Morrison-Knudsen Co., Inc. v. CHG Intern., Inc., MORRISON-KNUDSEN

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Writing for the CourtBefore SNEED, KENNEDY and BEEZER; SNEED
Citation811 F.2d 1209
PartiesCO., INC., a California and Delaware Corporation, Plaintiff- Appellee, v. CHG INTERNATIONAL, INC., a Washington Corporation, et al., Defendants, and Stevenson Associates, a limited partnership, Defendant-Appellant. STEVENSON ASSOCIATES, a limited partnership, Plaintiff-Appellant, v. FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION, as Receiver for Westside Federal Savings and Loan Association, et al., Defendants-Appellees. AMERICAN FEDERAL SAVINGS AND LOAN ASSOCIATION, a federally chartered association having its principal office in Oklahoma, Plaintiff-Appellant, v. WESTSIDE FEDERAL SAVINGS AND LOAN ASSOCIATION, a federally chartered association having its principal office in Washington, etc., Defendant- Appellee. In re CHG INTERNATIONAL, Debtor. CHG CREDITORS' COMMITTEE, Plaintiff-Appellee, v. FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION, as Receiver for Westside Federal Savings and Loan Association, Defendant-Appellee. Wayne C. REMBOLD, Plaintiff, v. GIBRALTAR SAVINGS OF WASHINGTON and Queen City Inc., also known as Gibraltar Savings of Washington and Queen City Inc., Defendant/Counterclaimant/Cross- Claimant/Appellant, v. WESTSIDE FEDERAL SAVINGS AND LOAN ASSOCIATION, Additional Counterclaim/Cross-Claim/Defendant/Appellee, v. REMBOLD CORPORATION, an Oregon corporation, Third Party Defendant.
Decision Date25 February 1987
Docket Number86-3658,86-2081,Nos. 86-2063,86-3646,86-3621,MORRISON-KNUDSEN

Page 1209

811 F.2d 1209
55 USLW 2481
MORRISON-KNUDSEN CO., INC., a California and Delaware
Corporation, Plaintiff- Appellee,
v.
CHG INTERNATIONAL, INC., a Washington Corporation, et al., Defendants,
and
Stevenson Associates, a limited partnership, Defendant-Appellant.
STEVENSON ASSOCIATES, a limited partnership, Plaintiff-Appellant,
v.
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION, as Receiver
for Westside Federal Savings and Loan Association,
et al., Defendants-Appellees.
AMERICAN FEDERAL SAVINGS AND LOAN ASSOCIATION, a federally
chartered association having its principal office
in Oklahoma, Plaintiff-Appellant,
v.
WESTSIDE FEDERAL SAVINGS AND LOAN ASSOCIATION, a federally
chartered association having its principal office
in Washington, etc., Defendant- Appellee.
In re CHG INTERNATIONAL, Debtor.
CHG CREDITORS' COMMITTEE, Plaintiff-Appellee,
v.
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION, as Receiver
for Westside Federal Savings and Loan Association,
Defendant-Appellee.
Wayne C. REMBOLD, Plaintiff,
v.
GIBRALTAR SAVINGS OF WASHINGTON and Queen City Inc., also
known as Gibraltar Savings of Washington and Queen
City Inc.,
Defendant/Counterclaimant/Cross-
Claimant/Appellant,
v.
WESTSIDE FEDERAL SAVINGS AND LOAN ASSOCIATION, Additional
Counterclaim/Cross-Claim/Defendant/Appellee,
v.
REMBOLD CORPORATION, an Oregon corporation, Third Party Defendant.
Nos. 86-2063, 86-2081, 86-3621, 86-3646, 86-3658.
United States Court of Appeals,
Ninth Circuit.
Argued and Submitted Oct. 3, 1986.
Decided Feb. 25, 1987.

Page 1212

William F. Abrams, Patricia S. Brody, San Francisco, Cal., for Stevenson Associates.

