Kramer, et al v. Federal Deposit Insurance Corporation, et al

Filing 26

MEMORANDUM OPINION AND ORDER granting FDIC's 21 MOTION to Dismiss. Signed by Judge David A. Faber on 12/5/2013. (cc: counsel of record) (mjp)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
AT BLUEFIELD
MARGERIE KRAMER, Executrix of
the Estate of Beatrice Clark
Taylor,
Plaintiff,
v.

CIVIL ACTION NO. 1:08-1430

FEDERAL DEPOSIT INSURANCE
CORPORATION, et al.,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending before the court is the motion to dismiss filed by
defendant Federal Deposit Insurance Corporation ("FDIC"), as
Receiver for Ameribank, Inc.

(Doc. # 21).

For the reasons

expressed below, that motion is GRANTED.
Background
On October 29, 2007, plaintiff filed this civil action, in
the Circuit Court of McDowell County, against various defendants,
including Ameribank, alleging that defendants committed various
acts of negligence, breach of contract, and civil conspiracy.
See Complaint generally.

Specifically, plaintiff contends that

Ameribank was negligent in allowing defendant Sandra Faye Parker
to withdraw the contents from decedent Taylor's safety deposit
and in allowing Sandra Parker to withdraw all Taylor's money.
See Complaint ¶¶ 9, 10.

On September 19, 2008, the Office of

Thrift Supervision closed Ameribank and appointed the FDIC as
Receiver.
Pursuant to 12 U.S.C. § 1821(d)(3)(B)(i) and (ii), the FDIC
published notice of its appointment to all creditors of Ameribank
in various publications, including The Welch News, a newspaper in
McDowell County, West Virginia, on September 26, 2008; October
27, 2008; and November 26, 2008.
to Dismiss.

See Exhibit A to FDIC's Motion

These notices also advise creditors of Ameribank to

submit all claims to the Receiver by the Claims Bar Date of
December 26, 2008.

Id.

On December 17, 2008, the FDIC filed a Motion to Substitute,
in the McDowell County Circuit Court,
FDIC as Receiver for Ameribank.

seeking to substitute the

On that same day, the FDIC

removed the case to federal court.

On January 20, 2009, the FDIC

moved to stay this action for a period of 90 days, pursuant to
the statutory stay provisions of 12 U.S.C. § 1821(d)(12)(A)(ii).
That motion was granted on March 4, 2009, and the case was stayed
until June 3, 2009.
During this stay, the FDIC mailed a Notice of Discovered
Creditor and Proof of Claim Form to plaintiff, care of her
attorney, on May 14, 2009.
Dismiss.

See Exhibit B to FDIC's Motion to

In the Notice to Discovered Creditor, the FDIC states

that it published notice in The Welch News and The Times Leader
that any claims against Ameribank must be filed with the FDIC by

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the Claims Bar Date of December 26, 2008.

The Notice further

stated, however, that if a Claimant could satisfy certain
statutory exceptions contained in 12 U.S.C. § 1821(d)(5)(C), the
Receiver would consider a late-filed claim.

Id.

The notice gave

plaintiff a deadline of August 12, 2009, to file a claim.

Id.

On July 13, 2009, plaintiff returned her Proof of Claim and
supporting documentation to the Receiver.
FDIC's Motion to Dismiss.

See Exhibit C to

Plaintiff implies that she never saw

the notices published in the newspapers because she resides in
New York.

See id.; Affidavit of Margerie S. Kramer, July 9,

2009, at ¶ 9 (hereinafter "Kramer Aff. at ___").

Plaintiff did,

however, state that she received notice of the appointment of
receiver "at the end of December, 2008 or early January, 20098,
when [she] learned of the lawsuit being removed to Federal Court
by the FDIC on or about December 17, 2008."

Id.

The FDIC reviewed plaintiff's claim, found that it was timebarred, and sent a notice of denial to plaintiff, care of her
attorney, on January 20, 2010.

See Exhibit D to FDIC's Motion to

Dismiss.
In its motion to dismiss, the FDIC argues that the court
lacks subject matter jurisdiction over plaintiff's complaint as
to it based on plaintiff's failure to pursue her administrative
remedies.

According to plaintiff, she did not receive notice of

the FDIC's appointment as receiver in time to file a proof of

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claim before the Claims Bar Date.

