GWN Petroleum Corp. v. OK-Tex Oil & Gas, Inc.

Citation998 F.2d 853
Decision Date09 July 1993
Docket NumberO-O,OK-TEX,No. 92-6054,92-6054
PartiesGWN PETROLEUM CORP., Plaintiff, and Four-ne Corporation, Plaintiff-Appellant, v.OIL & GAS, INC., Turbo Oil & Gas, Inc., L.D. Cook, Pamela J. Hobbs, First Bank & Trust Company, Defendants, and Federal Deposit Insurance Corporation, Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (10th Circuit)

Richard K. Goodwin, Oklahoma City, OK, for plaintiff-appellant.

Jerome A. Madden, Counsel, FDIC, Washington DC (Michael S. Richie, FDIC, Oklahoma City, OK; Ann S. DuRoss, Asst. Gen. Counsel, and Richard J. Osterman, Sr. Counsel, FDIC, Washington DC, with him on the brief), for defendant-appellee.

Before EBEL, Circuit Judge, McWILLIAMS, Senior Circuit Judge, and OWEN, Senior District Judge. *

EBEL, Circuit Judge.

This appeal arises out of a garnishment action instituted by the appellant, Four-O-One Corp. ("Four-O-One"), to recover proceeds from the sale of oil and gas that were paid to the appellee, the Federal Deposit Insurance Corporation ("FDIC"). The district court granted the FDIC's motion for summary judgment, denying Four-O-One relief. We affirm.

FACTS

Both parties accepted, and set forth in their briefs, the description of the facts of this case as set forth by the district court. They are as follows:

In early 1984 Sutherland Well Service, Inc., ("Sutherland"), Four-O-One's predecessor in interest, filed Statements of Lien Against Leasehold and Well for Labor and Materials Furnished against Ok-Tex Oil Co. ("Ok-Tex"). These liens, filed in Stephens County, Oklahoma, covered wells, the leasehold estate, equipment, pipelines, buildings upon the premises, and all tools and supplies located thereon or used in connection therewith, for the leasehold estate underlying the Southeast Quarter of Section 22, Township 1 North, Range 9 West, Stephens County, Oklahoma (hereinafter "leasehold estate").

First City Bank, N.A. ("the bank") loaned money to Ok-Tex and in 1983 and early 1984 signed two agreements with Ok-Tex entitled Financing Statement, Security Agreement and Mortgage of Oil and Gas Property. The two mortgage agreements between the bank and Ok-Tex were filed in Stevens County and covered, among other property, the leasehold estate described above, which is the only property at issue in this action.

Both of the mortgage agreements covered the leasehold estates and the mineral interests of the property described therein. The mortgages also contained an Assignment of Production clause (hereinafter "clause") that allowed the bank, as mortgagee, to recover the proceeds of production from any of the wells covered by the mortgages, in the event of default by Ok-Tex.

In June of 1985, the FDIC took over as receiver for the bank. Beginning 30 May 1985 and continuing through 4 December 1985, Gray Pipeline, Inc. ("Gray"), the purchaser of production for the leasehold estate, paid the FDIC $41,290.66 in production proceeds, pursuant to the clause in the mortgages. Each of the checks was payable to the FDIC "for the account of Ok-Tex Oil & Gas, Inc.," and as such, was set off against the indebtedness owed to the bank by Ok-Tex.

On 5 September 1984, Sutherland filed suit in Oklahoma District Court for Stephens County (hereinafter "state court") to foreclose on its liens against Ok-Tex. Four-O-One was substituted as the plaintiff in the state court action in April of 1989, after it purchased from Sutherland all right, title and interest in and to the liens, accounts and causes of action concerning Ok-Tex. The FDIC, in its corporate capacity and as successor in interest to certain assets of the FDIC as receiver for the bank, was named as a defendant in the foreclosure action, along with Ok-Tex and other parties not involved in the present action.

Judge George W. Lindley of Stevens County issued a Journal Entry of Judgment on 23 June 1989 against Ok-Tex for $44,504.76 in principal, $42,754.03 in interest (totalling $87,258.79), plus legal interest on the judgment, costs, and attorneys' fees. The Judgment also stated that Four-O-One's lien was foreclosed against the leasehold estate at issue here, "including all personal property located thereon or used in connection therewith...." Journal Entry of Judgment at 2.

Further, the Judgment stated that the above-described property interest of Ok-Tex should be sold at a sheriff's sale, and that the proceeds of the sale should be applied, in pertinent part, to: 1) the costs of the sale and of the foreclosure action; 2) the payment of Four-O-One's judgment; 3) the remainder, if any, to the Clerk of the Court. Finally, Judge Lindley ruled that any right, title, or interest that the FDIC had or claimed to have, through its mortgage on the leasehold estate, was subsequent, junior and inferior to the liens and interests of Four-O-One.

