Intercontinental Travel Marketing, Inc. v. F.D.I.C.

• Decision Date: 28 December 1994
• Docket Number: No. 92-16507,92-16507
• Parties: INTERCONTINENTAL TRAVEL MARKETING, INC., Plaintiff-Appellant, v. FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for Gateway National Bank, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1278

45 F.3d 1278

INTERCONTINENTAL TRAVEL MARKETING, INC., Plaintiff-Appellant, v. FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for Gateway National Bank, Defendant-Appellee.

No. 92-16507.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Jan. 11, 1994.

Decided Dec. 28, 1994.

Jon Eric Hollmann, Hollmann & Wertheimer, San Diego, CA, for plaintiff-appellant.

Marc Kalish and Kenneth E. Moyer, Kalish, Forrester & Torres, Phoenix, AZ, Ann S. DuRoss, Asst. Gen. Council, Colleen B. Bombardier, Sr. Counsel, Claire L. McGuire, of counsel, Barbara S. Woodall (argued), F.D.I.C., for defendant-appellee.

Appeal from the United States District Court for the District of Arizona.

Before: ALDISERT ^*, WIGGINS, and BRUNETTI, Circuit Judges.

BRUNETTI, Circuit Judge:

In this appeal, we address the effect of a claimant's failure to pursue administrative remedies before the expiration of the claims bar date specified in the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"). We have jurisdiction over this appeal under 28 U.S.C. Sec. 1291. Because we find that the district court properly dismissed this case for lack of subject matter jurisdiction, we affirm.

I. FACTS

On or about July 25, 1989, Intercontinental Travel Marketing ("ITM") and Gateway National Bank ("GNB") entered into a Merchant Bankcard Agreement. On January 9, 1990, ITM filed suit in the United States District Court for the District of Arizona against GNB and Southwestern States Bankcard Association ("SSBA"), alleging breach of the terms of the Agreement. (SSBA processed the credit transactions between ITM and GNB.) On February 15, 1990, after GNB had been placed in receivership, the Federal Deposit Insurance Corporation ("FDIC") assumed control of GNB. In an order dated March 8, 1990, ITM and the FDIC entered a stipulation substituting the FDIC as defendant in the lawsuit. In furtherance of its role as receiver, the FDIC executed a purchase and assumption transaction pursuant to authority granted by 12 U.S.C. Sec. 1821(c)(2)(A) ¹. After receiving an extension of time, the FDIC filed its answer on June 27, 1990.

In accordance with Sec. 1821(d)(3)(B)(i) ², the FDIC published notices from February 28, 1990 through April 25, 1990 announcing the administrative claims bar date, May 29, 1990, but the FDIC did not mail notice of the bar date to ITM as required by Sec. 1821(d)(3)(C). ³ However, there was no evidence that the FDIC intended to conceal the bar date from ITM. ITM did not file an administrative claim with the FDIC until March 11, 1992, after the FDIC filed its motion for summary judgment.

The FDIC moved for summary judgment on March 2, 1992, contending that the district court lacked jurisdiction over ITM's claims because ITM had failed to file a timely administrative claim pursuant to Sec. 1821(d). ITM opposed the FDIC's motion, arguing that because the FDIC had failed to mail a notice of the claims bar date to ITM, required by Sec. 1821(d)(3)(C), ITM's notice of receivership by the March 1990 stipulation notwithstanding, ITM did not need to exhaust FIRREA's administrative remedy requirement. The district court granted summary judgment in favor of the FDIC on June 30, 1992.

ITM filed a motion to reconsider on the grounds that it had submitted an administrative claim, although after the claims bar date. When the district court denied ITM's motion on August 4, 1992, ITM filed the present appeal. ⁴

II. DISCUSSION

A. Standard of Review

We review a grant of summary judgment de novo. Jones v. Union Pacific R.R., 968 F.2d 937, 940 (9th Cir.1992). We also review the existence of subject matter jurisdiction de novo. Reebok Int'l, Ltd. v. Marnatech Enters., Inc., 970 F.2d 552, 554 (9th Cir.1992).

B. ITM's Failure to Exhaust FIRREA's Claims Process

Section 1821(d)(3)(A) of FIRREA provides the FDIC, acting in its capacity as receiver, with the authority to determine claims against a failed depository institution. If a claimant submits a timely claim to the FDIC, it must determine within 180 days whether to allow or disallow the claim. ⁵ If the FDIC fails to determine the claim or disallows the claim, then, under Sec. 1821(d)(6)(A), the claimant has 60 days to request administrative review or file or continue suit on such claim in the district court. ⁶ No court has jurisdiction over the claim until the exhaustion of this administrative process. ⁷

In Henderson v. Bank of New England we held that no jurisdiction exists if a claimant does not exhaust FIRREA's administrative process. 986 F.2d 319, 320-21 (9th Cir.), cert. denied, --- U.S. ----, 114 S.Ct. 559, 126 L.Ed.2d 459 (1993). The claimant in Henderson filed his complaint against the bank in district court before exhausting his administrative remedies but after the FDIC was appointed as receiver for the bank. We held that the district court lacked subject matter jurisdiction because FIRREA "contains no provision granting federal jurisdiction to claims filed after a receiver is appointed but before administrative exhaustion" and "[s]ection 1821(d)(13)(D) strips all courts of jurisdiction over claims made outside the administrative procedures of section 1821." Id. at 320 (citing Meliezer v. Resolution Trust Corp., 952 F.2d 879, 882 (5th Cir.1992)).

