New Maine Nat. Bank v. Reef, Civ. No. 91-0044-P.

• Court: U.S. District Court — District of Maine
• Writing for the Court: GENE CARTER
• Citation: 765 F. Supp. 763
• Docket Number: Civ. No. 91-0044-P.
• Decision Date: 31 May 1991
• Parties: NEW MAINE NATIONAL BANK, Plaintiff, Federal Deposit Insurance Corporation, Counterclaim Defendant, v. Norman S. REEF and Robert L.S. McClure, III, Defendants.

765 F. Supp. 763

NEW MAINE NATIONAL BANK, Plaintiff,
Federal Deposit Insurance Corporation, Counterclaim Defendant,
v.
Norman S. REEF and Robert L.S. McClure, III, Defendants.

Civ. No. 91-0044-P.

United States District Court, D. Maine.

May 31, 1991.

765 F. Supp. 764

Thomas A. Cox, Michael K. Martin, Petrucelli, Cox & Martin, Portland, Me., for plaintiff.

Allen Hrycay, Reef, Jordan, Hrycay & Sears, Portland, Me., for defendants.

MEMORANDUM OF DECISION AND ORDER ON DEFENDANTS' RESPONSE TO THE COURT'S ORDER TO SHOW CAUSE OF MARCH 8, 1991 (Docket No. 7)

GENE CARTER, Chief Judge.

This matter is now before the Court on the Court's review of Defendant's Response (Docket No. 9), filed on March 27, 1991, to this Court's Order to Show Cause (Docket No. 7), entered herein on March 8, 1991. In their Response, Defendants take the position that the counterclaim should not be dismissed without prejudice pursuant to the provisions of 12 U.S.C. section 1821(d)¹ pending exhaustion of the procedure for claims resolution by the FDIC, as that is established by 12 U.S.C. sections 1821(d)(3) and (5) and the regulations promulgated under 12 U.S.C. sections 1821(d)(4) for the reason that this Court is not without jurisdiction over the counterclaim because the claim was commenced and pending in court prior to the appointment of the FDIC as Receiver. Defendants' Response to Order to Show Cause (Docket No. 9) at 2. This position is amplified by the assertion that

The provisions of 18 sic U.S.C. section 1821(d)(13)(D) are not applicable to actions which were pending in Court prior to the appointment of the FDIC because such actions are governed by other provisions of that subsection. 12 U.S.C. section 1821(d)(6)(A) clearly refers to the continuation of action commenced before the appointment of the receiver and 12 U.S.C. section 1821(d)(12)(A) & (B) clearly provides that upon the application for a stay by the FDIC this Court must grant the stay as to all parties.

Id. Accordingly, Defendants argue that the Court is not presently without jurisdiction over the counterclaim pursuant to the provisions of 12 U.S.C. section 1821(d)(13)(D) of the Act and that it may not, therefore, dismiss the counterclaim without prejudice pending exhaustion of

765 F. Supp. 765

the administrative claims process mandated by FIRREA. Defendants' construction of the statutory provisions is wholly in error; therefore, the predicate for its argument that the Court maintains substantive jurisdiction over the counterclaim in this case is without merit.²

First of all, the provisions of sections 1821(d)(13)(D)(i) and (ii) make it clear that the Court is without substantive jurisdiction over any claim or action of the type put forth in the counterclaim herein. The statute provides:

(D) Limitation on judicial review

Except as otherwise provided in this subsection, no court shall have jurisdiction over —

(i) any claim or action for payment from, or any action seeking a determination of rights with respect to, the assets of any depository institution for which the Corporation has been appointed receiver, including assets which the Corporation may acquire from itself as such receiver; or

(ii) any claim relating to any act or omission of such institution or the Corporation as receiver.

No provision is made in subsection (13) of section 1821(d) that would place the counterclaim within the exception referred to in the first phrase of subsection (D). Further, Defendants' argument that somehow section 1821(d)(6)(A) or section 1821(d)(12)(A) and (B) apply to place the counterclaim herein in a category of claims excepted from the clear operation of the language of subsection (D) is without merit.

First of all, section 1821(d)(6)(A) relates to the statutory grant of a right to a claimant against the FDIC or the receiver bank to request either administrative review or judicial review by filing a suit on such claim after the expiration of the period for the administrative processing of the claim by the FDIC. Clearly, no jurisdiction is conferred upon the Court by the filing of any claim for administrative review. It is equally clear that no jurisdiction exists in the court with respect to a claim for judicial determination of a claim subject to the administrative claims process until the specified "suit on such claim" has been filed with the court.

The parenthetical phrase in subsection (6) "(or continue an action commenced before the appointment of the receiver)" can apply only where there has been some administrative action of the court in the...