Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-01520/USCOURTS-casd-3_10-cv-01520-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1441 Petition for Removal

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1 10cv1520-BTM (JMA)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

FEDERAL DEPOSIT INSURANCE

CORPORATION as Receiver for La Jolla

Bank, FSB,

Plaintiff,

Case No. 10cv1520-BTM (JMA)

ORDER RE EX PARTE

APPLICATION

v.

PATRICK O’CONNOR & ASSOCIATES,

Defendant.

The ex parte application of FDIC, as receiver for La Jolla Bank, FSB, for an order

setting aside a previous substitution of OneWest Bank, FSB as plaintiff in this action is

GRANTED. Plaintiff submits a declaration from a senior counsel at OneWest Bank, FSB

stating that La Jolla Bank, FSB’s claim against Defendant was not assigned to OneWest

Bank. (Schwappach Decl. ¶ 6) The Court is now satisfied that the FDIC’s claim against

Defendant remains subject to the control of the FDIC and was not transferred to OneWest

Bank. Therefore, the Court sets aside the Texas state court order substituting OneWest

Bank as party plaintiff. The FDIC, in its capacity as receiver for La Jolla Bank, FSB, is the

proper plaintiff in this action.

Defendant, in response to this application, asks the Court to reconsider its denial of

Defendant’s motion to remand. As explained in the Court’s prior order, the state court order

of substitution applied only to the “Party Plaintiff” in the Texas action. Because Defendant

Case 3:10-cv-01520-BTM-JMA Document 19 Filed 06/03/11 Page 1 of 2
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2 10cv1520-BTM (JMA)

had filed counterclaims prior to the entry of the state court order of substitution, the FDIC

remained a counter-defendant in the state action. 

Defendant’s citation to Texas rules of civil procedure governing joinder does not alter

this conclusion. Under the plain text of the state court order of substitution, the FDIC

remained a party to the state action, conferring this Court with subject matter jurisdiction

pursuant to 12 U.S.C. § 1441a(l)(1) and 12 U.S.C. § 1819(b)(2)(A). Defendant’s request is

DENIED. 

Finally, Defendant states that should the Court grant Plaintiff’s application, “O’Connor

requests that the Court clarify the substitution of parties so as to specifically designate that

the FDIC is the party Plaintiff in the capacity as receiver for La Jolla Bank, FSB, as to all

claims raised by the pleadings in the case, inclusive of the counterclaims raised herein by

O’Connor.” 

As explained in the order denying remand and as discussed above, the FDIC, in its

capacity as receiver, is a party to Defendant’s counterclaims. This is because “as receiver

the FDIC steps into the shoes of the failed financial institution, assuming all the rights and

obligations of the defunct bank.” Sharpe v. FDIC, 126 F.3d 1147, 1152 (9th Cir. 1997). No

clarification on this point should be needed, but to be abundantly clear, the FDIC, in its

capacity as receiver for La Jolla Bank, FSB, is the counter-defendant in this action.

IT IS SO ORDERED.

DATED: June 3, 2011

Honorable Barry Ted Moskowitz

United States District Judge

Case 3:10-cv-01520-BTM-JMA Document 19 Filed 06/03/11 Page 2 of 2