Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-01562/USCOURTS-azd-2_08-cv-01562-8/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1331 Fed. Question

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NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

SHERRYL L. MADISON, 

Plaintiff, 

vs.

FIRST MAGNUS FINANCIAL

CORPORATION, et al., 

Defendants. 

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No. CV-08-1562-PHX-GMS

ORDER

Pending before the Court is the Motion to Dismiss of Defendants IndyMac Bank and

IndyMac Federal Bank. (Dkt. # 188.) For the reasons set forth below, the Court grants the

motion.

Plaintiff is an Arizona resident who allegedly owns real property in Arizona at the

following addresses: (1) 24220 N. 53rd Avenue, Glendale, Arizona 85310; (2) 522 E.

Glendale Avenue, Phoenix, Arizona 85020; (3) 2302 E. Lincoln Drive, Phoenix, Arizona

85016; (4) 16083 West Morning Glory Street, Goodyear, Arizona 85338; (5) 18607 N. 45th

Drive, Glendale, Arizona 85308; and (6) 7384 W. Utopia Road, Glendale, Arizona 85308.

In her Second Amended Complaint (“SAC”), Plaintiff alleges that, at various times between

April 2005 and June 2007, she either refinanced or purchased each of her six properties. The

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financing was obtained from various financial institutions pursuant to promissory notes

secured by deeds of trust on each property. 

Defendant IndyMac Bank is a financial institution that allegedly was or is involved

in some manner with either the purchase, refinance, and/or the trustee sales of one or more

of Plaintiff’s properties. On July 11, 2008, the Office of Thrift Supervision closed Defendant

IndyMac Bank due to concerns over its financial viability. Consequently, substantially all

of IndyMac’s assets were transferred to a new institution – IndyMac Federal Bank. The

Office of Thrift Supervision appointed the Federal Deposit Insurance Corporation (“FDIC”)

conservator of IndyMac Federal Bank.

On December 8, 2008, Defendant IndyMac Bank moved pursuant to the Financial

Institutions Reform, Recovery and Enforcement Act of 1989, 12 U.S.C. § 1821(d)(12)

(“FIRREA”), to dismiss the First Amended Complaint on grounds that the district court lacks

jurisdiction over claims against failed banks where the administrative claims procedures

enacted by FIRREA have not been exhausted. On March 12, 2009, the Court dismissed

Defendant IndyMac Bank without prejudice because Plaintiff “failed to sufficiently plead

or otherwise demonstrate exhaustion of the administrative procedure required under” the

Financial Institutions Reform, Recovery and Enforcement Act of 1989, 12 U.S.C. §

1821(d)(12) (“FIRREA”). (Dkt. # 141 at 6.) Plaintiff, however, reasserted her claims against

IndyMac Bank in her SAC. (Dkt. # 181.) Consequently, Defendant IndyMac Bank again

moves for dismissal on the same grounds. (Id. at 3.)

In her response brief, Plaintiff states that exhausted the administrative procedure under

FIRREA because, on March 10, 2008, she “delivered [a] qualified written request for proof

of the alleged debt and notification that she disputed the transaction.” (Dkt. # 245 at 2.)

Plaintiff, however, failed to plead facts supporting exhaustion in her SAC and otherwise fails

to provide any evidence supporting her assertion. Even if true, however, delivering a

qualified written request for proof of the alleged debt and notification that she disputed the

transaction does not constitute exhaustion of the administrative procedure under FIRREA.

12 U.S.C. § 1821(d)(13)(D) provides:

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Except as otherwise provided in this subsection, no courts shall

have jurisdiction over–

(i) any claim or action for payment from, or any action seeking

a determination of rights with respect to, the assets of any

depository institution for which the Corporation has been

appointed receiver, including assets which the Corporation may

acquire from itself as such receiver; or

(ii) any claim relating to any act or omission of such institution

or the Corporation as receiver.

“Jurisdiction over claims covered by section 1821(d)(13)(D) is ‘otherwise provided’ in §

1821 only after completion of the claims procedures outlined in §§ 1821(d)(6)(A) and

(d)(8)(C).” Feise v. Resolution Trust Corp., 815 F. Supp. 344, 346 (E.D. Cal. 1993) (“The

language ‘except as otherwise provided’ indicates that Congress expressly withdrew

jurisdiction from courts over any claim to a failed institution’s assets made outside the

statutory claims procedure.”); see also McCarthy v. F.D.I.C., 348 F.3d 1075, 1078 (9th Cir.

