Rembold v. GIBRALTAR SAV. AND LOAN ASS'N, C84-1644V.

• Decision Date: 27 December 1985
• Docket Number: No. C84-1644V.,C84-1644V.
• Citation: 624 F. Supp. 1006
• Parties: Wayne C. REMBOLD, Plaintiff, v. GIBRALTAR SAVINGS AND LOAN ASSOCIATION, a federally chartered savings and loan association; and Queen City, Inc., a Washington corporation, Defendants, Counterclaimants and Cross-Claimants, v. WESTSIDE FEDERAL SAVINGS AND LOAN ASSOCIATION, a federally chartered savings and loan association, Additional Counterclaim and Cross-Claim Defendants, v. REMBOLD CORPORATION, an Oregon corporation, Third-Party Defendant.
• Court: U.S. District Court — Western District of Washington

624 F. Supp. 1006

Wayne C. REMBOLD, Plaintiff, v. GIBRALTAR SAVINGS AND LOAN ASSOCIATION, a federally chartered savings and loan association; and Queen City, Inc., a Washington corporation, Defendants, Counterclaimants and Cross-Claimants, v. WESTSIDE FEDERAL SAVINGS AND LOAN ASSOCIATION, a federally chartered savings and loan association, Additional Counterclaim and Cross-Claim Defendants, v. REMBOLD CORPORATION, an Oregon corporation, Third-Party Defendant.

No. C84-1644V.

United States District Court, W.D. Washington.

December 27, 1985.

Louis D. Peterson, Hillis, Phillips, Cairncross, Clark & Martin, Seattle, Wash., for Rembold Corp., an Oregon corp.

David Lieberworth, Logerwell, Farley & Schoonmaker, Seattle, Wash., for Gibraltar Sav. and Queen City.

John D. Alkire, Perkins Coie, Seattle, Wash., for Westside Federal Sav.

ORDER

VOORHEES, District Judge.

Having considered the motion of cross-claim defendant, the Federal Savings and Loan Insurance Corporation ("FSLIC"), to dismiss, the motion of cross-claim plaintiff Gibraltar Savings and Loan Association ("Gibraltar") to defer the decision date on the motion to dismiss, and the motion of Gibraltar to disqualify Perkins Coie and to bar transfer of confidences, together with the memoranda and affidavits submitted by counsel, the Court now finds and rules as follows:

1. In the fall of 1982, Queen City Savings and Loan Association ("Queen City") lent $2,000,000.00 to Wayne Rembold. Westside Federal Savings and Loan allegedly entered into a standby commitment to back the loan. In late 1983 Rembold was in default on his loan.

2. On July 24, 1984, FSLIC was appointed as receiver for Queen City, which was in financial difficulties. Thereafter, on that same day, Gibraltar purchased most of the assets and assumed most of the liabilities of Queen City. Among its assets was the Rembold loan. In September, 1984, Rembold filed this action against Gibraltar, seeking a judicial declaration of the rights and obligations of the parties to the Queen City-Rembold loan. Gibraltar answered and counterclaimed against Rembold. It also filed several cross-claims against Westside Federal based on the standby commitment.

3. FSLIC has moved to dismiss the cross-claims, contending that Congress has committed the determination of the validity, priority and satisfaction of these claims in the first instance to the FSLIC. The FSLIC contends that Gibraltar must present its claims to the receiver and the Federal Home Loan Bank Board before obtaining any judicial consideration of its claims.

4. The FSLIC relies on two provisions in its enabling statute and on a recent Fifth Circuit opinion. 12 U.S.C. 1464(d)(6)(C) provides:

Except as otherwise provided in this subsection, no court may ..., except at the instance of the Federal Home Loan Bank Board, restrain or affect the exercise of powers or functions of a conservator or receiver.

12 U.S.C. 1729(d) then provides:

In connection with the liquidation of insured institutions, the FSLIC shall have power to carry on the business of and to collect all obligations to the insured institutions, to settle, compromise, or release claims in favor of or against the insured institutions, and to do all other things that may be necessary in connection therewith, subject only to the regulation of the Federal Home Loan Bank Board....

The FSLIC contends that these provisions require that the validity of Gibraltar's claims be first decided by the receiver. Thereafter, if Gibraltar feels aggrieved by the receiver's determination, it can seek administrative review before the Federal Home Loan Bank Board and in the courts pursuant to the Administrative Procedure Act.

5. The Court is persuaded by the reasoning by the Fifth Circuit in North Mississippi Savings and Loan Association v. Hudspeth, 756 F.2d 1096 (5th Cir.1985), that the contentions of the FSLIC are correct.

6. Gibraltar argues that the Hudspeth decision was wrongly decided and that this Court should not follow that decision. Gibraltar contends that 12 U.S.C. 1730(k)(1), which...