Plaintiff also contends that

the failure of the FDIC to provide her with timely written
notice, pursuant to 12 U.S.C. § 821(d)(3)(C), should excuse her
failure to file a proof of claim by the Claims Bar Date.
Analysis
"[The Financial Institutions Reform, Recovery and
Enforcement Act ("FIRREA")] was enacted in 1989 as an emergency
measure to enable the RTC and the Federal Deposit Insurance
Corporation ("FDIC") to resolve and liquidate expeditiously the
hundreds of failed financial institutions throughout the
country."

Tillman v. Resolution Trust Corp., 37 F.3d 1032, 1035

(4th Cir. 1994).

Section 1821(d) of FIRREA sets forth an

administrative process for the receiver of a failed financial
institution to settle claims against the institution and
liquidate its assets."

12 U.S.C. § 1821(d); Elmco Properties,

Inc. v. Second National Federal Savings Assoc., 94 F.3d 914, 919
(4th Cir. 1996); see also

Brady Development Co., Inc. v.

Resolution Trust Corp., 14 F.3d 998, 1002 (4th Cir. 1994) (FIRREA
"sets forth a detailed series of rules under which all claims
involving an insolvent institution are received and handled.")
(citing 12 U.S.C. § 1821(d)).
Upon becoming receiver, the RTC [or FDIC] must promptly
publish notice to the institution's creditors that they
must present their claims before a certain date - - the
"bar date" - - which is to be at least ninety days
after publication of the notice. § 1821(d)(3)(B)(i).
Furthermore, the RTC must mail a similar notice to (1)
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creditors appearing on the institution's books, and (2)
claimants not appearing on the books but whose names
and addresses the RTC later discovers.
Elmco Properties, 94 F.3d at 919.

"Congress required persons

making claims against a failed financial institution or seeking
to adjudicate rights against them to present their claims first
to the receiver for resolution.

More specifically, under 12

U.S.C. § 1821(d), a claimant must present his claim to the
receiver for an initial determination of whether the claim should
be allowed within 90 days of the publication of notice by the
receiver."

Tillman v. Resolution Trust Corp., 37 F.3d 1032, 1035

(4th Cir. 1994).
After a claim is submitted, the receiver has 180 days from
the date of filing to allow or disallow the claim.
§ 1821(d)(5)(A)(i).

21 U.S.C.

If the FDIC disallows the claim or fails to

make a determination within 180 days, the claimant may seek
judicial review.

Elmco Properties, 94 F.3d at 919.

But, unless a claim is first presented to the RTC for
resolution, no court has jurisdiction over it. These
provisions combine to create an exhaustion requirement
that, [the Fourth Circuit has] concluded, is "absolute
and unwaivable." Importantly, FIRREA does not allow
waiver of the exhaustion requirement even for claimants
to whom the [FDIC] failed to mail the required notice
of the claims process and bar date.
Id.

The United States Court of Appeals for the Fourth Circuit

has "held that a plaintiff's failure to exhaust the
administrative process deprives the courts of subject matter

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jurisdiction."

Tillman v. Resolution Trust Corp., 37 F.3d 1032,

1035 (4th Cir. 1994).
Courts make a distinction between the consequences of a
receiver's failure to notify a claimant of its appointment as
receiver and the receiver's failure to mail the notice required
by 21 U.S.C. § 1821(d)(3)(C).
One exception exists to the rule presented in 12 U.S.C.
§ 1821(d)(5)(C)(i). Section 1821(d)(5)(C)(ii) provides
that if a claimant establishes that she did not receive
notice of the appointment of the receiver in time to
file her claim before the bar date, a receiver may
consider her late-filed claim. [Claimants] have never
alleged that they were not aware of the appointment of
a receiver; they alleged in their filing of claim with
the FDIC only that they had no notice of a time bar to
their filing a claim . . . .
This contention does not
suffice:
By its terms . . . the exception [in §
1821(d)(5)(C)(ii) ] only applies to claimants
who do not receive notice of the fact of the
appointment of a receiver. The exception
makes no reference to claimants who are aware
of the appointment of a receiver but who do
not receive notice of the filing deadline.
Therefore, a claimant's assertion that he or
she was not made aware of the filing
deadline, as distinct from an assertion that
the claimant was not aware of the fact of
receivership, does not bring the claimant
within the exception.
FDIC v. Atchison & Keller, 913 F. Supp. 19, 25 (D.D.C. 1996)
(quoting McLaughlin v. FDIC, 796 F. Supp. 47, 49 (D. Mass. 1992)
(internal citations omitted)).
Fatal to plaintiff's argument herein, the courts have made
clear that the FDIC's failure to mail notice of the bar date does

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not excuse a plaintiff from exhausting her administrative
remedies.

