708 F.3d 1011 (8th Cir. 2013), 12-1327, Dittmer Properties, L.P. v. F.D.I.C.

Docket Nº:12-1327, 12-1329.
Citation:708 F.3d 1011
Opinion Judge:BEAM, Circuit Judge.
Party Name:DITTMER PROPERTIES, L.P., Plaintiff-Appellant v. FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for Premier Bank, Jefferson City, Missouri; Cathy Richards, Successor Trustee of the Peters Family Trust u.t.a. Restated September 27, 2007, Assignee of a Fifty Percent General Partnership Interest in Barkley Center General Partnership Derived Origin
Attorney:Thomas M. Schneider, argued and on the brief, Columbia, MO, for appellants. William L. Sauerwein, argued, Michael C. Schroer, Anne Johnston Kelly, on the brief, Saint Louis, MO, for appellees.
Judge Panel:Before WOLLMAN, BEAM, and MURPHY, Circuit Judges.
Case Date:February 27, 2013
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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708 F.3d 1011 (8th Cir. 2013)

DITTMER PROPERTIES, L.P., Plaintiff-Appellant

v.

FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for Premier Bank, Jefferson City, Missouri; Cathy Richards, Successor Trustee of the Peters Family Trust u.t.a. Restated September 27, 2007, Assignee of a Fifty Percent General Partnership Interest in Barkley Center General Partnership Derived Origin; Cathy Richards, Defendants-Appellees.

Buford Farrington; Dittmer Holdings, L.L.C.; Barkley Center Holdings, L.L.C.; UMB Bank, N.A., Plaintiffs-Appellants

v.

Cathy Richards, Successor Trustee of the Peters Family Trust and Successor Personal Representative of the Estate of John Peters; CADC/RADC Venture 2011-1, L.L.C., Defendants-Appellees.

Nos. 12-1327, 12-1329.

United States Court of Appeals, Eighth Circuit.

February 27, 2013

Submitted: Sept. 20, 2012.

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Thomas M. Schneider, argued and on the brief, Columbia, MO, for appellants.

William L. Sauerwein, argued, Michael C. Schroer, Anne Johnston Kelly, on the brief, Saint Louis, MO, for appellees.

Before WOLLMAN, BEAM, and MURPHY, Circuit Judges.

BEAM, Circuit Judge.

Dittmer Properties, L.P., Dittmer Holdings, L.L.C., Barkley Center Holdings, L.L.C., Buford Farrington, and UMB Bank, N.A. (collectively " Dittmer" ) appeal the district court's 1 dismissal under Federal Rule of Civil Procedure 12(b) of their two lawsuits against a failed bank, the Federal Deposit Insurance Corporation (FDIC) as the bank's receiver, and Cathy Richards, successor personal representative to the Estate of John Peters. We affirm.

I. BACKGROUND

Barkley Center General Partnership (Barkley) is a Missouri general partnership, that, at all times relevant to this action, had two equal general partners— John Peters and Joe Dittmer. Peters was the managing general partner, and this position, set forth in the amended partnership agreement, in addition to a durable power of attorney (POA) executed by Joe Dittmer, gave Peters broad authority to act for the benefit of Joe Dittmer's interest in Barkley. The amended partnership agreement and the POA expressly indicated that Peters had the authority to manage partnership property, execute mortgages against the property in Joe Dittmer's name as a Barkley partner, and generally transact partnership business in the manner that Peters thought proper.

In a series of transactions from July through September 2006, Premier Bank loaned Barkley $2,550,000, at the behest of Peters in his role as managing partner. Partnership property was used as collateral for the loan. Prior to the loan's execution, Joe Dittmer faxed a letter to Premier stating, " I have no problem with John Peters using Power of Attorney to encumber on Comm. Property of Barkley Partnership." The loan proceeds were used to fund Peters' individual business interests and service loans related to three properties owned solely by Peters— the Ranch at Cedar Creek, the Lodge of Cedar Creek, and Sports at Cedar Creek.

