Beverly Hills Federal Savings and Loan Ass'n v. Webb
| Decision Date | 30 January 1969 |
| Docket Number | 22404.,No. 21957,21957 |
| Citation | 406 F.2d 1275 |
| Parties | BEVERLY HILLS FEDERAL SAVINGS AND LOAN ASSOCIATION, Appellant, v. Eugene WEBB, Jr., Marguerite R. Webb, Richards Matthews, Jr., Robert G. Rufi and Eugene C. Jones, Appellees. BEVERLY HILLS FEDERAL SAVINGS AND LOAN ASSOCIATION, Appellant, v. TITLE INSURANCE AND TRUST COMPANY, Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Joseph A. Ball (argued), of Ball, Hunt, Hart & Brown, Long Beach, Cal., for appellant.
John P. Pollack (argued), of Pollock & Palmer, Paul, Hastings, Janofsky & Walker, Richard P. Byrne, Vaughan, Brandlin, Robinson & Roemer, Los Angeles, Cal., MacCracken, Collins & Hawes, Washington, D. C., for appellees.
Before BARNES and HAMLEY, Circuit Judges, and McNICHOLS, District Judge*.
These are consolidated appeals from two judgments dismissing the action as to certain defendants for lack of subject matter jurisdiction. Notwithstanding the fact that the action was not dismissed as to all defendants, these judgments are final and appealable because the district court made the determination and direction called for by Rule 54(b), Federal Rules of Civil Procedure.
The first judgment under review was entered on April 6, 1967. It dismissed the action as to defendants Eugene Webb, Jr., Marguerite R. Webb, Richards Matthews, Jr., Robert G. Rufi and Eugene C. Jones, hereinafter referred to as "the Webb group." The second judgment was entered on August 14, 1967 and dismissed the action as to defendant Title Insurance and Trust Company (Title Company). The Webb group and the Title Company have filed separate appellees' briefs in this court.
These judgments were entered in the course of litigation which has been before this court on two previous occasions. See Reich v. Webb, 9 Cir., 336 F.2d 153, and Webb v. Beverly Hills Federal Savings and Loan Assn., 9 Cir., 364 F.2d 146. It will be here assumed that the reader is familiar with the background facts, as stated in our prior opinions.
The most recent factual developments in this controversy, reported in 364 F.2d 146, were (1) the settlement agreement between Beverly Hills Federal Savings and Loan Association (Association) and Federal Home Loan Bank Board (Board), entered into in January, 1965; (2) the entry, shortly thereafter, of a district court stipulated judgment predicated upon the settlement agreement, dismissing the action with prejudice as to certain defendants; and (3) the appeal from that judgment, dismissed in 364 F.2d 146. The defendants so dismissed were Lytton Financial Corporation, Bart Lytton, Beth Lytton, Thomas W. Clarke, Samuel J. Sills, H. P. Braman and Glenn Wilson (Lytton group).
On May 10, 1965, the Association filed a second amended and supplemental complaint. In this pleading, the Association sought a judicial declaration that the transfer of control of the Association by the Webb group to Lytton Financial Corporation on March 14, 1961 was illegal, and that the members of the Webb group hold in trust for the Association the $1,800,000 paid to them as consideration for such transfer. The Association further sought joint and several judgments against the members of the Webb group for damages in the amount of $1,800,000.
In August, 1965, the Webb group moved to dismiss the second amended and supplemental complaint insofar as it asserted a claim by the Association against the Webb group. The motion was made on the grounds that: (1) the district court did not have jurisdiction of the parties and subject matter, (2) no claim was stated upon which relief may be granted, and (3) the claim sought to be stated is barred by the statute of limitations. A hearing was held and affidavits were submitted and considered. The court granted this motion for lack of subject matter jurisdiction and dismissed the action. This appeal followed.
In this court the Association advances several reasons why the district court erred in entering this judgment. One of these is that, under 12 U.S.C. § 1464 (d) (1) (1964), as it then existed,1 the district court has subject matter jurisdiction to entertain the claim asserted against the Webb group in the second amended and supplemental complaint.
Section 1464(d) (1) provided that the Board shall, by formal resolution, state any alleged violation of law or regulation, of which the Board becomes aware, by a federal savings and loan association, and shall give written notice to the affected association of the facts alleged to constitute such violation. It also provided that, where such a notice is given:
"* * * either the Board or the association affected may, within thirty days after the service of said notice, apply to the United States district court * * * for a declaratory judgment and an injunction or other relief with respect to such controversy, and said court shall have jurisdiction to adjudicate the same as in other cases and to enforce its orders."
On January 26, 1962, and March 30, 1962, the Board gave a section 1464(d) (1) notice to the Association, based upon the transfer of control of the Association by the Webb group to the Lytton group on March 9, 1961, for an alleged consideration of $1,800,000. The Board asserted that this transaction was illegal and that in participating therein the Webb group violated their fiduciary duty to the members of the Association and improperly profited from the transaction. Responsive to this notice the Association, invoking jurisdiction as then conferred by section 1464(d) (1), commenced this district court action against the Board on February 20, 1962. The Association, then controlled by the Lytton group, asserted that the transaction in question was not illegal and asked for a declaratory judgment to that effect.
On April 23, 1962, the Association filed a first amended complaint adding the members of the Webb and Lytton groups as parties defendant. The Board answered on July 2, 1962, reasserting its position that the transaction was illegal. In its answer the Board also asserted cross-claims against the members of the Webb and Lytton groups asking, among other things, that (1) the Association, through the then-managing Lytton group, be ordered to correct such alleged violations of law as are found to exist in connection with the transfer of control of the Association to the Lytton group, (2) all individual party defendants be barred from serving in a capacity of trust and responsibility as an officer, director or party otherwise connected with the management and control of the Association for five years, (3) punitive damages be awarded against certain members of the Lytton and Webb groups for willful and deliberate disregard of their fiduciary duties to the Association and willful disregard for the requirements of applicable laws and regulations, (4) defendants Eugene Webb, Jr. and Marguerite R. Webb be deemed to hold in constructive trust, for the benefit of the Association, the sum of $1,620,000 and any other sum which may have been received by them as a consideration for the transfer of control of the Association to the Lytton group, and (5) the Association be awarded general damages in such amount against these two Webb defendants.
The pleadings remained in this status until January, 1965. A settlement was then entered into between the Board and the Lytton group. The latter agreed to relinquish management of the Association. The stipulation provided that the court would be requested to enter a judgment of dismissal as to the Lytton group only, and that the settlement would not affect the rights or obligations of any other parties. On January 14, 1965, a stipulated...
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