Bloom v. Fed. Deposit Ins. Corp. (In re First State Bancorporation)

• Decision Date: 17 September 2013
• Docket Number: Bankruptcy No. 7–11–11916 JA.,Adversary No. 13–1033 J.
• Citation: 498 B.R. 322
• Parties: In re FIRST STATE BANCORPORATION, Debtor. Linda S. Bloom, as Chapter 7 Trustee for First State Bancorporation, Plaintiff, v. Federal Deposit Insurance Corporation, as receiver for First Community Bank, Defendant.
• Court: U.S. Bankruptcy Court — District of New Mexico

498 B.R. 322

In re FIRST STATE BANCORPORATION, Debtor.Linda S. Bloom, as Chapter 7 Trustee for First State Bancorporation, Plaintiff,

v.Federal Deposit Insurance Corporation, as receiver for First Community Bank, Defendant.

Bankruptcy No. 7–11–11916 JA.

Adversary No. 13–1033 J.

United States Bankruptcy Court,

D. New Mexico.

Sept. 17, 2013.

Corali Lopez–Castro, David Aaron Samole, Kozyak Tropin & Throckmorton PA, Miami, FL, for Plaintiff.

Jeffrey A. Sandell, Federal Deposit Insurance Corporation, Dallas, TX, Joshua David Wayser, Katten Muchin Roseman LLP, Los Angeles, CA, for Defendant.

MEMORANDUM OPINION

ROBERT H. JACOBVITZ, Bankruptcy Judge.

THIS MATTER is before the Court on the Motion to Dismiss Count II (“Motion”) filed by the Federal Deposit Insurance Corporation, as receiver for First Community Bank (“FDICR”), by and through its attorneys of record, Jeffrey A. Sandell and Joshua David Wayser. FDIC–R asserts that the jurisdictional bar found in 12 U.S.C. § 1821(d)(13)(D) of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”), 12 U.S.C. § 1821 et seq., applies to Plaintiff's claim to avoid First State Bancorporation's obligations under an alleged capital maintenance guaranty as a fraudulent transfer under 11 U.S.C. § 548. FDIC–R argues further that FIRREA's statutory framework for determining the amount of the alleged capital maintenance guaranty conclusively establishes reasonably equivalent value for purposes of defeating the Chapter 7 Trustee's fraudulent transfer claim.

The Court heard oral argument on the Motion on August 9, 2013 and took the matter under advisement. After considering counsel's arguments and relevant case law, and being otherwise sufficiently informed, the Court finds that the jurisdictional bar found in 28 U.S.C. § 1821(d)(13)(D) does not divest this Court of subject matter jurisdiction over the Trustee's fraudulent transfer claim raised in Count II of the Complaint for Avoidance of Fraudulent Conveyance and Objection to Claim No. 9–2 (“Complaint”).¹ The Court also finds that Count II survives FDIC–R's motion to dismiss for failure to state a claim. The Court will, therefore, deny the Motion.

MOTION TO DISMISS STANDARDS

FDIC–R filed its Motion pursuant to Fed.R.Civ.P. 12(b)(1)(lack of subject-matter jurisdiction), and Fed.R.Civ.P. 12(b)(6)(failure to state a claim upon which relief can be granted), each made applicable to adversary proceedings by Fed.R.Bankr.P. 7012. Motions to dismiss filed pursuant to Fed.R.Civ.P. 12(b)(1) “generally take one of two forms: (1) a facial attack on the sufficiency of the complaint's allegations as to subject matter jurisdiction; or (2) a challenge to the actual facts upon which subject matter jurisdiction is based.” Ruiz v. McDonnell, 299 F.3d 1173, 1180 (10th Cir.2002) (citation omitted). FDIC–R's Motion asserts a facial attack on the allegations of subject matter jurisdiction; consequently, the Court acceptsas true all of the allegations in the Complaint. See Stuart v. Colorado Interstate Gas Co., 271 F.3d 1221, 1225 (10th Cir.2001) (“In reviewing a facial attack, the district court must accept the allegations in the complaint as true.”) (citation omitted).

Similarly, the Court reviews a motion to dismiss for failure to state a claim upon which relief can be granted under Fed.R.Civ.P. 12(b)(6) by accepting all well-pleaded facts in the Complaint as true and viewing them in the light most favorable to the non-moving party. See Alvarado v. KOB–TV, L.L.C., 493 F.3d 1210, 1215 (10th Cir.2007) (stating that under Fed.R.Civ.P. 12(b)(6), the Court “must accept all the well-pleaded allegations of the complaint as true and must construe them in the light most favorable to the plaintiff.”) (citation and internal quotation marks omitted). To survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), the complaint must contain enough facts to state a cause of action that is “plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). The Court's function in deciding a motion to dismiss under Fed.R.Civ.P. 12(b)(6) is “to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted.” Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201 (10th Cir.2003) (citations and quotation marks omitted).