On 20 July 1990, Four-O-One acquired a deficiency judgment against Ok-Tex for $72,875.00--the balance of the judgment debt remaining after the sheriff's sale.

Four-O-One instituted the present garnishment proceeding in Oklahoma state court on October 5, 1990. The action was removed to the U.S. District Court for the Western District of Oklahoma by the FDIC.

Four-O-One submitted interrogatories to the FDIC, and based in part upon the answers that they received, Four-O-One filed a motion for summary judgment on May 10, 1991. The FDIC answered and filed a cross-motion for summary judgment on May 28, 1991. Four-O-One filed an answer to the FDIC's motion on June 3, 1991. Although all issues had been fully briefed, the court subsequently granted, over the objections of the plaintiff, a motion by the FDIC to amend. The court allowed the FDIC to supplement its discovery responses and to file a new motion and brief in support of summary judgment. However, it denied the FDIC's request to strike the FDIC's previous pleadings.

Based on the revised pleadings and supplemental briefs requested by the district court, the district court granted the motion for summary judgment filed by the FDIC and denied the motion filed by Four-O-One. The court found that Four-O-One failed to perfect or enforce its liens against the proceeds of production of oil and gas, and that the garnishment proceeding was barred by 12 U.S.C. §§ 1823 and 1825, 1 which preclude liens from attaching to the property of the FDIC in its corporate capacity or when acting as a receiver. A timely notice of appeal was filed on January 31, 1992.

On appeal, Four-O-One argues that: 1) its lien was perfected as to the proceeds of production; 2 2) the action is not barred by 12 U.S.C. §§ 1825(b)(2) and 1823(d)(3)(A); and 3) the district court abused its discretion in allowing the FDIC to amend and supplement its discovery and pleadings. The FDIC responds by denying these contentions and claiming that the court is without jurisdiction because the case sounds in tort and is barred by the Federal Torts Claims Act ("FTCA"), 28 U.S.C. §§ 1346(b), 2671 et seq. 3 We affirm.

DISCUSSION
A. Whether the Present Action is Barred by FIRREA

The district court held that Four-O-One could not bring a garnishment action because the FDIC had not consented as is required under 12 U.S.C. §§ 1825(b)(2) and 1823(d)(3)(A). Title 12 U.S.C. § 1825(b)(2) states that:

When acting as a receiver, the following provision shall apply with respect to the [Federal Deposit Insurance] Corporation: ... (2) [n]o property of the Corporation shall be subject to levy, attachment, garnishment, foreclosure, or sale without the consent of the Corporation, nor shall any involuntary lien attach to the property of the Corporation.

12 U.S.C. § 1823(d)(3)(A) extends the rights, powers, privileges, and authorities enumerated in sections 1821 and 1825(b), that the FDIC holds when acting as a receiver, to the FDIC when it is acting in its corporate capacity.

With respect to any asset acquired or liability assumed pursuant to this section, the Corporation shall have all of the rights, powers, privileges, and authorities of the Corporation as receiver under sections 1821 and 1825(b) of this title.

12 U.S.C. § 1823(d)(3)(A). Thus, the effect of 12 U.S.C. § 1823(d)(3)(A) is simply to cause § 1825(b)(2) to be applicable to the FDIC in both its capacity as receiver and its corporate capacity.

Although not raised by the parties or the court below, 12 U.S.C. § 1821(d)(13)(C) would also appear to place a limitation on the power of this court to grant relief in this case. According to that provision, "[n]o attachment or execution may issue by any court upon assets in the possession of the receiver." 12 U.S.C. § 1821(d)(13)(C).

The mortgage agreements, containing the assignment of production clauses, passed to the FDIC in receivership upon the bank's failure. Later, the agreements were assigned to the FDIC in its corporate capacity. Whether the FDIC was acting in its capacity as receiver or its corporate capacity, 12 U.S.C. §§ 1821(d)(13)(C), 1823(d)(3)(A), and 1825(b)(2) prohibit this court from attaching, executing, garnishing, foreclosing, selling, or levying the proceeds from the production of oil and gas.

The appellant, arguing that section 1825(b)(2) is inapplicable, contends that the proceeds of production are not the "property of the corporation" because Four-O-One holds a superior security interest in such proceeds. However, even if Four-O-One does hold a security interest in the proceeds, that does not preclude the proceeds from being considered the "property of the corporation" under 12 U.S.C. § 1825(b)(2). As of the time that the garnishment action was filed, Four-O-One's interest in the proceeds was merely that of a secured party. The proceeds had been paid by the purchaser of the production to the FDIC pursuant to the mortgage provisions entitling the FDIC to such proceeds. The FDIC had lawful possession of the proceeds pursuant to a claim of title. Therefore, notwithstanding the possibility that the proceeds might be encumbered with a superior lien, for...

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