1994 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

6-6-1994

Spring Garden Associates, L.P. v. Resolution Trust

Corp.

Precedential or Non-Precedential:

Docket 93-1323

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1994

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova

University School of Law Digital Repository. It has been accepted for inclusion in 1994 Decisions by an authorized administrator of Villanova

University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.

Recommended Citation

"Spring Garden Associates, L.P. v. Resolution Trust Corp." (1994). 1994 Decisions. Paper 37.

http://digitalcommons.law.villanova.edu/thirdcircuit_1994/37
1 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

 

N0. 93-1323 

 

 SPRING GARDEN ASSOCIATES, L.P., 

Appellant 

v. 

RESOLUTION TRUST CORPORATION, IN ITS CAPACITY AS RECEIVER 

OF BELL FEDERAL SAVINGS BANK, PA S.A.; 

JAY M. GROSS; NATHANIEL D. GROSS; GARY L. WILSON 

 

On Appeal From the United States District Court 

For the Eastern District of Pennsylvania 

(D.C. Civil Action No. 93-00205) 

 

Argued February 28, 1994 

 BEFORE: STAPLETON and SCIRICA, Circuit Judges, and 

 SMITH, District Judge* 

(Opinion Filed June 6, l994 ) 

 

 

 

* Honorable D. Brooks Smith, United States District Judge for the 

 Western District of Pennsylvania, sitting by designation. 
2 

Francis X. Clark (Argued) 

John H. Kiefel 

SILVERMAN, CLARK & VAN GALEN, P.C. 

2000 Valley Forge Circle 

Suite 109 West 

King of Prussia, PA 19406 

Attorneys for Appellant 

P. Matthew Sutko (Argued) 

Sheila Kraft Budoff 

801 17th St., N.W. 

Washington, D.C. 20434-0001 

Cynthia Nimerichter 

Northeast Consolidated Office 

P.O. Box 1500 

Valley Forge, PA 19482-1500 

Bruce S. Haines 

COHEN, SHAPIRO, POLISHER, 

SHIEKMAN AND COHEN 

2200 PFSF Building 

12 S. 12th Street 

Philadelphia, PA 19107 

Attorneys for THE RESOLUTION 

TRUST CORPORATION in its 

capacity as Receiver of BELL 

FEDERAL SAVINGS BANK, PA S.A. 

 

OPINION OF THE COURT

 

STAPLETON, Circuit Judge: 

 The Financial Institutions Reform, Recovery, and 

Enforcement Act of 1989 ("FIRREA") authorizes the Resolution 

Trust Corporation ("RTC") to remove certain actions from state 

court to federal court: 
3 

 The Corporation, in any capacity and 

without bond or security, may remove any 

action, suit, or proceeding from a State 

court to the United States district court 

with jurisdiction over the place where the 

action, suit, or proceeding is pending, to 

the United States district court for the 

District of Columbia, or to the United States 

district court with jurisdiction over the 

principal place of business of any 

institution for which the Corporation has 

been appointed conservator or receiver if the 

action, suit, or proceeding is brought 

against the institution or the Corporation as 

conservator or receiver of such institution. 

The removal of any such suit or proceeding 

shall be instituted-- 

 (i)not later than 90 days 

after the date the Corporation is 

substituted as a party, or 

 (ii) not later than 30 days 

after service on the Corporation, 

if the Corporation is named as a 

party in any capacity and if such 

suit is filed after August 9, 1989. 

12 U.S.C. § 1441a(l)(3)(A). This case requires us to review a 

district court's application of FIRREA's RTC removal provision to 

an action by a borrower against a savings bank (now under RTC 

receivership) and its directors. We find the district court's 

result correct and will affirm. 

 

I. 

 Spring Garden Associates ("Spring Garden") filed this 

suit in the Montgomery County Court of Common Pleas against Bell 

Saving Bank ("Bell") and its directors, following a dispute over 

a $9 million loan from Bell to Spring Garden. The five-count 

complaint sought preliminary and permanent injunctive relief 
4 

prohibiting Bell from foreclosing on the loan, specific 

performance of the loan agreement, and damages for Bell's alleged 

failure to extend credit under that agreement.0 The court of 

common pleas entered a "Temporary Restraining Order"0 against all 

of the defendants. 

