F.D.I.C. v. S & I 85-1, Ltd.

• Decision Date: 14 June 1994
• Docket Number: No. 92-4943,92-4943
• Citation: 22 F.3d 1070
• Parties: FEDERAL DEPOSIT INSURANCE CORPORATION, Plaintiff-Appellant, v. S & I 85-1, LTD., a Florida Limited Partnership, Darryl B. Mall, individually and as general partner of S & I 85-1, Ltd., Willis B. Mall, individually and as general partner of S & I 85-1, Ltd., P. Darlene Mall, Phyllis V. Mall, City of Lake Worth, Florida, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1070

22 F.3d 1070

FEDERAL DEPOSIT INSURANCE CORPORATION, Plaintiff-Appellant, v. S & I 85-1, LTD., a Florida Limited Partnership, Darryl B Mall, individually and as general partner of S & I 85-1 Ltd., Willis B. Mall, individually and as general partner of S & I 85-1, Ltd., P. Darlene Mall, Phyllis V. Mall, City of Lake Worth, Florida, Defendants-Appellees.

No. 92-4943.

United States Court of Appeals Eleventh Circuit.

June 14, 1994.

John P. Cole, West Palm Beach, FL, Denise L. Brown, co-counsel, Orlando, FL, Daniel H. Kurtenbach, Washington, DC, for appellant.

Richard T. Stierer, Colin M. Cameron, West Palm Beach, FL, for appellees.

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

Before COX and CARNES, Circuit Judges, and WOOD ^*, Senior Circuit Judge.

COX, Circuit Judge:

We address the issue of whether the Federal Deposit Insurance Corporation ("FDIC"), having brought an action as plaintiff in state court, may subsequently remove that action to federal court when counterclaims are filed against it. We conclude that FDIC may remove such an action pursuant to 12 U.S.C. Sec. 1819(b)(2)(B).

I. BACKGROUND

On December 23, 1991, FDIC, as Receiver for First American Bank and Trust, initiated an action in state court against S & I 85-1, Ltd., a Florida limited partnership, and Darryl B. Mall and Willis B. Mall as general partners of S & I 85-1, Ltd. (collectively "Borrowers"); Darryl B. Mall, Willis B. Mall, P. Darlene Mall and Phyllis V. Mall, individually (collectively "Guarantors"); and a potential lienor, for enforcement of a promissory note and foreclosure of a mortgage. (App. to Appellees' Br. at 1). On March 13, 1992, Borrowers and Guarantors (collectively "Defendants") counterclaimed against FDIC seeking specific performance of an alleged agreement for renewal of the note and mortgage, damages for breach of that alleged agreement, and damages for malicious prosecution of the foreclosure action. (R.1-3 at Ex. 1, 2). On April 13, 1992, based on those counterclaims, FDIC sought to remove the action to federal court pursuant to 12 U.S.C. Sec. 1819(b)(2)(B). (R.1-2). Defendants filed a motion to remand to state court. (R.1-8). The district court remanded the action, concluding that removal under 12 U.S.C. Sec. 1819(b)(2)(B) was improper. (R.1-10 at 3). In so ordering, the district court held that "the plain meaning of 12 U.S.C. Sec. 1819(b)(2)(B) does not provide for removal when the Federal Deposit Insurance Corporation commenced the underlying State court action." (Id. at 2).

Thereafter, FDIC filed a motion for reconsideration and clarification. (R.1-11). The district court recognized "that as a general matter, a court does not have the power to reconsider orders of remand." (R.1-16 at 2). ¹ Nonetheless, the district court went on to reject FDIC's contention that the filing of a counterclaim triggers FDIC's right to remove an action under Sec. 1819 where FDIC initiated the action in state court. (Id. 7-9). In denying FDIC's motion for reconsideration, the district court concluded that "[t]he plain meaning of 12 U.S.C. Sec. 1819(b)(2)(B) affords FDIC the power to remove an action asserted against it, measured from the commencement of the suit or its substitution as a party. Hence, Congress has expressly authorized the FDIC, as Plaintiff, to remove an action only if it is substituted as a plaintiff and then it must do so within ninety days from the date of said substitution." (Id. at 5-6). This appeal follows.

II. STANDARD OF REVIEW

We review a district court's interpretation and application of a statute de novo. Int'l Union, UMW v. Jim Walter Resources, Inc., 6 F.3d 722, 724 (11th Cir.1993).

III. ISSUES ON APPEAL & CONTENTIONS OF THE PARTIES

FDIC argues that the liberal removal rights granted to it by Congress in 12 U.S.C. Sec. 1819(b)(2)(B) extend to an action in which FDIC is the original plaintiff in state court where FDIC is subsequently named as a defendant in a counterclaim, and thereafter seeks to remove the action to federal court, and that the district court erred in holding otherwise. Defendants counter that Sec. 1819 provides a ninety-day period in which FDIC may seek removal, that the ninety-day period starts to run from the filing of the original complaint and not the filing of a counterclaim, that FDIC sought to remove the action more than ninety days after FDIC filed the original complaint, and therefore, FDIC's petition for removal was not timely. ²

IV. DISCUSSION

As a general rule, we do not review "[a]n order remanding a case to the State court from which it was removed." 28 U.S.C.A. Sec. 1447(d) (West 1973). However, FDIC falls under an exception to that rule. FDIC "may appeal any order of remand entered by any United States district court." 12 U.S.C.A. Sec. 1819(b)(2)(C) (West 1989).

