Acciard v. Whitney, CASE NO. 2:07-CV-00476-FtM-36DNF
| Decision Date | 30 September 2011 |
| Docket Number | CASE NO. 2:07-CV-00476-FtM-36DNF |
| Parties | GLENN ACCIARD, et al., Plaintiffs, v. RUSSELL WHITNEY, et al., Defendants. |
| Court | U.S. District Court — Middle District of Florida |
This cause comes before the Court on the Defendant/Counter-Claimant National Credit Union Administration's ("NCUA") Motion for Summary Judgment on its Amended Counterclaim ("Motion for Summary Judgment") (Doc. 732). Plaintiffs/Counter-Defendants1 (the "Borrowers") filed a Memorandum in Opposition to the Motion for Summary Judgment (Doc. 893), to which the NCUA replied (Doc. 932). Oral argument on the motion was held on August 22, 2011. Upon due consideration of the record before this Court, the NCUA's Motion for Summary Judgment will be denied.
From 2005 through 2006, the Construction Loan Company, Inc. ("CLC") issued loans to the Borrowers that were secured by mortgages on real property located in Florida. In return for theloans, the Borrowers executed and delivered notes to CLC. Thereafter, those notes and mortgages were assigned to Huron River Area Credit Union ("Huron") by CLC. On March 13, 2007, various plaintiffs, including the Borrowers, initiated an action against Huron and others in a multi-count complaint in the Circuit Court of the Twentieth Judicial Circuit in and for Lee County, Florida. (Doc. 2). The cause of action was removed to the Ft. Myers Division of the Middle District of Florida on July 31, 2007. (Doc. 1).
On November 17, 2007, NCUA placed Huron into involuntary liquidation and became the liquidating agent of Huron. (Doc. 671-4). As liquidating agent, NCUA enjoyed all right and title to Huron's assets. As a result of the Borrowers having failed to repay the principal and accumulated interest upon maturity of the notes, NCUA filed a counterclaim against the Borrowers on January 19, 2010 (Doc. 611)2 seeking to foreclose on the mortgages and obtain judgments on the notes. NCUA also filed a Motion for Summary Judgment (Doc. 612) on the Plaintiffs' claim against it, arguing that the doctrine established in D'Oench, Duhme & Co., Inc. v. FDIC, 315 U.S. 447 (1942) barred all claims against it. Subsequently, the NCUA amended its Counterclaim (Doc. 671). On September 17, 2010, the Court granted the NCUA's Motion for Summary Judgment primarily on the ground that the Plaintiffs' claims were barred by the D'Oench doctrine. (Doc. 674).
The Borrowers then filed an Answer and Affirmative Defenses (Doc. 676) on September 20, 2010 in reply to NCUA's Amended Counterclaim. The Borrowers supplemented their Answer on October 12, 2010, with an Amended Answer (Doc. 693), which included seven new affirmative defenses (Doc. 693, pp. 158-162). Affirmative Defenses 30-36 primarily relate to the ConstructionLoan Agreements the Borrowers entered into. Id. On November 30, 2010, the NCUA filed the instant Motion for Summary Judgment. (Doc. 732).
Summary judgment is appropriate only when the court is satisfied that "there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law" after reviewing the "pleadings, the discovery and disclosure materials on file, and any affidavits . . . ". Fed. R. Civ. P. 56(c)(2). Issues of facts are "genuine only if a reasonable jury, considering the evidence presented, could find for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct 2505, 91 L.Ed.2d 202 (1986). A fact is "material" if it may affect the outcome of the suit under governing law. Id. The moving party bears the initial burden of stating the basis for its motion and identifying those portions of the record demonstrating the absence of genuine issues of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1259-60 (11th Cir. 2004). That burden can be discharged if the moving party can show the court that there is "an absence of evidence to support the nonmoving party's case." Celotex Corp., 477 U.S. at 325. In determining whether a genuine issue of material fact exists, the court must consider all the evidence in the light most favorable to the nonmoving party. Shotz v. City of Plantation, Fla., 344 F.3d 1161, 1164 (11th Cir. 2003).
NCUA seeks entry of a summary final judgment foreclosing mortgages made by Borrowers, which are now held by NCUA and for money damages on the promissory notes made by Borrowers and now held by NCUA. NCUA contends that the borrowers failed to repay the principal andaccumulated interest upon maturity of the promissory notes. NCUA further contends that the Borrowers' affirmative defenses all fail as a matter of law. Specifically, NCUA asserts that Affirmative Defenses 1 through 29 are barred by the law of the case doctrine and Affirmative Defenses 30 through 36 are barred due to failure to exhaust administrative remedies. The Borrowers oppose the motion contending that NCUA has failed to address the substance of their affirmative defenses numbered 1 through 36, that they exhausted their administrative remedies, and that genuine issues of material fact exist to preclude the entry of summary judgment.
