First Federal Sav. and Loan Ass'n of Lake Worth v. Brown

• Decision Date: 20 June 1983
• Docket Number: Nos. 82-5094,s. 82-5094
• Citation: 707 F.2d 1217
• Parties: FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF LAKE WORTH, a corporation organized and existing under the laws of the United States of America, Plaintiff-Appellant, v. Paul E. BROWN, et al., Defendants-Appellees. FIRST FEDERAL SAVINGS & LOAN ASSOCIATION OF LAKE WORTH, Plaintiff-Appellant, v. Roy A. GOMES, et al., Defendants-Appellees. FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF LAKE WORTH, Plaintiff-Appellant, v. Anthony PRIETO, et al., Defendants-Appellees. FIRST FEDERAL SAVINGS & LOAN ASSOCIATION OF LAKE WORTH, Plaintiff-Appellant, v. Eugene MASSON, et al., Defendants-Appellees. FLORIDA FEDERAL SAVINGS AND LOAN ASSOCIATION, a corporation organized and existing under the laws of the United States of America, Plaintiff-Appellant, v. Larry O. BAUER and Sandra D. Bauer, his wife; and David B. Hernandez, a single man, Defendants-Appellees. CLEARWATER FEDERAL SAVINGS AND LOAN ASSOCIATION, Plaintiff-Appellant, v. Ruth E. MILLS, Joyce E. Smith, HWB Employees Federal Credit Union, Defendants-Appellees. Ned I. PRICE, Roberta, M. Price, Plaintiffs-Appellants, v. FLORIDA FEDERAL SAVINGS & LOAN ASSOCIATION, a Corporation, Defendant-Appellee. FIRST FEDERAL SAVINGS & LOAN, et al., Plaintiffs-Appellees, v. H.B. PETERSON & Ruth Peterson, Defendants-Appellants. MUTUAL FEDERAL SAVINGS & LOAN et al., Plaintiffs-Appellees, v. William M. ANGELO, et al., Defendants-Appellants. MUTUAL FEDERAL SAVINGS & LOAN, Plaintiff-Appellee, v. PENSACOLA TRACTOR & EQUIPMENT et al., Defendants-Appellants. FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF GADSDEN COUNTY, Plaintiff-Appellee, v. H.B. PETERSON and Ruth E. Peterson, Defendants, William M. Angelo and Debi P. Angelo, husband and wife; Tracy V. Herring and Brenda G. Herring, husband and wife; et al., Defendants-Appellants. to 82-5097, 81-5303, 81-5309, 81-5969, 81-6105 and 81-6237.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1217

707 F.2d 1217

FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF LAKE WORTH, a

corporation organized and existing under the laws

of the United States of America, Plaintiff-Appellant, v. Paul E. BROWN, et al., Defendants-Appellees.

FIRST FEDERAL SAVINGS & LOAN ASSOCIATION OF LAKE WORTH, Plaintiff-Appellant, v. Roy A. GOMES, et al., Defendants-Appellees.

FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF LAKE WORTH, Plaintiff-Appellant, v. Anthony PRIETO, et al., Defendants-Appellees.

FIRST FEDERAL SAVINGS & LOAN ASSOCIATION OF LAKE WORTH, Plaintiff-Appellant, v. Eugene MASSON, et al., Defendants-Appellees.

FLORIDA FEDERAL SAVINGS AND LOAN ASSOCIATION, a corporation

organized and existing under the laws of the

United States of America, Plaintiff-Appellant, v. Larry O. BAUER and Sandra D. Bauer, his wife; and David B.

Hernandez, a single man, Defendants-Appellees.

CLEARWATER FEDERAL SAVINGS AND LOAN ASSOCIATION, Plaintiff-Appellant, v. Ruth E. MILLS, Joyce E. Smith, HWB Employees Federal Credit

Union, Defendants-Appellees.

Ned I. PRICE, Roberta, M. Price, Plaintiffs-Appellants, v. FLORIDA FEDERAL SAVINGS & LOAN ASSOCIATION, a Corporation,

Defendant-Appellee.

FIRST FEDERAL SAVINGS & LOAN, et al., Plaintiffs-Appellees, v. H.B. PETERSON & Ruth Peterson, Defendants-Appellants.

