Firstier Bank v. Fed. Deposit Ins. Corp.

• Decision Date: 25 March 2013
• Docket Number: Civil Action Nos. 11–cv–03231–CMA–MJW, 11–cv–03404–CMA–KMT, 12–cv–00240–CMA–KMT.
• Citation: 935 F.Supp.2d 1109
• Parties: FIRSTIER BANK, KIMBALL, NEBRASKA, a Nebraska Bank, Plaintiff, v. FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for FirsTier Bank, Louisville, Colorado, a Colorado Bank in receivership, Defendants.
• Court: U.S. District Court — District of Colorado

935 F.Supp.2d 1109

FIRSTIER BANK, KIMBALL, NEBRASKA, a Nebraska Bank, Plaintiff,

v.FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for FirsTier Bank, Louisville, Colorado, a Colorado Bank in receivership, Defendants.

Civil Action Nos. 11–cv–03231–CMA–MJW, 11–cv–03404–CMA–KMT, 12–cv–00240–CMA–KMT.

United States District Court, D. Colorado.

March 25, 2013.

Brian Keith Matise, Burg, Simpson, Eldredge, Hersh & Jardine, PC, Englewood, CO, for Plaintiff.

Diana C. Fields, Michael J. Repucci, Johnson & Repucci, LLP, Boulder, CO, Larry Lee Goodman, Federal Deposit Insurance Corporation, Arlington, VA, for Defendants.

ORDER GRANTING FDIC'S MOTIONS TO DISMISS IN CONSOLIDATED CASES NO. 12–CV–00240, NO. 11–CV–03231, AND NO. 11–CV–03404

CHRISTINE M. ARGUELLO, District Judge.

This matter is before the Court on the Federal Deposit Insurance Corporation's (“FDIC”) Motion to Dismiss Amended Third Amended Complaint (“Third Amended Complaint”) in Case No. 12–cv–00240 ( Adams I ).¹ (Doc. # 75.) Also before the Court is the FDIC's Motion to Dismiss in the above-captioned case (Doc. # 23), the FDIC's Motion to Dismiss in Adams II ( Adams II, Doc. # 32), and the FDIC's Motion to Dismiss FTB–NE's Cross–Claim in Adams II. (Doc. # 37.)

I. BACKGROUND

These three consolidated cases relate to a $17 million real estate loan (the “Loan”) originated by FirsTier Bank, Louisville, Colorado (“FTB–CO”) to Everest Marin, LP, and two nearly identical loan participation agreements between FTB–CO and Adams Bank & Trust (“Adams”) and FTB–CO and FirsTier Bank, Kimball, Nebraska (“FTB–NE”). The heart of this dispute is Adams' contention that it is entitled to “Last-in First-out” (“LIFO”) priority under its Loan Participation Agreement, whereas the FDIC ² and FTB–NE contend that any proceeds from the sale of the real estate securing the Loan (the “Real Estate”) should be distributed pro rata among the originating lender and both participants.

A. FACTS³

On or about June 5, 2008, FTB–CO simultaneously entered into participation agreements with FTB–NE and Adams, under which FTB–CO agreed to participate $6,000,000 of the Loan to FTB–NE and $3,235,000 to Adams. (Doc. # 3, ¶ 8.) When the 2008 Participation Agreements were nearing maturity, FTB–CO approached FTB–NE and Adams about signing new participation agreements. ( Id., ¶ 11.) On July 2, 2009, both Adams and FTB–NE signed new participation agreements (collectively the “Participation Agreements”). (Doc. # 23–2 at 34–37; Doc. # 65–1.) FTB–CO again participated $6,000,000 of the Loan to FTB–NE and $3,235,000 to Adams. ( See id.) The Participation Agreements contain the following provisions relevant to the instant cases:

UNDERLYING LOAN. Originating Institution [FTB–CO] has agreed to make, or has made, a loan to EVEREST MARIN, L.P.... The Originating Institution desires to sell and grant to the Participant, and the Participant desires to purchase and accept from the Originating Institution, a participation interest in the Originating Institution's rights and obligations under the Loan subject to the terms and conditions set forth therein.

SALE OF LOAN PARTICIPATION INTEREST. The Originating Institution hereby sells to the Participant, and the Participant hereby purchases from the Originating Institution a participation in the Originating Institution's rights and obligations with respect to the Loan ... The sale is made by the Originating Institution without recourse and shall in no way be construed as an extension of credit by the Participant to the Originating Institution.

Application of Payments. Upon receipt of a payment of principal, interest, fees, or other payments under the Loan, or whenever Originating Institution makes an application of funds to the Loan (including, without limitation, any payment or application from ay property or deposit held or taken by the Originating Institution in connection with the Loan, whether as Collateral or otherwise), Originating Institution will promptly pay to the Participant ... an amount equal to the Participant's Participation interest of each amount received and applied by the Originating Institution in payment of principal, interest on the Loan, shared fees, or other payments in respect of the Loan. Such application of funds shall be on a [LIFO] basis with Participant's Participation Interest being distributed first before the application of funds to the Originating Institution. Notwithstanding the above, upon the occurrence of an event of default with respect to the Loan, all expenses incurred in collecting the Loan as well as all collected funds shall be shared between the Originating Institution and Participant on a pro rata basis until such default is cured.

