIRREA); accord Brady.
. See Praxis (analyzing the legislative history and the language of 12 U.S.C. § 1821(d)(12)(A) and concluding that Congress intended that the receiver request the stay within the first 90 days
. 12 U.S.C. § 1821(d)(3)(A) (entitled "Authority of receiver to determine claims”) (emphasis added).
. 12 U.S.C. § 1821 (d)(12)(A)(ii) (emphasis added).
. Rose v. Rose, 481 U.S. 619, 107 S.Ct. 2029, 95 L.Ed.2d 599 (1987) (Congress’ use of word "may” does not imply exclusivity; it establishes only a discretionary power); accord F.D.I.C. v. McSweeney, 976 F.2d 532 (9th Cir.1992), cert. denied, - U.S. -, 113 S.Ct. 2440, 124 L.Ed.2d 658 (1993); F.D.I.C. v. Canfield, 967 F.2d 443 (10th Cir.), cert. dismissed, — U.S. -, 113 S.Ct. 516, 121 L.Ed.2d 527 (1992); Resolution Trust Corp. v. Lightfoot, 938 F.2d 65 (7th Cir.1991).
. See also 12 U.S.C. § 1821(d)(6)(A)© (the receiver may opt out of the administrative process after an administrative claim is filed by refusing to act on the claim for 180 days at which point the claimant is free to proceed in federal court).
. See also Brady (concluding stay provision of paragraph (12)(A)(ii) is optional and discretionary).
. See e.g., 12 U.S.C. § 1821(d)(5)(A)® (establishing time period in which receiver shall determine administrative claims); (8)(A) (receiver shall establish an expedited claims process for certain claimants); (15)(A) and (B) (receiver shall make an accounting).
. See Carney; see also Brady.
. See e.g., 11 U.S.C. § 362(a)(1) (imposing automatic stay in the bankruptcy context).
. Matter of Meyerland Co., 960 F.2d 512 (5th Cir.1992), cert. denied, — U.S. -, 113 S.Ct. 967, 122 L.Ed.2d 123 (1993). See also Lightfoot; McSweeney; Canfield.
. See Brady; Carney; Marquis; Meliezer.
. In so holding, we recognize that other circuits are not in accord. See Brady Development Co. v. Resolution Trust Corp., 14 F.3d 998 (4th Cir.1994); see also Bueford v. Resolution Trust Corp., 991 F.2d 481 (8th Cir.1993); Resolution Trust Corp. v. Mustang Partners, 946 F.2d 103 (10th Cir.1991).
Concurrence Opinion
concurring:
I agree that the receiver’s failure to invoke the optional stay simultaneously with the giving of notice to creditors means that the pending action was not suspended under § 1821(d)(12) but continued under § 1821(d)(5)(F)(ii). (Paragraph (5)(F)(ii) recognizes that a claimant’s right to continue a pre-appointment law suit is not prejudiced unless the receiver requests a stay under paragraph (12)). A plaintiff whose suit continues cannot have his claim disallowed for failure to continue his suit.
I write separately to express my opinion that RTC’s failure to mail the notice required under § 1821(d)(3)(C) is also dispositive, for two reasons.
First, the failure to mail notice left the receiver without the power to determine the plaintiffs’ claim administratively and, therefore, exempted plaintiffs from the exhaustion requirement notwithstanding Meliezer. In Meliezer, a suit filed against the receiver post-appointment, the receiver’s failure to mail notice upon learning the identity of the claimant (under subsection (d)(3)(C)(ii)) did not relieve the claimant from the obligation to exhaust administrative remedies, because subsection (d)(3)(C) does not impose “a consequence for failure of compliance.”
Chief Judge Politz’s opinion recognizes, at least implicitly, that the receiver’s notice to a claimant with a suit pending against the receiver is important. I consider his reference to the receiver’s “request [for a] substitute or supplemental filing” an allusion to the receiver’s duty to notify a plaintiff of any administrative filing requirements. Thus if the receiver requests a stay of a suit without requesting from the claimant a “substitute or supplemental filing,” the receiver must consider the claim administratively based solely on the complaint. The mailing of notice under § 1821(d)(3)(C) would constitute such a request for substitute or supplemental presentation of the claim at the address given in the notice.
Second, I would hold that the Due Process Clause requires mailed notice to a claimant known to the receiver by virtue of his having filed suit against the institution before the appointment of the receiver. For such claimants, publication of notice (which is sufficient for unknown claimants
I nevertheless concur. Regardless of the adequacy of the notice given by the receiver under either the constitution or FIRREA itself, the receiver must also request a stay to suspend judicial action in a case filed pre-appointment. Otherwise, the jurisdiction of the court continues.
. Meliezer, 952 F.2d at 883. Unlike the Meliezer panel, I find sound statutory basis for the argument that the receiver's very authority to determine claims hinges on its compliance with the notice requirements. See § 1821(d)(3)(A) (receiver may determine claims in accordance with “requirements” of § 1821(d)); § 1821(d)(3)(B) (receiver “shall” publish notice); § 1821(d)(3)(C) (receiver "shall” mail a similar notice to creditors shown on the institution’s books and claimants who become known); see also Meliezer, 952 F.2d at 881 (recognizing that under § 1821(d)(3) it is the new claims procedure which "gives the Receiver ... authority to review claims”); id. at 880 (recognizing that by publishing the notice and establishing a claims deadline the RTC "implement[s] the administrative claims process"); Brady Dev. Co. v. RTC, 14 F.3d 998, 1001 (4th Cir.1994) (noting that RTC "began its claims process" by publishing the required notice). Because the notice provisions are mandatory under paragraph (3)(B) & (C), I consider them a "requirement” of subsection (d). I also interpret paragraph (3) (A) as conferring authority to determine claims only if the receiver satisfies such "requirements.” Accordingly, the statutory scheme does provide a consequence for the failure of compliance with the notice requirement.
. See § 1821(d)(5)(C)(i) (providing for final disal-lowance of claims filed after the date given in the published notice, unless clause (ii) applies, i.e., claimant does not have notice of the appointment of the receiver in time to file a claim before the bar date but files in time to permit payment).
. Meliezer is again distinguishable. This Court never considered the effect of the constitutional requirement of due process on the statutory notice provisions in that case. The Meliezer plaintiff apparently received constitutionally adequate notice via the newspaper publication. Meliezer at 883 n. 7. Until suit was filed after the receiver was appointed and indeed after the bar date had passed, the Meliezer plaintiff was not a known claimant and was known only as a debtor of the institution. Id. at 880.
