VILLAGE PARK OFFICE I LLC v. Federal Deposit Insurance Corporation
ORDER denying 25 Motion for Summary Judgment. Ordered by Judge Clay D. Land on 03/26/2013. (CGC)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
VILLAGE PARK OFFICE I, LLC,
FEDERAL DEPOSIT INSURANCE
CORPORATION, as receiver for
North Georgia Bank,
CASE NO. 3:11-CV-182 (CDL)
O R D E R
Plaintiff Village Park Office I, LLC (“Village Park”) leased
failed, Defendant Federal Deposit Insurance Corporation (“FDIC”)
was appointed as the bank’s receiver.
Under 12 U.S.C. § 1821(e),
FDIC had authority to repudiate the lease agreement under certain
U.S.C. § 1821(e)(1)-(2).
Village Park contends that FDIC did not
effectively repudiate the lease agreement within a reasonable time
and seeks to recover from FDIC under a breach of contract theory.
FDIC seeks summary judgment on this issue, asserting that it did
timely repudiate the lease agreement.
Based on the facts viewed
dispute exists on the question whether FDIC repudiated the lease
agreement within a reasonable time after being appointed receiver.
Therefore, FDIC’s Motion
for Summary Judgment
SUMMARY JUDGMENT STANDARD
Summary judgment may be granted only “if the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed. R. Civ.
In determining whether a genuine dispute of material
fact exists to defeat a motion for summary judgment, the evidence
opposing party’s favor.
Anderson v. Liberty Lobby, Inc., 477 U.S.
necessary to the outcome of the suit.
Id. at 248.
dispute is genuine if the evidence would allow a reasonable jury
to return a verdict for the nonmoving party.
record reveals the following.
Unless otherwise noted, the facts
are undisputed for purposes of FDIC’s summary judgment motion.
(“Lease”) with North Georgia Bank, as tenant, for office space in
The Georgia Department of Banking and Finance
appointed as the bank’s receiver.
FDIC notified Village Park that
appointed as the bank’s receiver.
assumption agreement with FDIC.
Under that agreement, BankSouth
had an option to assume North Georgia Bank’s Lease with Village
BankSouth officially notified FDIC on May 4, 2011 that it
would not assume the Lease.
Two weeks later, on May 18, 2011,
FDIC informed Village Park that BankSouth intended “to conclude
its operations at the Premises on August 03, 2011.”
for Summ. J. Ex. J, Letter from L. Austin to Village Park (May 18,
2011), ECF No. 25-11.
In its letter, FDIC explained that it “has
not disaffirmed or repudiated the Lease, and this letter does not
constitute a commitment or election by [FDIC] to do so in the
The letter further stated, “it is likely that
[FDIC] will choose to repudiate the Lease as soon as it is able to
wind up its operations at the Premises following [BankSouth’s]
closure of its operations there.”
According to the letter,
any “formal repudiation of the Lease” would be communicated to
Village Park in writing, and until FDIC “affirmatively elects to
disaffirm or repudiate the Lease, if ever, the obligations of the
parties under the Lease shall remain undisturbed by the closure of
[North Georgia Bank].”
An FDIC employee, Laura Austin (“Austin”), was responsible
for reviewing North Georgia Bank’s
Lease with Village Park to
determine whether it could be terminated or required repudiation.
After Austin analyzed the Lease, she determined that the Lease
should be repudiated.
To determine the repudiation date, Austin
had to find out when BankSouth would conclude its operations at
the leased premises and how much additional time, if any, FDIC
would need to clear out the space.
Austin requested the vacate
date from a separate FDIC department in June 2011; she received a
response from her FDIC colleague several weeks later.
department on June 23, 2011.
which was sent to FDIC’s legal
The legal department approved the
repudiation case on July 6, 2011, and FDIC’s senior management
approved the repudiation case on July 8, 2011.
Austin prepared a formal notice of repudiation on July 8,
2011 and mailed it to Village Park on July 12, 2011.
stated that FDIC had elected to repudiate the lease.
Due to an
effective date for the repudiation.
The heading of the letter
stated: “Effective Date of Repudiation: [DATE].”
Def.’s Mot. for
Summ. J. Ex. N, Letter from FDIC to Village Park (July 8, 2011),
ECF No. 25-15.
The body of the letter stated: “The effective date
‘Repudiation Effective Date’).”
