F.D.I.C. v. Lacentra Trucking, Inc.

• Decision Date: 16 October 1998
• Docket Number: No. 96-4118,96-4118
• Citation: 157 F.3d 1292
• Parties: 12 Fla. L. Weekly Fed. C 161 FEDERAL DEPOSIT INSURANCE CORP., as Receiver for Flagler Federal Savings and Loan Association, Plaintiff-Counter-Defendant-Appellee. v. LACENTRA TRUCKING, INCORPORATED, a Florida corporation, Wenger Excavating, Incorporated, an Ohio corporation, Mayfair Plumbing, Incorporated, a Florida corporation, KJK Enterprises, Incorporated, a Florida corporation d.b.a. Mr. Electric, Defendants-Counter-Claimants-Appellants, Tarmac Florida, Incorporated, a Florida corporation, Defendant-Counter-Claimant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1292

157 F.3d 1292

12 Fla. L. Weekly Fed. C 161

FEDERAL DEPOSIT INSURANCE CORP., as Receiver for Flagler

Federal Savings and Loan Association, Plaintiff-Counter-Defendant-Appellee. v. LACENTRA TRUCKING, INCORPORATED, a Florida corporation,

Wenger Excavating, Incorporated, an Ohio corporation,

Mayfair Plumbing, Incorporated, a Florida corporation, KJK

Enterprises, Incorporated, a Florida corporation d.b.a. Mr.

Electric, Defendants-Counter-Claimants-Appellants,

Tarmac Florida, Incorporated, a Florida corporation,

Defendant-Counter-Claimant.

No. 96-4118.

United States Court of Appeals, Eleventh Circuit.

Oct. 16, 1998.

Rehearing En Banc Denied Oct. 20, 1998.

Harry G. Carratt, Morgan, Carratt & O'Connor, Ft. Lauderdale, FL, for Wenger/Lacentra/KJK/Mayfair.

Richard Hugh Lumpkin, Karl Schumer, Keith, Mack, Lewis, Cohen & Lumpkin, Miami, FL, Reginald John Clyne, Clyne & Assoc., Coral Gables, FL, for F.D.I.C.

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

ON PETITION FOR REHEARING

Before TJOFLAT and BARKETT, Circuit Judges, and GODBOLD, Senior Circuit Judge.

GODBOLD, Senior Circuit Judge:

I. History

This case involves a dispute over priority between holders of mechanics' liens filed against a construction site and Resolution Trust Corporation (RTC) ¹, holder of a mortgage on that site. It requires application of provisions of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA"), Pub.L. No. 101-73, 103 Stat. 1839, (codified as amended in scattered sections of 12 U.S.C.). The Act provides for handling of claims of claimants to assets of failed depository institutions and persons seeking a declaration of rights with respect to such assets. It authorizes RTC as receiver to "determine [such] claims." 12 U.S.C. § 1821(d)(3)(A). Section 1821(d)(13)(D) provides that "no court shall have jurisdiction of [any such claim or action] 'except as otherwise provided in this subsection'." Id. § 1821(d)(13)(D). While not an explicit mandate for exhaustion of administrative remedies these provisions are accepted by the cases and by Congress as having that meaning. See Marquis v. FDIC, 965 F.2d 1148, 1151-52 (1st Cir.1992). In this case we must consider the interplay between § 1821(d)(13)(D) and the jurisdiction of a court over a pre-receivership claim that is pending in that court when receivership commences.

The district court held that the administrative exhaustion procedures of FIRREA apply to the appellant lienors and that they had not complied with those procedures; therefore it granted summary judgment to RTC. Flagler Federal Savings and Loan Association of Miami v. Greenview Apts., Ltd., 897 F.Supp. 1431 (S.D.Fla.1995). This court affirmed in an unpublished opinion. 116 F.3d 1492 (11th Cir.1997). The appellants moved for rehearing.

We hold, first, that the district court erred in finding that appellants had not complied with the requirements of FIRREA that their claims be presented to the receiver for administrative processing. Second, we hold that, even if appellants' claims had not been presented, the district court in which the pre-receivership claims were pending had jurisdiction over them and the receiver had the option to invoke the process of administrative review or to have the claims litigated by the court; the receiver chose the option of litigation and, having made that choice, it could not on the eve of trial invoke the administrative process it had eschewed and thereby have the case dismissed for failure to exhaust. In considering this first point, we hold that the jurisdiction of a federal court over pre-receivership claims pending in a pre-receivership case is not terminated by the appointment of a receiver. Next we address the interplay of the jurisdiction of the court over pending pre-receivership claims and the administrative exhaustion requirements of FIRREA. We hold that the receiver has the option of adjudicating the preexisting claims in the pending litigation or of following the administrative claims procedures of the Act. And we hold that in this case RTC chose to litigate the claims in the pending case, and having made that election, it could not on the eve of trial invoke the administrative complaint procedures it had foregone to require that the case be dismissed for want of jurisdiction. Additionally, we hold that the district court erred in holding that the claimants had not complied with the requirements of presenting their claims to the receiver.

