Westberg v. Federal Deposit Insurance

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 21, 2013 Decided January 31, 2014
No. 13-5080
KIM S. WESTBERG, HUSBAND, AND LAVERNE V. WESTBERG,
WIFE,
APPELLANTS
v.
FEDERAL DEPOSIT INSURANCE CORPORATION, AS RECEIVER
FOR AND ON BEHALF OF SILVER STATE BANK, AND MULTIBANK
2009-1 RES-ADC VENTURE, LLC,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:09-cv-01690)
Christopher Alan LaVoy argued the cause for the
appellants.
Kathleen V. Gunning, Counsel, Federal Deposit Insurance
Corporation, argued the cause for the appellees. Colleen J.
Boles, Assistant General Counsel, Kathryn R. Norcross, Senior
Counsel, John B. Isbister and Jaime W. Luse were on brief.
Before: HENDERSON, BROWN and GRIFFITH, Circuit
Judges.
2
KAREN LECRAFT HENDERSON, Circuit Judge: In May
2008, Kim and Laverne Westberg (Westbergs) obtained a
residential construction loan from Silver State Bank (Silver
State), located in Henderson, Nevada. Silver State collapsed
shortly thereafter and the Federal Deposit Insurance
Corporation (FDIC) was appointed as receiver. The FDIC
repudiated the loan agreement but notified the Westbergs that
they were obligated to continue making payments on the
portion of the loan that had been disbursed to them before
Silver State’s failure. The Westbergs brought suit in district
court seeking, inter alia, a declaratory judgment that the
FDIC’s repudiation relieved them of any obligation to continue
making loan payments. The FDIC subsequently assigned its
interest in the loan to Multibank 2009-1 RES-ADC Venture,
LLC (Multibank) and the Westbergs amended their complaint
to add Multibank as a defendant. The district court dismissed
the Westbergs’ claim for declaratory relief against Multibank
for lack of subject matter jurisdiction, concluding that their
claim was subject to the administrative exhaustion requirement
set forth in the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, Pub. L. No. 101-73, 103 Stat. 183
(FIRREA or Act), and that they did not exhaust that
administrative remedy. We affirm.
I. Background
A
The Congress enacted FIRREA “in the midst of the
savings and loan insolvency crisis to enable the FDIC . . . to
expeditiously wind up the affairs of literally hundreds of failed
financial institutions throughout the country.” Freeman v.
FDIC, 56 F.3d 1394, 1398 (D.C. Cir. 1995) (citing H.R. REP.
3
NO. 101-54(I), reprinted in 1989 U.S.C.C.A.N. 86, 87, 103).
FIRREA confers broad powers on the FDIC in its capacity as
receiver for failed depository institutions. See id. at 1398–99.
Its powers include the authority to repudiate any contract “(A)
to which [the failed] institution is a party; (B) the performance
of which the [FDIC], in [its] discretion, determines to be
burdensome; and (C) the disaffirmance or repudiation of which
the [FDIC] determines, in [its] discretion, will promote the
orderly administration of the institution’s affairs.” 12 U.S.C.
§ 1821(e)(1); see also Nashville Lodging Co. v. Resolution
Trust Corp., 59 F.3d 236, 241 (D.C. Cir. 1995).
FIRREA also authorizes the FDIC to adjudicate creditors’
claims against failed depository institutions for which the
FDIC has been appointed receiver. See 12 U.S.C.
§ 1821(d)(3)–(13); see also Freeman, 56 F.3d at 1399–1400
(summarizing administrative claims process). FIRREA
includes a broadly worded limitation on judicial review:
Except as otherwise provided in this subsection, no
court shall have jurisdiction over—
(i) any claim or action for payment from, or any
action seeking a determination of rights with
respect to, the assets of any depository institution
for which the [FDIC] has been appointed receiver,
including assets which the [FDIC] may acquire
from itself as such receiver; or
(ii) any claim relating to any act or omission of
such institution or the [FDIC] as receiver.
12 U.S.C. § 1821(d)(13)(D). The “[e]xcept as otherwise
provided” clause refers back to section 1821(d)(6), “which
4
provides for administrative determination of ‘any claim against
a depository institution for which the [FDIC] is receiver’ and
thereafter for adjudication in district court.” Auction Co. of
Am. v. FDIC, 141 F.3d 1198, 1200 (D.C. Cir. 1998) (quoting
12 U.S.C. § 1821(d)(6)(A)(i)). We have read sections
1821(d)(6) & (13)(D) together “as setting forth a ‘standard
exhaustion requirement’” that “‘routes claims through an
administrative review process, and . . . withholds judicial
review unless and until claims are so routed.’” Am. Nat’l Ins.
