First Union Nat. Bank of Florida v. Hall

• Decision Date: 23 September 1997
• Docket Number: No. 95-4893,95-4893
• Parties: 11 Fla. L. Weekly Fed. C 579 FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association, Plaintiff-Counter-Defendant-Third-Party- Plaintiff-Appellee, v. M. Lewis HALL, Jr., Defendant-Counter-Claimant-Appellant, Federal Deposit Insurance Corporation, Third-Party Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1374

123 F.3d 1374

11 Fla. L. Weekly Fed. C 579

FIRST UNION NATIONAL BANK OF FLORIDA, a national banking

association, Plaintiff-Counter-Defendant-Third-Party- Plaintiff-Appellee, v. M. Lewis HALL, Jr., Defendant-Counter-Claimant-Appellant, Federal Deposit Insurance Corporation, Third-Party Defendant-Appellee.

No. 95-4893.

United States Court of Appeals, Eleventh Circuit.

Sept. 23, 1997.

Thomas C. MacDonald, Shackleford, Farrior, Stallings & Evans, P.A., Tampa, FL, for Defendant-Counter-Claimant-Appellant.

Mark P. Dikeman, Eugene E. Stearns, Stearns, Weaver, Miller, Weissler, Alhadeff & Sitterson, P.A., Miami, FL, Plaintiff-Counter-Defendant-Third-Party-Plaintiff-Appellee.

Gregory F. Taylor, Washington, DC, for Federal Deposit Ins. Corp., Third-Party Defendant-Appellee.

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

Before TJOFLAT and BLACK, Circuit Judges, and REAVLEY ^*, Senior Circuit Judge.

TJOFLAT, Circuit Judge:

This case arises out of an effort by appellee First Union National Bank to enforce a note against its maker, appellant M. Lewis Hall. We address two issues here: (1) whether the district court's initial order to remand the case to state court deprived it of jurisdiction to reconsider that order and to hear the merits of this case, and (2) whether the district court erred in granting summary judgment in favor of First Union on the ground that Hall's defense against enforcement of the note was barred by the D'Oench, Duhme doctrine. We conclude that the district court did have jurisdiction to decide the case and that summary judgment was proper. We therefore affirm.

I.

On September 20, 1991, First Union entered into an agreement with the Federal Deposit Insurance Corporation (the "FDIC"), pursuant to which First Union purchased many of the assets of Southeast Bank, N.A., which had been declared insolvent by the Comptroller of the Currency the previous day. As part of this transaction, the FDIC agreed partially to indemnify First Union for any liability it might incur as a result of claims asserted against it as successor to the Southeast assets that First Union purchased.

Among the Southeast assets that First Union purchased was a note in the amount of $5,048,779.00 signed by Hall. This note was in default, and First Union filed suit against Hall in Florida state court to enforce it. Hall's answer asserted, inter alia, that Southeast had agreed to limit its remedies in the event of default, and that the failure of Southeast and First Union to limit their remedies in accordance with that agreement excused his non-payment of the note. First Union contended that this argument was barred by the D'Oench, Duhme doctrine, ¹ which prohibits the enforcement of any alleged "side agreement" that diminishes the interests of the FDIC or its successors in assets acquired from failed banks, unless that agreement is clearly set forth in the loan documents.

First Union then impled the FDIC, citing the FDIC's agreement partially to indemnify First Union. The FDIC removed the case to the District Court for the Southern District of Florida, pursuant to its statutory authority. ² Hall moved the district court to remand the entire case to state court, or, in the alternative, to retain jurisdiction only over First Union's indemnification claim against the FDIC (the "FDIC-First Union claim") and remand the claims between Hall and First Union (the "First Union-Hall" claims). The district court initially decided to follow the latter course and issued an order remanding the First Union-Hall claims and staying the FDIC-First Union claim pending the state court's resolution of the First Union-Hall claims. The FDIC and First Union moved the court to reconsider its remand order, and the court decided to reverse course; it vacated the remand order and retained jurisdiction over the entire case.

The district court decided most of the issues involved in this case on motions to dismiss or motions for summary judgment. Relevant to this appeal, the district court granted summary judgment in favor of First Union on the question of whether D'Oench, Duhme and section 1823 barred Hall's counterclaim regarding the alleged "side agreement." The sole remaining issue at trial was the amount of Hall's liability. After a short bench trial, the district court entered judgment in favor of First Union in the amount of $10,006,923.79.

Hall now appeals, asserting, inter alia, two claims of error. ³ First, Hall argues that the district court's initial remand order divested it of jurisdiction to reconsider its decision to remand, and thus also divested it of jurisdiction to decide this case on the merits. Second, Hall argues that summary judgment on the D'Oench, Duhme issue was inappropriate because he had presented facts sufficient to raise a material question of fact as to whether D'Oench, Duhme barred his claim.