RTC Mortg. Trust 1994-N2 v. Haith, 133 F.3d 574, 579

(8th Cir. 1998) ("The only exception to the strict requirement of
exhaustion of remedies, [is] where the claimant does not receive
notice of the appointment of the receiver in time to file his
claim.

This exception will only apply to the appellants if they

did not receive notice of the fact of the appointment of a
receiver.

The exception does not apply to claimants who are

aware of the appointment of a receiver but who do not receive
notice of the filing deadline.”) (citations omitted);
Intercontinental Travel Marketing, Inc. v. FDIC, 45 F.3d 1278,
1284-86 (9th Cir. 1994) ("While this section seems to make the
mailing requirement imperative for the FDIC, the statute imposes
no consequence on the FDIC for failure to do so.").
In Elmco, one of the cases upon which plaintiff relies,* the
Fourth Circuit accepted a claimant's argument that the dismissal
of its claim based on failure to exhaust violated the claimant's
right to due process where the claimant had no knowledge of the
failed financial institution's entry into receivership.

*

Elmco

The other case upon which plaintiffs rely is Greater
Slidell Auto Auction v. American Bank & Trust Co., 32 F.3d 939,
942 (5th Cir. 1994). For the reasons expressed in Greater
Slidell's dissent, 38 F.3d 180, which acknowledges that the
majority opinion is at odds with the Fourth Circuit's holding in
Brady Development Co. v. RTC, 14 F.3d 998, 1005 (4th Cir. 1994),
the court does not find the reasoning of the majority opinion
persuasive herein.
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Properties, 94 F.3d at 921-22.

In so ruling, the Elmco court

acknowledged that a claimant "may not complain of its lack of
formal notice if it actually knew enough about the situation to
place it on `inquiry notice' as to the details of the
administrative process."

Id.

("Accordingly, if Elmco had

timely, actual knowledge that FSA had entered receivership, its
due process argument might be defeated by its own failure to act
on that knowledge to protect its rights.").

According to the

Elmco court, "a claimant's knowledge that a bank has entered
receivership triggers such inquiry notice."

Id.

The instant case is distinguishable from Elmco because the
record makes clear that plaintiff, through her counsel, had
actual knowledge of the receivership.

The notice of removal and

motion to substitute the FDIC as receiver for Ameribank, filed on
December 17, 2008, put plaintiff on notice of the receivership
before the claims bar date of December 26, 2008.

Counsel for

plaintiff acknowledged his receipt of the notice of removal and
motion to substitute on December 18, 2008.

Furthermore,

plaintiff herself acknowledges that she became aware of the
appointment of the FDIC's appointment as receiver "at the
end of December, 2008 or early January, 2009."
at ¶ 8.

Kramer Affidavit

Significantly, plaintiff does not establish that she

failed to receive notice of the receivership prior to the Claims
Bar Date.

See FDIC v. Estrada-Colon, 848 F. Supp.2d 206, 210

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(D.P.R. 2012) ("Thus, the only notice required by FIRREA is one
that makes claimants aware of the FDIC's appointment as receiver,
through either personal knowledge or a representative.");
Maldonando-Vaillant v. FDIC, Civil No. 10-1700 (JAG), 2011 WL
1545429, *3 (D.P.R. Apr. 25, 2011) ("As long as the claimants are
aware of the appointment of the receiver, through personal
knowledge or through a representative, the requirements of 12
U.S.C. § 1821(d)(3)(B) will be satisfied.").
Because the plaintiff had notice of the FDIC's appointment
as Receiver of Ameribank prior to the Claims Bar Date and failed
to file a claim before expiration of that date, this court is
without jurisdiction to consider plaintiff's claims against the
FDIC as Receiver for Ameribank.
Conclusion
For the reasons discussed above, the motion to dismiss is
GRANTED.
The Clerk is requested to send a copy of this Memorandum
Opinion and Order to counsel of record.
IT IS SO ORDERED this 5th day of December, 2013.
ENTER:

David A. Faber
Senior United States District Judge

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