 In March 1991, the Treasury Department's Office of 

Thrift Supervision appointed the RTC conservator and, later, 

receiver of Bell. On January 12, 1993, the RTC filed a petition 

for substitution with the court of common pleas. This petition 

was followed on January 14, 1993, by removal of the case to the 

district court pursuant to 12 U.S.C. § 1441a(l)(3). The RTC then 

filed a motion in district court to vacate the state court 

injunction, arguing that 12 U.S.C. § 1821(j) expressly prohibited 

injunctions against the RTC. 

 Before the district court ruled on the RTC's motion, 

Spring Garden filed a motion to remand to state court. Spring 

Garden argued that the RTC had failed to file its notice of 

removal within the time limit provided by 12 U.S.C. 

§ 1441a(l)(3). Spring Garden further urged that 12 U.S.C. 

 

0Count I alleged breach of contract by Bell. Count II requested 

preliminary and permanent injunctive relief against Bell to 

prohibit foreclosure on the loan. Count III alleged intentional 

or negligent misrepresentation by Bell and its directors. Count 

IV alleged breach of fiduciary duty by Bell. Count V contained a 

promissory estoppel claim against Bell and its directors. 

0The order entered by the court of common pleas is more properly 

termed a preliminary injunction than a temporary restraining 

order. It was issued upon notice to all parties, following a 

hearing, and was, by its terms, to be in effect for an indefinite 

period. 
5 

§ 1441a(l)(1), the statute conferring original jurisdiction on 

the district courts in RTC cases,0 did not confer federal 

jurisdiction over its claims against Bell's directors and, 

accordingly, that the case had been improperly removed. 

 The district court denied Spring Garden's motion to 

remand and granted the RTC's motion to vacate the injunction. The 

dissolution of the state court injunction was based on 12 U.S.C. 

§ 1821(j), which substantially restricts the authority of a court 

to enter an injunction against the RTC.0 Spring Garden now 

appeals. 

II. 

 We begin by inquiring whether our appellate 

jurisdiction extends to a review of the district court's order 

dissolving the state court's injunction. Under 28 U.S.C. 

§ 1292(a)(1), this court has jurisdiction to review orders of 

district courts "dissolving injunctions." Spring Garden has 

 

012 U.S.C. § 1441a(l)(1) provides: 

 Notwithstanding any other provision of 

law, any civil action, suit, or proceeding to 

which the Corporation is a party shall be 

deemed to arise under the laws of the United 

States, and the United States district courts 

shall have original jurisdiction over such 

action, suit, or proceeding. 

012 U.S.C. § 1821(j) provides: 

 Except as provided in this section, no 

court may take any action, except at the 

request of the Board of Directors by 

regulation or order, to restrain or affect 

the exercise of powers or functions of the 

Corporation as a conservator or a receiver. 
6 

challenged the portion of the order vacating the injunction, and 

28 U.S.C. § 1292(a)(1) thus gives us appellate jurisdiction to 

review that portion of the district court's order, even though 

that order is not final. 

 As for the district court's denial of a remand, neither 

28 U.S.C. §§ 1291 nor 28 U.S.C. § 1292 expressly confers 

jurisdiction on this court to review orders denying a remand to a 

state court. See Aberle Hosiery Co. v. American Arbitration 

Ass'n, 461 F.2d 1005, 1006 (3d Cir. 1972); Albright v. R. J. 

Reynolds Tobacco Co., 531 F.2d 132, 134 (3d Cir.), cert. denied, 

426 U.S. 907 (1976). In this case, nevertheless, we can review 

the denial of a remand because that portion of the district 

court's order is "closely intertwined" with the portion of that 

order dissolving the injunction. Ortiz v. Eichler, 794 F.2d 889, 

892 (3d Cir. 1986). We therefore conclude we have appellate 

jurisdiction to review both portions of the district court's 

order. 

 In so concluding, we reject the RTC's contention that 

28 U.S.C. § 1447(d) bars review of the order denying remand. 

While § 1447(d) precludes an appeal of an order granting remand, 

that statute does not prohibit appellate review of orders denying

remand. See Aliota v. Graham, 984 F.2d 1350, 1353 (3d Cir.), 

cert. denied, 114 S. Ct. 68 (1993) (28 U.S.C. § 1447(d) only 

concerns appellate review of "[a]n order remanding a case to the 

State court from which it was removed"); see also Doe v. American 

Red Cross, 14 F.3d 196, 199 (3d Cir. 1993) ("It is axiomatic that 
7 

remanding a case to state court terminates the jurisdiction of a 

. . . district court over that case."). 