In support of its Motion for Summary Judgment, NCUA filed an affidavit of John Monk and the original notes and mortgages (Docs. 733-748). It is undisputed that the Borrowers failed to repay the principal and accumulated interest upon maturity of the notes. Here, the dispute pertains to the Borrowers' affirmative defenses.
Under the law of the case doctrine, "an issue decided at one stage of a case is binding at later stages of the same case." Aldana v. Del Monte Fresh Produce N.A., Inc., 578 F.3d 1283, 1288-89 (11th Cir. 2009) (quoting United States v. Escobar-Urrego, 110 F.3d 1556, 1560 (11th Cir. 1997). This doctrine applies to any issues where there has been a final judgment. Id. citing Gregg v. United States, 715 F.2d 1522, 1530 (11th Cir. 1983). Moreover, a ruling on a motion for summary judgment constitutes law of the case on issues decided. See United States v. Horton, 622 F.2d 144, 148 (5th Cir. 1980). The law of the case doctrine is "predicated on the premise that 'there would be no end to a suit if every obstinate litigant could, by repeated appeals, compel a court to listen to criticisms on their opinions . . . '". White v. Murtha, 377 F.2d 428, 431 (5th Cir. 1967) (quoting Roberts v. Cooper, 61 U.S. 467, 481, 15 L.Ed. 969 (1857).
In the Borrowers' Amended Answer (Doc. 693), they assert various defenses to the NCUA's Amended Counterclaim. In particular, Affirmative Defenses 1 through 29 relate to the alleged fraudulent and illegal acts and omissions by Huron, which the Borrowers argue should defeat NCUA's counterclaims. Id. However, this Court has previously addressed and dismissed with prejudice each of the claims and allegations that form the basis of Affirmative Defenses 1 through 29. (Doc. 674). In that Order, the Court found that the Borrowers' "illegality" argument failed and the allegedly fraudulent character of the appraisals was not facially apparent. Id. As such, the Borrowers' claims were found to be barred by the D'Oench doctrine. Id. Further, that Order became the law of the case when the Court denied the Borrowers' Motion for Reconsideration. (Doc. 1003).
Consequently, the underlying arguments that serve as the basis for the Borrowers' Affirmative Defenses 1 through 29 have already been considered and rejected by the Court. See Doc. 674. Moreover, a judgment has been rendered on these issues. See Doc. 675. Pursuant to the law of the case doctrine, these issues have been decided, are binding, and will not be reconsidered. The Borrowers Affirmative Defenses 1 through 29 are barred by the D'Oench doctrine.
In the Borrowers' Amended Answer, they provide seven additional affirmative defenses ("Affirmative Defenses 30 through 36"), primarily concerning the Construction Loan Agreements. (Doc. 693, pp. 159-63). These Affirmative Defenses, 30 through 36, have not yet been considered by the Court. As such, their consideration is not barred by the law of the case doctrine.
The Federal Credit Union Act (FCUA) was enacted to establish a system of credit unions to facilitate stabilization of the nation's credit structure and to achieve increased availability of loans.12 U.S.C. § 1751 et seq. Section 1787 of the FCUA governs the liquidation of federally insured credit unions and provides an administrative claim procedure which serves as a jurisdictional prerequisite to litigation. Pursuant to this administrative scheme, a prospective plaintiff wishing to assert a "claim" against the assets of a failed credit union must submit an administrative claim within a defined period. See 12 U.S.C. § 1787(b)(5)-(11). A prospective plaintiff's failure to follow these procedures divests the district court of jurisdiction over the prospective claim. See 12 U.S.C. §1751(b)(13)(D).
The implementing regulations of § 1787 provide little guidance in defining a "claim" as "a creditor's claim against the credit union in liquidation." 12 C.F.R. § 709.1(d); see also 12 C.F.R. § 709. Additionally, the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)3 does not define the terms claim or creditor either. See PL 101-73, 1989 HR 1278. However, various courts have found that with regard to FIRREA, the Bankruptcy Code provides the most promising source to turn to in defining those terms. See Nat'l Union Fire Insurance Co. v. City Savings, F.S.B., 28 F.3d 376, 386 (3rd Cir. 1994) (); see also Elmco Properties, Inc. v. Second Nat. Fed. Sav. Ass'n, 94 F.3d 914, 919 (4th Cir. 1996); Office & Professional Employees Int'l Union, Local 2 v....
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