Howell v. Washington Mutual Bank

Filing 64

ORDER re 54 Motion to Continue.The motion to continue the pre-receivership lawsuit is Denied as moot. This case is referred to the magistrate judge to hold a case management conference. Signed by Judge Barry Ted Moskowitz on 9/14/11. (All non-registered users served via U.S. Mail Service)(ecs) (jrl).

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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LEONARD K. HOWELL,

Case No. 08cv1060-BTM (WMc)

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ORDER RE MOTION TO CONTINUE

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Plaintiff,
v.
JP MORGAN CHASE BANK, N.A., et al.,

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Defendants.

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Plaintiff moves to continue his pre-receivership lawsuit. For the reasons set forth
below, this motion is DENIED as moot.

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The Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”)

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provides that within sixty days of the FDIC’s disallowance of a claim, “the claimant may . .

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. file suit on such claim (or continue an action commenced before the appointment of the

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receiver).”

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receivership lawsuit can result in dismissal of claims against the FDIC as a receiver for lack

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of subject matter jurisdiction. See Intercontinental Travel Mktg. v. FDIC, 45 F.3d 1278, 1282

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(9th Cir. 1994); § 1821(d)(6)(B).

12 U.S.C. § 1821(d)(6)(A).

Failure to timely file suit or continue a pre-

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On July 27, 2009, the FDIC sent Plaintiff a notice of disallowance of claim as untimely

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filed. See Dock. # 31. Plaintiff asked the FDIC to reconsider this determination. By letter

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dated February 17, 2011, the FDIC again disallowed Plaintiff’s claim as untimely filed. Mem.

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Ex. 2. Plaintiff filed the instant motion to continue within sixty days of the FDIC’s second

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notice of disallowance.
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Neither party addresses whether the FDIC’s reconsideration of a prior disallowance

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restarts the time period where a claimant may continue a claim. However, the Court need

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not address this issue here.

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A request to continue is largely a ministerial act. See Lewis v. Fed. Deposit Ins. Co.,

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No. 08-11508-NMG, 2010 U.S. Dist. LEXIS 36206, at *12-13 (D. Mass. Apr. 13, 2010).

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Although it appears that the Ninth Circuit has not specified what steps are necessary to

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continue an action, “many courts have interpreted the phrase to imply that some kind of

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‘affirmative action’ is necessary to continue an action commenced before the appointment

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of a receiver.” Id. at *8 (citing cases). Such affirmative acts can constitute notice filed with

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the court or an email to opposing counsel stating the claimant’s desire to “continue” the case.

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See id. at *12-13.

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In light of this authority, the Court concludes that Plaintiff does not need court approval

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to express his intent to continue the pre-receivership lawsuit. Because the Court’s approval

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is unnecessary, Plaintiff’s motion is DENIED as moot. If Defendants believe that Plaintiff’s

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notice to continue is deficient under § 1821(d)(6)(B), they may move to dismiss on this

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ground.

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Defendant JP Morgan Chase (“Chase”), in opposition to this motion, invites the Court

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to dismiss the lawsuit generally and dismiss claims against Chase specifically. The Court

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declines to do so at this time.

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Chase argues that pursuant to 12 U.S.C. § 1821(d)(6)(A)(ii) venue is only proper

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where “the depository institution’s principal place of business is located or the United States

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District Court for the District of Columbia.” While the Ninth Circuit does not appear to have

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addressed this issue, “case law overwhelmingly suggests . . . that a plaintiff can ‘continue

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an action commenced before the appointment of the receiver,’ whether or not the case was

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originally filed in [the United States District Court for the District of Columbia] or in the district

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within which the depository institution’s principal place of business is located.” Poku v. FDIC,

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752 F. Supp. 2d 23, 29 (D.D.C. 2010) (citing cases). Here, Chase does not argue that venue

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was lacking over the pre-receivership lawsuit in this case. Accordingly, § 1821(d)(6)(A)(ii)
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08cv1060-BTM (WMc)

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does not divest the Court of venue.

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Chase also points to § 1821(f) for the proposition that the Court lacks venue and

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subject matter jurisdiction. Section 1821(f) pertains to suits against the FDIC in its corporate

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capacity. As the Court noted in the order granting Plaintiff leave to amend to name as a

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defendant the FDIC in its corporate capacity, the record is unclear as to whether Plaintiff

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sought agency review of a claim for an insured deposit. See Dock. #52. The second

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amended complaint does not offer any more clarity, as it does not contain allegations that

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Plaintiff sought an administrative remedy to recover insured deposit funds. Nevertheless,

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the Court does not reach this issue. Objections to venue can be waived. See Fed. R. Civ.

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P. 12(h)(1). The FDIC did not join Chase in its opposition and instead has filed an answer

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to the second amended complaint. [Dock. #63] Chase offers no authority for the proposition

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that it can object to venue on the FDIC’s behalf.

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Chase’s arguments that claims against it should be dismissed are not properly before

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the Court in opposition to the motion to continue. Such arguments may be raised in a

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properly noticed motion for summary judgment.

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The motion to continue the pre-receivership lawsuit is DENIED as moot. This case
is referred to the magistrate judge to hold a case management conference.

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IT IS SO ORDERED.

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DATED: September 14, 2011

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Honorable Barry Ted Moskowitz
United States District Judge

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08cv1060-BTM (WMc)