2003) (“The phrase ‘except as otherwise provided in this subsection’ refers to a provision

that allows jurisdiction after the administrative claims process has been completed.”). 

The effect of these provisions, read together, is to require

anyone bringing a claim against or seeking a determination of

rights with respect to the assets of a failed bank held by the

FDIC as receiver to first exhaust administrative remedies by

filing an administrative claim under the FDIC’s administrative

claims process. As the First Circuit explained, “FIRREA makes

participation in administrative claims review process mandatory

for all parties asserting claims against failed institutions,” and

“where a claimant has . . . failed to initiate an administrative

claim within the filing period, the claimant necessarily forfeits

any right to pursue a claim against the failed institution’s assets

in any court.” Marquis v. F.D.I.C., 965 F.2d 1148, 1151-52 (1st

Cir. 1992) (citation omitted). Section 1821(d)(13)(D) thus acts

as a jurisdictional bar to claims or actions by parties who have

not exhausted their § 1821(d) administrative remedies.

Freeman v. F.D.I.C., 56 F.3d 1394, 1400 (9th Cir. 1995) (quotation omitted). A plaintiff

“must first file a claim with [the failed institution] before a claimant can file suit in district

court.” Resolution Trust Corp. v. Flanagan, 24 F.3d 248, *2 (9th Cir. 1994). 

Here, Plaintiff’s alleged qualified written request was filed months before the Office

of Thrift Supervision even closed Defendant IndyMac Bank. Thus, as this Court has before

stated, even assuming its contents were sufficient to meet the requirements of a claim, its

submission to IndyMac months before IndyMac was placed into receivership did not qualify

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Defendants alternatively argue that Plaintiff’s fraudulent concealment claim (claim

23) should be dismissed for failure to plead the claim with particularity pursuant to Federal

Rule of Civil Procedure 9(b). (Dkt. # 188 at 6.) However, because dismissal is warranted

on other grounds, the Court declines to reach the merits of Defendants’ Rule 9(b) arguments.

 

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with the statutory requirement that claims be made against the Federal Deposit Insurance

Corporation as IndyMac’s receiver. The FDIC is now resolving claims against IndyMac

through its administrative process. This court is not part of that process. The claim in this

court is thus, at best, premature and is dismissed. 

 In the motion, Defendant IndyMac Federal also moves for dismissal pursuant to

Federal Rule of Civil Procedure 12(b)(6) arguing that the SAC fails to state a claim against

it because it did not come into existence until after the transactions which form the basis of

the SAC occurred.1

 (Id. at 3.) Defendant IndyMac Federal points out that it came into

existence after all of the relevant factual allegations in the SAC had already occurred. (Id.

at 5.) Indeed, in her SAC, Plaintiff failed to assert any factual allegations supporting liability

on the part of IndyMac Federal. Plaintiff fails to respond to this argument in her first

responsive brief. (See Dkt. # 245.) However, in her improperly filed second responsive brief

(Dkt. # 247), Plaintiff states that IndyMac Federal “assumes all the rights and obligations .

. . for IndyMac[] [Bank’s] participation . . . involving Plaintiff’s property.” (Id. at 3.)

Plaintiff, however, provides no factual or legal authority for her contention. And makes no

response to IndyMac Federal’s contrary assertions. Even if this were true, however, because

this Court lacks subject matter jurisdiction over the claims against Defendant IndyMac Bank,

Plaintiff is precluded from pursuing any such derivative liability against Defendant IndyMac

Federal. 

Because Plaintiff failed to sufficiently plead or otherwise demonstrate exhaustion of

the administrative procedure required under FIRREA, this Court does not presently have

jurisdiction over Plaintiff’s claims asserted against Defendant IndyMac Bank and

derivatively against Defendant IndyMac Federal Bank.

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IT IS THEREFORE ORDERED that the Motion to Dismiss of Defendants IndyMac

Bank and IndyMac Federal Bank (Dkt. # 188) is GRANTED.

IT IS FURTHER ORDERED that Defendants IndyMac Bank and IndyMac Federal

bank are DISMISSED WITHOUT PREJUDICE.

DATED this 8th day of September, 2009.

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