Alkasabi v. Wash. Mut. Bank, F.A.
| Decision Date | 21 March 2014 |
| Docket Number | Civil Case No. 12–02021 RJL |
| Citation | 31 F.Supp.3d 101 |
| Parties | Osama A. Alkasabi et al., Plaintiffs, v. Washington Mutual Bank, F.A. et al., Defendants. |
| Court | U.S. District Court — District of Columbia |
Osama A. Alkasabi, La Jolla, CA, pro se.
Nadia Haddada, La Jolla, CA, pro se.
Lori J. Searcy, Searcy Business Litigation & Employment Law, LLC, Alexandria, VA, for Defendant.
Plaintiffs Osama A. Alkasabi and Nadia Haddada, proceeding pro se, brought this suit against defendants Washington Mutual Bank, F.A., Washington Mutual Bank (together, “WAMU”), and the Federal Deposit Insurance Corporation (“FDIC”), as receiver for WAMU, in connection with plaintiffs' purchase of two condominiums in La Jolla, California. See generally Compl. [Dkt. # 1]. Plaintiffs, borrowers from WAMU, a failed bank, allege that WAMU misrepresented that Certificates of Occupancy for the properties would be issued by the city before the loans closed. Before the Court is defendant FDIC's Motion to Dismiss the complaint for lack of subject matter jurisdiction and for failure to state a claim. See FDIC–Receiver's Mot. to Dismiss and Mem. P. & A. in Supp. (“Def.'s Mot.”) [Dkt. # 4]. Upon consideration of the pleadings, record, and relevant law, I find that this Court lacks subject matter jurisdiction, and therefore FDIC's motion is GRANTED, and all claims against defendants WAMU and the FDIC are dismissed.1
Plaintiffs' suit stems from their purchase of two condominiums at the Seahaus development in La Jolla, California.See Compl. ¶ 35. On June 1, 2005, plaintiffs borrowed $1,199,925 from WAMU to purchase one unit, id. ¶ 9 and Ex. D (Deed of Trust), and on July 24, 2006, plaintiff Alkasabi borrowed $1,216,224 from WAMU to purchase a second unit, id. ¶ 10 and Ex. E (Deed of Trust).
On December 14, 2012—more than eight years after the first condominium purchase and seven years after the second—plaintiffs filed their two-count complaint initiating this action, alleging that they did not receive “marketable title to their Seahaus Units because of the absence of a Certificate of Occupancy from the City of San Diego.” Compl. ¶ 35. In the first count, entitled “Fraud and Deceit: Negligent Misrepresentation of Fact,” plaintiffs allege that the issuance of Certificates of Occupancy was a condition precedent to closing the two loan transactions, id. ¶¶ 40, 52, but such certificates were not issued, id. ¶ 46. Further, plaintiffs allege that WAMU knew that no certificates had been issued at the time the loans were being negotiated, id. ¶¶ 37–38, made statements that such certificates had been issued while knowing, or being reckless in not knowing, that such statements were false, id. ¶¶ 41, 43–44, and thereby induced plaintiffs to enter into the loan contracts, id. ¶¶ 35, 59. Plaintiffs also assert that they did not discover that Certificates of Occupancy had not been issued until March 29, 2012 and May 18, 2012, when the Superior Court of San Diego County issued rulings in a related case. Id. ¶¶ 24, 48.2 In the second count, plaintiffs seek a declaratory judgment that the FDIC (and Chase) assumed WAMU's alleged liability for the claim alleged in the first count. See id. ¶¶ 60–61.
Between the time when the loans closed and when plaintiffs initiated this action, WAMU collapsed. On September 25, 2008, the U.S. Department of the Treasury's Office of Thrift Supervision declared WAMU insolvent and appointed the FDIC as receiver pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act (“FIRREA”), Pub.L. No. 101–73, 103 Stat. 183 (1989) (). See Compl. ¶ 2; Decl. of William A. Starnes (“Starnes Decl.”) [Dkt. # 4–1], at ¶ 3 and Ex. A (Order Appointing FDIC as Receiver); 12 U.S.C. § 1821(c). Pursuant to FIRREA's administrative claims process for handling creditors' claims against failed banks that are in receivership with the FDIC, discussed infra, the FDIC set December 30, 2008 as the deadline for filing claims against the WAMU receivership (hereinafter “Claims Bar Date”). See Compl. ¶ 22; Starnes Decl. ¶ 5. Also pursuant to FIRREA's statutory requirements, the FDIC published notice of its appointment as receiver (and of the Claims Bar Date) in newspapers of general circulation in October and December of 2008. Starnes Decl. ¶ 5 and Ex. B (Publication Notices).3
Nearly four years after the Claims Bar Date, on August 22, 2012, plaintiffs filed an administrative claim with the FDIC raising the misrepresentation claim that forms the basis of the instant suit. Compl. ¶ 21; Starnes Decl. ¶ 6 and Ex. C (Administrative Complaint). On October 16, 2012, the FDIC disallowed plaintiffs' claim as untimely filed. Compl. ¶ 22 and Ex. C (Notice of Disallowance); Starnes Decl. ¶ 7 and Ex. D (Notice of Disallowance). Thereafter, within the 60 day time limit allowed by statute to seek judicial review, plaintiffs filed their complaint in this case on December 14, 2012.