The present case differs from Henderson because the claimant in Henderson filed his action after the FDIC was appointed as receiver. Nonetheless, we see no reason, in Sec. 1821(d) or any other source, why that holding should not apply to cases in which the claimants filed their action before the FDIC was appointed as receiver, and we extend Henderson's holding accordingly. Because ITM failed to properly exhaust the statutorily mandated exhaustion requirements of Sec. 1821(d), no jurisdiction exists over its action.

ITM argues that it should not have to exhaust under FIRREA because the word "continue" in Sec. 1821(d)(5)(F)(ii) ⁸ means that claimants who file suit before the FDIC's appointment as receiver are exempt from FIRREA's exhaustion requirement. We disagree. We find that Sec. 1821(d)(5)(F)(ii) merely means that filing a claim with the FDIC will not prejudice claimants who decide to continue an action in district court after having complied with the administrative process. This provision neither creates a separate scheme for cases pending at the time of the FDIC's appointment as receiver, nor allows claimants to pursue administrative and judicial remedies simultaneously. See Carney v. Resolution Trust Corp., 19 F.3d 950, 955-56 (5th Cir.1994) ("allowing a claimant simultaneously to pursue administrative and judicial remedies would thwart Congress' purpose in enacting FIRREA"); Brady Dev. Co. v. Resolution Trust Corp., 14 F.3d 998, 1003 (4th Cir.1994) ("Congress clearly envisioned that administrative and judicial review of claims could not take place simultaneously.").

Our holding is in accord with decisions from other circuits. ⁹ For example, in Bueford v. Resolution Trust Corp., 991 F.2d 481, 485 (8th Cir.1993), the Eighth Circuit rejected the claimant's allegation that applying the administrative requirements of FIRREA to a pending case was an improper retroactive application of the statute. Relying on Sec. 1821(d)(6)(B)(ii), which provides for the final disallowance of cases if claimants fail to "continue an action commenced before the appointment of the receiver" within 60 days after the end of the FDIC's period of review, the court concluded that FIRREA applies to pending actions. Applying the exhaustion procedures, the court upheld the district court's dismissal of the claimant's action for lack of subject matter jurisdiction, since the claimant failed to file a claim with the FDIC. Bueford, 991 F.2d at 485; see also Carney, 19 F.3d at 955 ("FIRREA makes participation in the administrative claim review process mandatory, regardless of whether the claims were filed before or after the [FDIC] was appointed receiver of the failed institution."); Brady Dev., 14 F.3d at 1004-05 (In an action involving a pre-receivership claim, the court stated that "[o]nly after the [FDIC] denies a claim or fails to act within 180 days after receiving the claim may judicial review be sought or a previously filed action continued.") ¹⁰ ; Resolution Trust Corp. v. Mustang Partners, 946 F.2d 103 106 (10th Cir.1991) ("No interpretation [of FIRREA] is possible which would excuse this requirement for creditors with suits pending, or allow the filing of suit to substitute for the claim process.... Mustang's right to continue pursuing its pending lawsuit is dependent upon its compliance with FIRREA's claims provisions.").

We recognize that some courts, addressing the issue of jurisdiction over actions pending at the time of the FDIC's appointment as receiver, have stayed, not dismissed, the actions. We agree that a stay may be appropriate where the district court examines jurisdiction when the claimant still has time to file an administrative claim with the FDIC before the administrative bar date passes. Dismissal may not be appropriate in such a case because the claimant still can comply with FIRREA's exhaustion requirement. The district court technically does not lose jurisdiction over the case until the claimant fails to file a timely administrative claim. See, e.g., Marquis v. FDIC, 965 F.2d 1148, 1154-55 (1st Cir.1992) (observing that FIRREA's purpose, the efficient processing of claims against failed banks, "would be disserved by forcing the courts to dismiss all pending litigation, only to have the cases refiled when and if administrative settlement proved impracticable"); Carney, 19 F.3d at 955 (reversing district court's dismissal for lack of subject matter jurisdiction and approving of Marquis' language that a court should stay an action to permit exhaustion); Coston v. Gold Coast Graphics, 782 F.Supp. 1532, 1536 (S.D.Fla.1992) (deciding that a court should grant a stay until claimants comply with FIRREA...