Federal Deposit Ins. Corp. v. Buttram

• Decision Date: 23 July 1984
• Docket Number: Civ. A. No. CV83-PT-2637-M.
• Parties: FEDERAL DEPOSIT INSURANCE CORPORATION, in its corporate capacity, Plaintiff, v. H.D. BUTTRAM, Sr., et al., Defendants.
• Court: U.S. District Court — Northern District of Alabama

590 F. Supp. 251

FEDERAL DEPOSIT INSURANCE CORPORATION, in its corporate capacity, Plaintiff, v. H.D. BUTTRAM, Sr., et al., Defendants.

Civ. A. No. CV83-PT-2637-M.

United States District Court, N.D. Alabama, M.D.

July 23, 1984.

L. Burton Barnes, III, Lewis W. Page, Jr., Lange, Simpson, Robinson & Somerville, Birmingham, Ala., for plaintiff.

Curtis Wright, Dortch, Wright & Russell, Gadsden, Ala., for defendants.

MEMORANDUM OPINION

PROPST, District Judge.

This cause comes to be heard on plaintiff's April 13, 1984 motion, which seeks summary judgment with respect to the second, third, fourth, fifth, sixth and special defenses raised by defendants in their answer. Plaintiff, "Federal Deposit Insurance Corporation, in its corporate capacity," brings this action against the directors of the Cedar Bluff Bank for breach of fiduciary duty and negligence. The defenses in question allege that this court does not have jurisdiction over this action, that the action is barred by the applicable statute of limitations, that the claims made the basis of this action were not properly assignable to plaintiff, and that plaintiff's claim against the estate of defendant P.L. Snead has not been properly asserted.

The undisputed facts, as revealed by the evidence of record and the parties' agreed summary contained in the pre-trial order, are as follows: This case arises out of the activities of defendants as directors and officers of the Cedar Bluff Bank. On November 2, 1982, the Board of Directors of the Cedar Bluff Bank requested that the Superintendent of Banks for the State of Alabama take possession of the property and business of the Bank pursuant to ALA. CODE § 5-8A-20 et seq. (Exhibit A to plaintiff's motion.). The Superintendent ordered the Bank closed and appointed the F.D.I.C. to act as receiver of the bank. (Exhibits B, C). This appointment was confirmed by the Circuit Court of Cherokee County, Alabama on the same date. (Exhibit D). On the next day, November 3, 1982, the F.D.I.C. sold, for a valuable consideration, certain of the bank's assets to an "assuming bank," the Union State Bank of Cedar Bluff, Alabama. (Exhibit E). The F.D.I.C., acting as receiver, sold to F.D.I.C. in its corporate capacity, the remaining assets, including "all pending claims, actions or judgments, whether known or unknown, which the Receiver owns, holds, or has against any surety, insurer, or any person or persons whomsoever, including, without being limited to, any claim or claims against its directors, officers, or employees arising out of any act or acts of any such persons in respect to the Bank or its property, by virtue of the nonperformance or manner of performance of their duties...." (Exhibit F at § 1.1). The sale of these assets, both to the assuming bank and to F.D.I.C. — Corporate, was approved by the Circuit Court of Cherokee County, Alabama on November 3, 1982. (Exhibit 6).

Despite the somewhat confusing label of "F.D.I.C., in its corporate capacity as receiver of the Cedar Bluff Bank" which the F.D.I.C. occasionally chose to give itself in this action, it now appears undisputed that the F.D.I.C. seeks to bring this action in its corporate capacity only, and not in any respect in the capacity of receiver of the Cedar Bluff Bank. See the "Agreed Summary" contained in the pre-trial order filed April 27, 1984. As such, it is clear that this court has jurisdiction over this action pursuant to 12 U.S.C. § 1819, which states:

All suits of a civil nature ... to which the F.D.I.C. shall be a party shall be deemed to arise under the laws of the United States, and the United States district courts shall have original jurisdiction thereof ... except that any such suit to which the F.D.I.C. is a party in its capacity as receiver of a State bank and which involves only the rights or obligations of depositors, creditors, stockholders, and such State bank under State law shall not be deemed to arise under the laws of the United States.

12 U.S.C.A. § 1819. See also F.D.I.C. v. Ashley, 585 F.2d 157 (6th Cir.1978); F.D. I.C. v. Godshall, 558 F.2d 220, (4th Cir. 1977); F.D.I.C. v. Braemoor Associates, 686 F.2d 550 (7th Cir.1982), cert. denied, ___ U.S. ___, 103 S.Ct. 2086, 77 L.Ed.2d 297.

