Damiano v. F.D.I.C.

• Decision Date: 29 January 1997
• Docket Number: No. 94-4947,94-4947
• Citation: 104 F.3d 328
• Parties: 72 Fair Empl.Prac.Cas. (BNA) 1709, 65 USLW 2505 Irene J. DAMIANO, Plaintiff-Appellant, v. FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for Amerifirst Bank, A Federal Savings Bank, successor in interest to Amerifirst Federal Savings and Loan Association, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 328

104 F.3d 328

72 Fair Empl.Prac.Cas. (BNA) 1709, 65 USLW 2505

Irene J. DAMIANO, Plaintiff-Appellant, v. FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for Amerifirst Bank, A Federal Savings Bank, successor in interest to Amerifirst Federal Savings and Loan Association Defendant-Appellee.

No. 94-4947.

United States Court of Appeals Eleventh Circuit.

Jan. 29, 1997.

Jacob Addington Rose, West Palm Beach, FL, for Plaintiff-Appellant.

David Michael Rogero, Blackwell & Walker, P.A., Miami, FL, Roland R. St. Louis, Jr., Jorge L. Guerra, Paulino A. Nunez, Jr., Friedman, Rodriguez & Ferraro, P.A., Miami, FL, Jeffrey Ehrlich, F.D.I.C., Washington, DC, for Defendant-Appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before EDMONDSON and BIRCH, Circuit Judges, and FOREMAN ^*, Senior District Judge.

BIRCH, Circuit Judge:

This appeal presents the first impression issue in our circuit of whether the plaintiff in a pre-receivership lawsuit must file an administrative claim with the federal receiver of a failed financial institution pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"), Pub.L. No. 101-73, 103 Stat. 183 (codified as amended in scattered sections of 12 U.S.C.) when the receiver did not timely require exhaustion of administrative remedies. The district court held that it lacked subject matter jurisdiction over this pre-receivership lawsuit and dismissed the case. Because we hold that the receiver did not stay the action within ninety days of its appointment as receiver and, thus, did not timely require exhaustion of administrative remedies, we vacate the district court's dismissal and remand for further proceedings.

I. BACKGROUND

On September 27, 1990, plaintiff-appellant Irene J. Damiano brought this action against her former employer, Amerifirst Federal Savings and Loan Association ("Amerifirst") for age discrimination under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §§ 621-634. After the district court denied Amerifirst's motion to dismiss for failure to state a claim, Amerifirst filed an answer on February 27, 1991. Less than three weeks later, on March 15, 1991, Amerifirst was declared insolvent and the Resolution Trust Corporation ("RTC") was appointed its receiver. ¹ On April 10, 1991, the RTC filed a motion to be substituted as the party defendant in this case.

On March 24, 1991, the RTC published a notice to claimants in local newspapers setting out an administrative claim procedure for the winding down of Amerifirst pursuant to FIRREA, 12 U.S.C. § 1821(d)(3)(B). ² The notice advised Amerifirst's creditors that they should file their claims with the RTC at its claims department in Tampa, Florida, within ninety days of the notice publication (i.e., before June 22, 1991). The RTC, however, did not mail the notice to Damiano or her lawyer as required by § 1821(d)(3)(C). ³

Damiano did not comply with the administrative claim procedure described in the RTC's notice. She did, however, contact opposing counsel on several occasions in an effort to resolve her lawsuit out of court. Damiano first sent a settlement proposal to Amerifirst's counsel, David Rogero, on January 18, 1991. On March 28, 1991, Damiano sent a second letter to Rogero to confirm a telephone conversation which took place on March 20, 1991, and offered to provide any additional information that Rogero's "client" (the RTC at that time, arguably) might require to review the settlement proposal adequately. Rogero responded on April 11, 1991, and informed Damiano that the RTC had taken over Amerifirst and that he could not predict when the RTC would review and respond to her settlement proposal. Rogero later withdrew as defense counsel in November 1991.

After the claims bar date of June 22, 1991 passed, Damiano was informed that the RTC retained Jesse McCrary as its new counsel in connection with her lawsuit. Damiano sent a letter to McCrary on August 6, 1991, in which she reiterated her settlement proposal. She sent another letter to McCrary on October 9, 1991, to discuss the trial schedule.

On November 21, 1991, the RTC filed a motion to dismiss or, alternatively, for a stay pending exhaustion of administrative remedies. Damiano failed to respond to this motion and, on November 19, 1992, the district court dismissed the case without prejudice because it did not know whether Damiano had attempted to comply with the administrative process. Damiano filed a motion for reconsideration and for reinstatement of the action on December 28, 1992. The district court granted Damiano's motion and reinstated the action on April 8, 1993. ⁴ On February 25, 1994, the court placed the case on the trial calendar for June 27, 1994. The RTC filed a new motion to dismiss for lack of subject matter jurisdiction on June 16, 1994.

