Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-02059/USCOURTS-casd-3_11-cv-02059-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1331 Fed. Question

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

RICHARDS INDUSTRIAL PARK, LP, a

California limited partnership; and MARC

BARMAZEL, an individual,

Plaintiffs,

CASE NO. 11cv2059-LAB (DHB)

ORDER DENYING PLAINTIFFS'

MOTION TO FILE SECOND AMENDED

COMPLAINT

vs.

FEDERAL DEPOSIT INSURANCE

CORPORATION, as receiver for La Jolla

Bank, FSB; and NATIONSTAR

MORTGAGE, a business entity,

Defendants.

Richards Industrial Park, LP and its general partner, Marc Barmazel, brought this

lawsuit against the Federal Deposit Insurance Corporation (FDIC) based on its alleged

breach of a real estate related agreement. (Docket no. 33.) The Court dismissed Plaintiffs'

claims without prejudice because (1) they failed to sufficiently allege exhaustion of

administrative remedies and (2) their breach of implied covenant of good faith and fair

dealing claim is superfluous in light of their breach of contract claim. (Docket no. 40.) 

Plaintiffs move for leave to file a second amended complaint (SAC). (Docket no. 41.)

I. Background

As relevant here, Plaintiffs contend that La Jolla Bank made misrepresentations in the

course of several real estate transactions, causing Plaintiffs damages. (Docket no. 41-1,

- 1 - 11cv2059

Case 3:11-cv-02059-LAB-DHB Document 44 Filed 08/19/15 Page 1 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

¶¶ 6-10.) Thereafter, the FDIC was appointed receiver for La Jolla Bank. (Id., ¶ 11.) 

Plaintiffs allege that, in an effort to resolve their dispute with the FDIC without litigation, they

negotiated, and reached an agreement for, a ten percent discount on certain real estate

loans. (Id., ¶¶ 12-23.) Plaintiffs allege that, in reliance on their agreement with the FDIC,

they changed their marketing, pricing, and strategy for the sale of one of their properties. 

(Id., ¶ 25.) They allege further that, after Plaintiffs found a buyer for the property, the FDIC

refused to honor its earlier agreement to offer a ten percent discount. (Id., ¶¶ 26-27.) Based

on these allegations regarding the FDIC's post-receivership conduct, Plaintiffs assert claims

for breach of contract and breach of the implied covenant of good faith and fair dealing.

II. Exhaustion of Administrative Remedies 

The First Amended Complaint (FAC) alleged that Plaintiffs "have complied with any

pre-ligitation requirement that they submit a claim for breach of the Agreement by complying

with the criteria set forth in Heno v. FDIC, 20 F.3d 1204 (1st Cir. 1994) (Heno II) for

submitting a post receivership claim to the FDIC." (Docket no. 33, ¶ 28.) However, Plaintiffs

didn't explain what they did to comply with Heno II, or even what they thought Heno II

requires. Plaintiffs were similarly coy in their response to the FDIC's motion to dismiss,

declaring, without providing details, that they "did submit a post receivership claim that

complies with applicable case law." (Docket no. 35 at 6.) The Court granted the FDIC's

motion to dismiss, but gave Plaintiffs the opportunity to amend their complaint to allege facts

sufficient to show that they met the exhaustion requirement. (Docket no. 40 at 4-6.)

Plaintiffs amended and, in their motion for leave to file their SAC, they argue:

(1) the FDIC always represented in writing to Plaintiffs that the Claims Bar Date

was May 26, 2010,

(2) the FDIC never informed Plaintiffs that it would deem any post receivership

claims timely even after submitted May 26, 2010, 

(3) the FDIC never complied with the prerequisites required by McCarthy v.

FDIC, 348 F.3d 1075, 1080-1081 (9th Cir. 2003), and [Heno II] for triggering

the administrative claims process for Plaintiff's post receivership claims, and 

(4) after the FDIC breached its agreement with Plaintiffs, the Plaintiffs

protested in writing, meeting the criteria of Heno II to comply with the

administrative process in this instance.

- 2 - 11cv2059

Case 3:11-cv-02059-LAB-DHB Document 44 Filed 08/19/15 Page 2 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

(Docket no. 41 at 2.) The amendments to their SAC reflect these arguments. (See Docket

no. 41-1 at ¶¶ 28-30.)