MUTUAL FEDERAL SAVINGS & LOAN et al., Plaintiffs-Appellees, v. William M. ANGELO, et al., Defendants-Appellants.

MUTUAL FEDERAL SAVINGS & LOAN, Plaintiff-Appellee, v. PENSACOLA TRACTOR & EQUIPMENT et al., Defendants-Appellants.

FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF GADSDEN

COUNTY, Plaintiff-Appellee, v. H.B. PETERSON and Ruth E. Peterson, Defendants, William M. Angelo and Debi P. Angelo, husband and wife;

Tracy V. Herring and Brenda G. Herring, husband

and wife; et al., Defendants-Appellants.

Nos. 82-5094 to 82-5097, 81-5303, 81-5309, 81-5969, 81-6105

and 81-6237.

United States Court of Appeals, Eleventh Circuit.

June 20, 1983.

Eugene E. Shuey, Norman L. Schroeder, II, Lake Worth, Fla., Montgomery, Lytal Reiter, Denney & Searcy, F. Gregory Barnhart, West Palm Beach, Fla., for First Federal Sav. and Loan Assn. of Lake Worth.

Scott, Burk, Royce & Harris, Gary J. Nagle, Palm Beach, Fla., for Brown, Gomes, Prieto and Masson, et al.

Stephen C. Chumbris, Greene, Mann, Rowe, Stanton, Mastry & Burton, St. Petersburg, Fla., for First Federal Sav. and Loan Assn.

Patrick F. Sprague, Sprague & Jeske, P.A., Tampa, Fla., for Bauer, et al.

Richards, Nodine, Gilkey, Fite, Meyer & Thompson, Dennis Thompson, Clearwater, Fla., for Clearwater Federal Sav. and Loan Assn.

Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Lawrence M. Watson, Jr., Edward A. Marod, Darryl M. Bloodworth, Orlando, Fla., Boyd & Smith, Joseph R. Boyd, Tallahassee, Fla., for Petersons.

Charles Sherrill, Pensacola, Fla., Charles R. Gardner, Tallahassee, Fla., for Pensacola Tractor.

John E. Gunther, Trial Counsel, Washington, D.C., for First Federal Sav. and Loan Assn. of Gadsden County.

W. Spencer Mitchem, G. Edison Holland, Jr., Pensacola, Fla., for Mut. Federal Sav. and Loan Assn. of Pensacola and Pensacola Tractor.

Anthony E. Fiorentino, Pensacola, Fla., for Fausz, Fiorentino and Schwartz.

Appeals from the United States District Court for the Northern District of Florida.

Before HILL and HATCHETT, Circuit Judges, and HAYNSWORTH ^*, Senior Circuit Judge.

PER CURIAM:

Each of these cases involves a federally chartered savings and loan association seeking to enforce a due-on-sale clause in a mortgage. This clause allows a savings and loan to declare immediately due and payable all sums secured by the association's security instrument if the borrower transfers or sells all or any part of the real property securing the loan without the association's prior written consent. 12 C.F.R. Sec. 545.8-3(f) (1982). In each case, a mortgagor seeks to transfer his property without the prior approval of the savings and loan. We have consolidated these actions upon our own motion, Fed.R.App.P. 3(b), and hold that we lack subject matter jurisdiction over the foreclosure actions and declaratory judgment actions brought by the associations. In the declaratory judgment action brought by subsequent buyers of property, we hold that we have jurisdiction and that federal law regulating the due-on-sale clause preempts contrary state law.

I. Procedural Background

These cases present three different procedural backgrounds. First, in cases No. 82-5094, First Federal Savings and Loan Association v. Brown; No. 82-5095, First Federal Savings and Loan Association v. Gomes; No. 82-5096, First Federal Savings and Loan Association v. Prieto; No. 82-5097, First Federal Savings and Loan Association v. Masson; No. 81-5303, Florida Federal Savings and Loan Association v. Bauer; and No. 81-5309, Clearwater Federal Savings and Loan Association v. Mills, the plaintiff savings and loans filed complaints in federal court seeking to foreclose mortgages on the basis of the due-on-sale clauses. The trial courts, 515 F.Supp. 869, dismissed the actions for lack of subject matter jurisdiction.

