Director of Office of Thrift Supervision, U.S. Dept. of Treasury v. Lopez
| Decision Date | 18 May 1992 |
| Docket Number | No. 91-6019,91-6019 |
| Citation | 960 F.2d 958 |
| Parties | DIRECTOR OF the OFFICE OF THRIFT SUPERVISION, U.S. DEPARTMENT OF TREASURY, Plaintiff-Appellant, v. Pedro R. LOPEZ, Teresa Saldise, Ramon Lopez, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Geraldine R. Gennet, Aaron B. Kahn, Laurie Romanowich, Miami, Fla., for plaintiff-appellant.
Marc Cooper, Cooper, Wolfe & Bolotin, P.A., Miami, Fla., for defendants-appellees.
G. Richard Strafer, Quinon, Strafer & Scola, Miami, Fla., for Pedro R. Lopez.
Addison J. Meyers, Anderson, Moss & Parks, P.A., Miami, Fla., for Ramon Lopez.
Appeal from the United States District Court for the Southern District of Florida.
Before KRAVITCH and DUBINA, Circuit Judges, and RONEY, Senior Circuit Judge.
The Director of the Office of Thrift Supervision, United States Department of the Treasury (the "OTS"), appeals the district court's order denying its application for a preliminary injunction to freeze the assets of Pedro Lopez, Teresa Saldise and Ramon Lopez (referred to individually or collectively as the "Lopezes"). The OTS acted pursuant to section 8(i) of the Federal Deposit Insurance Act, section 2521(b)(1) of the Comprehensive Thrift and Bank Fraud Prosecution and Taxpayer Recovery Act of 1990, Pub.L. No. 101-647, 104 Stat. 4864 (1990) (the "Bank Fraud Act"), codified at 12 U.S.C. § 1818(i)(4)(B) (1991); see also H.R.Rep. No. 101-681(I), 101st Cong. 2nd Sess., reprinted in 1990 U.S.C.C.A.N. 6472, 6585. 1 For the reasons which follow, we reverse.
Pedro Lopez was chairman of the board of General Bank, a federal savings bank headquartered in Miami, Florida. Teresa Saldise, his spouse, was also a General Bank director. In August 1982, General Bank converted from mutual to stock ownership. At that time, Pedro Lopez and Teresa Saldise jointly purchased an 8,718-share block of General Bank stock equal to 4.9 percent of General Bank's outstanding shares. Ramon Lopez, the father of Pedro Lopez, purchased an identical block. In 1985, Pedro Lopez and Teresa Saldise acquired more General Bank stock, increasing their disclosed holdings to approximately 24.8 per cent of General Bank's outstanding stock. In November of 1989, the OTS appointed the Resolution Trust Corporation (the "RTC") as conservator of General Bank. Soon thereafter, the RTC removed Pedro Lopez and Teresa Saldise as directors of General Bank.
On May 3, 1991, the OTS issued a Notice of Assessment of Civil Money Penalty (the "Notice") against the Lopezes. 2 In the Notice, the OTS charged the Lopezes with acquiring more General Bank stock than was legally permissible. Specifically, the OTS alleged that Pedro Lopez and Teresa Saldise wrongfully acquired more than five percent of the total shares offered by General Bank when it converted from mutual to stock ownership, in violation of 12 C.F.R. § 563b.3 (the "Conversion Regulations"). 3 The OTS further alleged that Pedro Lopez and Teresa Saldise illegally obtained control of General Bank by acquiring more than 25 percent of its stock without regulatory approval, in violation of the Savings and Loan Control Act, 12 U.S.C. § 1730(q) (1982) (the "Control Act") 4 and the regulations 5 promulgated thereunder. The OTS alleged that the illegal stock acquisitions enabled Pedro Lopez and Teresa Saldise to exercise secret control of General Bank in a manner which caused millions of dollars in losses to General Bank. The Notice informed Pedro Lopez and Teresa Saldise that the OTS sought $27,772,500 in civil money penalties in connection with their alleged wrongdoing.
The Notice also alleged that Ramon Lopez violated the Conversion Regulations by secretly acquiring more than five per cent of General Bank's stock when it converted from mutual to stock ownership. The OTS sought $1,322,500 in civil money penalties from Pedro Lopez based on that alleged conversion violation. 6
Central to the OTS' charges was the allegation that the Lopezes hid improper stock acquisitions through a fraudulent scheme involving nominee shareholders. The OTS alleged that the Lopezes surreptitiously bought General Bank stock and then registered it in the names of nominee shareholders.
The Lopezes requested an administrative hearing, and the matter is now pending before the OTS.
