Impresos Maxima, Inc. v. FDIC
Filing
30
OPINION AND ORDER granting 19 MOTION to Dismiss/Lack of Jurisdiction for Failure to Exhaust Mandatory Claims Process as to Impresos Maxima, Inc. filed by Federal Deposit Insurance Corporation. Judgment dismissing the case with prejudice shall be entered accordingly. Signed by Judge Jay A Garcia-Gregory on 05/10/2011.(DPS)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
IMPRESOS MAXIMA
Plaintiff
CIVIL NO. 10-1618 (JAG)
v.
FEDERAL DEPOSIT INSURANCE
CORPORATION, as Receiver of
Eurobank, Inc.
Defendant
OPINION AND ORDER
GARCIA-GREGORY, D.J.
Pending
before
the
Court
is
Federal
Deposit
Insurance
Corporation’s, as Receiver of Eurobank Inc., Motion to Dismiss.
(Docket No. 20). For the reasons set forth below, the Court
GRANTS the motion.
FACTUAL AND PROCEDURAL BACKGROUND
The Office of the Commissioner of Financial Institutions of
the Commonwealth of Puerto Rico (“Commissioner”) closed Eurobank
on April 30, 2010. As it is required by law, the Commissioner
appointed the Federal Deposit Insurance Corporation (“FDIC”) as
receiver of the failed bank.
On July 14, 2010, due to a suit pending before the Puerto
Rico Court of First Instance against Eurobank, the FDIC sent
Impresos Maxima, Inc. (“Plaintiff”) a notice letter through its
Civil No. 10-1618 (JAG)
2
counsel of record. The letter informed Plaintiff of its right to
file an administrative claim before the FDIC. It also indicated
that such claim had to be submitted on or before August 4, 2010.
Plaintiff
never
filed
a
proof
of
claim.
The
Claim
was
thus
disallowed by the FDIC.
On July 7, 2010, the FDIC removed the case from the state
court to this Court. (Docket No. 1).
On October 20, 2010, the
FDIC filed a Motion to Dismiss. (Docket No. 19). It posits that
the
District
Plaintiff
process.
Court
failed
lacks
to
Specifically,
subject-matter
exhaust
it
the
argues
jurisdiction
mandatory
that
Plaintiff
because
administrative
was
properly
notified by the FDIC, but it did not submit its claim by August
4, 2010, the Claim Bar Date.
Plaintiff opposed the FDIC’s Motion to Dismiss. (Docket No.
26). In the motion, it avers that it was not until two days
before the Claim Bar Date that it received the notification and
that its case against Eurobank is a monetary damages claim.
(Docket No. 29). It also avers that since the same law firm that
represented Eurobank is now representing the FDIC, it is not
obligated to provide the required documentation with its Proof
of Claim because the FDIC, through the law firm in question,
already has actual knowledge of the claim. Id.
Civil No. 10-1618 (JAG)
3
ANALYSIS
The Financial Institutions Reform, Recovery and Enforcement
Act of 1989 (“FIRREA”), Pub. L. No. 101-73, 103 Stat. 183 §§
101-1404, established the FDIC as the authority, as conservator
or receiver, “which will succeed to all rights, titles, powers,
and privileges of the insured depository institution.” 12 U.S.C.
§ 1821(d)(2)(A). In order for the FDIC to evaluate and determine
claims
against
a
failed
institution,
efficiently
and
effectively, FIRREA established a mandatory administrative claim
process, which shall be exhausted by every claimant.
The FDIC has to notify the claimant of the failed depository
institution’s
“changing
governmental
entity
Commissioner)
appoints
of
(in
institution,
depository
institution’s
guard.”
the
the
depository
the
it
case
FDIC
has
of
as
to
claimants
Once
the
Puerto
receiver
publish
of
a
their
of
appropriate
Rico,
the
notice
the
failed
to
the
obligation
to
present their claims by a specific date in order to liquidate or
conclude all pending affairs. The bar date must be at least 90
days after said notice. It has to be republished approximately
one and two months, respectively, after the first publication.
12
U.S.C.
publication,
§
1821(d)(3)(B).
the
FDIC
has
to
Simultaneously
to
mail
notice
a
similar
the
first
to
any
claimant shown on the failed institution’s books; or within 30
days after the name and address of a claimant not appearing on
Civil No. 10-1618 (JAG)
4
the institution’s books is known. 12 U.S.C. § 1821(d)(3)(C).
Failure
to
mail
the
notice,
however,
will
not
exempt
the
claimant from exhausting the administrative process. The statute
does not provide a waiver or exception if the notice is not
mailed. Freeman v. FDIC, 56 F.3d 1394 (D.C. Cir. 1995); Accord
v. FDIC, 45 F.3d 1278, 1285 (9th Cir. 1994); Melieze v. RTC, 952
F.2d 879, 882 (5th Cir. 1992).