Borrower's Default: Enforcement: ... Upon the occurrence of any default under the Loan Documents ... [t]he Originating Institution and the Participant shall share ratably in the income and expense incurred pursuant to this paragraph, including all necessary expenses incurred in payment of taxes, insurance, premiums, prevention of wasting of assets, repairs, maintenance, construction of improvements, management court costs, reasonable attorneys' fees, and other similar expenses.

(Doc. # 23–2 at 34–37; Doc. # 65–1 at 1–4) (emphasis and capitalization in original).

There is only one difference between the Participation Agreement signed by Adams and the Agreement signed by FTB–NE. The “Purchaser First Out” clause in FTB–NE's Agreement states: “100% of payments before Default until such time as Purchaser has received Purchaser's Investment plus interest thereon at Purchaser's Interest Rate.” (Doc. # 23–2 at 36.) The “Purchaser First Out” clause in Adams' Agreement states: “100% of payments until such time as Purchaser has received Purchaser's Investment plus Interest thereon at Purchaser's Interest Rate Regardless of Default.” (Doc. # 65–1 at 3.)

In accordance with the Participation Agreements, Adams remitted $3,235,000 to FTB–CO and FTB–NE remitted $6,000,000 to FTB–CO. (Doc. # 3, ¶ 34; Doc. # 65, ¶ 7.) Sometime during 2009, the borrower, Everest Marin, defaulted on the Loan and the Real Estate was foreclosed upon in 2010. (Doc. # 3, ¶ 19; Doc. # 65, ¶ 20.) On June 30, 2010, FTB–CO was the high and only bidder at the trustee's sale of the Real Estate, and its bid of $17,609,372.87 was accepted. (Doc. # 3, ¶ 20; Doc. # 65, ¶ 23.) The Real Estate has not yet been sold to a third party and remains in the control of the FDIC as receiver for FTB–CO. (Doc. # 3, ¶ 20.) Both Adams and FTB–NE allege that they have not received any payment under the terms of the 2008 and 2009 Participation Agreements. (Doc. # 3, ¶ 28; Doc. # 65, ¶ 27.)

B. PROCEDURAL HISTORY

On December 2, 2010, Adams initiated Adams I by filing a complaint against FTB–CO in Nebraska state court. ( Adams I, Doc. # 1.) After the FDIC was appointed as the receiver for FTB–CO, the FDIC removed Adams I to the United States District Court for the District of Nebraska on March 2, 2011, and the case was stayed for 180 days while the FDIC considered the administrative claims of Adams and FTB–NE. The FDIC denied both Adams' and FTB–NE's administrative claims and the stay was lifted. ( Id.)

On December 9, 2011, FTB–NE filed suit against the FDIC in the District of Colorado. (Doc. # 1.) Then, on December 30, 2011, Adams filed Adams II in this district. ( Adams II, Doc. # 1.) In Adams II, Adams brought essentially the same claims against the FDIC as in Adams I, but added FTB–NE as a defendant because FTB–NE disputed Adams' claimed LIFO priority rights.⁴ ( Id., ¶ 17.) One month after Adams II was filed, Adams I was transferred to this district from the Nebraska District Court. ( Adams I, Doc. # 1.)

The FDIC filed a Motion for Consolidation of Action on February 23, 2012, which the Court granted on May 8, 2012. (Doc. 14, 24.) In these three consolidated cases, the FDIC has filed four different motions to dismiss, all of which are ripe for the Court's review. In the above-captioned case, the FDIC filed its Motion to Dismiss on April 24, 2012.⁵ (Doc. # 23.) In Adams II, the FDIC filed its Motion to Dismiss on May 7, 2012.⁶ ( Adams II, Doc. # 32.) Also in Adams II, the FDIC filed a Motion to Dismiss FTB–NE's Cross–Claim on May 22, 2012.⁷ (Doc. # 37.) Lastly, in Adams I, the FDIC filed its Motion to Dismiss Third Amended Complaint on December 5, 2012. ⁸ (Doc. # 75.)

II. STANDARD OF REVIEW

The FDIC brings the instant motions to dismiss under both Fed.R.Civ.P. 12(b)(1) and 12(b)(6). Thus, the Court will set forth the proper standard of review for motions under each rule.

A. FED. R. CIV. P. 12(b)(1)

Dismissal pursuant to Federal Rule of Civil Procedure 12(b)(1) is appropriate when the Court lacks subject matter jurisdiction over the claims asserted in the complaint. As set forth by the Tenth Circuit in Holt v. United States, the standard of review for a Rule 12(b)(1) motion is as follows:

Generally, Rule 12(b)(1) motions to dismiss for lack of subject matter jurisdiction take two forms. First, a facial attack on the complaint's allegations as to subject matter jurisdiction questions the sufficiency of the complaint. In reviewing a facial attack on the complaint, a district court must accept the allegations in the complaint as true.

Second, a party may go beyond allegations contained in the complaint and challenge the facts upon which subject matter jurisdiction depends. When reviewing a factual attack on subject matter jurisdiction, a district court may not presume the truthfulness of the complaint's factual allegations. A court has wide discretion to allow affidavits, other documents, and a limited evidentiary hearing to resolve disputed jurisdictional facts under Rule 12(b)(1). In such instances, a court's reference to evidence outside the pleadings does not convert the motion to a Rule 56 motion.

Holt v. United States, 46 F.3d 1000, 1002–03 (10th Cir.1995)(internal citations removed). The burden of establishing subject matter jurisdiction rests on the...