FDIC, as receiver for R-G Prem v. Estrada-Rivera

United States Court of Appeals
For the First Circuit
Nos. 11-2113, 11-2433
FEDERAL DEPOSIT INSURANCE CORPORATION
AS RECEIVER FOR R-G PREMIER BANK OF PUERTO RICO,
Plaintiff, Appellee,
v.
DIGNO EMÉRITO ESTRADA-RIVERA; EDITH DELIA COLÓN-FELICIANO;
CONJUGAL PARTNERSHIP ESTRADA-COLÓN;
EMÉRITO ESTRADA RIVERA-ISUZU DE PUERTO RICO, INC.,
Defendants, Appellants.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Gustavo A. Gelpí, U.S. District Judge]
Before
Torruella, Lipez, and Thompson, Circuit Judges.
Guillermo F. DeGuzmán, with whom DeGuzmán Law Offices was on
brief, for appellants.
Kathleen V. Gunning, Counsel, Federal Deposit Insurance
Corporation, with whom Colleen Boles, Assistant General Counsel,
and Lawrence H. Richmond, Senior Counsel, were on brief, for
appellee.
July 3, 2013
LIPEZ, Circuit Judge. Appellants challenge the district
court's grant of summary judgment for the Federal Deposit Insurance
Corporation ("FDIC") in a collection action stemming from their
default on a $700,000 loan. They contend that their lending bank
-- later taken over by the FDIC -- caused the default by failing to
follow through on a promised loan to a third-party. The district
court also dismissed a counterclaim based on that contention for
lack of subject matter jurisdiction. Although we adopt a different
rationale for disposing of the counterclaim, we affirm both of the
court's rulings.1
I.
It is unnecessary to describe the financial transactions
underlying this case in detail, as both issues on appeal are
controlled by well established legal principles. We thus briefly
sketch the background of the dispute, with elaboration provided
below as pertinent to our discussion.
In early 2008, appellant Digno Emérito Estrada-Rivera
("Estrada-Rivera") signed a loan agreement with R-G Premier Bank of
Puerto Rico ("the Bank") for a $700,000 line of credit for his
business, Emérito Estrada Rivera-Isuzu de Puerto Rico ("EER-IPR").
Less than a year later, Estrada-Rivera defaulted on the loan, and
the Bank brought a collection action in commonwealth court against
1
Appellants filed a separate appeal of each ruling, and the
two actions were later consolidated.
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the four appellants in this appeal: Estrada-Rivera, his wife (Edith
Delia Colón-Feliciano), their conjugal partnership, and EER-IPR.
In a counterclaim, appellants asserted that the Bank was
responsible for the default because it had breached a financing
agreement with an entity that was purchasing property from
appellants for a shopping plaza project. Appellants alleged that
they were to receive some of the proceeds from that financing to
complete the third party's purchase of appellants' property, and
appellants would then have used those funds to pay their
outstanding loan commitments with the Bank, including the line of
credit. They asserted damages of "not less than" $50 million
resulting from the Bank's breach.
The FDIC subsequently took over the Bank as receiver,
removed the litigation to federal court, and eventually obtained
summary judgment in its favor on the collection action. The
district court noted the absence of any dispute that the $700,000
debt was due and payable, and it found "nothing in the record that
made Defendants' payment under the note conditional upon [the
Bank]'s compliance with its obligation under the [third-party]
financing agreement." Hence, because "Defendants have breached
their contractual obligations," the court granted summary judgment
for the FDIC. The court also dismissed appellants' counterclaim,
finding a lack of subject-matter jurisdiction on the ground that
appellants had not taken the steps necessary, within the required
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time frame, to maintain an action against the FDIC. See 12 U.S.C.
§ 1821(d)(6), (d)(13)(D).
Appellants raise two issues on appeal. First, they
contend that summary judgment was improperly granted on the
collection action because factual disputes remain concerning the
Bank's role in causing them to breach their loan agreement with the
Bank and whether, as a result, appellants should be released from
their obligations under that agreement. Second, appellants argue
that the district court erred in rejecting their counterclaim on
jurisdictional grounds. They assert that they met all applicable
requirements for pursuing the claim and that, in any event, their
action should not be barred because the FDIC gave them inadequate
notice of the need to file a proof of claim.
We review an appeal from a grant of summary judgment de
novo, Johnson v. Univ. of P.R., 714 F.3d 48, 52 (1st Cir. 2013),
and likewise apply de novo review to the court's dismissal of the
counterclaim for lack of subject-matter jurisdiction, Alphas Co. v.
Dan Tudor & Sons Sales, Inc., 679 F.3d 35, 38 (1st Cir. 2012). In
considering the propriety of the district court's rulings, we are
not limited to the rationales it adopted but may affirm its
judgment on any ground supported by the record. Miles v. Great N.