III. 

 We next look to whether the district court had 

jurisdiction to enter its order. See Employers Insurance of 

Wausau v. Crown Cork & Seal Co. Inc., 905 F.2d 42, 45 (3d Cir. 

1990) ("every federal appellate court has a special obligation to 

satisfy itself not only of its own jurisdiction, but also that of 

the lower courts in a cause under review"). 

 Section 1441a(l)(3) authorizes the RTC to remove any 

"action, suit or proceeding from a state court to" a United 

States district court "with jurisdiction over" designated places. 

Section 1441a(l)(1) confers original jurisdiction on United 

States district courts to hear cases involving the RTC: 

 Notwithstanding any other provision of law, any civil 

action, suit, or proceeding to which the Corporation is a party 

shall be deemed to arise under the laws of the United States, and 

the United States district courts shall have original 

jurisdiction over such action, suit or proceeding. 

 Both Spring Garden and the RTC accept the proposition 

that § 1441a(l)(3) authorizes the RTC to remove cases over which 

the district court would have original jurisdiction under 

§ 1441a(l)(1). They then part ways. The RTC insists that 

§ 1441a(l)(1) confers original federal jurisdiction over all the 

claims asserted in Spring Garden's state court action. Spring 

Garden, on the other hand, argues that this section confers 

original federal jurisdiction only over the claims against Bell 

and not over its claims against Bell's directors. 
8 

 We confess that we have some difficulty understanding 

Spring Garden's legal analysis of the removal jurisdiction issue. 

Spring Garden contends in its brief that (1) 12 U.S.C. 

§ 1441a(l)(1) "only states that federal question jurisdiction is 

applicable to any claim to which the RTC is a party," (Brief, p. 

12) (emphasis added); (2) under the general removal statute, 28 

U.S.C. § 1441, district courts can exercise jurisdiction over 

pendent claims as well as federal question claims, but "the 

district court could not invoke pendant jurisdiction over Spring 

Garden's action against the officers of Bell" who would be 

impermissible pendant parties (Brief, p. 18); (3) the only 

situation in which a suit including both removable claims and 

non-removable claims can be removed to a district court is the 

one described in subsection (c) of the general removal statute, 

28 U.S.C. § 1441(c)0, and, under that subsection, removal can 

occur only if the removable claim is "separate and independent" 

of the non-removable claims; and (5) since Spring Garden's claim 

against Bell is not "separate and independent" of its claims 

against the officers of Bell, there was no authority to remove 

any of the claims asserted in the state court and the district 

 

028 U.S.C. § 1441(c) provides: 

 (c) Whenever a separate and independent 

claim or cause of action within the 

jurisdiction conferred by section 1331 of 

this title is joined with one or more 

otherwise non-removable claims or causes of 

action, the entire case may be removed and 

the district court may determine all issues 

therein, or, in its discretion, may remand 

all matters in which State law predominates. 
9 

court had no removal jurisdiction. (Brief, pp. 18-20.) We have 

a number of difficulties with Spring Garden's analysis, but it 

will suffice for present purposes to indicate that we find its 

first step fatally flawed. 

 The proper starting point of our inquiry is, of course, 

the language of 28 U.S.C. § 1441a(l)(1) itself. See Smith v. 

Fidelity Consumer Discount Co., 898 F.2d 907, 909-10 (3d Cir. 

1990) ("'[t]here is, of course, no more persuasive evidence of 

the purpose of a statute than the words by which the legislature 

undertook to give expression to its wishes.'") Section 

1441a(l)(1) does not confer original federal jurisdiction over 

"any claim" asserted by or against the RTC, as Spring Garden 

insists. Rather, it confers original federal jurisdiction over 

"any action, suit or proceeding to which the [RTC] is a party." 

We believe the commonly understood meaning of the wording of that 

phrase encompasses the entirety of any case to which the RTC is a 

party and not just those claims in such a case brought by or 

against the RTC. 

 Cases from two other Courts of Appeal agree with our 

common parlance reading of § 1441a(l)(1). In People of State of 

Cal. By and Through Lungren v. Keating, 986 F.2d 346 (9th Cir. 