Co. v. FDIC, 642 F.3d 1137, 1141 (D.C. Cir. 2011) (quoting
Auction Co. of Am., 141 F.3d at 1200); accord Freeman, 56
F.3d at 1400 (“The effect of these provisions, read together, is
to require anyone bringing a claim against or seeking a
determination of rights with respect to the assets of a failed
bank held by the FDIC as receiver to first exhaust
administrative remedies by filing an administrative claim
under the FDIC’s administrative claims process.” (quotation
marks omitted)). This is a jurisdictional exhaustion
requirement that we cannot excuse. See Avocados Plus Inc. v.
Veneman, 370 F.3d 1243, 1247 (D.C. Cir. 2004).
B
Pursuant to a loan agreement, a promissory note and a
deed of trust (collectively, “Loan Documents”), the Westbergs
obtained a loan in the principal amount of $1,318,000 from
Silver State to build a house in Gilbert, Arizona. The Loan
Documents provided for periodic loan amounts as construction
progressed. On September 5, 2008, the FDIC notified the
Westbergs that Silver State had been closed and that the FDIC
had been appointed as receiver. As of that date, Silver State
had disbursed $171,510.95 to the Westbergs and the
Westbergs had fully complied with their obligations under the
terms of the Loan Documents.
5
On April 21, 2009, the FDIC-as-receiver notified the
Westbergs that it had elected to repudiate the loan agreement
pursuant to 12 U.S.C. § 1821(e). The notice letter specified
that the Westbergs were obligated to continue making
payments “[w]ith respect to any outstanding balance
previously funded”—i.e., the balance owing on the
$171,510.95 the Westbergs had already received. Joint
Appendix (JA) 57. The notice letter also warned that if they
failed to file a proof of claim by the specified bar date, their
failure would result in disallowance of any claim and waiver of
further rights and remedies. On June 18, 2009, the Westbergs
submitted a proof of claim on the FDIC’s standard form. The
claim sought compensation for costs resulting from the
construction delays caused by the FDIC’s repudiation.
Notably, however, the Westbergs’ administrative claim did not
seek to be relieved of their obligation to repay the loan amount
already disbursed to them. By letter dated July 6, 2009, the
FDIC notified the Westbergs that their damages claim had
been disallowed and that they had 60 days to file a lawsuit.
On September 3, 2009, the Westbergs filed a complaint
against the FDIC in the district court for the District of
Columbia. Count One sought a declaratory judgment that the
FDIC’s repudiation of the loan agreement released the
Westbergs from the obligation to repay the loan amount
already disbursed to them; Count Two sought damages
resulting from the FDIC’s repudiation, including alleged
project delay costs. On February 9, 2010, the FDIC assigned
its rights, title and interest in the Westbergs’ loan to Multibank.
Multibank maintained the FDIC’s position that the Westbergs
were obligated to repay the previously disbursed portion of the
loan.
6
On July 19, 2010, the Westbergs filed an amended
complaint adding Multibank as a defendant on Count One but
not Count Two. The district court granted the FDIC’s motion
to dismiss the Westbergs’ claims against it, Westberg v. FDIC,
759 F. Supp. 2d 38, 45, 48 (D.D.C. 2011), and the Westbergs
do not appeal that decision. The district court denied
Multibank’s motion to dismiss, however, because Multibank
had submitted only a brief joinder to the FDIC’s motion,
failing to explain how the FDIC’s arguments applied to the
Westbergs’ claim against Multibank. Id. at 45–46. After the
Westbergs and Multibank cross-moved for summary
judgment, the district court sua sponte raised the issue of
administrative exhaustion and instructed the parties to file
supplemental briefs. On February 26, 2013, the district court
dismissed the Westbergs’ claim against Multibank for lack of
subject matter jurisdiction, concluding that they were required
to exhaust their administrative remedies but had not done so.
Westberg v. FDIC, 926 F. Supp. 2d 61, 64 (D.D.C. 2013).
The Westbergs timely appealed.
