Federal Deposit Insurance Corp. v. Bank of Boulder, Civ. A. No. 85-Z-764.
| Decision Date | 04 December 1985 |
| Docket Number | Civ. A. No. 85-Z-764. |
| Citation | 622 F. Supp. 288 |
| Parties | FEDERAL DEPOSIT INSURANCE CORPORATION, a United States corporation, Plaintiff, v. BANK OF BOULDER, a Colorado corporation, Defendant. |
| Court | U.S. District Court — District of Colorado |
Robert A. Zupkus, Nancy V. Curtis, White and Steele, P.C., Denver, Colo., for plaintiff.
Richard L. Eason, Pamela K. Pritzel, Eason, Sprague & Wilson, Denver, Colo., for defendant.
This is an action by the Federal Deposit Insurance Corporation (FDIC) in its corporate capacity seeking to enforce a letter of credit issued by the defendant Bank of Boulder. The matter is before the Court on defendant's Motion to Dismiss. Defendant's Motion was set for hearing on November 14, 1985, and was granted at that time. The Court is issuing a written opinion because of the unusual circumstances and the impact of this decision on other enforcement actions by the FDIC.
In its Motion to Dismiss the Bank of Boulder raises two issues which place the FDIC on the horns of a dilemma. On the one hand, the Bank of Boulder challenges the federal court's jurisdiction to hear this action because defendant asserts the FDIC is essentially proceeding in its capacity as a receiver. Only if plaintiff is suing in its corporate capacity would the federal court have jurisdiction. On the other hand, defendant argues, if the FDIC is proceeding in its corporate capacity and jurisdiction is good, it cannot enforce a non-transferable letter of credit. Only FDIC as receiver can arguably enforce a non-transferable letter of credit because it received this asset by operation of law, and not by sale.
The jurisdictional issue is governed by 12 U.S.C. § 1819 Fourth. That section provides as follows:
All suits of a civil nature at common law or in equity to which the Corporation 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 Corporation 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.
The defendant contends that this action falls within the exception clause in § 1819 and jurisdiction is proper only in the state courts. This Court is satisfied that, if the FDIC is proceeding in its corporate capacity, jurisdiction in this Court is proper; the question is whether the FDIC is proceeding as receiver or in its corporate capacity.
The capacity question is resolved by addressing the second issue: Does the FDIC as corporation have the right to draw on a non-transferable letter of credit issued by the Bank of Boulder to the Dominion Bank of Denver? The letter of credit was issued by the Bank of Boulder to secure a promissory note from Gil Reed in favor of the Dominion Bank of Denver for $22,500. Mr. Reed defaulted on the promissory note and the FDIC, which was appointed receiver by the ...
To continue reading
Request your trial
-
Federal Deposit Ins. Corp. v. Bank of Boulder
...of credit. On April 10, 1985, Bank of Boulder filed a motion to dismiss which was granted by the district court. FDIC v. Bank of Boulder, 622 F.Supp. 288 (D.Colo.1985). The district court concluded that the letter of credit could not legally be transferred to FDIC/Corporation; and, thus, th......
-
Federal Deposit Ins. Corp. v. Bank of Boulder
...by operation of law to the state banking commissioner and to FDIC/Receiver, could not be validly transferred to FDIC/Corporation. 622 F.Supp. 288. Specifically, because the letter of credit did not expressly state that it was transferable or assignable, the district court determined that th......
-
Aequitas Enters., LLC v. Interstate Inv. Grp., LLC
... ... typically refers to a property owned by a bank after an unsuccessful foreclosure sale. The ... 22 The Federal District Court for the District of [267 P.3d ... -------- Notes: 1. See Fed.R.Civ.P. 64(a) (At the commencement of and throughout ... FN21. Pac. Decision Scis. Corp. v. Superior Court, 121 Cal.App.4th 1100, 18 ... FN22. Id. at 109. FN23. Fed. Deposit Ins. Corp. v. Rodenberg, 622 F.Supp. 286, 288 ... ...
-
Crist v. J. Henry Schroder Bank & Trust Co.
...894 (1979) (receiver for insolvent insurance company entitled to draw under letter of credit).5 Cf. Federal Deposit Insurance Corporation v. Bank of Boulder (D.C.Colo.1985) 622 F.Supp. 288 (suggesting that receiver, which succeeded by operation of law to rights of failed bank, was entitled ......