Heafitz v. Interfirst Bank of Dallas, 88 Civ. 7244 (PKL).

• Decision Date: 11 April 1989
• Docket Number: No. 88 Civ. 7244 (PKL).,88 Civ. 7244 (PKL).
• Parties: Bruce HEAFITZ, Plaintiff, v. INTERFIRST BANK OF DALLAS and Republic National Bank of Dallas, appearing as Federal Deposit Insurance Corporation as receiver for their successor, First Republicbank Dallas, N.A., Defendants.
• Court: U.S. District Court — Southern District of New York

711 F. Supp. 92

Bruce HEAFITZ, Plaintiff, v. INTERFIRST BANK OF DALLAS and Republic National Bank of Dallas, appearing as Federal Deposit Insurance Corporation as receiver for their successor, First Republicbank Dallas, N.A., Defendants.

No. 88 Civ. 7244 (PKL).

United States District Court, S.D. New York.

April 11, 1989.

Kornstein Veisz & Wexler, New York City (Marvin Wexler, of counsel), for plaintiff.

Kaye, Scholer, Fierman, Hays & Handler, New York City (Barry Willner, Laura A. Cecere, of counsel), for defendants.

OPINION AND ORDER

LEISURE, District Judge:

This is an action by a joint venturer for alleged tortious interference. Plaintiff Bruce Heafitz ("Heafitz") entered a joint venture with four other individuals. The purpose of that venture was to acquire, develop and exploit certain oil and gas properties. Plaintiff alleges that InterFirst Bank of Dallas and Republic National Bank of Dallas (collectively "defendant banks") induced his co-venturers to breach their fiduciary duties to the joint venture, and that those breaches caused him injury. He seeks damages and equitable relief.

Since the action was initially brought in the New York State Supreme Court, New York County, the named defendant banks merged to form First RepublicBank Dallas, N.A. ("First RepublicBank"). First RepublicBank subsequently failed, and the Federal Deposit Insurance Corporation ("FDIC") was appointed receiver. The FDIC removed the action to federal court under 12 U.S.C. § 1819 and 28 U.S.C. § 1446.

The action is presently before the Court on plaintiff's motion to remand the action back to state court. Plaintiff argues three distinct reasons why removal here was improper: 1) the federal court has no subject matter jurisdiction, 2) defendants did not remove the case to federal court within the thirty day period for removal provided by 28 U.S.C. § 1446(b), and 3) defendants waived their right to remove by making dispositive motions in state court prior to removal to federal court. As indicated below, the Court agrees that defendants waived their right to remove, and grants the plaintiff's motion for remand.

BACKGROUND

Plaintiff Heafitz, a New York resident, commenced this action on May 1, 1987 in State Supreme Court, New York County. The original complaint asserted state law claims against defendant banks. Heafitz alleged that in spring of 1981, the banks tortiously interfered with the planned gas and oil joint venture noted above. Amended Complaint, at ¶ 5-12, attached as Exhibit D to Affidavit of Marvin Wexler, Esq., sworn to on December 1, 1988 ("Wexler Affidavit").

On June 6, 1987, the defendant banks merged to form First RepublicBank. Affidavit of Victoria Dancy, Esq., sworn to on September 28, 1988, ("Dancy Affidavit"), attached as Exhibit K to Wexler Affidavit, ¶ 3. On August 7, 1987, First RepublicBank responded to the Complaint by moving, under New York Civil Practice Law and Rules ("NYCPLR") §§ 3013, 3016 and 3024, for a more definite complaint, and, at the same time, informed the state court of the merger. Wexler Affidavit, Exhibit B, at 4. Argument on the motion was heard in State Supreme Court, New York County, and that court directed plaintiff to amend the complaint. See April 14, 1988 Order, attached as Exhibit C to Wexler Affidavit. Plaintiff served the Amended Complaint on May 4, 1988. First RepublicBank moved to dismiss that Amended Complaint, arguing that it failed to state a claim and was time barred. On July 11, 1988, plaintiff served papers in opposition to the motion to dismiss. Wexler Affidavit, Exhibit F.

At this point, on July 29, 1988, the United States Comptroller of the Currency closed First RepublicBank and appointed the FDIC to serve as receiver for it. Dancy Affidavit ¶ 4. The motion to dismiss was left pending before the state court. Pursuant to the receivership, on August 24, 1988, counsel for the defendant requested and received an adjournment. Wexler Affidavit, Exhibit H. Shortly thereafter plaintiff was informed that new counsel was taking over for the defendant bank/FDIC. On September 13, 1988, the new counsel requested another adjournment, to which plaintiff consented. Plaintiff alleges that the adjournment was agreed to because defendant FDIC claimed that it intended to respond to the initial motion to dismiss, as well as to "raise new grounds available to the FDIC." Wexler Affidavit, Exhibit J.