II. Analysis
We review de novo the district court’s dismissal for lack
of subject matter jurisdiction. Benoit v. U.S. Dep’t of Agric.,
608 F.3d 17, 20 (D.C. Cir. 2010). Our review of the district
court’s statutory interpretation is also de novo. United States
v. Moore, 703 F.3d 562, 572–73 (D.C. Cir. 2012). We first
address whether the Westbergs are required to exhaust their
claim for declaratory relief and then turn to whether they have
done so.
7
A. Is Exhaustion Required?
As already noted, 12 U.S.C. § 1821(d)(13)(D) is a broadly
worded limitation on judicial review of causes of action that
have not first been pursued in the administrative review
process. See Am. Nat’l Ins. Co., 642 F.3d at 1141; Auction
Co. of Am., 141 F.3d at 1200; Freeman, 56 F.3d at 1400. It
has two subsections. Subsection (i) covers “any claim or
action for payment from, or any action seeking a determination
of rights with respect to, the assets of any depository institution
for which the [FDIC] has been appointed receiver, including
assets which the [FDIC] may acquire from itself as such
receiver.” 12 U.S.C. § 1821(d)(13)(D)(i). Subsection (ii)
covers “any claim relating to any act or omission of such
institution or the [FDIC] as receiver.” Id.
§ 1821(d)(13)(D)(ii). The parties vie over which subsection
governs our analysis. Although the district court analyzed the
issue under subsection (i), see Westberg, 926 F. Supp. 2d at 66
& n.3, we think subsection (ii) governs here. Because
Multibank now owns all rights to repayment from the
Westbergs under the Loan Documents, the Westbergs’ request
for declaratory relief against Multibank is no longer an “action
seeking a determination of rights with respect to[] the assets of
any depository institution for which the [FDIC] has been
appointed receiver.” 12 U.S.C. § 1821(d)(13)(D)(i)
(emphasis added). It is instead an action seeking a
determination of rights with respect to the assets of a
third-party that purchased those assets from the FDIC. The
Westbergs’ claim does, however, “relat[e] to an[] act or
omission of . . . the [FDIC] as receiver”—namely, the FDIC’s
decision to repudiate the loan. Id. § 1821(d)(13)(D)(ii).
Subsection (i) seems the more relevant provision at first
blush: It applies to “any claim or action for payment” or “any
8
action seeking a determination of rights” and the latter phrase
more naturally describes a declaratory judgment action than
does subsection (ii), which applies to “any claim.” We have
held, however, that “claim” as used in FIRREA “is a
term-of-art that encompasses only demands that are resolvable
through the administrative process set out by FIRREA,” Am.
Nat’l Ins. Co., 642 F.3d at 1142, and that declaratory relief
against the FDIC is obtainable through the administrative
process, see Freeman, 56 F.3d at 1400, 1404; see also Placida
Prof’l Ctr., LLC v. FDIC, 512 F. App’x 938, 947 n.9 (11th Cir.
2013); Hudson United Bank v. Chase Manhattan Bank of
Conn., N.A., 43 F.3d 843, 844, 848–49 (3d Cir. 1994). Thus,
subsection (ii)’s reference to “any claim” includes a request for
declaratory relief.1 The question is whether declaratory relief
remains obtainable through the administrative process if
sought against a third-party acquiring bank like Multibank,
rather than the FDIC. If so, the request would fit within the
definition of “claim” in subsection (ii) and judicial review
would be precluded absent administrative exhaustion. See
Am. Nat’l Ins. Co., 642 F.3d at 1142 (“[D]emands unresolvable
through the process are not ‘claims,’ as the term is used in the
Act.”); see also Auction Co. of Am., 141 F.3d at 1200–01
(section 1821(d)(13)(D) applies to same claims resolvable in
1
The Westbergs argue subsection (ii)’s use of “claim” cannot
include a claim for declaratory relief because, if that were so,
subsection (i)’s separation of “claim or action for payment” and
“action seeking a determination of rights” would give two different
scopes to “claim.” To wit: the first in subsection (i) would not
encompass declaratory relief and the second in subsection (ii) would.
Subsection (i) refers specifically to “any claim or action for
payment.” Subsection (ii)’s use of “claim,” however, refers broadly
to “any claim relating to any act or omission” of the failed institution
or the FDIC.
9
administrative process); Homeland Stores, Inc. v. Resolution
Trust Corp., 17 F.3d 1269, 1274 (10th Cir. 1994) (same).
