Weichsel Farm Ltd. v. JPMorgan Chase Bank, Nat'l Ass'n
| Decision Date | 28 March 2012 |
| Docket Number | Civil Action No. 3:09-CV-00672-L |
| Parties | WEICHSEL FARM LIMITED, PARTNERSHIP, Plaintiff, v. JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, SUCCESSOR-IN-INTEREST TO WASHINGTON, MUTUAL BANK, Defendant, and FEDERAL DEPOSIT INSURANCE CORPORATION, AS RECEIVER FOR WASHINGTON MUTUAL BANK, Intervenor. |
| Court | U.S. District Court — Northern District of Texas |
Before the court is Plaintiff's Motion for Summary Judgment Against JPMC (Doc. 39), filed July 15, 2011; the Federal Deposit Insurance Corporation's Motion to Dismiss Pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure (Doc. 45), filed August 12, 2011; Intervenor, Federal Deposit Insurance Corporation, as Receiver for Washington Mutual Bank's Motion for Summary Judgment (Doc. 48), filed August 12, 2011; Defendant JPMorgan Chase Bank, National Association's Objections1 and Motion to Exclude Certain Evidence in Support of Plaintiff's Motionfor Summary Judgment (Doc. 52), filed August 12, 2011; and Defendant JPMorgan Chase Bank, National Association's Motion for Summary Judgment (Doc. 53), filed August 12, 2011.
After careful review of the motions, briefs, record, evidence, and applicable law, the court grants in part and denies in part Plaintiff's Motion for Summary Judgment Against JPMC (Doc. 39); and denies the Federal Deposit Insurance Corporation's Motion to Dismiss Pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure (Doc. 45); Intervenor, Federal Deposit Insurance Corporation, as Receiver for Washington Mutual Bank's Motion for Summary Judgment (Doc. 48); and Defendant JPMorgan Chase Bank, National Association's Motion for Summary Judgment (Doc. 53). The court denies as moot Defendant JPMorgan Chase Bank, National Association's Objections and Motion to Exclude Certain Evidence in Support of Plaintiff's Motion for Summary Judgment (Doc. 52), except to the extent certain of JPMC's objections are specifically overruled in this memorandum opinion and order.
On June 27, 2008, Washington Mutual Bank ("WaMu") entered into a ground lease with Plaintiff Weichsel Farm Limited ("Weichsel" or "Plaintiff") for vacant property located at 3040 West Mockingbird Lane, Dallas, Texas (the "Lease"). Section 1.08 of the Lease provided that WaMu could "use the property for constructing, maintaining and operating its desired improvements . . . consisting of a building . . . together with a drive-through area, parking area, and appurtenant fixtures . . . ." Pl.'s App. 9. Section 4.01 of the Lease included a "Feasibility Period Contingency that gave WaMu, as the tenant, 90 days to conduct a due diligence review and determine whether to proceed with the Lease. Id. at 14. If WaMu confirmed it was satisfied or failed to provide written notice toWeichsel within the Feasibility Period of its dissatisfaction, the contingency would be deemed satisfied, and WaMu would be obligated to pay rent under the Lease.
On September 22, 2008, WaMu confirmed that the Feasibility Period Contingency set forth in section 4.01 of the Lease had been satisfied and the Lease remained in effect. Weichsel asserts that all Lease contingencies or conditions imposed on it as the landlord have been satisfied. Shortly after confirming that the Feasibility Period Contingency had been satisfied, WaMu closed its doors and all of its assets and liabilities were transferred to the Federal Deposit Insurance Corporation ("FDIC"), as the receiver for WaMu, on September 25, 2008.
On the same day, the FDIC entered into a Purchase and Assumption Agreement ("PAA") with JPMorgan Chase Bank ("JPMC").2 Except for assets listed in schedule 3.5 of the PAA, JPMC purchased from the FDIC "all right, title, and interest of the Receiver in and to all of the assets (real, personal and mixed, wherever located and however acquired) . . . of the Failed Bank whether or not reflected in the books of the Failed Bank as of Bank Closing." Pl.'s App. 72. Schedule 3.5 excludes "leased Bank Premises," but JPMC had a 90 day option under the PAA to accept or decline to accept assignment of any leases for "leased Bank Premises, if any." Property defined as "Other Real Estate" was automatically transferred to JPMC under the PAA. See Pl.'s App. 101.
