Chau et al v. Ball et al
Filing
12
MEMORANDUM OPINION & ORDER: IT IS ORDERED upon the Court's own motion, Count III shall be DISMISSED. Signed by Judge Joseph M. Hood on 04/24/2014. (KLB) cc: COR, Pro se Plas via US Mail.
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
ALAN UT CHAU, et al.,
)
)
)
)
)
)
)
)
)
)
Plaintiffs,
v.
KENTON L. BALL, et al.,
Defendants.
Civil Case No.
5:13-cv-233-JMH
MEMORANDUM OPINION & ORDER
***
Plaintiffs have filed a Response [DE 11] to the Court’s
March 28, 2014 Memorandum Opinion and Order [DE 10] requiring
them to show cause why their claim in Count III should not be
dismissed.
In
their
Response
they
argue
that
they
have
correctly identified the named individuals, all directors of the
lending institution except for Perry Dunn, as parties to the
claim
in
Count
III
of
their
Complaint
that
it
would
be
unconscionable to enforce their mortgage agreement with their
lender.
As set forth below, the Court disagrees.
Plaintiffs
argue
that
the
defendants,
all
of
whom
were
directors except Perry Dunn, were properly named as defendants
with respect to Count III of the Complaint as they were the sole
parties from whom Plaintiffs could seek relief after the lending
bank was dissolved and the Federal Deposit Insurance Corporation
1
was named as receiver.
rely
on
Section
Commercial
5000.1
Bank
In support of this argument, Plaintiffs
of
the
Examination
“FDIC
Manual,
Supervision
which
Manual”
indicates
or
that
“[d]irectors who fail to discharge their duties completely or
who are negligent in protecting the interests of depositors or
shareholders may be subject to removal from office, criminal
prosecution, civil money penalties imposed by bank regulators,
and civil liability.”
The Commercial Bank Examination Manual
points to 12 U.S.C. § 1818(b) for the source of the Federal
Reserve Board’s authority to use its enforcement powers under to
take such corrective actions against financial institutions and
individuals
associated
with
financial
institutions,
including
“any officer, director, employee, controlling shareholder, or
agent
of
a
financial
institution.”
Examination Manual, § 5040.1.
See
Commercial
Bank
Plaintiffs have not, however,
identified what state or federal authority permits the Chaus –
who do not purport to be agents of the Federal Reserve Board –
to seek relief against the individuals named in the complaint,
even if they were directors of a lending institution and even if
they
could
be
subject
Reserve Board.
to
corrective
action
by
the
Federal
Nor have the Chaus identified other agreements
made by and with these individual defendants upon which a claim
arising from a contract, i.e., their claim of unconscionability,
could be founded.
2
Having considered the Chaus arguments, the Court concludes
that they have failed to show cause why their claims should not
be dismissed for the reasons stated in the Court’s March 28,
2014, Memorandum Opinion and Order.1
Accordingly,
IT
IS
ORDERED
that,
upon
the
Court’s
own
motion, Count III shall be DISMISSED.
This the 24th day of April, 2014.
1
The Court need not reach the Chau’s additional argument with respect to
Count III, that it misunderstands the legal definition of unconscionability,
and declines to discuss it further at this instance.
3
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