The applicability of the administrative exhaustion
requirement in subsection (ii) is based not on the entity named
as defendant but on the actor responsible for the alleged
wrongdoing: “Where a claim is functionally, albeit not
formally, against a depository institution for which the FDIC is
receiver, it is a ‘claim’ within the meaning of FIRREA’s
administrative claims process.” Am. Nat’l Ins. Co., 642 F.3d
at 1144; accord Acosta-Ramirez v. Banco Popular de P.R., 712
F.3d 14, 20–21 (1st Cir. 2013); Farnik v. FDIC, 707 F.3d 717,
722–23 (7th Cir. 2013); Tellado v. IndyMac Mortg. Servs., 707
F.3d 275, 280–81 (3d Cir. 2013); Benson v. JPMorgan Chase
Bank, N.A., 673 F.3d 1207, 1214–15 (9th Cir. 2012); Vill. of
Oakwood v. State Bank & Trust Co., 539 F.3d 373, 386 (6th
Cir. 2008). The functional approach ensures “that plaintiffs
cannot circumvent FIRREA’s jurisdictional bar by drafting
their complaint strategically,” Am. Nat’l Ins. Co., 642 F.3d at
1144; see also Farnik, 707 F.3d at 723 (“[S]trategic case
captioning would allow creditors to completely bypass
FIRREA’s administrative process . . . .”), and thus undermine
the Congress’s goal of enabling the FDIC to expeditiously
wind up the affairs of failed financial institutions, see
Freeman, 56 F.3d at 1398; see also Vill. of Oakwood, 539 F.3d
at 386 (contrary approach would “encourage the very litigation
that FIRREA aimed to avoid” (quotation marks omitted)).
A few cases illustrate how the functional approach has
been applied. During the recent financial crisis, Washington
Mutual Bank was seized by a federal agency, the Office of
Thrift Supervision, and placed into receivership with the
FDIC. In American National Insurance Co. v. FDIC,
Washington Mutual bondholders brought state tort claims
10
against JPMorgan Chase & Co. (JPMC), alleging that it had
pressured the FDIC to sell Washington Mutual’s most valuable
assets to JPMC at a drastically undervalued price. 642 F.3d
1137, 1138–40 (D.C. Cir. 2011). We held that “[b]ecause
appellants’ suit is against a third-party bank for its own
wrongdoing, not against the depository institution for which
the FDIC is receiver (i.e., Washington Mutual), their suit is not
a claim within the meaning of the Act and thus is not barred by
subsection (ii).” Id. at 1142. Notwithstanding the FDIC’s
actions may have “form[ed] one link in the causal chain
connecting JPMC’s wrongdoing with appellants’ injuries,” we
concluded that the bondholders’ suit was functionally against
JPMC for its wrongdoing. Id. at 1144. Accordingly, the
bondholders were not required to exhaust their claims. Id. at
1144–45.
On the other hand, in Village of Oakwood v. State Bank &
Trust Co., uninsured depositors of a failed bank sued another
bank (“assuming bank”) that had purchased the failed bank’s
assets from the FDIC-as-receiver. 539 F.3d 373, 375–76 (6th
Cir. 2008). The suit alleged that the FDIC had breached its
fiduciary duty to depositors, but the assuming bank, not the
FDIC, was the named defendant. Id. Although the plaintiffs
alleged that the assuming bank had aided and abetted the
FDIC’s breach, the Sixth Circuit held that plaintiffs’ claim was
functionally against the FDIC because the FDIC was the
primary wrongdoer. Id. at 386 (“[A]ll of [plaintiffs’] claims
against [the assuming bank] are directly related to acts or
omissions of the FDIC as the receiver of [the failed bank].”).
Exhaustion was therefore required. Id. at 388. In American
National Insurance Co., we found the two cases factually
distinguishable because “in Village of Oakwood the
wrongdoing alleged was perpetrated by the FDIC-as-receiver,
which the assuming bank allegedly aided and abetted,”