William K. Black, Washington, D.C., Christine A. Murphy, Laura R. Craft, San Francisco, Cal., John D. Alkire, Joseph E. Bringman, Seattle, Wash., for Federal Sav. and Loan Ins. Corp., as Receiver for Westside Federal Sav. and Loan Ass'n.

David Lieberworth and Scott G. Warner, Seattle, Wash., for Gibraltar Sav. of Washington, F.A. and Queen City, Inc.

Martin T. Crowder, Bruce J. Borrus, Seattle, Wash., for CHG Creditors' Committee.

E. Michele Moquin, John J. Sullivan, Seattle, Wash., for American Federal Sav. & Loan Ass'n.

Appeal from the United States District Court for the Northern District of California.

Appeal from the United States District Court for the Western District of Washington.

Appeal from the United States District Court for the Western District of California.

Before SNEED, KENNEDY and BEEZER, Circuit Judges.

SNEED, Circuit Judge:

The five appeals consolidated here present the question whether the Federal Savings and Loan Insurance Corporation (FSLIC) has exclusive jurisdiction to adjudicate claims against the assets of an insolvent thrift association placed in a FSLIC receivership. FSLIC contends not only that it has the power to adjudicate such claims, but that judicial jurisdiction is limited to reviewing the agency's determinations under the Administrative Procedure Act. The Fifth Circuit accepted FSLIC's position in North Mississippi Savings & Loan Association v. Hudspeth, 756 F.2d 1096 (5th Cir.1985), cert. denied, --- U.S. ----, 106 S.Ct. 790, 88 L.Ed.2d 768 (1986). See also Chupik Corp. v. FSLIC, 790 F.2d 1269 (5th Cir.1986) (reaffirming Hudspeth ). Our examination of the legislative materials leads us to a contrary conclusion. We hold that FSLIC has no power to adjudicate creditor claims. Notwithstanding this FSLIC disability, we hold that exhaustion of administrative remedies may be a basis for dismissal or stay of proceedings, and remand for further consideration.

I.

FACTS

On August 30, 1985, exercising its power under 12 U.S.C. Sec. 1464(d)(6)(A), the Federal Home Loan Bank Board (the Board) appointed FSLIC receiver for the insolvent

Page 1213

Westside Federal Savings and Loan Association (Westside). The cases appealed here arise out of Westside's troubled pre-receivership financial affairs.

In No. 86-3658, a borrower from another thrift association brought a state court suit in Oregon for a declaration that his two million dollar repayment obligation was void. The defendant, Gibraltar Savings of Washington, impleaded Westside as a third-party defendant, alleging that Westside had guaranteed repayment in the event of default. Gibraltar then removed the action to federal court; FSLIC became Westside's receiver in the interim. After being substituted for Westside as party to the suit, FSLIC moved to dismiss Gibraltar's third-party claim for lack of subject matter jurisdiction, taking the position that claims against the assets of a FSLIC receivership fell within the agency's exclusive original jurisdiction. The district court agreed, relying on the Fifth Circuit's Hudspeth decision, and granted FSLIC's motion. 1 Gibraltar appeals.

In No. 86-3621, Westside lent CHG International Corporation (CHG) $6.5 million to develop certain property for a state convention center, the loan being secured by trust deeds on the subject property. CHG defaulted on the loan, declared bankruptcy, and gave Westside a quitclaim deed to the development property in satisfaction of its loan obligations. American Federal Savings and Loan Association then sued Westside in federal district court, claiming that it had entered into a participation agreement with Westside under which American Federal bought a 95 percent share in this loan and Westside was to continue collecting payments as trustee. American Federal sought declaratory relief on the validity of the various agreements, an order quieting title, and damages. When FSLIC became receiver for Westside, it moved to dismiss. The court granted the motion, also relying on Hudspeth, and American Federal appeals.

