BankUnited Fin. Corp. v. Fed. Deposit Ins. Corp. (In re BankUnited Fin. Corp.)

CourtUnited States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Southern District of Florida
Writing for the CourtLAUREL M. ISICOFF
Citation2011 USTC P 50734,108 A.F.T.R.2d 2011,55 Bankr.Ct.Dec. 220,462 B.R. 885
PartiesIn re BANKUNITED FINANCIAL CORPORATION, et al., Debtors.BankUnited Financial Corporation, BankUnited Financial Services, Inc., CRE America Corporation, and BU Realty Corporation, Plaintiffs, v. Federal Deposit Insurance Corporation, in its capacity as Receiver of Bank United, FSB, Defendant.
Decision Date23 November 2011
Docket NumberBankruptcy No. 09–19940–BKC–LMI.,Adversary No. 10–02872–BKC–LMI.

108 A.F.T.R.2d 2011-7356
2011-2 USTC P 50,734
462 B.R. 885
55 Bankr.Ct.Dec.
220

In re BANKUNITED FINANCIAL CORPORATION, et al., Debtors.BankUnited Financial Corporation, BankUnited Financial Services, Inc., CRE America Corporation, and BU Realty Corporation, Plaintiffs,
v.
Federal Deposit Insurance Corporation, in its capacity as Receiver of Bank United, FSB, Defendant.

Bankruptcy No. 09–19940–BKC–LMI.

Adversary No. 10–02872–BKC–LMI.

United States Bankruptcy Court, S.D. Florida.

Nov. 23, 2011.


[462 B.R. 887]

John R. Dodd, Esq., Mark D. Bloom, Esq., Scott M. Grossman, Esq., Miami, FL, for Plaintiffs.

Bruce J. Berman, Raquel A. Rodriguez, Miami, FL, Geoffrey T. Raicht, New York, NY, for Defendant.

MEMORANDUM OPINION ON ORDER GRANTING SUMMARY JUDGMENT IN FAVOR OF PLAINTIFFS AND DENYING SUMMARY JUDGMENT IN FAVOR OF DEFENDANTS
LAUREL M. ISICOFF, Bankruptcy Judge.

This matter came before me on September 13, 2011 on cross-motions for summary judgment filed by the Plaintiffs, BankUnited Financial Corporation (“BUFC” or “Holding Company”), BankUnited Financial Services, Incorporated (“BUFS”), CRE America Corporation (“CRE”) (collectively “BankUnited Debtors”) and BU Realty Corporation (“BU Realty” collectively with the BankUnited Debtors, the “Plaintiffs”) and the Cross–Motion for Summary Judgment filed by the Defendant Federal Deposit Insurance Corporation, in its capacity as Receiver (“FDIC–R” or “Defendant”) of BankUnited, FSB (“BUFB” or the “Bank”). 1

FACTUAL AND PROCEDURAL HISTORY

On December 31, 1997, the Holding Company and the Bank entered into an Income Tax Allocation Agreement (“TAA”). The TAA defined the appropriate methods for allocating current and deferred income tax assets and liabilities among the Holding Company, the Bank, and the other members of the Affiliated Group identified in the TAA (the “BU Consolidated Tax Group”).2 Under the TAA the Bank was to make all tax payments on behalf of the BU Consolidated Tax Group. Any members with net tax payables were then responsible for reimbursing

[462 B.R. 888]

the Bank for each member's proportional share of liability. Conversely, the Bank was obligated to reimburse members that had a net tax receivable with respect to any tax refund held by the Bank. Both Plaintiffs and Defendant agree that the TAA is controlling.

On May 21, 2009 BUFB was closed by the Office of Thrift Supervision (“OTS”) and the FDIC–R was appointed as Receiver. On May 22, 2009, BUFC and the other BankUnited Debtors filed petitions under Chapter 11 of the Bankruptcy Code.

BUFC filed a consolidated tax return titled “Amended U.S. Corporation Income Tax Return” for the fiscal year ended September 30, 2008 on Form 1120X filed by “BankUnited Financial Corp. & Subs C/O DSI” on or about September 10, 2009 (the “Amended FY 2007 Return”), and a certain consolidated tax return titled “U.S. Corporate Income Tax Return” for the fiscal year ended September 30, 2009 on Form 1120 filed by “BankUnited Financial Corporation and Subsidiaries” on or about June 14, 2010 (the “FY 2008 Return”).

In conjunction with the filing of the Amended FY 2007 Return, on September 30, 2009, BUFC filed a Form 1139 “Corporate Application for Tentative Refund” (“Form 1139”) through which it claimed a refund of $5,566,878 (the “FY 2007 Refund”). In conjunction with the filing of the FY 2008 Return, on June 17, 2010, BUFC filed a Form 1139 through which it claimed a refund of $42,552,226 (the “FY 2008 Refund”) for taxes paid in fiscal years 2003 (fiscal year ending September 30, 2004), 2005 (fiscal year ending September 30, 2006), and 2006 (fiscal year ending September 30, 2007) (the “FY 2008 Refund Claim”), representing the maximum refund available to the BU Consolidated Tax Group.