PROCEDURAL HISTORY AND ALLEGED FACTS ²

First State Bancorporation (“First State” or “Debtor”) operated as a holding company for its wholly owned subsidiary, First Community Bank (the “Bank”), a New Mexico-chartered member of the Federal Reserve System. The Federal Deposit Insurance Corporation (“FDIC”) insured the Bank's deposits. As of March 21, 2010, the Bank's regulatory capital status fell to “undercapitalized,” and the Federal Reserve Bank of Kansas City (“Federal Reserve”) charged with supervising the Bank, issued a letter requiring the Bank to submit a capital restoration plan to correct the undercapitalization. In June of 2010, First State and the Bank submitted a capital restoration plan (the “Capital Restoration Plan”) to the Federal Reserve and to the New Mexico Regulation and Licensing Department, Financial Institutions Division (the “State”) outlining the actions to be taken to restore the Bank's capitalization. The Capital Restoration Plan included a signed resolution by First State's board ensuring that First State would take all actions required to implement the Capital Restoration Plan. The Bank's undercapitalization was never corrected. On January 28, 2011, the State closed the Bank. FDIC was appointed the Bank's receiver.

First State filed a voluntary petition under Chapter 7 of the Bankruptcy Code on April 27, 2011. Linda S. Bloom was appointed Chapter 7 Trustee of First State's bankruptcy estate (the “Trustee”). Neither First State nor the Trustee filed a claim with the FDIC–R as part of the administrative claims procedure establishedunder FIRREA. FDIC–R filed a proof of claim in the Debtor's bankruptcy case asserting an unsecured priority claim of $63,821,000 based on FDIC–R's contention that the Debtor breached its capital maintenance guaranty issued in connection with the Capital Restoration Plan (the “Capital Maintenance Claim”). The Trustee filed this adversary proceeding on April 23, 2013 objecting to FDIC–R's Capital Maintenance Claim and seeking to avoid First State's obligations under the alleged capital maintenance guaranty as a fraudulent transfer. Count I of the Complaint objects to FDIC–R's Capital Maintenance Claim on five different theories. Count II of the Complaint consists of the Trustee's fraudulent transfer claim.

DISCUSSION

I. Whether the Court has subject matter jurisdiction over Count II

FIRREA contains an administrative claims procedure pursuant to which the FDIC or the Resolution Trust Corporation (“RTC”), as receiver of a failed federally insured depository institution, processes claims asserted against the failed institution. See12 U.S.C. § 1821(d)(3)-(13). Through this procedure, FDIC–R was required to give notice to the Bank's creditors of the Bank's closure and the deadline for submitting a claim. See12 U.S.C. § 1821(d)(3)(B).³ If the FDIC–R disallows the claim, or fails to take action within the required period, the claimant can commence an action in district court to obtain a de novo adjudication of the claim, or continue an action against the failed financial institution commenced before appointment of the receiver. See12 U.S.C. § 1821(d)(6)(A).⁴ However, if a claimant fails to participate in the administrative claims procedure when required to do so, FIRREA imposes a jurisdictional bar to judicial resolution of the claim. See12 U.S.C. § 1821(d)(13)(D).⁵ FDIC–R asserts that this Court lacks subject matter jurisdiction over the Trustee's fraudulent transfer claim under FIRREA's jurisdictional bar, which provides:

Except as otherwise provided in this subsection, no court shall have jurisdiction over—

(i) any claim or action for payment from, or any action seeking a determination of rights with respect to, the assets of any depository institution for which the Corporation has been appointed receiver, including assets which the Corporation may acquire from itself as such receiver; or

(ii) any claim relating to any act or omission of such institution or the Corporation as receiver.

12 U.S.C. § 1823(d)(13)(D).

The phrase “[e]xcept as otherwise provided” contained in this subsection refers in part to the administrative claims process set forth in 12 U.S.C. § 1821(d)(3) through (d)(13). Colman v. Wendover Funding, Inc., 89 F.3d 849, 1996 WL 316460, at *3 (10th Cir.1996) (unpublished) (citing Nat'l Union Fire Ins. Co. of Pittsburg v. Midland Bancor, 869 F.Supp. 880, 884 (D.Kan.1994)).⁶

Generally, a party's failure to exhaust the administrative claims process under FIRREA bars that party's ability to assert a claim against the FDIC or RTC as receiver ⁷ in any other forum. See, e.g., Marquis v. FDIC, 965 F.2d 1148, 1151–52 (1st Cir.1992) (“FIRREA makes participation in the administrative claims review process mandatory for all parties asserting claims against failed institutions,” and “where a claimant has ... failed to initiate an administrative claim within the filing period, the claimant necessarily forfeits any right to pursue a claim against the failed institution's assets in any court.”) (citations omitted); Resolution Trust Corp. v. Midwest Fed. Sav. Bank of Minot, 36 F.3d 785, 791 (9th Cir.1993) (stating that “ § 1821(d)(13)(D) divests the district courts of jurisdiction over both claims and counterclaims against the RTC until the claimants have exhausted the...