The district court dismissed the case. Citing Brady Development Co. v. RTC, 14 F.3d 998, 1006 (4th Cir.1994) and RTC v. Mustang Partners, 946 F.2d 103, 106 (10th Cir.1991), the court held that FIRREA created a mandatory administrative exhaustion requirement for all claims, including those asserted in a pre-receivership lawsuit. The court then found that Damiano's correspondence with opposing counsel did not constitute compliance with the administrative claims procedures set out in the RTC's published notices ⁵ and, thus, concluded that Damiano forfeited her claim by failing to exhaust her administrative remedies. This appeal followed.

II. DISCUSSION

We review de novo the district court's dismissal of the action for lack of subject matter jurisdiction and its interpretation of the statute. Sims v. Trus Joist MacMillan, 22 F.3d 1059, 1060 (11th Cir.1994). Damiano argues on appeal that the RTC has elected to proceed with her claim judicially, rather than administratively, by failing to timely request a stay of her lawsuit pending exhaustion of the administrative process. ⁶ See Whatley v. RTC, 32 F.3d 905 (5th Cir.1994). We agree.

FIRREA is a complex statute. ⁷ Understanding the process that § 1821(d) established for the liquidation of failed financial institutions requires careful parsing through its myriad subparts. Our previous review of the statutory scheme led us to conclude that FIRREA created a statutory exhaustion requirement that generally applies to post-receivership as well as pre-receivership claims. Motorcity of Jacksonville, Ltd. v. Southeast Bank N.A., 39 F.3d 292, 296 & n. 4 (11th Cir.1994) (collecting cases), vacated for reh'g en banc, 58 F.3d 589 (1995), reinstated in part, 83 F.3d 1317, 1323 n. 3 (1996) (en banc) (reinstating the relevant part of the first opinion in which the panel construed the administrative exhaustion requirement of FIRREA), vacated on other grounds sub nom., Hess v. F.D.I.C., No. 96-106, 65 U.S.L.W. 3500, 3505 (U.S. Jan. 21, 1997); see also Aguilar v. F.D.I.C., 63 F.3d 1059, 1061 (11th Cir.1995) (per curiam) (recognizing that FIRREA's administrative exhaustion requirement applies generally to all claims against an institution in federal receivership). The statute deals, however, with pre-receivership lawsuits differently from post-receivership claims as it established "a separate scheme ... for the disposition of lawsuits filed pre-receivership." Whatley, 32 F.3d at 908 (footnote and citations omitted); see also Aguilar, 63 F.3d at 1061-62 (explaining the applicability of the exhaustion requirement to pre-receivership lawsuits) (citing Whatley, 32 F.3d at 907-08).

For post-receivership claims, the court has no subject matter jurisdiction unless the claimant has exhausted the administrative remedies. See 12 U.S.C. § 1821(d)(13)(D) ⁸; McMillian v. F.D.I.C., 81 F.3d 1041, 1045 (11th Cir.1996) (involving a post-receivership employee claim). The statutory scheme is more complex for claims asserted in pre-receivership lawsuits. Subject matter jurisdiction is ordinarily tested as of the time of filing the complaint. Lujan v. Defenders of Wildlife, 504 U.S. 555, 569 n. 4, 112 S.Ct. 2130, 2141 n. 4, 119 L.Ed.2d 351 (1992); Rosa v. RTC, 938 F.2d 383, 392 n. 12 (3d Cir.), cert. denied, 502 U.S. 981, 112 S.Ct. 582, 116 L.Ed.2d 608 (1991). Therefore, courts in which lawsuits were pending when the RTC is appointed receiver remain vested with jurisdiction. Whatley, 32 F.3d at 907. This is confirmed by the statute's reference to the continuation, as opposed to the reinstatement, of pre-receivership lawsuits after the appointment of the receiver. See 12 U.S.C. § 1821(d)(5)(F)(ii). ⁹ Moreover, the statute does not provide for an automatic stay of all pre-receivership actions, pending exhaustion of the administrative process. Cf. 11 U.S.C. § 362(a)(1) (automatic stay for all pending lawsuits against debtor who files for bankruptcy). It specifically gives the receiver the right, but not the duty, to stay a pending action within the first ninety days of being appointed as a receiver. 12 U.S.C. § 1821(d)(12); see Praxis Properties, Inc. v. Colonial Sav. Bank, 947 F.2d 49, 71 (3d Cir.1991).

There are two possible explanations for the absence of an automatic stay provision in FIRREA: either Congress intended for the judicial and administrative processes to run concurrently; or it intended to give the receiver the discretion of deciding whether to require the claimant to exhaust its administrative remedies or to allow the suit to proceed judicially. The first explanation is inconsistent with FIRREA's aim of the "expeditious[ ] and fair[ ]" resolution of claims against failed financial institutions in federal receivership and its concern for conserving judicial resources. See H.R.Rep. No. 54(I), 101st Cong., 1st Sess. 419 (1989), reprinted in 1989 U.S.C.C.A.N. 86, 215. ¹⁰ The second explanation is supported both by the legislative history and the language of the statute. The drafters of FIRREA explained that the purpose of "the stay [is to] give[ ] the [receiver] a chance to analyze pending...