A. Lack of Notice Doesn't Excuse Exhaustion of Administrative Remedies

The FDIC's alleged failure to inform Plaintiffs of the post-receivership claims process

is irrelevant because "failure to give notice does not render the administrative claims process

inapplicable." McCarthy, 348 F.3d at 1081. That's especially true where, as here, the FDIC

has informed Plaintiffs that they remain willing to entertain the post-receivership claims. (See

Docket no. 38 at 2.) Thus, Plaintiffs are required to exhaust their claims administratively.

B. Plaintiffs' E-mails Don't Exhaust Administrative Remedies

Plaintiffs attach e-mail communications between Michael.Ashby@nationstarmail.com

and Plaintiff Marc Barmazel. In the e-mails, Ashby informed Barmazel that "the reviewing

authorities denied the settlement offer. . . ." (Docket no. 41-1 at 2, 4, 6, 8, 10.) Barmazel

responded "It was already approved. Next step is the lawsuit." (Id. at 6.) Then he asked

"Please send me the names of the people that denied this." (Id. at 8.) Then he responded

again "Please send all future emails to my attorney, Joel simon. His email is also attached." 

(Id. at 10.) Then he asked again "Please tell me the name of the person you spoke with that

denied the 90% payoff." (Id. at 4.) Finally he asked 

I’ve asked you the same question three times now. If you are not going to

answer me, please have the courtesy to just say you are not going to help me. 

Otherwise, please tell me the name of the person who declined the 10% offer

to payoff the loan that was already approved by the FDIC.

(Id. at 12.) 

Plaintiffs contend that, under Heno II, these e-mails sufficiently exhausted the

administrative process. Heno II is inapplicable. There, the plaintiff submitted "detailed"

written requests for action to the FDIC, and the FDIC conceded its treatment of the letters

was "tantamount to administrative review under FDIC's internal manual procedures." Heno

II, 20 F.3d at 1210. Here, Plaintiffs' e-mails were directed to a nationstarmail.com e-mail

address, not to the FDIC, and the FDIC doesn't concede that the e-mails led to administrative

review. Under these circumstances, Barmazel's e-mails didn't "provide[] the particular FDIC

- 3 - 11cv2059

Case 3:11-cv-02059-LAB-DHB Document 44 Filed 08/19/15 Page 3 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

receiverships with adequate notice of the challenged claims and with sufficient information

and detail about the claims to enable the FDIC expeditiously and fairly to allow or disallow

the claims." Branch v. FDIC, 833 F. Supp. 56, 60 (D. Mass. 1993); see also Bank of Am.,

NA v. FDIC, 908 F. Supp. 2d 60, 82 (D.D.C. 2012) ("A claimant may not exhaust its

administrative remedies through communications outside of its proof of claim.).

III. Breach of the Implied Covenant of Good Faith and Fair Dealing

The Court granted the FDIC's motion to dismiss Plaintiffs' claim for breach of the

implied covenant of good faith and fair dealing because it didn't go beyond the statement of

a mere contractual breach. (Docket no. 40 at 6-7); see also Careau & Co. v. Sec. Pac. Bus.

Credit, Inc., 222 Cal.App.3d 1371, 1395 (1990) ("If the allegations [of breach of implied

covenant of good faith and fair dealing] do not go beyond the statement of a mere contract

breach and, relying on the same alleged acts, simply seek the same damages or other relief

already claimed in a companion contract cause of action, they may be disregarded as

superfluous as no additional claim is actually stated."). Plaintiffs' SAC includes the same

breach of the implied covenant of good faith and fair dealing claim that the Court dismissed

in its previous order. The Court DENIES Plaintiffs' motion to file this same claim again.

IV. Conclusion

Plaintiffs' motion to file an amended complaint is DENIED and their claims are

DISMISSED. Plaintiffs may file their breach of contract claim again once they have

exhausted heir administrative remedies.

IT IS SO ORDERED.

DATED: August 18, 2015

HONORABLE LARRY ALAN BURNS

United States District Judge

- 4 - 11cv2059

Case 3:11-cv-02059-LAB-DHB Document 44 Filed 08/19/15 Page 4 of 4