In Nos. 86-2081 and 86-2063, Morrison-Knudsen Company built condominia under a contract with the above-mentioned CHG. When the latter went bankrupt, Morrison-Knudsen (after obtaining permission from the bankruptcy court) brought suit in a California state court against CHG, Westside, and all other parties claiming an interest in the property. The company sought both contractual damages and foreclosure of its lien. One of the defendants, Stevenson Associates (Stevenson), having sold CHG some of the land at issue, cross-claimed against Westside on the basis of certain financing agreements among CHG, Westside, and itself. Stevenson also sought both monetary and equitable relief. FSLIC, after its appointment as receiver, removed the cases to federal court, whereupon all claims against it were dismissed once again in reliance on Hudspeth. Stevenson appeals the dismissal of both Morrison-Knudsen's claims against FSLIC and its own cross-claims.

Finally, in No. 86-3646, Westside filed a separate, $62 million claim in CHG's bankruptcy proceedings. The CHG Creditors Committee (the Committee), appointed by the bankruptcy court to represent CHG's unsecured creditors, entered a complaint against Westside seeking to subordinate Westside's interests on equitable grounds. FSLIC, having become receiver, moved the supervising district court to dismiss, asserting that the complaint was a claim against one of Westside's assets and as such within FSLIC's exclusive jurisdiction. The district court denied the motion, and FSLIC appeals.

II.

JURISDICTION

In Nos. 86-3658, 86-3621 and 86-2081--the dismissals of Gibraltar's, American Federal's, and Stevenson's claims against FSLIC--the district courts entered final judgment against the appellants. We

Page 1214

therefore have jurisdiction under 28 U.S.C. Sec. 1291. The other two cases present more difficult issues.

In No. 86-2063 Stevenson appeals the dismissal of Morrison-Knudsen's claims against Westside. It is hornbook law that "a party may only appeal to protect its own interests, and not those of a coparty." Libby, McNeill, & Libby v. City Nat'l Bank, 592 F.2d 504, 511 (9th Cir.1978). Stevenson, simply as co-defendant, may not appeal the dismissal of an additional defendant from Morrison-Knudsen's original claims, without itself being a party-plaintiff to those claims. See Bryant v. Technical Research Co., 654 F.2d 1337, 1343 (9th Cir.1981). This is so despite Stevenson's assertion that its position may be affected in some way by the ultimate resolution of Morrison-Knudsen's claims against FSLIC. An indirect financial stake in another party's claims is insufficient to create standing on appeal. SEC v. Securities Northwest, Inc., 573 F.2d 622, 626 (9th Cir.1978). A purely speculative concern about the eventual result of a co-party's case is likewise insufficient. See United States v. 5.96 Acres of Land, 593 F.2d 884, 887 (9th Cir.1979). Stevenson's direct interests as against FSLIC are protected by its own appeal in No. 86-2081, which we consider below. Its asserted, indirect interests in Morrison-Knudsen's claims against FSLIC cannot sustain the appeal in No. 86-2063. That appeal must therefore be dismissed.

In No. 86-3646, FSLIC appeals the denial of its motion to dismiss the Committee's claim for equitable subordination. A refusal to dismiss is not a final order and hence is not appealable under 28 U.S.C. Sec. 1291. A motions panel of this court previously ruled that we had jurisdiction here under 28 U.S.C. Sec. 1292(a)(1). We cannot agree, however, and are bound to note a defect in appellate jurisdiction whenever one appears. See Fed.R.Civ.P. 12(h)(3).

Section 1292(a)(1) authorizes appeals from interlocutory orders granting or refusing injunctions. FSLIC requested dismissal, not an injunction. Even characterizing FSLIC's motion as a request to stay the Committee's claim, the district court's refusal to stay would still be unappealable under this section because the underlying claim is solely for equitable rather than legal relief. See Mediterranean Enters. v. Ssangyong Corp., 708 F.2d 1458, 1462 (9th Cir.1983).

Nor do we have jurisdiction under section 1292(a)(2), which permits an interlocutory appeal from orders "refusing ... to wind up receiverships or to take steps to accomplish the purposes thereof,...