On or about June 13, 2011, BUFC and the FDIC–R jointly filed an amended return for FY 2008 (the “Amended FY 2008 Return”) pursuant to a Settlement Agreement dated as of June 4, 2011 (the “Settlement Agreement”). The anticipated tax refunds from the Amended FY 2007 Return and the Amended FY 2008 Return will be referred to hereinafter collectively as the “Tax Refunds”.

The FDIC–R filed proofs of claim in each of the BankUnited Debtors' bankruptcy cases; those proofs of claim include the FDIC–R's assertion of ownership of the Tax Refunds.3 The Plaintiffs filed claims in the Bank receivership (the “Receivership Claims”).

On April 21, 2010 the Plaintiffs filed a 22 count complaint (ECF # 1) (the “Complaint”) objecting to the FDIC–R proofs of claim on the grounds that any claim relating to the Tax Refunds are at most an unsecured claim, seeking a declaratory judgment that the Holding Company owns the Tax Refunds, and seeking additional relief under several other counts including a determination that the Receivership Claims were deemed allowed due to the FDIC–R's alleged untimely objection to the Receivership Claims. The FDIC–R filed a Motion for Withdrawal of the Reference (ECF # 11) alleging that considerations of Title 12 mandated the reference be withdrawn.4

On August 23, 2010, the district court entered its order Granting in Part and

[462 B.R. 889]

Denying in Part the Motion to Withdraw the Reference. BankUnited Financial Corp. v. Federal Deposit Insurance Corp., 436 B.R. 216 (S.D.Fl.2010). The district court held that mandatory withdrawal was not required 5 except with respect to one discreet Title 12 issue related to the timeliness of the FDIC–R's objection to the Receivership Claims, on which issue the district court ruled. The district court declined to withdraw the balance of the Complaint,6 rejecting the FDIC–R's argument that 12 U.S.C. § 1821(d)(6) 7 confers sole jurisdiction of any claim against an FDIC receivership on the district court to the exclusion of any other court, including the bankruptcy court. The district court held, citing to other bankruptcy cases that adjudicated statutorily described district court matters, like ERISA, that the bankruptcy court was capable of adjudicating claims filed against the FDIC–R since “[a]s a general matter, such issues—absent indication that they may involve substantial and material consideration—are routinely adjudicated by bankruptcy courts.” 436 B.R. at 220. The district court observed in reaching its holding that “[t]he bankruptcy court is an adjunct of the district court. Absent express contrary indication, statutory grant of jurisdiction to a district court does not divest the bankruptcy court of coextensive referral jurisdiction.” Id. at 221.

Soon thereafter, the Plaintiffs filed an Amended Complaint (ECF # 67), to which the FDIC–R filed its Answer and Affirmative Defenses (ECF # 73). Subsequently the parties filed their cross-motions for partial summary judgment with respect to Count I and Count II of the Amended Complaint, agreeing that there are no disputed material facts. Count I of the Amended Complaint is the Plaintiffs' objection to the FDIC–R's claims; Count II seeks a declaration by this Court that the Tax Refunds are property of the Holding Company, and not of the Bank or the FDIC–R as its receiver.

The adjudication of the cross-motions was delayed for approximately eight months while the parties negotiated the Settlement Agreement pursuant to which all matters between the Plaintiffs and the FDIC–R were resolved other than a portion of Counts I, and Count II, of the Amended Complaint.8 The Settlement Agreement addresses the disposition of the Tax Refunds and the amount of the FDIC–R's claims, if any, in the BankUnited Debtors' bankruptcy cases, based on the outcome of the dispute over ownership of the Tax Refunds. 9

[462 B.R. 890]

SUMMARY JUDGMENT STANDARD

Rule 56 of the Federal Rules of Civil Procedure is applicable to this adversary proceeding under Fed. R. of Bankr.P. 7056. Summary judgment is appropriate where the “pleadings, dispositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c); Celotex v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If there are no material facts in dispute, and only a purely legal question remains to be decided by the court, then granting summary judgment is appropriate. See, e.g., Neff v. American Dairy Queen Corp., 58 F.3d 1063 (5th Cir.1995) (finding summary judgment appropriate when there were no material facts in dispute); United States v. Reader's Digest Ass'n, 662 F.2d 955, 961 (3d Cir.1981) (noting that interpreting the provisions of a consent order was a question of law and therefore, appropriate for summary judgment). As previously noted, the parties agree this matter can be resolved on summary judgment.10

JURISDICTION

The Amended Complaint alleges that this Court has jurisdiction pursuant to 12 U.S.C. §§ 1819(b)(2)(A) 11 and 1821(d)(6) 12 and 28 U.S.C. §§ 1331 13 and 1334.14 Amended Complaint ¶ 6. The Amended Complaint further alleges that the “matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), (B), (C), (E), (F), (H), and (O).” Amended Complaint, ¶ 8. The Answer denies all the jurisdictional allegations of the Amended Complaint.

