Henry v. Independent American Sav. Ass'n
| Decision Date | 30 September 1988 |
| Docket Number | 87-1849 and 87-1961,Nos. 87-1844,s. 87-1844 |
| Citation | 857 F.2d 995 |
| Parties | W.O. HENRY, Plaintiff-Appellant, v. INDEPENDENT AMERICAN SAVINGS ASSOCIATION; Independent American Savings Association, FSLA; and Independent American Real Estate, Inc., Defendants- Appellees. SUNBELT SERVICE CORPORATION, Plaintiff-Appellant, v. INDEPENDENT AMERICAN SAVINGS ASSOCIATION and Independent American Savings Association, FSLA, Defendants-Appellees. Jeff BEAN, Individually and as Managing General Partner for White Rock Texas Joint Venture, A Texas General Partnership, Plaintiff-Appellant, v. INDEPENDENT AMERICAN SAVINGS ASSOCIATION, et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Robert M. Greenberg, Greenberg, Fisk, Bush & Walker, Dallas, Tex., Ivan M. Scott, Jr., Bedford, Tex., for W.O. Henry.
Larry D. Carlson, Kenneth B. Tomlinson, Dallas, Tex., Colleen B. Bombardier, Office of Gen. Counsel, Washington, D.C., for amicus FSLIC.
C. Michael Moore, David P. Blanke, Martin Griffen, Locke, Purnell, Rain & Harrell, Dallas, Tex., for Independent American Sav. Assoc., et al.
Kathryn R. Wray, Baker & Botts, Dallas, Tex., for Federal Sav. & Loan Assoc. (FSLA).
John Bickel, William Brewer, Harold F. Marshall, Denise Gorges, Bickel & Brewer, Dallas, Tex., for Vineyard, Trustee for Estate of Independent American.
Richard Thornburg, Atty. Gen., Washington, D.C., Interested Person in 87-1844.
Mark R. Hall, David P. Stone, Moore & Peterson, Dallas, Tex., for Sunbelt Service Corp.
Edwin Meese, III, Atty. Gen., Washington, D.C., Interested Person in 87-1849.
Allan B. Diamond, Kim J. Askew, Hughes & Luce, Dallas, Tex., for Bean.
Appeals from the United States District Court for the Northern District of Texas.
Before BROWN, POLITZ, and HIGGINBOTHAM, Circuit Judges.
The district court permitted removal of these three state-court suits against a now-defunct savings and loan association and its successor. The court held that removal was proper because the suits implicate, to varying degrees, receivership functions of the Federal Savings and Loan Insurance Corporation. After removal, however, the court dismissed all claims against the successor-institution on the basis of our decision in North Mississippi Savings & Loan Association v. Hudspeth. 1 The court reasoned that these suits, like the one in Hudspeth, would impede the FSLIC's statutory power to resolve claims against a failed savings and loan association. We affirm the district court's ruling on the propriety of removal, but we reverse the court's ruling on the reach of Hudspeth and remand the cases for further proceedings.
Independent American Savings Association, a Texas-chartered, federally-insured savings and loan, was declared insolvent and closed on May 20, 1987, by the Federal Home Loan Bank Board. The FHLBB immediately placed the closed association, which we will refer to as "Old IASA," in receivership with the Federal Savings and Loan Insurance Corporation. At the FSLIC's direction, substantially all of Old IASA's assets and liabilities were transferred to a newly created, federally-chartered institution, Independent American Savings Assn., F.S.L.A., or "New Federal." By virtue of a "Special Agreement," the FSLIC retained wide supervisory power over New Federal's daily operations. The FSLIC's approval was required for, among other things, the implementation of any "policy, goal or objective," the appointment or retention of any officer or director, the acceptance of any contract of employment, and the lease or purchase of any real estate.
The assets and liabilities assumed by New Federal included two commercial agreements that were the subject of pending state-court lawsuits, the Sunbelt and Henry cases. In Sunbelt, Old IASA had agreed to issue Sunbelt a letter of credit to secure a loan Sunbelt previously had made to a now-defunct affiliate of Old IASA. In Henry, Old IASA had provided Henry with financing for a real estate transaction. In their suits, Henry and Sunbelt alleged that Old IASA committed fraud and breach of contract in connection with the agreements. After the FSLIC's intervention, both plaintiffs amended their complaints to name New Federal as an additional defendant.
