Fdic v McFarland, 5

Decision Date29 March 2001
Docket Number9930756,5
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Appeal from the United States District Court For the Western District of Louisiana

Before JOLLY, HIGGINBOTHAM, and EMILIO M. GARZA, Circuit Judges.


This appeal turns in part on whether the Federal Deposit Insurance Corporation (FDIC) as receiver must abide by Louisiana reinscription rules to preserve its liens. The district court determined that the mortgage and assignment held by the assignee of the FDIC, the Dennis Joslin Company ("Joslin"), lost priority status because of the FDIC's failure to reinscribe the mortgage within the statutory period. The court found that two creditors, Bank One and David L. Jump, had valid liens that were senior to the FDIC's interest.

In addition to its assertions based on Louisiana law, Joslin argues that the FDIC is not bound by reinscription requirements. The argument is that either the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, FIRREA, or federal common law insulates the FDIC from state-law reinscription requirements. We are not persuaded and affirm this holding of the district court. We also conclude that Jump's lien was based on a judgment that was not final when registered. We reverse the district court's contrary holding and remand.


On November 30, 1984, Rory S. McFarland pledged a note in the amount of $2.5 million to the Bank of Commerce of Shreveport, Louisiana.1 McFarland secured this note with a mineral lease mortgage and assignment, an "assignment of runs," of his interest in the oil, gas, and minerals produced from the mortgaged leasehold and mineral interests.2

A casualty of the misfortunes that befell banking in the 1980s, the Bank of Commerce failed in 1986. The FDIC was appointed receiver and took over the bank's assets, including the pledged 1984 note and the assignment.3

In August 1990, Bank One Equity Investment, Inc., formerly Premier Venture Capital Corporation, obtained judgment, "the Bank One judgment," against McFarland in Louisiana state court. Bank One recorded this judgment in various Louisiana parishes between March and August of 1991.

On October 1, 1991, David L. Jump obtained a judgment against McFarland, "the Jump judgment," in the United States District Court for the Western District of Colorado. Jump registered the judgment in the Western District of Louisiana on June 26, 1992. In June and July of 1992, Jump recorded the judgment in various Louisiana parishes.

On October 31, 1991, the FDIC filed suit to collect the debt owed by McFarland to the Bank of Commerce, including the 1984 mortgage and assignment. Bank One and Jump intervened in the case4 seeking the proceeds from the mineral leases that had been paid into the court registry.5 They claimed that the 1984 assignment did not encompass a specific offshore lease, OCS-310.

In 1993, the district court ordered McFarland to pay the FDIC from the proceeds in the court registry and recognized the 1984 mortgage as the first lien. The court also held that the 1984 assignment did not include OCS-310 and ordered McFarland to pay the proceeds of that lease to Bank One and Jump.6 The FDIC recorded the 1993 judgment of the district court in various Louisiana parishes between November 2, 1993, and November 8, 1993. This Court subsequently affirmed the judgment in relevant part.7

The FDIC reinscribed the 1984 mortgage and assignment in various Louisiana parishes in July 1995. In 1997, the FDIC assigned the mortgage and assignment to the Dennis Joslin Company.

In 1998, Joslin filed a motion for issuance of a writ of execution and for foreclosure of the property subject to the 1984 mortgage and assignment. Joslin also sought distribution of the funds that had accumulated in the court registry. The district court issued the requested writ of execution and the United States Marshal for the Western District of Louisiana seized the property. The marshal advertised the sale of the property and set October 28, 1998 as the date of sale.

Through successive filings on October 23 and 26, 1998, Jump objected to Joslin's actions. Jump contended that the FDIC's failure to reinscribe the 1984 mortgage and assignment within ten years of its execution resulted in a loss of ranking. Jump argued that the 1991 Jump judgment consequently had priority as to both the mineral interests and the proceeds deposited in the court registry. The court postponed the marshal's sale.

In June 1999, the district court entered another judgment holding that Louisiana law required the FDIC to reinscribe the 1984 mortgage and assignment by November 30, 1994.8 The FDIC's reinscription in 1995 was therefore untimely, depriving its assignee, Joslin, of priority rank. The court consequently ranked the Bank One judgment first, the Jump judgment second, and the FDIC's 1984 mortgage and assignment third. Joslin appeals this determination.