Ins. Co., 634 F.3d 61, 65 n.5 (1st Cir. 2011).
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A. The Collection Action
Appellants attempt to demonstrate that summary judgment
was improperly granted against them by highlighting factual
disputes related to the financing that the Bank had agreed to
provide for the shopping plaza project. They state that the Bank
structured the deal so that final payment to appellants would be
withheld until after the Bank released additional funds to the
buyer, Empresas Cerromonte Corp. ("ECC"), for construction.2
Appellants claim, however, that the Bank subsequently refused to
disburse the additional monies, breaching its financing agreement
with ECC along with a commitment made to appellants that they would
receive full payment for their property within a year of the sale.3
Appellants thus assert that their default on the line of
credit was attributable to the Bank's breach of both the ECC
financing deal and its obligations to appellants themselves. They
argue that a factfinder must evaluate their contention that the
Bank's culpability overrides their own breach, and they insist that
the district court would be authorized to modify their obligations
under the line of credit if the Bank is found to have acted in bad
faith. Hence, because further development of the facts may show
that the Bank bears responsibility for their default, appellants
2
Appellants were therefore required to temporarily self-
finance part of the purchase price.
3
Appellants state that the balance due was to be paid
directly by the Bank to them from ECC's construction loan proceeds.
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maintain that summary judgment for the FDIC on the collection claim
was improper.
The problem for appellants is that, whatever the merits
of their defense as a matter of contract or promissory estoppel,
their contentions are unavailing against the FDIC. Enforcement
against the FDIC of unwritten promises or agreements is barred by
12 U.S.C. § 1823(e)(1), which provides, in pertinent part:
No agreement which tends to diminish or defeat
the interest of the [FDIC] in any asset
acquired by it . . . as receiver of any
insured depository institution, shall be valid
against the [FDIC] unless such agreement--
(A) is in writing . . . [and]
(D) has been, continuously, from the time of
its execution, an official record of the
depository institution.
See also D'Oench, Duhme & Co. v. FDIC, 315 U.S. 447 (1942)
(establishing the common law "D'Oench doctrine," which "prevents
plaintiffs from asserting as either a claim or defense against the
FDIC oral agreements or 'arrangements,'" FDIC v. LeBlanc, 85 F.3d
815, 821 (1st Cir. 1996) (internal quotation marks omitted));
McCullough v. FDIC, 987 F.2d 870, 874 n.6 (1st Cir. 1993)
(describing § 1823(e) as "D'Oench's statutory partner").
The district court found no written proof that
appellants' obligation to repay the line of credit was contingent
on ECC's independent financing agreement with the Bank, and
appellants point to no such explicit documentation. Instead, they
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rely on inferences to be drawn from the collection of documents
executed by the Bank, ECC and themselves in connection with the
sale of appellants' property to ECC. Appellants depict an
arrangement in which all parties understood that appellants'
partial self-financing of the ECC purchase would be short-term and
that the Bank would soon provide the additional funds enabling ECC
to pay off that debt. But such a de facto arrangement, although
plausible as alleged, is not enough. Section 1823(e)(1) protects
the FDIC from facing precisely that kind of unrecorded
understanding as a defense to a debt that is otherwise due and
collectible. See, e.g., Beal Bank, SSB v. Pittorino, 177 F.3d 65,
68 (1st Cir. 1999); LeBlanc, 85 F.3d at 821.
Because appellants have not produced any written evidence
that their obligation to pay the line-of-credit debt was
conditioned on the Bank's provision of financing to ECC, and they
do not contest that their debt is due and payable,4 they have
failed to identify a material fact affecting their obligation that
remains in dispute. See Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986) ("Only disputes over facts that might affect the
4
Appellants assert that there is a factual dispute about the
number and timing of the payments they made on the line of credit,
but this argument is both undeveloped and unsupported by the
evidence they cite. See App. at 112-116 (highlighting six
payments, all of which were acknowledged by the FDIC). It is
therefore waived. See Cruz v. Bristol-Myers Squibb Co., PR, 699
F.3d 563, 572 (1st Cir. 2012) (deeming waived a "woefully
undeveloped" argument that was "not supported by reference to
either legal authority or evidence in the record").
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outcome of the suit under the governing law will properly preclude
the entry of summary judgment."); Calero-Cerezo v. U.S. Dep't of
Justice, 355 F.3d 6, 19 (1st Cir. 2004) ("[A] 'material fact' is
one that has the potential of affecting the outcome of the case.").
The district court therefore properly granted summary judgment in
favor of the FDIC on the collection action.5
5
For the first time on appeal, appellants argue summarily
that neither Colón-Feliciano nor EER-IPR may be held responsible
for the $700,000 debt because only Estrada-Rivera signed the
promissory note and other loan documents. The argument is
untimely, and thus forfeited. See Randall v. Laconia, N.H., 679
F.3d 1, 5 (1st Cir. 2012) ("[Appellant's] perfunctory treatment, as
well as his raising this argument for the first time on appeal,
waives the issue.").