The OTS brought suit in district court under 12 U.S.C. § 1818(i)(4) 7 for a preliminary injunction to freeze the Lopezes' assets pending the administrative hearing. The district court granted an ex parte order freezing the Lopezes' assets the next day. The district court held a hearing and, thereafter, vacated the asset freeze as to Ramon Lopez. The district court extended the freeze for ten days as to Pedro Lopez and Teresa Saldise. It then referred the case to a United States magistrate judge who conducted a two-day preliminary injunction hearing. The magistrate judge's Report and Recommendation concluded that the OTS failed to establish a prima facie case against the Lopezes and recommended denial of OTS' request for prejudgment attachment. The district court adopted the magistrate judge's report and dismissed the action. This appeal followed.
The Bank Fraud Act authorizes district courts to grant an OTS request for prejudgment attachment upon a prima facie showing of illegality. 12 U.S.C. § 1818(i)(4)(B); see Commodity Futures Trading Com. v. Muller, 570 F.2d 1296, 1300 (5th Cir.1978). We review a district court's denial of a request for prejudgment attachment under 12 U.S.C. § 1818(i)(4)(B) for abuse of discretion. 12 U.S.C. § 1818(i)(4)(B); Muller, 570 F.2d at 1300. 8 However, whether a plaintiff has made out a prima facie case is a question of law, subject to plenary review. See Hill v. Metropolitan Atlanta Rapid Transit Auth., 841 F.2d 1533, 1538 (11th Cir.1988).
The district court denied the requested injunction because it found that the OTS had failed to make out a prima facie case of illegality. We disagree.
Section 8(i) of the Bank Fraud Act provides that in actions where the OTS seeks prejudgment attachment, the district court shall issue an order of attachment "upon a prima facie showing that money damages, restitution, or civil money penalties as sought by [the] agency is appropriate." 12 U.S.C. § 1818(i)(4)(B). A prima facie case is established if the evidence presented is sufficient to withstand a motion for a directed verdict. See Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir.1990). A directed verdict is permissible only when, without weighing witness credibility, the facts and inferences point so strongly and overwhelmingly in favor of one party that a reasonable trier of fact could have but one conclusion. Johns v. Jarrard, 927 F.2d 551, 557 (11th Cir.1991); American Sav. & Loan Assn. v. Pembroke Lakes Regional Center Assoc., Ltd, 908 F.2d 885, 888 (11th Cir.1990). The court must view the evidence "in the light and with all reasonable inferences most favorable to the party opposed to the motion." Jarrard, 927 F.2d at 557. In so doing, the court may not weigh the evidence presented, but instead must determine whether any credible evidence has been proffered by the non-moving party. Id.
A. The Evidence Presented
The crux of this action rests on the OTS' charges that (1) in 1982, the Lopezes acquired more than five percent of General Bank's stock, in violation of the Conversion Regulations, and (2) in 1985, Pedro Lopez and Teresa Saldise acquired more than 25 percent of General Bank's stock, in violation of the Control Act. The OTS asserts that after purchasing permissible amounts of stock, the Lopezes purchased additional stock surreptitiously by registering it in the names of nominee shareholders, thereby contravening federal statutes and regulations.
To support these charges, the OTS introduced the following evidence forming the gravamen of its case. OTS Federal Thrift Regulator Albert Reyes ("Reyes") testified as to his examination of General Bank's records. Evidence introduced through his testimony included (1) a General Bank stock ledger listing the names of the alleged nominee shareholders; (2) Reyes' testimony that Teresa Saldise had asked permission to use her sister's name to purchase stock; and (3) a series of checks written on accounts allegedly controlled by the Lopezes in payment for General Bank stock.
The General Bank stock ledger contained the names of all General Bank stockholders, the amounts of stock purchased, and the price paid for the stock. Reyes testified that the ledger sheet aroused his suspicion because the last page contained a segregated list of stockholders, most of whom had purchased identical 8,718-share blocks on the same day, August 20, 1982. Each block equalled 4.9 percent of all General Bank stock and cost $50,128.50. The list included the names of the Lopezes, and indicated that Pedro Lopez and Teresa Saldise, jointly, and Ramon Lopez, individually, bought identical 8,718-share blocks of General Bank stock.
The list further indicated that Amie Behar ("Behar"), the sister of Teresa Saldise, also bought an 8,718-share block of General Bank stock for $50,128.50. However, Reyes testified that in March of 1990, Behar told him she was not a General Bank stockholder and that Teresa Saldise had asked for permission to use Behar's name to purchase stock. Reyes testified as follows:
THE COURT: All right. Mr. Reyes, the conversation you had with Miss Behar, would you relate to the Court the circumstances under which it occurred, please.
THE WITNESS [Examiner Reyes]: Sure. I was basically--at the time I was having a change, personal change in my insurance policy. Miss Behar handled [my] account ...
* * * * * *
Q. By Mr. Levin [OTS counsel]: All right. You were working in March of 1990 ... at General Bank?
A. Yes, I was.
Q. And you had a conversation with Amy [sic] Behar at the insurance agency?
Q. And, now, could you please recount...
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