Bean, the third case consolidated here, also arose out of a real estate financing agreement involving Old IASA and assumed by New Federal. However, because Bean did not bring suit until after the creation of New Federal, his complaint did not name Old IASA as a defendant. Rather, the suit was brought against New Federal and several individual defendants also alleged to be involved in the real estate deal, namely Tommy G. Lane; John Carpenter; and Poscher, Bond, Wilk & Allison, Inc. Bean's complaint also differed from Henry and Sunbelt's complaints because in addition to the state-law claims, Bean alleged that Old IASA violated a federal law against tying arrangements in credit transactions. 2
New Federal removed all three cases to federal district court, relying on a federal statute that permits removal of state-law claims brought against the FSLIC or a savings institution in receivership with the FSLIC. 3 On motions to remand, the court determined that removal was proper in each case, notwithstanding the fact that Bean did not name Old IASA--the only party in FSLIC receivership--as a defendant. Likewise, the court would not permit Henry and Sunbelt to amend their complaints so as to eliminate Old IASA as a party and, in their view, render Sec. 1730(k)(1) inapplicable.
Bean moved for a preliminary injunction against the foreclosure of the properties subject to Bean's agreement with Old IASA. The district court denied the motion. The court then dismissed all three actions, finding the suits barred under the doctrine of North Mississippi Savings & Loan Association v. Hudspeth. 4 The court determined that the pending actions would "restrain or affect" the FSLIC's exercise of receivership powers over Old IASA, which Hudspeth held to be prohibited by 12 U.S.C. Sec. 1464(d)(6)(C). 5
The plaintiffs in all three cases filed notices of appeal, Henry and Sunbelt from the dismissal and Bean from the denial of preliminary relief. Despite the pending appeals, the district court entered an order on January 7, 1988, inviting the government to file an amicus brief addressing the applicability of Hudspeth. After the FSLIC filed a brief contending that Hudspeth should not apply, the district court issued an order on February 2 vacating the December 17 order of dismissal.
Meanwhile, on December 23, 1987, Bean petitioned the Fifth Circuit for a preliminary injunction against foreclosure pending an appellate determination on the merits. We granted the motion in a published order, 6 finding that Bean's suit was likely to succeed because the district court probably erred in applying Hudspeth to a claim against a savings institution not in FSLIC receivership. 7
At the threshold, New Federal argues that there is "some authority" that the district court's February 2 order vacating dismissal of these actions forecloses appellate review. In Oliver v. Home Indemnity Co., 8 for example, the district court amended its "final judgment" on a Rule 60(b) motion after one of the parties filed a notice of appeal; because the amendment rendered the issues on appeal non-final, this court dismissed the appeal. 9
Nevertheless, most of our cases have recognized that "a district court is divested of jurisdiction upon the filing of the notice of appeal with respect to any matters involved in the appeal." 10 As this court wrote in Brown v. United Insurance Co.: 11
While we may have sometimes allowed the district court to grant Rule 60(b) relief after notice of appeal and without appellate court permission, see Oliver [ ], such decisions, if we assume that they are consistent with prior and subsequent precedents of this Court, are explainable only as an aspect of the "dual jurisdiction" concept, rather than on the theory that the appellate court does not have jurisdiction. 12
Because this court had jurisdiction over the present appeal at the time of the February 2 order, we need not give force to the district court's order vacating the judgment.
Title 12 of the United States Code, section 1730(k)(1) deems all suits "to which the [FSLIC] shall be a party" to arise under federal law, thus permitting their removal to federal court. Although the FSLIC was not named as a party in Henry or Sunbelt, the complaints did name Old IASA, an institution in receivership with the FSLIC at the time of removal. As we explained in Hudspeth, even though the FSLIC has not been formally joined, it is a party in the contemplation of Sec. 1730(k)(1) when the FSLIC is present as receiver of a named defendant. 13 As originally stated, then, the Henry and Sunbelt cases were removable because their claims against Old IASA arose under federal law.
Henry and Sunbelt argue that even if their cases were properly removed, the district court abused its discretion in denying them leave to drop Old IASA from the complaint, 14 an action that they argue would have eliminated federal jurisdiction. The district court found that the amendment was merely a tactical maneuver to facilitate remand. The court also noted that it needed to retain jurisdiction in order to refer the claims to the FSLIC's administrative track, in accord with the district court's expansive reading of Hudspeth.
As we explain in part IV of this opinion, the district court erred in its second conclusion. Because the court denied leave to amend based on its understanding of Hudspeth--an understanding we now reject--we leave it to the district court to reconsider its decision on remand. We note however that "a plaintiff's voluntary amendment to a complaint after removal to eliminate the federal claim upon which removal was based will not defeat federal jurisdiction." 15 If it allows plaintiff...
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