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137 practice notes
  • Standage v. Braithwaite, Civil Action No. ELH-20-2830
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Maryland)
    • December 22, 2020
    ...relief.'" McDonald v. Centra, Inc., 946 F.2d 1059, 1063-64 (4th Cir. 1991) (quoting Morrison-Knudsen Co., Inc. v. CHG Int'l, Inc., 811 F.2d 1209, 1223 (9th Cir.1987), cert. denied, 488 U.S. 935 (1988)). In support of his ripeness argument, plaintiff also draws on Useche v. Trump, No. PX-PAH......
  • Association of Irr. Residents v. C & R Vand. Dairy, No. F 05-4593 AWI SMS.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • June 16, 2006
    ...Dist., 307 F.3d 1064, 1070 (9th Cir.2002); Tomas v. Rubin, 926 F.2d 906, 911 (9th Cir.1991); Morrison-Knudsen Co. v. CHG Int'l, Inc., 811 F.2d 1209, 1223 (9th Cir.1987). "In exercising its discretion, the court must balance the agency's interest in applying its expertise, correcting its own......
  • In re BFW Liquidation, LLC, No. 09–00634–BGC–11.
    • United States
    • United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Northern District of Alabama
    • September 28, 2011
    ...seeking relief.’ ” McDonald v. Centra, Inc., 946 F.2d 1059, 1063 (4th Cir.1991) (quoting Morrison–Knudsen Co., Inc. v. CHG Int'l, Inc., 811 F.2d 1209, 1223 (9th Cir.1987)), cert. denied, 488 U.S. 935, 109 S.Ct. 358, 102 L.Ed.2d 349 (1988). “The exhaustion requirement furthers many important......
  • Western Radio Services Co. v. Qwest Corp., No. 05-35796.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • July 9, 2008
    ...to habeas corpus petition based on denial of due process during removal proceedings); Morrison-Knudsen Co., Inc. v. CHG Int'l, Inc., 811 F.2d 1209, 1223 (9th Cir.1987) (holding that on remand district court should consider whether prudential exhaustion required plaintiffs to exhaust their a......
  • Request a trial to view additional results
137 cases
  • Standage v. Braithwaite, Civil Action No. ELH-20-2830
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Maryland)
    • December 22, 2020
    ...relief.'" McDonald v. Centra, Inc., 946 F.2d 1059, 1063-64 (4th Cir. 1991) (quoting Morrison-Knudsen Co., Inc. v. CHG Int'l, Inc., 811 F.2d 1209, 1223 (9th Cir.1987), cert. denied, 488 U.S. 935 (1988)). In support of his ripeness argument, plaintiff also draws on Useche v. Trump, No. PX-PAH......
  • Association of Irr. Residents v. C & R Vand. Dairy, No. F 05-4593 AWI SMS.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • June 16, 2006
    ...Dist., 307 F.3d 1064, 1070 (9th Cir.2002); Tomas v. Rubin, 926 F.2d 906, 911 (9th Cir.1991); Morrison-Knudsen Co. v. CHG Int'l, Inc., 811 F.2d 1209, 1223 (9th Cir.1987). "In exercising its discretion, the court must balance the agency's interest in applying its expertise, correcting its own......
  • In re BFW Liquidation, LLC, No. 09–00634–BGC–11.
    • United States
    • United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Northern District of Alabama
    • September 28, 2011
    ...seeking relief.’ ” McDonald v. Centra, Inc., 946 F.2d 1059, 1063 (4th Cir.1991) (quoting Morrison–Knudsen Co., Inc. v. CHG Int'l, Inc., 811 F.2d 1209, 1223 (9th Cir.1987)), cert. denied, 488 U.S. 935, 109 S.Ct. 358, 102 L.Ed.2d 349 (1988). “The exhaustion requirement furthers many important......
  • Western Radio Services Co. v. Qwest Corp., No. 05-35796.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • July 9, 2008
    ...to habeas corpus petition based on denial of due process during removal proceedings); Morrison-Knudsen Co., Inc. v. CHG Int'l, Inc., 811 F.2d 1209, 1223 (9th Cir.1987) (holding that on remand district court should consider whether prudential exhaustion required plaintiffs to exhaust their a......
  • Request a trial to view additional results

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