Rosa v. Resolution Trust Corp.
| Decision Date | 27 June 1991 |
| Docket Number | No. 90-6010,90-6010 |
| Citation | 938 F.2d 383 |
| Parties | , 13 Employee Benefits Ca 2425 Kenneth J. ROSA, Brian O'Connor, Gerald L. Negri, Herbert J. Kupfer, Priscilla Carpenter, Individually, and on Behalf of All Participants and Beneficiaries of the City Savings Bank, F.S.B., Minimum Benefit Retirement Plan (formerly, the "City Federal Savings Bank Minimum Benefit Retirement Plan") v. RESOLUTION TRUST CORPORATION, in its Corporate Capacity, and as Receiver of City Federal Savings Bank, as Receiver of City Savings Bank, F.S.B. and as Conservator for City Savings, F.S.B., City Federal Savings Bank; Manufacturers Hanover Trust Company, a New York Corporation, City Savings, F.S.B. ("City Savings"), City Savings Bank, F.S.B. ("City Savings Bank"), Pension Benefit Guaranty Corporation, Intervenor, Resolution Trust Corporation, City Federal Savings Bank, City Savings Bank, F.S.B., and City Savings, F.S.B., Appellants. |
| Court | U.S. Court of Appeals — Third Circuit |
Roger B. Kaplan (argued), Laura V. Studwell, Richard B. Robins, Wilentz, Goldman & Spitzer, Woodbridge, N.J., for appellees Kenneth J. Rosa, Brian O'Connor, Gerald L. Negri, Herbert J. Kupfer and Priscilla Carpenter, individually and on behalf of all participants, etc.
Dennis S. Klein (argued), Robert P. Fletcher, Hopkins & Sutter, Washington, D.C., Arthur Meisel, Ann F. Kiernan, Jamieson, Moore, Peskin & Spicer, Princeton, N.J., for appellants.
Sarah L. Reid, Kelley, Drye & Warren, New York City, for appellee Mfrs. Hanover Trust Co.
Carol Connor Flowe, Jeanne K. Beck, Deborah West (argued), Deborah J. Bisco, Pension Benefit Guar. Corp., Washington, D.C., for intervenor Pension Benefit Guar. Corp.
Before STAPLETON, GREENBERG and SEITZ, Circuit Judges.
Defendants Resolution Trust Corporation, City Federal Savings Bank, City Savings Bank, F.S.B., and City Savings, F.S.B. ("appellants") appeal the order of the district court granting plaintiffs, participants in and beneficiaries of a pension plan, a preliminary injunction. This court has jurisdiction pursuant to 28 U.S.C. Sec. 1292(a)(1) (1988). We review for abuse of discretion. Tustin v. Heckler, 749 F.2d 1055, 1060 (3d Cir.1984). However, our review of legal issues is plenary. Id.
Plaintiffs' complaint invoked the jurisdiction of the district court under the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. Secs. 1001 et seq. (1988) ("ERISA"). The Resolution Trust Corporation ("RTC") challenges the district court's jurisdiction over plaintiffs' claims against appellants other than it in its corporate capacity for plaintiffs' failure first to comply with statutory claims procedures. See 12 U.S.C.A. Sec. 1821(d)(3)-(13) (West 1989).
This case involves important issues as to the meaning of certain provisions of the Financial Institutions Reform and Recovery Enforcement Act of 1989 ("FIRREA"), Pub.L. No. 101-73, 103 Stat. 183 (1989) () in the context of claims brought under ERISA. Congress recently enacted FIRREA as a response to the crisis in the savings and loan industry that has commanded so much public attention in recent years. For example, the insurance system backing the industry was in financial danger and public confidence in the industry suffered. FIRREA's numerous and complex provisions seek to remedy the problems Congress perceived to result from the existing regulatory scheme. See H.Rep. No. 101-54(I), 101st Cong., 1st Sess. 291-312, reprinted in 1989 U.S.Code Cong. & Admin.News 86, 87-108 ().
One of FIRREA's purposes was "[t]o establish a new corporation, to be known as the Resolution Trust Corporation, to contain, manage, and resolve failed savings associations." 12 U.S.C.A. Sec. 1811 note (West 1989). RTC was created by section 501(b) of FIRREA, 12 U.S.C.A. Sec. 1441a(b) (West Supp.1991), which also defines its duties, powers, make-up and functions. RTC in large part took over the role of the Federal Savings and Loan Insurance Corporation ("FSLIC") with respect to failing insured savings and loan institutions. See id. Sec. 1441a(b)(3)(A), (6), (11)(B). Broadly stated, this case involves the functioning of RTC.
Plaintiffs are participants in and beneficiaries of the City Savings Bank, F.S.B., Minimum Retirement Benefit Plan (originally the City Federal Savings Bank Minimum Benefit Retirement Plan) ("plan"). This plan was created in 1985 and was subject to ERISA. The plan's trustee is Manufacturer's Hanover Trust Company ("trustee").