11
whereas in American National Insurance Co., the alleged
wrongdoing was perpetrated by JPMC. Am. Nat’l Ins. Co.,
642 F.3d at 1144.
Similarly, in Tellado v. IndyMac Mortgage Services, the
plaintiffs had obtained a mortgage loan from IndyMac Bank,
FSB (IndyMac) before IndyMac’s failure. 707 F.3d 275,
277–78 (3d Cir. 2013). After IndyMac entered into FDIC
receivership and the FDIC sold the loan to OneWest Bank,
FSB (OneWest), the plaintiffs sued OneWest seeking to cancel
the loan. Id. Their claim, however, was based on IndyMac’s
alleged failure to provide adequate notice (under state law) of
their right to cancel the loan and ultimately the Third Circuit
held that the claim was functionally against IndyMac. Id. at
280. Notably, although OneWest had refused the plaintiffs’
pre-suit request to cancel the loan, the court rejected the
argument that its refusal made the claim functionally against
OneWest, finding instead that their claim was “wholly
dependent upon IndyMac’s wrongdoing”—i.e., IndyMac’s
failure to provide adequate notice. Id. Exhaustion was thus
required. Id. at 281.2
2
See also Acosta-Ramirez, 712 F.3d at 15, 21 (exhaustion
required where former employees of failed bank sued assuming bank
for severance pay but claim was functionally against
FDIC-as-receiver for its decisions to terminate employees and to not
transfer liability for severance pay to assuming bank); Farnik, 707
F.3d at 719–20, 723–24 (exhaustion required where plaintiffs who
borrowed from failed bank sued assuming bank but their claims were
based on failed bank’s alleged deceptive practices and complaint did
not identify any independent wrongdoing by assuming bank);
Benson, 673 F.3d at 1208–09, 1215 (exhaustion required where
investors in Ponzi scheme, which scheme failed bank allegedly aided
and abetted, brought suit against assuming bank but their claims
were “based almost exclusively on alleged malfeasance by” failed
bank).
12
This case is more like Village of Oakwood and Tellado
than it is like American National Insurance Co. The
Westbergs’ complaint seeks “a declaration that the FDIC’s
repudiation of the [loan agreement] released and discharged
Plaintiffs from any and all obligations under the [Loan
Documents].” First Amended Complaint (FAC), Westberg v.
FDIC, No. 09-cv-1690 ¶ 28 (D.D.C. July 19, 2010) (reprinted
at JA 24) (emphasis added). The claim is based on the
FDIC-as-receiver’s act of repudiating the loan because,
without that act, the Westbergs would not have sought a
declaration freeing them from having to repay the already
disbursed portion of the loan. Functionally, the claim
“relat[es] to an[] act . . . of . . . the [FDIC] as receiver.” 12
U.S.C. § 1821(d)(13)(D)(ii).
The Westbergs argue that their claim relates not to the
FDIC’s repudiation of the loan agreement but rather to
“Multibank’s discretionary call about how to interpret and
respond to [the repudiation] after acquiring the loan.” Brief of
Appellants 24, Westberg v. FDIC, No. 13-5080 (D.C. Cir. July
15, 2013). Their contention is belied by their pleadings,
which make no mention of a discretionary call by Multibank
but simply state: “Because Multibank has no greater rights
than the FDIC from which it acquired the Loan, Plaintiffs are
entitled to the same declaration as to Multibank.” FAC ¶ 28
(reprinted at JA 25) (capitalization altered). Moreover, the
argument is similar to the plaintiffs’ unavailing contention in
Tellado that the assuming bank’s failure to cancel the loan
based on the acts of its predecessor-in-interest constituted an
independent act that changed the functional analysis. See
Tellado, 707 F.3d at 280. It might be a different story if the
FDIC had not repudiated the loan and Multibank had instead
purchased the loan from the FDIC intact and then itself
13
repudiated or breached the agreement. In that case, the
Westbergs’ claim would be functionally against Multibank.
Here, however, the Westbergs’ claim for declaratory relief is
inextricably related to the FDIC’s act of repudiation.
Although it is formally brought against Multibank, it is
functionally against the FDIC. It is therefore a “claim” under
subsection (ii) that must first be resolved in the administrative
claims process. See Am. Nat’l Ins. Co., 642 F.3d at 1142.3
3
As the Westbergs point out, we have construed the claims
process broadly only where either the failed depository institution or
the FDIC “might be held legally responsible to pay or otherwise
resolve the asserted claim” because, if neither bears any legal
responsibility, “the claims process offers only a pointless
bureaucratic exercise” and “we doubt Congress intended to force
claimants into a process incapable of resolving their claims.” Am.
Nat’l Ins. Co., 642 F.3d at 1143. But whether the Westbergs
correctly contend that the FDIC’s declaration would not bind
Multibank, see Brief of Appellants 21–22, Westberg v. FDIC, No.