The motion of the plaintiffs for rehearing is GRANTED. The decision of this court is VACATED, and this opinion is entered as the opinion of the court. The judgment of the district court is REVERSED and the case is REMANDED to the district court for further proceedings.

II. Background

The liens held by claimants originated from construction of an apartment complex in Broward County Florida by Greenview Apartments, Ltd. Under Fla. Stat. Ann. § 713.13(1)(a), before "actually commencing" to improve real property an owner must file a Notice of Commencement in the Office of the Clerk of the Circuit Court of the county in which the property is located, and must post a copy thereof. Fla. Stat. Ann. § 713.13(1)(a) (West 1989). Under § 713.07 a lien for labor, services or materials furnished to the property attaches and takes priority at the time of recording the Notice of Commencement. Id. § 713.07. The Notice is of no effect, however, if the improvements described in the Notice are not commenced within 30 days after the recording thereof, and it is not effectual after one year from the date of recording. Id. § 713.13(2) & (5).

The events of this case are set out chronologically.

July 28, 1988: The Notice of Commencement for the Greenview site was recorded.

August 17, 1988: According to affidavits filed by the lienors in the summary judgment record of the Florida state court, where this case began, on August 17, 1988 a surveying firm performed work at the site consisting of surveying, staking, flagging, and verifying of property boundary and monuments.

December 14, 1988: Greenview Apartments obtained a construction loan from Flagler Federal Savings and Loan Association in the amount of $3,800,000 and executed a mortgage in favor of Flagler which was recorded the same date.

III. The state court proceeding

April 1989: Flagler filed suit in Florida state court to foreclose its mortgage on the construction site, alleging that the loan was in default. Flagler named as parties defendant some 16 entities that it alleged had supplied work or materials to the construction job, including the appellants appearing in this appeal. Flagler alleged:

The following parties have been joined in these proceedings, since they may claim some right, title, and interest in and to the subject property by virtue of being lienholders. Said entries, if any, is [sic] junior and inferior to Plaintiff's Mortgage and Security Agreement.

Each of these appellants was alleged to have filed a claim of lien on the property. A copy of each appellant's claim of lien, filed pursuant to Florida's mechanics' lien law, was attached to Flagler's complaint. Each claim of lien was sworn to as required by Florida law. Each briefly described the labor or services or materials supplied and the amount alleged to be unpaid. Each claim of lien had been filed in the Office of Records of Broward County, Florida.

Flagler prayed that the court "adjudge the lien of the Plaintiff's Mortgage and Security Agreement to be a valid first lien upon the property ... superior to the rights, claims and liens of all Defendants to this cause." Flagler also asked for appointment of a receiver to secure and protect the property with power to complete the improvements. In short, from the beginning of this case to the present the lienholders have been identified persons or entities having claims against the property that Flagler alleged to be junior to its claim. The nature of each claim, the amount claimed by each lienor to be due, and the type of work out of which it arose have been known to Flagler (and to RTC as its successor) from the claims of liens attached to Flagler's complaint.

October 16, 1989: Flagler moved for partial summary judgment of foreclosure on the ground that the liens were void because improvements had not been commenced within 30 days of July 28, 1988, when the Notice of Commencement was filed. It later moved for final summary judgment.

September 11, 1990: The Florida trial court granted summary judgment of foreclosure to Flagler on the ground that no visible improvements had commenced on the project within the 30 days following the recording of the Notice of Commencement; therefore, it held Flagler's mortgage had priority. Lienholders appealed.

September 25, 1991: The Florida District Court of Appeals, Fourth District, reversed the judgment of foreclosure and remanded for trial. Lacentra Trucking, Inc. v. Flagler Sav. & Loan Assoc. of Miami, 586 So.2d 474 (Fla.Dist.Ct.App.1991). The court characterized the dispute as a familiar one, concerning priorities between a mortgagee and mechanics lienors, raising a precise question not previously answered in any Florida decision: whether surveying, flagging and staking a construction site for an improvement within 30 days of recordation of the Notice of Commencement can constitute actual commencement within the meaning of Fla. Stat. Ann. § 713.13. Id. at 475. The court held that the trial court had mistakenly relied upon a prior version of the mechanics' lien statute that had required "visible commencement" within 30 days of the Notice. Applying the current statutory standard of "actual commencement," the court reversed:

There is no legal reason under the statute why the ascertainment of boundary monuments and flagging and staking might not be the exact moment of a beginning. There is some evidence in this record suggesting that this particular survey was for mortgage...