Stevens v. Lowder, 80-7976
| Decision Date | 27 April 1981 |
| Docket Number | No. 80-7976,80-7976 |
| Citation | 643 F.2d 1078 |
| Parties | Ernest T. STEVENS, George T. Stevens et al., Plaintiffs-Appellants, v. Robert E. LOWDER, Thomas Lowder, et al., Defendants-Appellees. Summary Calendar. . Unit B |
| Court | U.S. Court of Appeals — Fifth Circuit |
R. Ben Hogan, III, Birmingham, Ala., for plaintiffs-appellants.
Cabaniss, Johnston, Gardner, Dumas & O'Neal, Fournier J. Gale, III, Birmingham, Ala., for defendants-appellees.
Appeal from the United States District Court for the Northern District of Alabama.
Before RONEY, FRANK M. JOHNSON, Jr. and HENDERSON, Circuit Judges.
Plaintiffs appeal from the district court's dismissal of this action due to their lack of standing. This class action was brought by stockholders of a bank in an Alabama state court against defendants for compensatory and punitive damages on charges of fraud, breach of confidential relationship, and conspiracy to destroy Southern National Bank in connection with the purchase of the bank's assets by defendants. The action was removed to the federal district court where it was then dismissed.
Plaintiffs are shareholders of Southern National Bank (SNB), seeking recovery for the loss in value of all common shares. While SNB was experiencing financial difficulty, it entered into negotiations with defendants. Shortly thereafter, SNB was declared to be insolvent, and the Comptroller of the Currency appointed the FDIC to serve as the bank's receiver. Submitting the highest bid, defendants, acting through another bank, purchased SNB's assets and liabilities.
In order for the district court to have jurisdiction upon removal, this must be a civil action "to wind up the affairs of any (national banking) association...." 28 U.S.C.A. § 1348. A court should look to the entire transaction in question, see Richmond v. Irons, 121 U.S. 27, 7 S.Ct. 788, 30 L.Ed. 864 (1887); Hoehn v. Crews, 144 F.2d 665 (10th Cir. 1944), aff'd, 324 U.S. 200, 65 S.Ct. 600, 89 L.Ed. 870 (1945); Chabot v. McRae, 7 F.Supp. 113 (W.D.Mich.1934), to see if the civil action affects the liquidation of an insolvent national bank, Federal Deposit Insurance Corp. v. M. C. Honea, Jr., Inc., 440 F.Supp. 1064 (N.D.Ga.1977).
Plaintiffs assert that defendants breached a fiduciary duty owed to SNB and that they defrauded SNB's directors as agents and representatives of the shareholders. Assertion of claims which belong to an insolvent bank are part of the process of winding up the affairs of the bank. See Hoehn v. Crews, 144 F.2d 665 (10th Cir. 1944), aff'd, 324 U.S. 200, 65 S.Ct. 600, 89 L.Ed. 870 (1945). Plaintiffs' claim that defendants committed fraud in connection with the purchase of SNB's assets is properly within the scope of winding up the affairs of the bank. Cf. Crum v. Patterson, 64 F.2d 263 (3d Cir. 1933). Viewing defendants' activities in relation to SNB as a whole, the district court correctly held that this action arises out of SNB's insolvency and the purchase and assumption of SNB's assets and liabilities by defendants' bank. As such, this is an action to wind up the affairs of a national banking association, and the district court properly exercised its jurisdiction upon removal.
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