13-5080 (D.C. Cir. July 15, 2013)—an issue we do not reach—the
administrative claims process is not a pointless bureaucratic exercise
here. At the time the Westbergs brought their administrative claim,
the FDIC still held its interest in the loan. The FDIC did not assign
that interest to Multibank until February 2010—eight months after
the Westbergs filed their administrative claim, seven months after
the FDIC resolved that claim and five months after the Westbergs
filed suit in the district court. Had the Westbergs timely sought
declaratory relief through the administrative process, the FDIC
would have resolved that request well before it assigned the loan to
Multibank. To allow the Westbergs to circumvent FIRREA’s
exhaustion requirement by declining to pursue the remedies
available to them and later arguing that such remedies are ineffective
because of their own delay would amount to permitting the strategic
pleading we have rejected. See Am. Nat’l Ins. Co., 642 F.3d at
1144; see also Benson, 673 F.3d at 1213 (“Although plaintiffs assert
that their claims are not currently susceptible to the claims process,
plaintiffs give us no reason to believe that FIRREA exhaustion
14
B. Have the Westbergs Exhausted?
Having concluded that administrative exhaustion is
required, we have little difficulty concluding that the
Westbergs have failed to meet the requirement. Although
they filed a timely proof of claim with the FDIC, their claim
requested only damages for construction delays. See JA 59–
65. Their claim made no mention of the declaratory relief the
Westbergs now seek nor could anything in the claim fairly be
construed to put the FDIC on notice that the Westbergs
challenged its conclusion that repudiation of the loan
agreement did not erase the Westbergs’ duty to repay the
previously disbursed amount. Because the Westbergs failed
to route their claim for declaratory relief through the
administrative review process, section 1821(d)(13)(D)(ii)
withholds judicial review of that claim. See Auction Co. of
Am., 141 F.3d at 1200; Freeman, 56 F.3d at 1400. Their
reliance on Sims v. Apfel, 530 U.S. 103 (2000), is misplaced.
That case deals with the failure to raise specific issues in an
administrative appeal, see id. at 105–06, whereas the
Westbergs failed to press an entirely separate claim. See
McGlothlin v. Resolution Trust Corp., 913 F. Supp. 15, 18–19
(D.D.C. 1996) (under section 1821(d)(13)(D), plaintiffs’
claims based on negligence and breach of contract not
exhausted where not submitted to administrative process,
despite fact that separate claim for fraudulent inducement was
submitted), aff’d, 111 F.3d 963 (D.C. Cir. 1997) (per curiam)
(mem.); see also BHC Interim Funding II, L.P. v. FDIC, 851 F.
Supp. 2d 131, 138–39 (D.D.C. 2012) (similar, collecting
cases).
would have been futile had they submitted them within the
appropriate time frame.”).
15
Because the Westbergs failed to administratively exhaust
their claim for declaratory relief, the district court correctly
dismissed their action for lack of subject matter jurisdiction
and we affirm.4
So ordered.
4
We reject the Westbergs’ argument that dismissal of their
claim for failure to exhaust violates due process. We agree that the
FDIC’s proof-of-claim form—which has subsequently been
amended, see Appellees’ Rule 28(j) Letter, Westberg v. FDIC, No.
13-5080 (D.C. Cir. Nov. 25, 2013)—was, in one provision,
incorrect. See JA 60 (“If the institution does not currently owe you
any money, it is not necessary for you to complete this form.”). But
due process requires only that the Westbergs be “afforded notice of
their exclusive opportunity to present their claims,” which notice
must be “‘reasonably calculated . . . to apprise interested parties of
the pendency of the action and afford them an opportunity to present
their objections.’” Freeman, 56 F.3d at 1403 n.2 (quoting Mullane
v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950)).
The FDIC gave the Westbergs adequate notice when it informed
them of its repudiation of the loan, specified that it expected the
Westbergs to repay the previously disbursed amount and stated:
“You may determine that the [FDIC’s] decision to disaffirm the
Loan Agreement gives you a claim against the receivership estate.
If so, you must file a Proof of Claim in writing . . . . Under federal
law, . . . failure to file claims by the Claims Bar Date will result
in disallowance by the [FDIC], the disallowance will be final,
and further rights or remedies with regard to claims will be
barred.” JA 58 (emphases in original).