1993), the Court of Appeals for the Ninth Circuit held that, 

notwithstanding the fact that the general removal statute would 

not have permitted any of the claims in the complaint to be 

removed to federal court, the addition of the RTC as a party 

"transforms the entire action into one that 'arises under' the 

laws of the United States." Id. at 347-48. The court determined 
10 

that "[t]he words 'action, suit, or proceeding' are not limited 

to specific claims, but are synonymous with the term 'case' in 

the constitutional sense." Id. at 348. 

 In Kansas Pub. Employees Retirement Sys. v. Reimer & 

Koger Assocs., Inc., 4 F.3d 614 (8th Cir. 1993), the Court of 

Appeals for the Eighth Circuit agreed with the Keating court's 

interpretation of § 1441a(l)(1). The court was there required to 

address whether a state court had violated the Constitution's 

Supremacy Clause by severing the case before it in order to 

preclude the RTC from removing the entire case. Id. at 618. The 

court of appeals held that because "the RTC had the right to 

remove 'the entire case' to federal court," id. (citing Keating, 

986 F.2d at 348-49), the state court's actions had run afoul of 

the Supremacy Clause, id. at 619.0 

 Further support of our reading of § 1441a(1)(1) is 

provided by cases that have addressed the similar language0 of 12 

U.S.C. § 1819(b)(2)(A), which provides: 

. . . all suits of a civil nature at common 

law or in equity to which the [FDIC], in any 

 

0While the issue raised here by Spring Garden has never before 

been argued to this court, we have expressed views in passing 

similar to those of the Courts of Appeals for the Ninth and 

Eighth Circuits. In Adams v. Madison Realty & Dev., Inc., 937 

F.2d 845, 855 (3d Cir. 1991), we stated: "Under 12 U.S.C. 

§ 1441a(l)(1), any civil action in which the RTC is a party is 

deemed to arise under federal law." And in Resolution Trust 

Corp. v. Nernberg, 3 F.3d 62, 68 n.3 (3d Cir. 1993), we remarked 

on the broad scope of 28 U.S.C. § 1441a(l)(1): "The language of 

the statute thus allows Resolution Trust to remove routine 

collection and foreclosure cases to the already overburdened 

federal courts." 

0See Resolution Trust Corp. v. Nernberg, 3 F.3d 62, 66 n.2 (3d 

Cir. 1993) (noting "close parallel" between enabling statutes of 

RTC and FDIC). 
11 

capacity, is a party shall be deemed to arise 

under the laws of the United States. 

In National Union Fire Ins. Co. of Pittsburgh v. Baker & 

McKenzie, 997 F.2d 305 (7th Cir. 1993), an insurer, seeking a 

declaration that it was not liable under a malpractice policy, 

sued three lawyers whom it had insured, their law firm, and the 

FDIC, which was now a receiver for one of their former clients. 

The court noted that the FDIC's "presence as a party conferred 

federal jurisdiction over the suit" pursuant to § 1819(b)(2)(A). 

Also helpful is Walker v. F.D.I.C., 970 F.2d 114 (5th Cir. 1992), 

in which developers sued a savings and loan and its directors in 

state court after the savings and loan failed to provide a loan. 

After the savings and loan became insolvent, the FSLIC was 

appointed receiver and added as a party to the lawsuit. The FDIC 

was later substituted for the FSLIC and the action was removed to 

federal court under § 1819(b)(2)(A). The court approved of the 

removal, noting that "where the FDIC is a party, federal question 

jurisdiction exists and removal by the FDIC is proper." Id. at 

118. The court also noted that settlement of the developers' 

claims against the FDIC did not oust the federal court of 

jurisdiction to consider the developers' claims against the 

directors. Id. at 119.0 

 

0See also Buckner v. F.D.I.C., 981 F.2d 816, 819 (5th Cir. 1993) 

("as the FDIC is a party to a civil suit, that suit is 

conclusively presumed to arise under the laws of the United 

States, and thus is within the original subject matter 

jurisdiction of the proper federal district court"); Matter of 

Meyerland Co., 960 F.2d 512, 515 (5th Cir. 1992) (in banc), cert. 

denied, 113 S. Ct. 967 (1993) ("Access to federal courts in all 

actions to which it is a party allows the FDIC to develop and 

rely on a national and uniform body of law . . ."); cf. American 
12 

 Further and finally, we find support for our reading of 

the relevant statute in the Supreme Court's decision in Finley v. 

