Dela Cruz et al v. Yuan et al

Filing 34

ORDER signed by Judge Garland E. Burrell, Jr on 2/15/2012 GRANTING 9 Motion to Dismiss. This dismissal is without prejudice and plaintiffs are GRANTED 5 court days leave from the date on which this order is filed to file an amended complaint. (Donati, J)

Download PDF
1 2 3 IN THE UNITED STATES DISTRICT COURT 4 FOR THE EASTERN DISTRICT OF CALIFORNIA 5 6 Victor A. Dela Cruz, Mary M. Dela Cruz, 7 Plaintiffs, 8 9 10 11 12 13 v. Washington Mutual Bank, Federal Deposit Insurance Company, JP Morgan Chase, N.A., Wells Fargo Bank, N.A., California Reconveyance Company, Defendants. ________________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) 2:11-cv-1176-GEB-DED ORDER GRANTING THE FEDERAL DEPOSIT INSURANCE CORPORATION’S MOTION TO DISMISS FOR LACK OF JURISDICTION* 14 Defendant Federal Deposit Insurance Corporation (“FDIC”), 15 erroneously sued as “Federal Deposit Insurance Company,” moves under 16 Federal Rule of Civil Procedure (“Rule”) 12(b)(1) for dismissal of all 17 Plaintiffs’ claims alleged against it. The basis of FDIC’s motion is 18 that the Court is without subject matter jurisdiction since Plaintiffs 19 “failed to exhaust the mandatory administrative claims process against 20 [the] FDIC [as required by the Financial Institutions Reform, Recovery 21 and Enforcement Act of 1989 (“FIRREA”)] prior to filing suit.”1 22 * 23 24 25 26 27 28 This matter is deemed suitable for decision without oral argument. E.D. Cal. R. 230(g). 1 The FDIC argues in the alternative, that Plaintiffs’ complaint should be dismissed under Rule 12(b)(6). Defendants JP Morgan Bank, N.A., Wells Fargo Bank, N.A., and California Reconveyance Company also move under Rule 12(b)(6) for dismissal of Plaintiffs’ complaint. (ECF No. 12.) In addition, the FDIC moves under Rule 12(f) for an order striking portions of Plaintiffs’ complaint. (ECF No. 10.) Since the FDIC’s Rule 12(b)(1) motion will be granted and this case will be remanded to the state court from which it was removed if Plaintiffs have (continued...) 1 1 (Defendant the Federal Deposit Insurance Corporation’s Motion to Dismiss 2 (“Mot.”) 2:19-21, ECF No. 9-1.) 3 “A Rule 12(b)(1) jurisdictional attack may be facial or 4 factual.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 5 2004). Here, the FDIC’s Rule 12(b)(1) motion is a facial attack because 6 it 7 insufficient on their face to invoke federal jurisdiction.” Id. Because 8 a facial attack challenges jurisdiction based on what is alleged in the 9 complaint, the factual allegations are assumed to be true, and all 10 reasonable inferences capable of being drawn therefrom are drawn in 11 favor of the non-movant. Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 12 2004). However, “the tenet that a court must accept as true all of the 13 allegations 14 conclusions.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). “asserts that the contained allegations in a contained complaint is in a complaint inapplicable to are legal 15 The FDIC argues because “Plaintiffs have not even alleged that 16 they have complied with FIRREA by filing an administrative claim with 17 [the] FDIC . . . Plaintiffs have not exhausted their administrative 18 remedies,” and Plaintiffs’ claims against the FDIC must be dismissed 19 “for lack of subject matter jurisdiction under Rule 12(b)(1).” (Mot. 20 8:28, 9:1-5.) 21 Under FIRREA, judicial review is constrained as follows: 22 Except as otherwise provided in this subsection, no court shall have jurisdiction over-- 23 (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 Corporation has been 24 25 26 27 28 1 (...continued) not exhausted FIRREA’s mandatory administrative claims process for the claims against the FDIC, the Rule 12(b)(6) and Rule 12(f) motions will not be addressed in this order. 