Aguilar v. Federal Deposit Insurance

United States Court of Appeals,
Eleventh Circuit.
Nos. 94-2929, 94-2930.
Gonzalo AGUILAR, M.D., Doroteo C. Audije, M.D., Doroteo M.
Barnes, M.D., Juan Bauer, M.D., Leonardo Del Rosario, M.D., et al.,
Appellants-Plaintiffs,
v.
FEDERAL DEPOSIT INSURANCE CORP., as Receiver for Southeast Bank,
N.A., etc., Receiver-Appellee,
SOUTHEAST BANK, N.A., a national banking association, fka First
Federal Savings and Loan Association of Jacksonville, Defendant.
Morteza YAVARI, M.D., St. Jude Medical, Home Health Systems,
Inc., Plaintiffs-Appellants,
Gonzalo Aguilar, M.D., Doroteo C. Audije, M.D., Doroteo M.
Barnes, M.D., Juan Bauer, M.D., Leonardo Del Rosario, M.D., et al.,
Plaintiffs,
v.
FEDERAL DEPOSIT INSURANCE CORP., a Receiver for Southeast Bank,
N.A., a national banking association, formerly known as First
Federal Savings and Loan Association of Jacksonville, Defendant-
Appellee,
Southeast Bank, N.A., a national banking association fka First
Federal Savings and Loan Association of Jacksonville, Defendant.
Sept. 12, 1995.
Appeals from the United States District Court for the Middle
District of Florida. (No. 91-747-CIV-J-20), Harvey E. Schlesinger,
Judge.
Before HATCHETT and EDMONDSON, Circuit Judges, and GIBSON*, Senior
Circuit Judge.
PER CURIAM:
These two appeals involve the interpretation and application
of the section of the Financial Institutions Reform, Recovery, and
*
Honorable John R. Gibson, Senior U.S. Circuit Judge for the
Eighth Circuit, sitting by designation.
Enforcement Act ("FIRREA") on agency review and judicial
determination of claims against the Federal Deposit Insurance
Corporation ("FDIC"). 12 U.S.C. § 1821(d)(6). These separate
appeals began as a single state court action brought by fourteen
plaintiffs against Southeast Bank. Before removal to federal
court, the state court granted Southeast's motion for summary
judgment against eleven of the plaintiffs (the Aguilar case),
leaving three plaintiffs to continue the case (the Yavari case).
Because the district court erred in its interpretation of section
1821(d)(6), we reverse the district court's dismissal of both
cases.
The Aguilar Case
The Aguilar plaintiffs ("Plaintiffs") appealed the summary
judgment granted against them in state court. During the pendency
of the appeal, Southeast Bank was declared insolvent; and the FDIC
was appointed receiver. The FDIC properly removed the case to
federal district court, and Plaintiffs filed a motion to modify or
to vacate judgment in the district court to appeal to this Court.1
1
In Resolution Trust Corp. v. Bakker, 51 F.3d 242 (11th
Cir.1995), we said that when a financial institution receivership
case is removed to federal court following the entry of a state
court judgment, the dissatisfied party must make a Civil Rule of
Procedure 59 motion to vacate or to modify the judgment within
ten days of the removal date. Id. at 245. This rule was first
set out in Jackson v. American Savings Mortgage Corp., 924 F.2d
195, 199 n. 9 (11th Cir.1991).
In the present case, Plaintiffs filed their motion to
modify or to vacate judgment thirteen days after the FDIC
served its notice of removal to federal district court.
Until 1993, we had not decided that Civil Rule of Procedure
6(e), which adds 3 days to the prescribed time to act or to
respond after notice is served by mail, was not applicable
to Rule 59. See Cavaliere v. Allstate Ins. Co., 996 F.2d
1111 (11th Cir.1993). So, we hold that in actions removed
The FDIC moved for summary judgment or alternatively for a
stay on the grounds that Plaintiffs could not go forward with the
suit until they had exhausted their administrative remedies before
the FDIC. On January 15, 1992, the district court stayed the
action for 180 days to allow Plaintiffs to exhaust their
administrative remedies. The FDIC denied Plaintiffs'
administrative claim on June 19, 1992; on July 15, 1992, the
court-ordered 180-day stay expired. On January 28, 1993, the
district court held a status conference; and on May 11, 1994, the
district court granted the FDIC's motion to dismiss with prejudice.
According to the district court's reading of 12 U.S.C. §
1821(d)(6), Plaintiffs—within 60 days after their administrative
claims were denied—were required to take some action "to continue,"
that is, to go on with, the case. We review the district court's
interpretation and application of section 1821(d)(6) de novo. Lee
v. Flightsafety Servs. Corp., 20 F.3d 428, 431 (11th Cir.1994).
Under FIRREA, federal courts generally lack the authority to
decide claims against an institution in federal receivership until
the claimant has exhausted his administrative remedies against the
FDIC. See Marquis v. Federal Deposit Ins. Corp., 965 F.2d 1148
(1st Cir.1992). Where a lawsuit against a financial institution is
to federal court before July 28, 1993, litigants filing Rule
59 motions had thirteen days from the date the FDIC served
by mail notice that the action was removed. We note that
the FDIC never argued in district court that Plaintiffs'
motion to modify or to vacate was made too late.