Joe Dittmer died on October 18, 2007, and Peters died on February 10, 2008. Barkley eventually defaulted on the loan. In the first of two eventual lawsuits arising out of the 2006 loan transaction to Barkley, Dittmer,2 representing Joe Dittmer's half interest in Barkley, sued Premier Bank,

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seeking declaratory judgment that the loan should be declared void as to Dittmer and sought to enjoin the bank from selling the encumbered property. The suit was filed in Missouri state court, and the primary basis for Dittmer's complaint was that Peters did not have authority from his partner, Joe Dittmer, to mortgage Barkley property for this transaction. Dittmer alleged that the bank improperly paid all of the loan proceeds to Peters' three Cedar Creek properties, and to itself to pay off other loans attributable to Peters' Cedar Creek properties.

On October 15, 2010, the FDIC was appointed receiver of Premier Bank after the bank became insolvent. See 12 U.S.C. § 1821 (section 1821 comprises the relevant portion of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA),3 for purposes of this case). Accordingly, the FDIC moved to be substituted for Premier Bank as the defendant in the case, and subsequently removed the case to federal court. The FDIC moved to dismiss the case based upon Federal Rule of Civil Procedure 12(b)(1) (for the declaratory and injunctive claims) and Rule 12(b)(6) (for the remaining common law claims). The district court denied the motion and instead stayed the action, pending the exhaustion of administrative remedies mandated by 12 U.S.C. § 1821(d) of FIRREA. After the FDIC had completed its administrative review and denied the administrative claim, Dittmer asked for leave 4 to file a second amended complaint, and the FDIC renewed its motion to dismiss. In September 2011, while the renewed motion to dismiss was pending, Dittmer filed another suit in Missouri state court, which included the same claims as the first case, but included all of the various Dittmer successors as plaintiffs, and both the FDIC and Richards as defendants. The FDIC likewise removed the second case and it was assigned to a different federal district court judge. In November 2011, the FDIC moved to substitute CADC/RADC Venture 2011-1, L.L.C. (CADC) for itself in both cases, because it sold the Barkley note to CADC. This motion was granted by the district court in the second case,

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and shortly thereafter, in December 2011, the second case was transferred to the same district court judge as the first case. In January 2012, the district court granted the motion to dismiss with regard to the first case, finding that the anti-injunction provisions in FIRREA, 12 U.S.C. § 1821(j), precluded Dittmer's requests for injunctive and declaratory relief, and that because Peters was authorized as the managing general partner to enter into the loan transaction, the partnership suffered no redressable injury and lacked standing. The district court remanded any possible claims against Richards to state court. The district court then dismissed the second case on res judicata grounds. Dittmer appeals.

II. DISCUSSION

We review the district court's dismissal of a case pursuant to Rule 12(b) de novo. Bueford v. Resolution Trust Corp., 991 F.2d 481, 484 (8th Cir.1993) (reviewing de novo a Rule 12(b)(1) motion for lack of subject matter jurisdiction pursuant to FIRREA); Illig v. Union Elec. Co., 652 F.3d 971, 976 (8th Cir.2011) (Rule 12(b)6).

A. FIRREA

The FDIC alleged in its Rule 12(b)(1) motion that the district court did not have subject matter jurisdiction over the requests for injunctive relief due to the operation of the anti-injunction provisions in FIRREA. In its capacity as receiver of a failed institution, the FDIC is shielded from judicial action that restrains or affects the exercise of its powers as receiver. The anti-injunction provisions in FIRREA state: " 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." 12 U.S.C. § 1821(j). This section has been construed broadly to constrain the court's equitable powers. Hanson v. FDIC, 113 F.3d 866, 871 (8th Cir.1997).

Part of the relief Dittmer seeks in its complaint— that the original note be declared void as to Dittmer, and that the bank be enjoined from selling the subject property— are requests for injunctive relief that would normally be barred by § 1821(j). Tri-State Hotels, Inc. v. FDIC, 79 F.3d 707, 715 (8th Cir.1996). However, Dittmer points out that the FDIC is no longer the holder of the note because it sold the note to CADC.5 Dittmer argues that CADC does not receive the same protections from the anti-injunction provisions of § 1821(j) as does the FDIC. On the other hand, the FDIC argues that the transfer of the note to CADC does not render § 1821 moot or meaningless because the transfer was an exercise of its statutory powers, set forth in § 1821(d) and protected by § 1821(j), and any declaration that the note was void as against the original signer would unduly restrain its powers as receiver.

Accordingly, we believe we must determine whether Dittmer's lawsuit " restrain[s] or affect[s]" the FDIC's powers as receiver, even though the FDIC has already disposed of the asset in question. We have not had the occasion to construe the effect of §...

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