United States, 490 U.S. 545 (1989). The court there examined 28 

U.S.C. § 1346(b), the jurisdictional provision of the Federal 

Tort Claims Act ("FTCA"). In interpreting the reach of the FTCA 

to include only claims against the United States and not any suit 

in which such a claim is asserted, the court wrote: 

The FTCA, § 1346(b), confers jurisdiction 

over "civil actions on claims against the 

United States." It does not say "civil 

actions on claims that include requested 

relief against the United States," nor "civil 

actions in which there is a claim against the 

United States" -- formulations one might 

expect if the presence of a claim against the 

United States constituted merely a minimum 

jurisdictional requirement, rather than a 

definition of the permissible scope of the 

FTCA actions. Just as the statutory 

provision "between . . . citizens of 

different States" has been held to mean 

citizens of different states and no one else, 

. . . so also here we conclude that "against 

the United States" means against the United 

States and no one else. 

Id. at 552. 

 

National Red Cross v. S.G., __ U.S. __, 112 S.Ct. 2465 (1992) 

(holding "sue and be sued" provision of Red Cross charter to 

confer original federal jurisdiction over all cases to which Red 

Cross is a party and finding such jurisdictional grants to be 

well within Article III limits); Kirkbride v. Continental 

Casualty Co., 933 F.2d 729, 731-32 (9th Cir. 1991) ("the grant of 

subject matter jurisdiction contained in [the] FDIC's removal 

statute evidences Congress' desire that cases involving [the] 

FDIC should generally be heard and decided by the federal 

courts"). 
13 

 The statutory language of § 1441a(l)(1) differs from 

that of § 1346(b) in much the same way as the hypothetical 

statutory text in the Finley court's analysis differs from 

§ 1346(b) -- "civil actions, suits, or proceedings to which the 

Corporation is a party" is very close to "civil actions in which 

there is a claim against the United States." The common usage 

reading of § 1346(b) in Finley thus supports the conclusion that 

the language Congress chose in § 1441a(l)(1) evidences an intent 

to confer original jurisdiction on the federal courts over the 

entire case to which the RTC has become a party. 

 As Spring Garden apparently concedes, if 12 U.S.C. 

§ 1441a(l)(1) does in fact provide federal jurisdiction over all 

the claims contained in a case, as we believe it does, there is 

no need to inquire as to pendent jurisdiction or pendant parties. 

Accordingly, we hold that 12 U.S.C. §§ 1441a(l)(1) and (3) 

authorized removal of the entire case. 

IV. 

 Under 12 U.S.C. § 1441a(l)(3)(A)(i), the RTC may remove 

a suit from a state court to a federal court "not later than 90 

days after the date [it] is substituted for a party." 

"Substitution" is defined for this purpose as the time when 

either: (1) the RTC or another party files a copy of the order 

appointing the RTC as conservator or receiver with the court in 

which the suit is pending, or (2) the RTC or another party files 

another pleading with the court in which the suit is pending 

informing the court that the RTC has been appointed. 12 U.S.C. 
14 

§ 1441a(l)(3)(B). See Resolution Trust Corp. v. Bakker, 801 F. 

Supp. 706, 707 (S.D. Fla. 1992) (pursuant to amended version of 

§ 1441a(l)(3)(B), substitution occurred when RTC filed notice of 

substitution, not when it was appointed receiver). 

 On January 12, 1993, the RTC filed a notice of 

substitution with the state court. Two days later, on January 

14, 1993, the RTC removed the case to the district court. We 

therefore conclude that the RTC removed the action in a timely 

fashion under 12 U.S.C. §§ 1441a(l)(3)(A) and (B). Since Spring 

Garden does not challenge before us the district court's 

conclusion that the state court's injunction was inconsistent 

with the provisions of 12 U.S.C. § 1821(j), it follows that the 

order appealed from must be sustained in all respects. 

V. 

 The RTC's removal was timely and the district court 

properly exercised jurisdiction over all claims against all 

parties to this suit pursuant to 12 U.S.C. §§ 1441a(l)(1) and 

(3). We therefore will affirm the district court's order of 

March 16, 1993.