FDIC is subject to the limits of the general removal statute, except as otherwise provided in 12 U.S.C. Sec. 1819(b)(2)(B). Lazuka v. FDIC, 931 F.2d 1530, 1536 (11th Cir.1991). 28 U.S.C.A. Sec. 1441(a), the general removal statute, provides:

Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending. For purposes of removal under this chapter, the citizenship of defendants sued under fictitious names shall be disregarded.

28 U.S.C.A. Sec. 1441(a) (West Supp.1993). A counter-defendant is not a "defendant" within the meaning of the general removal statute. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941). Therefore, under the general removal statute, FDIC could not remove an action from state to federal court as a plaintiff/counter-defendant. Our task, then, is to determine whether Sec. 1819 enlarges FDIC's right of removal such that FDIC may remove an action from state to federal court as a plaintiff/counter-defendant.

FDIC's special removal statute reads:

Except as provided in subparagraph (D), ³ the Corporation may, without bond or security, remove any action, suit, or proceeding from a State court to the appropriate United States district court before the end of the 90-day period beginning on the date the action, suit, or proceeding is filed against the Corporation or the Corporation is substituted as a party.

12 U.S.C.A. Sec. 1819(b)(2)(B) (West Supp.1994). Neither this circuit, nor any of our sister circuits, has addressed the question of whether FDIC may remove a case under Sec. 1819 when a counterclaim is filed against it. Several district courts have addressed the question and concluded that FDIC may remove an action from state to federal court when a counterclaim is filed against it. FDIC v. Greenhouse Realty Assocs., 829 F.Supp. 507, 510 (D.N.H.1993) (construing Sec. 1819, as amended in 1991, as allowing FDIC to remove an action when a counterclaim is filed against it); Yankee Bank v. Hanover Square Assocs., 693 F.Supp. 1400, 1411 (N.D.N.Y.1988) (concluding that under Sec. 1819 FDIC may remove an action upon the filing of counterclaims and that removal time limitations begin to run from the time the counterclaims are filed); FDIC v. First Mortgage Investors, 459 F.Supp. 880, 882 (E.D.Wis.1978) (holding that "FDIC can remove any action, whether it is a plaintiff or defendant," under Sec. 1819). Additionally, the Seventh Circuit held that a parallel statute, 12 U.S.C. Sec. 1730(k)(1), FSLIC's special removal statute, permitted FSLIC to remove an "independent" counterclaim filed against it. FSLIC v. Quinn, 419 F.2d 1014, 1018 n. 4, 1019 (7th Cir.1969).

This court's decision in Lazuka counsels that, unless Sec. 1819 provides for a specific exception, general removal procedure applies to FDIC. Lazuka, 931 F.2d at 1536. Lazuka should not be read to mean that the general removal statute continues to define the scope of FDIC's removal rights. Section 1819 defines FDIC's removal rights. And in construing Sec. 1819, we must begin "with the language of the statute itself." United States v. Ron Pair Enters., Inc., 489 U.S. 235, 241, 109 S.Ct. 1026, 1030, 103 L.Ed.2d 290 (1989). Except for the state law exception of Sec. 1819(b)(2)(D), FDIC may "remove any action, suit, or proceeding" from state to federal court. 12 U.S.C.A. Sec. 1819(b)(2)(B) (West Supp.1994). Conversely, the general removal statute provides that "any civil action ... may be removed by the defendant or the defendants" from state to federal court. 28 U.S.C.A. Sec. 1441(a) (West Supp.1993). The general removal statute expressly limits the power of removal to defendants. Section 1819 contains no such limitation. We "must presume that a legislature says in a statute what it means and means in a statute what it says there." Connecticut Nat'l Bank v. Germain, --- U.S. ----, ----, 112 S.Ct. 1146, 1149, 117 L.Ed.2d 391 (1992). We can only assume that if Congress had intended to limit FDIC's removal rights to cases in which FDIC is a defendant, it would have said so. Id. ⁴ Accordingly, we join our sister circuits that have concluded that FDIC may remove an action under Sec. 1819 irrespective of its alignment as plaintiff or defendant. See, e.g., Beighley v. FDIC, 868 F.2d 776, 779 n. 6 (5th Cir.1989) (recognizing that Sec. 1819 permits removal by FDIC "whether it is plaintiff or defendant in the lawsuit"); FSLIC v. Frumenti Dev. Corp., 857 F.2d 665, 666-67 n. 1 (9th Cir.1988) (noting that FDIC may remove an action as plaintiff under Sec. 1819); In re Franklin Nat'l Bank, 532 F.2d at 843 (holding that FDIC, pursuant to Sec. 1819, may remove any action regardless of its alignment as plaintiff or defendant).

The district court concluded that FDIC may only remove an action as plaintiff when FDIC is substituted as a plaintiff in the action. The district...