On December 22, 2008, JPMC notified Weichsel that it would not be assuming the Lease under the PAA. On February 4, 2009, Weichsel wrote to JPMC, contending that it was liable for the Lease under the PAA. By letter dated February 13, 2009, JPMC expressed its disagreement with Weichsel's interpretation of the PAA and denied any liability to Weichsel under the Lease. JPMCfurther asserted that it did not believe Weichsel had standing under the PAA to raise these issues. On March 23, 2009, the FDIC notified Weichsel of its decision to disaffirm the Lease based on its conclusion that the Lease was burdensome and that disaffirmance would promote the orderly administration of WaMu's affairs. On March 25, 2009, JPMC sent Weichsel a follow-up letter, confirming its election not to assume the Lease and notifying that it had vacated the leased premises as of January 22, 2009.
On April 13, 2009, Weichsel filed this action against JPMC for breach of the Lease, and the FDIC intervened. Weichsel asserts that all Lease contingencies or conditions imposed on it as the landlord have been satisfied. Weichsel seeks $3,724,165 in damages under the Lease from JPMC for unpaid rent, property taxes, and interest. It also seeks attorney's fees, costs, and prejudgment and postjudgment interest.
On March 18, 2010, JPMC moved to stay the proceedings pending resolution of an appeal in a related matter. According to JPMC, 290 at 71, L.L.C. v. JPMorgan Chase Bank, National Association, Dana Fowlkes and Federal Deposit Insurance Corporation as Receiver for Washington Mutual Bank, Case No. A-09-CA-576-SS, which was pending in the United States District Court for the Western District of Texas, involved a "virtually identical" liability issue, that is, whether the plaintiff had standing to enforce its own interpretation of the PAA. Doc. 21. JPMC therefore requested that the case be stayed, pending its and the FDIC's interlocutory appeal to the Fifth Circuit in 290 at 71, L.L.C. v. Federal Deposit Insurance Corporation, as Receiver for Washington Mutual Bank; JP Morgan Chase Bank, Case No. 10-00004. Id. Rather than stay the case, the court administratively closed the case pending resolution of the interlocutory appeal.
JPMC and the FDIC subsequently dismissed the appeal, and this case was reopened on December 29, 2010. The FDIC moved to dismiss the action under Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction, and all parties moved for summary judgment. In conjunction with their motions, the parties filed objections to evidence.
The FDIC contends that subject matter jurisdiction is lacking because Weichsel does not have standing to enforce or even interpret the PAA, as required to bring this action. Article III of the Constitution "confines the federal courts to adjudicating actual 'cases' and 'controversies.' " Allen v. Wright, 468 U.S. 737, 750 (1984). To establish standing, a plaintiff must satisfy three elements:
First, the plaintiff must have suffered an injury in fact an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. Second, there must be a causal connection between the injury and the conduct complained of the injury has to be fairly . . . trace[able] to the challenged action of the defendant, and not . . . th[e] result [of] the independent action of some third party not before the court. Third, it must be likely as opposed to merely speculative, that the injury will be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (internal citations, quotation marks, and footnote omitted). Because the question of standing implicates the court's subject matter jurisdiction, that is, the court's statutory or constitutional power to adjudicate a claim or dispute, Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 89 (1998), the court applies the standards for a motion to dismiss pursuant to Rule 12(b)(1).
A federal court has subject matter jurisdiction over cases "arising under" the Constitution, laws, or treaties of the United States, or in cases where the matter in controversy exceeds $75,000, exclusive of interest and costs, and diversity of citizenship exists between the parties. 28 U.S.C. §§1331, 1332. Federal courts are courts of limited jurisdiction and must have statutory or constitutional power to adjudicate a claim. See Home Builders Ass'n, Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir. 1998). Absent jurisdiction conferred by statute or the Constitution, they lack the power to adjudicate claims and must dismiss an action if subject matter jurisdiction is lacking. Id.; Stockman v. Federal Election Comm'n, 138 F.3d 144, 151 (5th Cir. 1998) (citing Veldhoen v. United States Coast Guard, 35 F.3d 222, 225 (5th Cir. 1994)). A federal court has an independent duty, at any level of the proceedings, to determine whether it properly has subject matter jurisdiction over a case. See Ruhgras AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999) (); McDonal v. Abbott Labs., 408 F.3d 177, 182 n.5 (5th Cir. 2005) ().
In considering a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, "a court may evaluate: (1) the complaint alone, (2) the complaint supplemented by undisputed...
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