Defendant FDIC has moved to dismiss plaintiffs' complaint for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) and for failure to state a claim under Rule 12(b)(6). In such a situation, a court should consider the Rule 12(b)(1) jurisdictional challenges before the Rule 12(b)(6) arguments. See United States ex rel. Settlemire v. District of Columbia, 198 F.3d 913, 920–21 (D.C.Cir.1999) (citing United States ex rel. Kreindler & Kreindler v. United Techs. Corp., 985 F.2d 1148, 1155–56 (2d Cir.1993) ).
On a motion to dismiss under Rule 12(b)(1), “the plaintiff bears the burden of establishing the factual predicates of jurisdiction by a preponderance of the evidence.” Erby v. United States, 424 F.Supp.2d 180, 182 (D.D.C.2006) (citing, inter alia, Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ); see also Khadr v. United States, 529 F.3d 1112, 1115 (D.C.Cir.2008) (). “[Plaintiffs'] factual allegations in the complaint ... will bear closer scrutiny in resolving a 12(b)(1) motion than in resolving a 12(b)(6) motion for failure to state a claim.” United States ex rel. Digital Healthcare, Inc. v. Affiliated Computer Servs., Inc., 778 F.Supp.2d 37, 43 (D.D.C.2011) (citation and internal quotation marks omitted). In deciding a 12(b)(1) motion, a court need not limit itself to the complaint; rather, it “may consider such materials outside the pleadings as it deems appropriate to resolve the question whether it has jurisdiction in the case.” Bank of America, N.A. v. FDIC, 908 F.Supp.2d 60, 76 (D.D.C.2012) (citation and internal quotation marks omitted).4
As a threshold issue, defendant FDIC argues that plaintiffs' complaint must be dismissed for want of subject matter jurisdiction: since plaintiffs did not timely file their administrative claim under FIRREA, they failed to exhaust the mandatory, jurisdictional administrative claims process, and therefore this Court lacks subject matter jurisdiction over these time-barred claims. Plaintiffs do not dispute that FIRREA provides this Court with jurisdiction over only claims that have first been filed administratively with the FDIC. Instead, they argue that they did, in fact, exhaust the administrative claims process because their claim meets FIRREA's late-filed claims exception, either on the ground that they did not receive adequate notice, or, in the alternative, because their claim did not accrue until after the Claims Bar Date had passed. See Pliantiffs [sic ] Osama A. Alkasabi and Nadia Haddada's Oppositions and Objections to the FDIC–Receiver's Motion to Dismiss and Mem. P. & A. in Supp. (“ ”) [Dkt. # 8], at 8, 10–11, 16. Next, plaintiffs contend that their administrative claim was not untimely because the Claims Bar Date should be equitably tolled. See Pls.' Opp'n at 12–13. For the reasons explained below, plaintiffs' arguments are without merit. Accordingly, I find that this Court lacks subject matter jurisdiction, and I do not reach the FDIC's alternative arguments for dismissal.
“ ‘Federal courts are courts of limited jurisdiction;’ ” they have subject matter jurisdiction only to the extent that it is conferred by statute or the Constitution. See Gunn v. Minton, ––– U.S. ––––, 133 S.Ct. 1059, 185 L.Ed.2d 72 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) ). Here, plaintiffs sue the FDIC pursuant to 12 U.S.C. § 1821(d)(6)(A)(ii), a provision of FIRREA, because the FDIC is acting as receiver for WAMU under that statute. See Compl. ¶ 30. FIRREA “extends a special kind of federal jurisdiction outside the scope of 28 U.S.C. § 1331, the normal source of federal question jurisdiction.” Youkelsone v. FDIC, 910 F.Supp.2d 213, 222 (D.D.C.2012).
FIRREA—which “Congress enacted ... ‘in the midst of the savings and loan insolvency crisis to enable the FDIC ... to expeditiously wind up the affairs of literally hundreds of failed financial institutions throughout the country,’ ” Westberg v. FDIC, 741 F.3d 1301, 1303 (D.C.Cir.2014) (quoting Freeman v. FDIC, 56 F.3d 1394, 1398 (D.C.Cir.1995) )—creates an administrative claims process under which the FDIC decides creditors' claims against the assets of failed banks that are in receivership with the FDIC. See 12 U.S.C. § 1821(d)(3)-(13)Am. Nat'l Ins. Co. v. FDIC, 642 F.3d 1137, 1141 (D.C.Cir.2011) ; Freeman, 56 F.3d at 1399–1400. When liquidating a failed bank's assets, the FDIC must “promptly publish a notice to the depository institution's creditors to present their claims ... [to the FDIC] by a date specified in the notice”—i.e. the Claims Bar Date. 12 U.S.C. § 1821(d)(3)(B). At the same time, the FDIC must also mail a similar notice to (1) “any...
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