2 1 appointed receiver, including assets which the Corporation may acquire from itself as such receiver; or 2 3 (ii) any claim relating to any act or omission of such institution or the Corporation as receiver. 4 12 U.S.C. § 1821(d)(13)(D). FIRREA is “a comprehensive statutory scheme 5 granting [the] FDIC authority to act as Receiver for failed financial 6 institutions [and] creat[ing] a statutory procedure for the processing 7 of claims against the FDIC.” Ramos v. NDEX West, LLC, No. 09-0190, 2010 8 WL 1675911, at *2 (E.D. Cal. June 1, 2009) (citing 12 U.S.C. §§ 9 1821(d)(3)-(13)). “FIRREA’s exhaustion requirement applies to any claim 10 or action respecting the assets of a failed institution for which the 11 FDIC is receiver.” McCarthy v. FDIC, 348 F.3d 1075, 1081 (9th Cir. 2003) 12 (emphasis in original). 13 Plaintiffs allege that “[t]he Office of Thrift Supervision 14 . . . closed Defendant [Washington Mutual] on September 25, 2009, and 15 appointed the FDIC to act as receiver.” (First Amended Complaint (“FAC”) 16 ¶ 7, ECF No. 3.) Plaintiffs allege eleven claims against the FDIC in the 17 FAC. However, Plaintiffs do not allege in the FAC that they exhausted 18 FIRREA’s administrative remedies applicable to Plaintiffs’ claims 19 against the FDIC. Plaintiff’s only reference in the FAC to the FIRREA 20 administrative claims procedure is that “[o]n December 30, 2008, 21 Defendant FDIC established the deadline for filing claims for 22 [Washington Mutual’s] liabilities.” (FAC ¶ 39.) In addition, Plaintiffs 23 do not indicate in their opposition to the FDIC’s Rule 12(b)(1) motion 24 that they have exhausted their claims against the FDIC under FIRREA. 25 Instead, Plaintiffs argue FIRREA is not applicable and exhaustion is not 26 necessary in this case because they are “challenging the direct actions 27 of [Washington Mutual] in purportedly attempting to foreclose on their 28 mortgage, and not the actions of FDIC as receiver[, and] . . . FDIC 3 1 stepped into [Washington Mutual’s] shoes in acting beyond, or contrary 2 to, 3 permitted, powers or functions.” (Plaintiffs’ Opposition to FDIC’s 4 Motion to Dismiss 6:17-23, ECF No. 17.) its statutorily and contractually prescribed, constitutionally 5 However, “Plaintiffs’ only basis for naming the FDIC as a 6 Defendant is the fact that it is the receiver of [Washington Mutual], a 7 failed bank that was party to Plaintiffs’ loan agreement. As such, 8 Plaintiffs’ claims relate to any act or omission of an institution 9 subject to FDIC receivership, triggering FIRREA’s jurisdictional bar.” 10 Herrera v. Streamline Funding, Inc., No. 11-709, 2011 WL 2110813, at *3 11 (N.D. Cal. May 26, 2011) (finding “no support in the law” for the same 12 arguments raised by Plaintiffs here). 13 Therefore, the FDIC’s motion to dismiss for lack is without prejudice of 14 jurisdiction 15 Plaintiffs are granted five court (5) days leave from the date on which 16 this order is filed to file an amended complaint for the limited purpose 17 of alleging exhaustion of FIRREA’s administrative claims procedure, if 18 this occurred. If Plaintiffs do not amend their complaint as stated 19 within this time period, this dismissal will be with prejudice and the 20 Court will direct the Clerk of Court to enter judgment in favor of the 21 FDIC, and to remand the case to the Superior Court of California in the 22 County of Sacramento from which it was removed. 23 Dated: is granted. This dismissal February 15, 2012 24 25 26 GARLAND E. BURRELL, JR. United States District Judge 27 28 4 and

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.


Why Is My Information Online?