The F.D.I.C. while acting as receiver of the Cedar Bluff Bank was similarly clearly within the scope of its authority when it assigned some of the assets of the bank to F.D.I.C. — Corporate. Title 12 U.S.C. § 1823(c)(2)(A)(i) provides that: "In order to facilitate ... the sale of assets of an insured bank and the assumption of such insured bank's liabilities by an insured institution ... the F.D.I.C. is authorized in its sole discretion and upon such terms and conditions as the F.D.I.C.'s Board of Directors may prescribe — (i) to purchase any such assets or assume any such liabilities...." Title 12 U.S.C. § 1823(d) also provides that:

Receivers or liquidators of insured banks ... shall be entitled to offer the assets of such banks for sale to the F.D. I.C. ... upon receiving permission from the appropriate State authority in accordance with the express provisions of State law.... The F.D.I.C. in its discretion, ... may purchase and liquidate or sell any part of the assets of an insured bank which is now or may hereafter be closed on account of inability to meet the demands of its depositors, but in any case in which the F.D.I.C. is acting as receiver of a closed insured bank, no such loan or purchase shall be made without the approval of a court of competent jurisdiction.

12 U.S.C.A. § 1823(d). As discussed later in this opinion, it appears that the F.D.I.C. — Receiver has complied with state law in transferring the "asset" in question to F.D. I.C. — Corporate and has obtained the required court approval.

The defendants have argued that 12 U.S.C. § 1821(d)¹ "limits the authority of the F.D.I.C. as a receiver of a state bank to those powers, rights and privileges granted by state law to a receiver of a state bank." 12 U.S.C. § 1821(e) does indeed provide that "the F.D.I.C. as such receiver shall possess all the rights, powers and privileges granted by State law to a receiver of a State bank." 12 U.S.C.A. § 1821(e) (emphasis added). The court does not read this to limit the rights, powers and privileges of the F.D.I.C. as receiver, particularly in view of the provisions of 12 U.S.C. § 1823(c)(2)(A)(i) which authorize the purchase of a closed bank's assets by the F.D.I.C. In any event, ALA.CODE § 5-8A-24 grants receivers the power to "liquidate and distribute the assets of any bank taken possession of by the state banking superintendent." (emphasis added). Prior Alabama cases have apparently held that a tort cause of action against the directors of a closed state bank is an "asset" which can be assigned.² See Buck v. Gimon, 201 Ala. 619, 79 So. 51 (1918); Blythe v. Enslen, 219 Ala. 638, 123 So. 71 (1929); Houghton v. Enslen, 261 F. 113 (5th Cir. 1919). Defendants have been unable to cite the court to any Alabama law which would cast doubt on the holdings of these cases.

ALA.CODE § 5-8A-32 authorizes the ex parte court approval of the sale of a closed bank's assets pursuant to a purchase and assumption transaction such as occurred in the case at bar. ALA.CODE § 5-8A-34 also provides that "The receiver, upon the order of the receivership court which may be ex parte, may sell to the F.D.I.C. any part or all of the assets of the closed bank." State court approval, as mentioned earlier, was obtained for the sale of the "asset" in question by the receiver (F.D.I. C. — Receiver) to F.D.I.C. — Corporate. See Exhibit G The Eleventh Circuit has clearly recognized that the F.D.I.C. may act in both its corporate capacity and in its capacity as a receiver with respect to the same bank. See Gunter v. Hutcheson, 674 F.2d 862, 873-74 (11th Cir.1982) ("The division of authority between the F.D.I.C. as receiver and F.D.I.C. as corporate insuror is statutorily mandated.... Section 1823(d), moreover, clearly contemplates transactions between the F.D.I.C. as receiver and F.D.I.C. as corporate insurer...." 674 F.2d at 873). The court in Gunter does state that the transfer between F.D.I.C. — Receiver and F.D.I.C. — Corporate must be "in good faith for value" before this court properly acquires jurisdiction under 12 U.S.C. § 1819. See Gunter, supra, 674 F.2d at 874, n. 16. There has been no assertion by defendants that the transfer was not in good faith or for value. The mere fact that the transfer creates federal jurisdiction is not, in this court's view, "bad faith" which would void this court's jurisdiction.

For the above-stated reasons, the court concludes that plaintiff's Motion for Summary Judgment is due to be granted with respect to the jurisdictional and...