In the light of the above, Plaintiffs' motion to strike
the post-argument letter of supplemental authority and
alternative motion for leave to submit additional briefing
are moot.
pending when the FDIC is appointed receiver and the FDIC timely
insists on the use of its administrative processes, the court
action will be suspended, but only suspended; the court retains
jurisdiction while the plaintiff exhausts the administrative
remedies. Id. at 1155; Whatley v. Resolution Trust Corp., 32 F.3d
905, 907-908 (5th Cir.1994); 12 U.S.C. § 1821(d)(12).
Section 1821(d)(6)(A) of FIRREA provides that within 60 days
of the date the administrative claim is denied or within 60 days of
the date on which the 180-day period for administrative review
expires, whichever is earlier, the claimant may "file suit on such
claim (or continue an action commenced before the appointment of
the receiver)" in district court. If the claimant fails to file
suit (or continue an action commenced before the appointment of the
receiver) before the end of that 60 day period, the claim is
disallowed; and the claimant has no further rights to relief. 12
U.S.C. § 1821(d)(6)(B).
None of the plain language of section 1821(d)(6) requires an
affirmative act in a case like this one; the statute does not say
what a claimant must do to "continue," that is, to go on with, an
action. Congress was precise in its choice of words in other
sections. For example, section 1821(d)(8)(D) specifically requires
a "motion to renew" a previously filed suit after the FDIC denies
a claim for expedited review.2 12 U.S.C. § 1821(d)(8). Given the
2
The legislative history focuses on giving the FDIC time to
settle claims administratively. The focus is not on what
claimants must do to "continue" an action after the FDIC denies
their administrative claims. See H.R.Rep. No. 54(l ), 101st
Cong., 1st Sess. 418 (1989), reprinted in 1989 U.S.C.C.A.N. 86,
214. In the Aguilar case, Plaintiffs filed their administrative
claim on December 24, 1991, and the claim was denied on June 19,
lack of express congressional direction, we hold that, where the
district court entered a stay of definite duration, claimants need
not take affirmative action to "continue" a suit which was filed
before the appointment of the receiver: the suit goes on when the
stay expires.
This interpretation is consistent with the purpose of
FIRREA—quick and efficient processing of claims. Marquis, 965 F.2d
at 1154. Congress was clear in providing the FDIC with the
opportunity to settle claims on its own before federal judicial
intervention; the FDIC has 180 days in which to process the claim
administratively. 12 U.S.C. § 1821(d)(5). These provisions mostly
benefit the FDIC. But, nothing in the statute explicitly provides
the FDIC with the additional benefit of requiring a claimant to
take additional affirmative steps to let the FDIC and the federal
court know the claimant is serious about its preexisting (but
temporarily suspended) lawsuit; filing a lawsuit is enough to
signal seriousness and to protect a claim so long as the claimant
does not fail to participate (for example, fails to attend a
conference or a deposition) in the action once the court-ordered
stay expires.
The Plaintiffs' failure to exhaust administrative remedies is
1992. The FDIC had its statutory opportunity to review this
claim administratively.
We know that there is one line in the legislative
history that suggests a motion to renew was contemplated in
a case like this one. But, we think this isolated statement
buried in the legislative history is not enough to amend the
language used (or not used) in the statute, nor enough to
alter the well-established expectations of litigants that
when a stay expires, a suit is automatically active.
for the FDIC to assert. Whatley, 32 F.3d at 908. When a court
enters a definite stay (as in this case, a 180-day stay), the case
becomes active when the stay expires. This result reflects the
usual practice in American courts when stays are issued.3 Applying
the usual practice seems fair to the claimants and does not hurt
the FDIC, unless one counts as "hurt" having to defend a claim on
its merits. If Congress directs us to depart from the usual
practice, we will; but we are unwilling to depart without clear
instructions, especially when Congress has given clear instructions
in other contexts. If the administrative remedies have still not
been exhausted when the stay expires, it is for the FDIC to tell
the court so; otherwise the suit just goes on.
Reversed and remanded.
The Yavari Case
This appeal involves three plaintiffs (the "Yavari
Plaintiffs") against whom summary judgment was not granted in state
court in the original combined action. The district court
dismissed the Yavari Plaintiffs' suit with prejudice, upon motion
of the FDIC, for failing to take affirmative action within the 60
day period following denial of their administrative claim.4
Because nothing in section 1821(d)(6) explicitly requires a
claimant to take affirmative action to "continue" its case, we hold
3
See, e.g., Monatt v. Pioneer Astro Indus., Inc., 42
Colo. App. 265, 592 P.2d 1352 (1979) (stating that upon a stay's
termination an action proceeds).
4
In the Yavari case, the district court entered a 180-day
stay on November 22, 1991. The Yavari Plaintiffs filed their
administrative claim on December 24, 1991. The court-ordered
stay expired on May 22, 1992; their administrative claims were
denied on June 19, 1992.
that the district court erred in dismissing this case. If, as in
this case, administrative remedies have not been exhausted upon the
expiration of a court-ordered stay of definite duration, the FDIC
should tell the court of the failure to exhaust these remedies.
The FDIC did not do so here. Therefore, when the stay expired, the
case went on: by the time Yavari Plaintiffs' case was dismissed,
the administrative remedies had been exhausted and the preexisting
lawsuit was in no sense suspended at that time.
REVERSED and REMANDED.