On December 7, 1989, the Director of the Office of Thrift Supervision ("OTS") issued a series of orders. First the Director appointed RTC receiver for City Federal Savings Bank ("City Federal") for the purpose of liquidation pursuant to its authority under 12 U.S.C.A. Sec. 1464(d)(2)(H)(ii) (West Supp.1991). 1 The Director next, upon RTC's application under 12 U.S.C.A. Sec. 1821(d)(2)(F)(i) (West 1989), authorized RTC's organization of City Savings Bank, F.S.B. ("City Savings Bank"), and issued a charter under Sec. 1464(a)(2). The Director then appointed RTC conservator for City Savings Bank pursuant to Sec. 1464(d)(2)(B)(i) effective upon RTC's consent of such appointment on behalf of City Savings Bank.
On December 8, under a Purchase and Assumption agreement between RTC as receiver for City Federal and City Savings Bank, RTC as receiver transferred certain City Federal assets and liabilities to City Savings Bank. Many City Federal employees were hired by City Savings Bank.
As a means of encouraging employees to remain with City Savings Bank, RTC as conservator determined that it would assume and continue the plan. This is a critical event because the issues presented arise out of that action and subsequent events. In its capacity as conservator RTC represented to City Savings Bank employees that it assumed the plan, and the record contains numerous references to such communications. On February 9, 1990, RTC as conservator and the trustee executed an amendment of the trust agreement to reflect the assumption. Further, on February 12, RTC as conservator formally assumed the plan effective December 8, 1989, replacing by amendment all references to City Federal with references to City Savings Bank. In all other respects the plan remained in "full force and effect." The Pension Benefit Guaranty Corporation ("PBGC") was notified of the assumption and amendment. 2
City Savings Bank, through RTC as conservator, made two contribution payments to the trustee as they became due in January and April of 1990. Consistent with the assumption of the plan, participants continued to accrue rights and to have them vest, and the trustee continued to pay benefits.
The record reflects that sometime during the spring or summer of 1990, RTC as conservator began to consider terminating the plan. In July the conservator's managing agent's committee met to discuss its options with respect to the plan. Minutes of the committee's July 5 meeting recite that the committee approved the proposal "to freeze participant benefit accruals." Minutes of the July 12 meeting note that "[t]he Committee unanimously concurred to return the Plan to the Receivership."
On July 13, 1990, Timothy O'Neill, RTC's attorney working on-site at City Savings Bank, instructed Jeffrey Kaplowitz, the plan administrator 3 and an employee of City Savings Bank, not to make the July contribution to the trustee. No further contributions were made by any party.
On July 18, 1990, Mr. O'Neill instructed Mr. Kaplowitz to distribute a notice of plan termination to plan participants. This notice, delivered on July 19, was directed to participants of the City Federal plan and stated that it was from RTC as receiver for City Federal. The notice stated that "the Conservator was prevented from assuming the Plan by applicable law, including 12 C.F.R. Sec. 563.47." 4 Further, the notice stated that all benefits ceased accruing as of December 7, 1989 (the date RTC initially took over), and that the expected termination date of the plan was September 20, 1990.
On September 19, 1990, RTC, as receiver for City Federal, sent PBGC formal notice of its intention to terminate. That notice did not mention the assumption, but stated that "[i]n connection with the receivership, the RTC as receiver for City Federal intends to file for a distress termination of the City Federal Savings Bank Minimum Benefit Retirement Plan...." Further, the notice identified City Federal as plan administrator. 5
On September 21, 1990, the Director of OTS issued another series of orders. The Director first replaced the conservator of City Savings Bank with RTC as receiver for the purpose of liquidation, pursuant to 12 U.S.C.A. Sec. 1464(d)(2)(F) and (H)(ii). Next, based on RTC's application under Sec. 1821(d)(2)(F)(i), the Director authorized RTC's organization of a new bank, City Savings, F.S.B. ("City Savings"), and issued a charter under Sec. 1464(a)(2). The Director then appointed RTC conservator for City Savings, effective upon RTC's consent, under Sec. 1464(d)(2)(B)(i). On the same day, pursuant to a Purchase and Assumption Agreement between RTC as receiver for City Savings Bank and City Savings, City Savings Bank transferred certain assets and liabilities to City Savings.
On November 6, 1990, plaintiffs brought this class action in the United States District Court for the District of New Jersey. 6 Named as defendants were RTC in its various capacities (corporate capacity, receiver for both City Federal and City Savings Bank, and conservator for City Savings), City Federal, City Savings Bank, City Savings and the trustee.
The complaint contained seven "counts." Relevant to this appeal are the following: (1) City Savings Bank failed to make contributions to the plan and threatened wrongfully...
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