Sometime between when the Cross Motions for Summary Judgment were filed and the scheduled oral argument on the Motions for Summary Judgment, the United States Supreme Court issued its opinion in Stern v. Marshall, ––– U.S. ––––, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011). Since its release, a maelstrom of opinions and articles have been written about the scope of Stern, ranging in tone from “much ado about nothing” to “the end of the bankruptcy world as we know it.” In light of this I determined it appropriate to issue an Order Setting Hearing to Determine Jurisdictional Issues (ECF # 142).15

[462 B.R. 891]

At the hearing and in subsequent briefs filed by the parties, 16 the FDIC–R resurrected the Title 12 argument previously rejected, for the most part, by Judge Huck and further argued...

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32 practice notes
  • Burns v. Dennis (In re Southeastern Materials, Inc.), Bankruptcy No. B–09–52606 C–7W.Adversary Nos. 11–6033
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — Middle District of North Carolina
    • March 27, 2012
    ...II, at *38. 21. The allegations are contained in count 11 against Tony and count 8 against Betty. 22. See In re BankUnited Fin. Corp., 462 B.R. 885, at 893–94 (Bankr.S.D.Fla.2011) (“Contrary to the FDIC–R's argument, what is or is not property of a bankruptcy estate is an issue that stems f......
  • Waldron v. Fed. Deposit Ins. Corp. (In re Venture Fin. Grp., Inc.), Case No. 13-46392-BDL
    • United States
    • United States Bankruptcy Courts. Ninth Circuit. U.S. Bankruptcy Court — Western District of Washington
    • September 9, 2016
    ...cases).The issue of whether a tax refund is property of the estate is a non-Stern core issue. In re BankUnited Financial Corporation , 462 B.R. 885, 891–95 (Bankr.S.D.Fla.2011) (rev'd on other grounds in In re BankUnited Financial Corp. , 727 F.3d 1100 (11th Cir.2013) ); In re First Nationa......
  • Burns v. Dennis (In re Southeastern Materials, Inc.), Case No. B-09-52606 C-7W
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — Middle District of North Carolina
    • March 27, 2012
    ...Part II, at *38. 21.The allegations are contained in count 11 against Tony and count 8 against Betty. 22.See In re BankUnited Fin. Corp., 462 B.R. 885, at 893-94 (Bankr. S.D. Fla. 2011) ("Contrary to the FDIC-R's argument, what is or is not property of a bankruptcy estate is an issue that s......
  • Kraken Invs. Ltd. v. Jacobs (In re Salander–O'Reilly Galleries, LLC), No. 11–CV–6133 (CS).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • July 10, 2012
    ...outside bankruptcy, and thus is core as an “arising in” proceeding, see BankUnited Fin. Corp. v. FDIC (In re Bank United Fin. Corp.), 462 B.R. 885, 893–94 (Bankr.S.D.Fla.2011) (“[W]hat is or is not property of a bankruptcy estate is an issue that stems from the bankruptcy itself, one that c......
  • Request a trial to view additional results
32 cases
  • Burns v. Dennis (In re Southeastern Materials, Inc.), Bankruptcy No. B–09–52606 C–7W.Adversary Nos. 11–6033
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — Middle District of North Carolina
    • March 27, 2012
    ...II, at *38. 21. The allegations are contained in count 11 against Tony and count 8 against Betty. 22. See In re BankUnited Fin. Corp., 462 B.R. 885, at 893–94 (Bankr.S.D.Fla.2011) (“Contrary to the FDIC–R's argument, what is or is not property of a bankruptcy estate is an issue that stems f......
  • Waldron v. Fed. Deposit Ins. Corp. (In re Venture Fin. Grp., Inc.), Case No. 13-46392-BDL
    • United States
    • United States Bankruptcy Courts. Ninth Circuit. U.S. Bankruptcy Court — Western District of Washington
    • September 9, 2016
    ...cases).The issue of whether a tax refund is property of the estate is a non-Stern core issue. In re BankUnited Financial Corporation , 462 B.R. 885, 891–95 (Bankr.S.D.Fla.2011) (rev'd on other grounds in In re BankUnited Financial Corp. , 727 F.3d 1100 (11th Cir.2013) ); In re First Nationa......
  • Burns v. Dennis (In re Southeastern Materials, Inc.), Case No. B-09-52606 C-7W
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — Middle District of North Carolina
    • March 27, 2012
    ...Part II, at *38. 21.The allegations are contained in count 11 against Tony and count 8 against Betty. 22.See In re BankUnited Fin. Corp., 462 B.R. 885, at 893-94 (Bankr. S.D. Fla. 2011) ("Contrary to the FDIC-R's argument, what is or is not property of a bankruptcy estate is an issue that s......
  • Kraken Invs. Ltd. v. Jacobs (In re Salander–O'Reilly Galleries, LLC), No. 11–CV–6133 (CS).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • July 10, 2012
    ...outside bankruptcy, and thus is core as an “arising in” proceeding, see BankUnited Fin. Corp. v. FDIC (In re Bank United Fin. Corp.), 462 B.R. 885, 893–94 (Bankr.S.D.Fla.2011) (“[W]hat is or is not property of a bankruptcy estate is an issue that stems from the bankruptcy itself, one that c......
  • Request a trial to view additional results

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