Joslin contends, first, that this case is moot.9 Joslin points to the 1993 judgment, in which the district court declared the FDIC to be "the owner and entitled to all funds paid into the Registry of this Court." Joslin argues that, except for the funds derived from the OCS-310 lease, the FDIC was declared owner of all past and future proceeds from the leases in question. Because the 1993 judgment vested the FDIC with priority lien status, Joslin contends that the reinscription question was rendered moot.10

Joslin's position is meritless. There is a live case or controversy regarding the meaning of the 1993 judgment--the extent to which it encompasses future, as well as past, proceeds deposited in the registry. Moreover, we note that Louisiana law mandates the reinscription of mortgages and assignments within a ten-year period.11 As the Louisiana Supreme Court has held, "[a] litigation between the mortgage creditors does not dispense from reinscription. . . . The inscription must continue until the proceeds of the property mortgaged are reduced to possession."12 The 1993 judgment did not then implicitly end the FDIC's continuing obligation to reinscribe the mortgage. Moreover, the FDIC's failure to reinscribe the mortgage did not occur until 1994, and the issue was not properly before the district court.13 Even if we were to interpret the 1993 judgment as declaring the FDIC to be owner of all future proceeds deposited in the court registry, the judgment would still not exclude the possibility that other circumstances--e.g., failure to reinscribe--might deprive the FDIC of its lien. The instant appeal therefore presents a live controversy.14


The larger question posed by this case is whether Louisiana reinscription law applies to mortgages held by the FDIC. The parties urge three different means of resolving this question. First, Jump15 contends that the 1993 judgment disposed of the reinscription question and is the "law of the case." Second, Joslin argues that the Financial Institutions Reform, Recovery, and Enforcement Act of 198916 frees the FDIC from state-law reinscription requirements. If FIRREA does not apply, Joslin asserts that federal common law governs the FDIC, thereby precluding the imposition of state reinscription obligations. We address each contention in turn.


Jump argues that the district court in the 1999 case was bound by the 1993 judgment, which provided the "law of the case." Under the "law of the case" doctrine, "a decision on an issue of law made at one stage of a case becomes a binding precedent to be followed in successive stages of the same litigation."17 Where a final judgment is entered, the case appealed, and the case remanded, a trial judge must adhere on remand to the rulings it made in the case before appeal, assuming that the appellate court has not overturned the rulings.18 Moreover, an appellate court is generally precluded from reexamining issues decided in a prior appeal.19 This doctrine applies regardless of whether the issue was decided expressly or by necessary implication.20

Jump notes that the 1993 judgment found a mortgage and assignment issued by McFarland in 1981 to be "preempted." He contends that the district court found the 1981 mortgage to be preempted because of the FDIC's failure to reinscribe the original mortgage within a ten-year period. Jump concludes that the district court thereby recognized that the FDIC must comply with Louisiana reinscription requirements. Jump concedes that the 1993 judgment did not and could not address the FDIC's subsequent failure to reinscribe the pledged 1984 mortgage. However, he asserts that the 1993 judgment enunciated a legal principle that was binding on the 1999 judgment.21 As we understand it, he contends that the 1993 case was merely a prior stage of the same litigation, and that the district court's prior judgment bound it in future phases of the same case.22

On the face of the matter it is doubtful whether the 1993 and 1999 proceedings constitute the same "case." It is true that the same trial judge presided at both proceedings and that the two judgments had the same case number and caption. It is equally true, however, that the 1993 decision was a final judgment and the 1999 case was not decided on remand from our 1994 decision. By then, several facts had changed: Joslin became the holder of the FDIC's 1984 mortgage and assignment, and the FDIC failed to reinscribe the mortgage.23

Even if we assume that the two rulings were part of the same "case," we do not read the 1993 judgment as advocated by Jump. The 1993 judgment does not explain its finding of preemption. In a pre-trial order adopted by the district court in 1993, the court...

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