On September 28, 1988, the FDIC filed a supplemental motion to dismiss on such new grounds (the "supplemental motion"). Those new bases for dismissal were: 1) that 12 U.S.C. § 94 requires actions against a national bank for which the FDIC has been appointed as receiver to be brought only in an appropriate court where the failed bank's principal place of business is located, in this case Texas, and 2) that the doctrine of D'Oench, Duhme & Co., Inc. v. FDIC, 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed. 956 (1942), which is codified as 12 U.S.C. § 1823(e), bars all of plaintiff's claims.¹ On October 12, 1988, plaintiff filed responding papers in opposition to the supplemental motion to dismiss. These motions to dismiss were scheduled to be heard in State Supreme Court on October 17, 1988.

On October 13, 1988 defendant FDIC removed the case to federal court.

DISCUSSION

A. Subject Matter Jurisdiction

The Removal Petition states that removal is based on 12 U.S.C. § 1819 (Fourth), which reads in relevant part as follows:

All suits of a civil nature at common law or in equity to which the Federal Deposit Insurance Corporation shall be a party shall be deemed to arise under the law of the United States, and the United States district courts shall have original jurisdiction thereof, without regard to the amount in controversy; and the Corporation may, without bond or security, remove any such action, suit, or proceeding from a State court to the United States district court, for the division embracing the place where the same is pending by following any procedure for removal now or thereafter in effect, 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, of such state bank under state law shall not be deemed to arise under the laws of the United States.

This provision explicitly provides for federal question jurisdiction in this action. Section 1819 also authorizes the FDIC to remove any action to which it is a party when it is serving in its capacity as receiver for a national bank.

Plaintiff argues that the defendant bank which the FDIC took into receivership was an insolvent state bank. In apparent support of this allegation, plaintiff cites the Dancy Affidavit at ¶ 4. However, as defendant correctly points out, that affidavit explicitly states that "until it was closed, First RepublicBank was a national banking association organized under 12 U.S.C. § 21".² Dancy Affidavit ¶ 6. Furthermore, "N.A." in the appellation First RepublicBank Dallas, N.A. is a common abbreviation among federally chartered banks for "National Association."

It is apparent that the FDIC is appearing as a receiver for a national bank. Consequently, this Court has subject matter jurisdiction pursuant to 12 U.S.C. § 1819, and removal was not improper because this Court lacked jurisdiction.

B. The Timeliness of Removal

As noted above, the FDIC, as receiver for an insolvent national bank, has the right to remove any civil state action involving such a bank to federal court under 12 U.S.C. § 1819. The procedure for removal is embodied in 28 U.S.C. § 1446(b). Section 1446(b) provides:

The petition for removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading.... If the case stated by the initial pleading is not removable, a petition for removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which has become removable.

The issue here is when the thirty day time period began to run. Plaintiff initially argues that the time period began to run in July, 1988, when the FDIC first had actual knowledge that the action was removable. Section 1446(b) expressly provides however, that only a written instrument can trigger the thirty day period. See Riggs v. Continental Baking Co., 678 F.Supp. 236, 238 (N.D.Cal.1988); Smith v. International Harvester Co., 621 F.Supp. 1005, 1007 (D.Nev.1985); see also Interior Glass Services v. FDIC, 691 F.Supp. 1255, 1257 (D.Alaska 1988) ("prior knowledge of a case in which the FDIC may or should become a party cannot suffice" to trigger the thirty day period). Knowledge in July, 1988 did not commence running of the thirty day period.

Plaintiff next argues that an August 24, 1988 letter to the state court from First RepublicBank's attorneys, noting that the FDIC had been appointed as a receiver, was the first "paper" from which it was ascertainable that the case was removable. See Wexler Affidavit, Exhibit H.

It was not until September 13, 1988, however, that defendant FDIC wrote to inform the state court that it had retained counsel to defend it as receiver for the failed bank, and that the FDIC was now the real party in interest. See Wexler Affidavit, Exhibit I. On September 28, 1988, the FDIC filed the supplemental motion to dismiss, which was the first pleading clearly indicating its appearance on behalf of First RepublicBank.

The general rule is that the thirty day time period begins to run from the date the FDIC intervenes, or is substituted for a failed bank in an action.³ See FDIC v. Otero, 598 F.2d 627, 633 n. 7 (1st Cir.1979); Interior Glass Services v. FDIC, 691 F.Supp. 1255, 1256-57 (D.Alaska 1988); Structural Systems, Inc. v. Sulfaro, 687 F.Supp. 22, 23 (D.Mass.1985)....