Id. at 2.
The letter further
continue to retain all rights of [North Georgia Bank] under the”
It is undisputed that Wesley Rogers (“Rogers”), one of the
owners of Village Place, did not contact Austin about the letter.
According to Rogers, he assumed based on his prior dealings with
contained a repudiation date.
Pl.’s Resp. to Def.’s Mot. for
Summ. J. Ex. G, Rogers Dep. 212:11-16, ECF No. 27-7.
Place did receive another letter; on August 18, 2011, FDIC sent
Agreement between Village Park Office I, LLC and North Georgia
Bank dated May 7, 2008.”
Def.’s Mot. for Summ. J. Ex. U, Letter
from R. Araujo to W. Rogers (Aug. 18, 2011), ECF No. 25-22.
letter acknowledged that the July 8, 2011 letter “did not specify
a repudiation date” but stated that the August 18, 2011 letter
“will confirm that the repudiation date is August 5, 2011.” Id.
Rogers responded via email that prior to August 18, 2011, Village
Park “did not receive any notice of repudiation that contained an
effective repudiation date of August 5, 2011.”
Def.’s Mot. for
Summ. J. Ex. V, Email from W. Rogers to R. Araujo (Aug. 18, 2011),
contention that it could retroactively assign an effective date of
FDIC responded via email that “the lease was
repudiated timely when notice of the repudiatioin [sic] was mailed
on on [sic] July 12.” Pl.’s Resp. to Def.’s Mot. for Summ. J. Ex.
M, Email from R. Araujo to S. Johnson (Aug. 19, 2011), ECF No. 2713.
It is undisputed that Village Park knew that BankSouth would
undisputed that BankSouth actually vacated the leased premises on
August 3, 2011, and BankSouth coordinated the move with Village
There is evidence, however, that Village Park did not know
to find another tenant
before he received the second
repudiation letter from FDIC, he could not market it to companies
that he did not control until he knew when the property would be
available based on the repudiation date.
Rogers Dep. 88:20-89:2;
id. at 92:1-8 (stating that Village Park could not effectively
market the lease until mid-August).
Rogers did show the leased
premises to one company, but that was a company he controlled and
with whom he had flexibility on a move-in date.
Id. at 89:3-12.
According to Rogers, it was not until Village Park received the
August 18 repudiation letter that Village Park began negotiating
with a potential tenant regarding the leased premises.
Park officially terminated the Lease in September 2011 and entered
a lease with a new tenant.
When FDIC was appointed receiver for North Georgia Bank, it
had authority to “disaffirm or repudiate any contract or lease” to
determined that performance of the contract would be “burdensome”
and that repudiation would “promote the orderly administration of”
North Georgia Bank’s affairs. 12 U.S.C. § 1821(e)(1).
required to “determine whether or not to exercise the rights of
appointment.” 12 U.S.C. § 1821(e)(2) (emphasis added).
receiver is appointed.
701 NPB Assocs. v. FDIC, 779 F. Supp.
1336, 1339 (S.D. Fla. 1991) (citing 12 U.S.C. § 1821(e)(2)).
In this action,
it is undisputed that FDIC was appointed
receiver for North Georgia Bank on February 4, 2011.
It is also
undisputed that FDIC knew on May 4, 2011 that BankSouth declined
to assume the Lease.
It is undisputed that FDIC did not attempt
to repudiate the Lease until July 12, 2011—five months after FDIC
BankSouth declined to assume the Lease.
A genuine fact dispute
exists as to whether FDIC effectively repudiated the lease prior
to August 18, 2011—six months after FDIC was appointed receiver
and three months after FDIC knew that BankSouth declined to assume
As discussed above, although Village Park knew when
BankSouth planned to vacate the leased premises, there is evidence
communicate to Village Park when FDIC planned to vacate the leased
appointment as receiver for North Georgia Bank.1
For the reasons discussed above, FDIC’s Motion for Summary
Judgment (ECF No. 25) is denied.
IT IS SO ORDERED, this 26th day of March, 2013.
S/Clay D. Land
CLAY D. LAND
UNITED STATES DISTRICT JUDGE
At this time, the Court
whether the FDIC executes
12 U.S.C. § 1821(d)(2) by
reasonable time after being
finds it unnecessary to decide the question
or approves a lease within the meaning of
failing to repudiate the lease within a
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