Lambert v. Federal Sav. & Loan Ins. Corp.
| Decision Date | 24 April 1989 |
| Docket Number | No. 88-3432,88-3432 |
| Citation | 871 F.2d 30 |
| Parties | Laurence L. LAMBERT, et al., Plaintiffs-Appellants, v. FEDERAL SAVINGS & LOAN INSURANCE CORPORATION, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Richard J. Tomney, Jr., Metairie, La., for plaintiffs-appellants.
Thomas J Segal, Cassandra N. Jones, Assoc. Gen. Counsel, Washington, D.C., for defendant-appellee.
Appeal from the United States District Court for the Eastern District of Louisiana.
Before CLARK, Chief Judge, HIGGINBOTHAM, Circuit Judge, and FISH *, District Judge.
This is an action challenging a determination by the Federal Savings and Loan Insurance Corporation (FSLIC) that certain funds on deposit at two failed thrift institutions were not insured. The district court granted summary judgment for FSLIC. We affirm.
In 1986, the Federal Home Loan Bank Board (FHLBB) appointed the FSLIC as receiver for Audubon Federal Savings and Loan Association (Audubon) and Crescent Federal Savings Bank (Crescent). Both failed thrifts were located in Louisiana and were federally chartered and insured. The FHLBB directed the FSLIC in its corporate capacity to make payment on each insured account at Audubon and Crescent in accordance with FSLIC insurance regulations. Laurence Lambert, his wife, and his engineering firm, Laurence Lambert & Associates, Engineers dispute the FSLIC's treatment of the following four accounts at the failed thrifts:
Audubon Account Title Balance
Acct. No. 52064003927 Laurence Lambert $ 91,593.75
Acct. No. 52064003943 Laurence Lambert $ 91,593.75
& Associates
Engineers
Crescent
Acct. No. 815160 Laurence Lambert $ 30,605.69
Acct. No. 812587 Laurence Lambert $108,119.44
& Associates
Engineers
After investigation the FSLIC concluded that the engineering firm was a sole proprietorship and thus the accounts held in the firm's name were not insured separately from the accounts held in the name of Laurence Lambert. Accordingly, the FSLIC aggregated the two accounts at Audubon and paid the insured limit of $100,000 for the accounts. The FSLIC also aggregated the two accounts at Crescent and paid $100,000 for those accounts. The FHLBB upheld FSLIC's determinations.
Lambert, his wife, and his engineering firm sued the FSLIC in its corporate capacity seeking payment of insurance for the portions of the accounts that FSLIC found to be uninsured. The district court granted summary judgment for the FSLIC, and plaintiffs appeal.
The parties disagree as to whether FSLIC insurance determinations are reviewable de novo or under the arbitrary and capricious standard of the Administrative Procedure Act. We have supported the proposition that "the FSLIC's determination on insurance must be challenged by seeking review pursuant to the Administrative Procedure Act." Godwin v. Federal Savings & Loan Insurance Corp., 806 F.2d 1290, 1292 (5th Cir.1987). However, that proposition was based on our holding in North Mississippi Savings and Loan Association v. Hudspeth, 756 F.2d 1096 (5th Cir.1985), cert. denied, 474 U.S. 1054, 106 S.Ct. 790, 88 L.Ed.2d 768 (1986), that determinations by the FSLIC as receiver cannot be subject to de novo review because of the existence of administrative procedures that must be exhausted. Hudspeth has been substantially overruled by the Supreme Court's recent holding that FSLIC as receiver does not have power to adjudicate creditor's claims and that creditor's claims are subject to de novo review in court. Coit Independence Joint Venture v. Federal Savings and Loan Insurance Corp., --- U.S. ----, 109 S.Ct. 1361, 103 L.Ed.2d 602(1989). It is unnecessary to decide whether Coit requires de novo review of FSLIC insurance determinations. Under any standard of review the district court correctly found that in the instant case there is no genuine issue as to any material fact and that FSLIC is entitled to judgment as a matter of law.
Plaintiffs argue that the accounts held in the name of the engineering firm are separately insured accounts of an unincorporated association engaged in an independent activity within the meaning of 12 C.F.R. Sec. 564.7. Both parties agree that state law is determinative in deciding whether the engineering firm is an unincorporated association. See 12 C.F.R. Sec. 564.2(a). Relying on La. Rev. Stat. Ann. Sec. 12:501 and La.Code Civ. Proc. Ann. arts. 689, 738 and 1264, the district court found that under Louisiana law the term "unincorporated association" means an association formed for a charitable or other...
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