No. 81-5969, Price v. Florida Federal Savings and Loan Association, embodies the second type of procedural posture. The Prices, buyers of property from prior mortgagors, filed this action in state court seeking a declaratory judgment determining the validity and enforceability of the due-on-sale provision. The savings and loan removed the case to federal court. The district court, 524 F.Supp. 175, exercised jurisdiction and granted the savings and loan summary judgment.

The final class of cases consists of No. 81-6105, First Federal Savings and Loan Association v. Peterson, and No. 81-6237, First Federal Savings and Loan Association v. Angelo. In these cases the plaintiff savings and loans brought declaratory judgment actions in federal court. The district courts, 516 F.Supp. 732, held that they possessed subject matter jurisdiction.

II. Jurisdiction

We must first determine whether we have subject matter jurisdiction to hear these cases. Our jurisdiction in the third class of cases, where the plaintiff savings and loans filed declaratory judgment actions in federal court, is coextensive with that of the first group, where the plaintiff associations filed complaints in federal court to foreclose the mortgages. The federal Declaratory Judgment Act, 28 U.S.C. Secs. 2201-02 (1976), does not expand federal jurisdiction; the Act merely creates a new remedy in cases or controversies for which an independent basis of federal jurisdiction exists. Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 70 S.Ct. 876, 94 L.Ed. 1194 (1950); Commercial Metals Co. v. Balfour, Guthrie & Co., 577 F.2d 264 (5th Cir.1978).

In the first and third groups of cases, the savings and loans have asserted federal question jurisdiction pursuant to either 28 U.S.C. Sec. 1331 or 28 U.S.C. Sec. 1337. We hold that the court lacks jurisdiction in these cases. A case does not present a federal question of the sort necessary to confer subject matter jurisdiction pursuant to these statutes where it merely anticipates a federal question defense which the defendant might raise; nor does a case present such a federal question where it anticipates a federal question response to a non-federal defense which the defendants might raise. Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 70 S.Ct. 876, 94 L.Ed. 1194 (1950); Gully v. First National Bank in Meridian, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936); Allegheny Airlines, Inc. v. Pennsylvania Public Utility Commission, 319 F.Supp. 407 (E.D.Pa.1970), aff'd, 465 F.2d 237 (3d Cir.1972), cert. denied, 410 U.S. 943, 93 S.Ct. 1367, 35 L.Ed.2d 609 (1973).

In these actions, the associations claim that the following federal questions are raised:

1. Are the due-on-sale provisions legal and enforceable?

2. Do federal regulations governing the lending practices of federally chartered savings and loan associations which authorize inclusion of these due-on-sale clauses, 12 C.F.R. Sec. 545.8-3(f) (1982), preempt contrary state law?

3. Does the authority of the savings and loan associations "to invest in, sell, or otherwise deal" in loans or other investments in or on the security of a first lien upon residential real property subject to regulations of the Federal Home Loan Bank Board preempt contrary state law?

These questions do not form the basis of any complaint to foreclose a mortgage or to collect a note. These questions could arise only if, in response to a foreclosure or a collection suit, the mortgagor or his successor asserted affirmative defenses challenging the enforceability of the due-on-sale clause and the association then attempted to avoid the application of that defense on the ground of federal preemption. The federal question must appear on the face of a well-pleaded complaint. See Gully v. First National Bank in Meridian, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936); Louisville & Nashville Railroad Co. v. Mottley, 211 U.S. 149, 152, 29 S.Ct. 42, 43, 53 L.Ed. 126 (1908).

The situations presented in the third class of cases is similar to the situation presented in Skelly Oil Co. v. Phillips Petroleum Co. As in Skelly Oil, the associations sought a declaration of the validity or enforceability of certain contractual clauses allegedly authorized by federal law. As in Skelly, the savings and loan associations' coercive remedies would arise solely under state law for breach of contract. Holding that such a suit did not present a federal question, the Skelly Court stated:

... to sanction suits for declaratory relief as within the jurisdiction of the district courts merely because, as in this case, artful pleading anticipates a defense based on...