The determination of whether to allow or disallow the claim
will be deemed satisfied once it is mailed to the last address
of the claimant. The address can be found on the depository
institution’s books, the claim filed by the claimant, or the
documents
submitted
as
proof
of
the
claim.
12
U.S.C.
§
1821(d)(5)(A)(iii). If the claim is disallowed, the notice has
to include a statement of each reason for the disallowance and
the
procedure
available
for
obtaining
an
administrative
or
judicial review of the determination to disallow the claim. 12
U.S.C. § 1821(d)(5)(A)(iii).
Due to the administrative process requirements prescribed by
FIRREA, a judicial bar has been imposed on “any claim that seeks
payment,
or
determination
of
rights
from
the
assets
of
the
failed institution, for which the corporation has been named
receiver,
if
said
1821(d)(13)(D);
Loyd
process
v.
is
FDIC,
not
22
completed.”
F.3d
335
12
(1st
Marquis v. FDIC, 965 F.2d 1148, 1153 (1st Cir. 1992).
U.S.C.
Cir.
§
1994);
Civil No. 10-1618 (JAG)
5
Because of subsection 1821(d)(13)(D), any claimant who does
not exhaust the administrative process, will lose its rights to
pursue any claim against the failed institution’s assets in any
court.
The
First
Circuit
explained
in
Marquis
that
this
jurisdictional bar applies to three distinct kinds of claims or
actions: “[1] all claims seeking payment from the assets of the
affected institutions; [2] all suits seeking satisfaction from
those
assets;
and
[3]
all
actions
for
the
determination
of
rights vis-a-vis those assets.” Freeman v. FDIC, 56 F.3d 1394,
1400 (D.C. Cir. 1995)(citing Marquis).
Multiple circuits have also decided, due to the controversy
arising
from
interpretation
of
subsection
1821(d)(5)(F)(ii),
that even if the claim were commenced before the appointment of
the receiver, claimants would have to exhaust the administrative
process. It has been decided that, in order to fulfill Congress’
intentions
of
ensuring
that
all
claims
be
expeditiously
and
effectively managed by the FDIC, pre-receiver claims would also
have to exhaust the administrative process. These claims will be
suspended, not dismissed, until the administrative process is
exhausted. RTC v. Mustang Partners, 946 F.2d 103, 106 (10th Cir.
1991) (“No interpretation is possible which would excuse this
requirement for [claimants] with suits pending, or allow the
filing
of
a
suit
to
substitute
for
the
claim
process.”);
Marquis, supra (a district court has to dismiss fully a pre-
Civil No. 10-1618 (JAG)
6
receiver claim if, once notified of receiver’s appointment, has
not exhausted the administrative process); Brady v. RTC, 14 F.3d
998 (4th Cir. 1994) (“[p]ermitting this action to go forward
would thwart FIRREA’s purpose and permit [claimant] to evade the
comprehensive administrative claims procedures envisioned by the
statute.”).
In the present case, once the FDIC was appointed receiver of
Eurobank, it sent Plaintiff a written notice through its counsel
of record, which they received on August 2, 2010. The letter
informed Plaintiff of it right to submit an administrative claim
to
the
FDIC.
Plaintiff
chose
not
to
complete
the
mandatory
administrative process and file a Proof of Claim. It argues that
it complied with all the discovery requests made by Eurobank
during the judicial process before the state Court and that the
same law firm that represented Eurobank, represents the FDIC
before this Court. According to it, it cannot be reasonably
considered
that
the
FDIC
does
not
have
all
the
information
regarding the claim since the FDIC is Eurobank’s alter ego.
Even if the Court were to agree with Plaintiff in finding
that the FDIC is a sort of doppelganger for Eurobank, the fact
that FIRREA is clear regarding the judicial bar when no Proof of
Claim has been filed, cannot be simply ignored. Plaintiff does
not deny the fact that it opted not to file a Proof of Claim and
Civil No. 10-1618 (JAG)
7
therefore, the Court has no alternative but to find that it does
not have jurisdiction to entertain this case.
CONCLUSION
Given that Plaintiff failed to timely exhaust the mandatory
claims process prescribed by 12 U.S.C. § 1821(d)(13)(D), the
Court
finds
that
it
lacks
subject-matter
jurisdiction
to
entertain the case at bar. Defendant’s Motion to Dismiss is
hereby
GRANTED.
(Docket
No.
19).
Judgment
shall
be
entered
dismissing the case with prejudice.
IT IS SO ORDERED.
In San Juan, Puerto Rico, this 10th day of May, 2011.
S/ Jay A. García-Gregory
JAY A. GARCÍA-GREGORY
United States District Judge
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