Moreover, appellants have repeatedly acknowledged EER-IPR's
responsibility for the debt. For example, their opposition to the
motion for summary judgment states that "[t]he loan . . . subject
of this litigation, was granted to EER-IPR, but under the name of
Mr. Digno Emérito Estrada Rivera at the behest of [the] Bank."
The opposition also states that "R-G Premier Bank effectively
impeded EER-IPR from fulfilling its payment obligations under the
credit facility subject of this lawsuit." Appellants' Opposing
Statement of Material Facts reports that all payments on the loan
were made by EER-IPR.
Colón-Feliciano's liability arises from her status as Estrada-
Rivera's wife. See P.R. Laws Ann. tit. 31, § 3661 (stating that
"[a]ll debts and obligations contracted during the marriage by
either of the spouses" are "[c]hargeable to the community
property"); see also Dyno Nobel, Inc. v. Amotech Corp., 959 F.
Supp. 109, 113, 115 (D.P.R. 1997) (recognizing exceptions,
inapplicable here, to liability for conjugal partnership, and
noting that wife and conjugal partnership must be included as
parties for judgment to be executed against them). In addition,
appellants stated in their counterclaim that EER-IPR was controlled
by Estrada-Rivera, Colón-Feliciano, and their conjugal partnership.
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B. Counterclaim
The district court dismissed the counterclaim on the
ground that appellants failed to follow the mandated administrative
process for maintaining a court action against the FDIC. Although
they filed a timely proof of claim with the agency, the district
court found that they took no further action within the sixty-day
period after the FDIC disallowed the claim. See 12 U.S.C.
§ 1821(d)(6) (providing that disallowance will be final unless
claimant requests administrative review, or files or continues an
action in district court, within sixty days of FDIC notice of
disallowance). The court held that their inaction divested the
federal courts of jurisdiction to consider the claim. See id.§ 1821(d)(13)(D); see also Acosta-Ramírez v. Banco Popular de P.R.,
712 F.3d 14, 19-20 (1st Cir. 2013) (describing the governing
administrative claims process).
We find it unnecessary to delve into the parties'
arguments about appellants' compliance, or lack thereof, with the
statutory claims procedures. About a week after the district court
issued its ruling on the counterclaim, the FDIC published notice of
its determination that the Bank has insufficient assets to make any
distribution on the claims of general unsecured creditors, a
category that would include appellants if they prevailed on their
counterclaim. The FDIC stated that, accordingly, "all such claims,
asserted or unasserted, will recover nothing and have no value."
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See Determination of Insufficient Assets To Satisfy Claims Against
Financial Institution in Receivership, 76 Fed. Reg. 50733-01, 2011
WL 3562786 (Aug. 16, 2011). The FDIC's no-value determination,
unchallenged by appellants, "precludes any relief for [claimants]
even i[f] they . . . obtained a favorable judgment" on their claim.
FDIC v. Kooyomjian, 220 F.3d 10, 15 (1st Cir. 2000). Without a
redressable claim, appellants cannot satisfy the constitutional
case or controversy requirement. Id. (noting that the case or
controversy requirement means that claimants must have "'suffered
some actual injury that can be redressed by a favorable judicial
decision.'" (quoting Iron Arrow Honor Soc'y v. Heckler, 464 U.S.
67, 70 (1983))).
Moreover, as the FDIC observes, even if "some theoretical
case or controversy exists," dismissal of the counterclaim would
still be warranted as a matter of prudential mootness. Numerous
courts have reached that conclusion in equivalent circumstances.
See, e.g., Henrichs v. Valley View Dev., 474 F.3d 609, 615 (9th
Cir. 2007); Maher v. FDIC, 441 F.3d 522, 525-26 (7th Cir. 2006);
First Ind. Fed. Sav. Bank v. FDIC, 964 F.2d 503, 507 (5th Cir.
1992); Adams v. Resolution Trust Corp., 927 F.2d 348, 354 (8th Cir.
1991); Wallis v. IndyMac Fed. Bank, 717 F. Supp. 2d 1195, 1198-1200
(W.D. Wash. 2010).
The district court therefore properly dismissed
appellants' counterclaim.
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II.
For the reasons we have explained, the district court
properly abbreviated this case. Appellants' attempt to escape
summary judgment on the collection action by positing a factual
dispute over the Bank's conduct founders on the requirements of
section 1823(e). Their effort to revive the dismissed counterclaim
is blocked by the FDIC's determination that the Bank has
insufficient assets to pay any judgment in favor of general
unsecured creditors. We therefore affirm the district court's
judgments.
So ordered.
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