II.

A.

In order to decide whether a remand order is reviewable, we look to the terms of the remand order itself and determine whether the district court remanded on the ground that removal to federal court was "improvident and without jurisdiction." See Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 346, 96 S.Ct. 584, 590, 46 L.Ed.2d 542 (1976); In re Merrimack Mut. Fire Ins., 587 F.2d 642, 648 (5th Cir.1978). ⁴ We then apply the law on the basis of that determination. The issue, then, is one of law, which we review de novo.

B.

Hall's first claim is that 28 U.S.C. § 1447(d) deprived the district court of jurisdiction to reconsider its decision to remand a portion of the case before it. Section 1447(d) states that "[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise." ⁵ This nonreviewability extends to the power of a district court to reconsider its own remand order. See Harris v. Blue Cross/Blue Shield of Alabama, Inc., 951 F.2d 325, 329-30 (11th Cir.1992) ("Section 1447(d) not only forecloses appellate review, but also bars reconsideration ... by the district court of its own remand order." (citations omitted)); see also In re Shell Oil 631 F.2d 1156, 1158 (5th Cir. Unit A 1980) (noting that where section 1447(d) does not bar review "a district court has jurisdiction to review its own order, and vacate or reinstate that order"). Section 1447(d), however, applies only to cases remanded, pursuant to 28 U.S.C. § 1447(c), for lack of subject matter jurisdiction or defects in the removal procedure. See Thermtron, 423 U.S. at 346, 96 S.Ct. at 590 ("[O]nly remand orders issued under section 1447(c) and invoking the grounds therein that removal was improvident and without jurisdiction are immune from review under section 1447(d)."). Remand orders issued on other grounds are fully reviewable, and the district court is free to reconsider those remand orders. See id.; In re Shell Oil, 631 F.2d at 1157-58. Hall argues that the district court remanded the First Union-Hall claims on the ground that it lacked subject matter jurisdiction; thus, he argues, the remand was pursuant to section 1447(c) and was unreviewable under section 1447(d).

This argument ignores the plain terms of the district court's remand order. The district court began its discussion by noting that the FDIC removal statute, 12 U.S.C. § 1819(b)(2)(B), conferred subject matter jurisdiction over the indemnification claim involving the FDIC, stating that "[s]ection 1819 creates a presumption of federal jurisdiction whenever the FDIC is a party to a suit" and concluding that the "removal of [First Union's] suit was proper." The district court went on to observe that under its supplemental jurisdiction, it could exercise its discretion to hear the First Union-Hall claims. ⁶ The district court declined to exercise this jurisdiction and remanded those claims because it believed that retaining jurisdiction over them would not serve the interests of "judicial economy, convenience, and fairness." At no point did the court state that it lacked subject matter jurisdiction and nowhere did it cite section 1447(c). The court clearly stated that it believed it had supplemental jurisdiction to hear the First Union-Hall claims under section 1367, if it exercised its discretion to do so. We therefore find that the district court based its remand order on its decision not to exercise its discretion to hear a supplemental claim, and not pursuant to section 1447(c).

The FDIC removal statute, 12 U.S.C. § 1819, also provides that the FDIC "may appeal any order of remand entered by any United States district court." 12 U.S.C. § 1819(b)(2)(C). We have held that, in cases to which the FDIC is a party, this section establishes an independent exception to the general rule of nonreviewability of remand orders contained in § 1447(d). See FDIC v. S & I 85-1, Ltd., 22 F.3d 1070, 1072 (11th Cir.1994); Lazuka v. FDIC, 931 F.2d 1530, 1536 n. 3 (11th Cir.1991) (holding that § 1819 "specifically departs from [§ 1447] by allowing FDIC to appeal any order of remand"). Where such an exception applies, "a district court has jurisdiction to review its own order, and vacate or reinstate that order." In re Shell Oil Co., 631 F.2d at 1158 (5th Cir.1980).

The district court's remand order was not, then, unreviewable under section 1447(d). The district court was free to reconsider its decision, and thereafter to resolve the claims involving Hall and First Union on the merits. Thus, Hall's first argument fails. ⁷

III.

A.

We review a district court's grant of summary judgment de novo. See Forbus v. Sears Roebuck & Co., 30 F.3d 1402, 1404 (11th Cir.1994), cert. denied, 513 U.S. 1113, 115 S.Ct. 906, 130 L.Ed.2d 788 (1995). In order to survive summary judgment, the nonmoving party must submit evidence sufficient to create a material issue of fact as to each element of its claim. See Real Estate Fin. v. Resolution Trust Corp., 950 F.2d 1540, 1543 (11th Cir.1992).

B.

Hall argues that the district court...