United States Court of Appeals,

Eleventh Circuit.

No. 94-4908.

RPM INVESTMENTS, INC., a California Corporation, Homero Meruelo,

Plaintiffs-Appellants,

v.

RESOLUTION TRUST CORPORATION, as receiver for General Federal

Savings Bank f/k/a General Bank; Crystal Lake Village, a Florida

Corporation, Defendants-Appellees.

Feb. 16, 1996.

Appeal from the United States District Court for the Southern

District of Florida. (No. 93-2025-CIV-KMM), K. Michael Moore,

Judge.

Before KRAVITCH, ANDERSON and BARKETT, Circuit Judges.

PER CURIAM:

RPM Investments, Inc. ("RPM") and Homero Meruelo challenge the

district court's determination that, because they failed to file an

administrative claim with the Resolution Trust Corporation ("RTC"),

the district court lacked subject matter jurisdiction over their

claims against the RTC in its receivership capacity. The district

court's alternative holding, that the relief appellants

request—specific performance—is not available under 12 U.S.C. §

1821(j) of the Financial Institutions Reform and Recovery

Enforcement Act ("FIRREA"), is a sufficient basis upon which to

deny relief. We affirm on the ground that jurisdiction is lacking

because the district court is barred from granting the specific

performance sought by appellants.

I. Facts

The RTC was appointed receiver of General Federal Savings Bank

in 1989. At that time Crystal Lake Village, Inc., which had
 1

Appellants' complaint has four counts. In Count I,

appellants seek specific performance on the theory that the

purchase agreement is valid and enforceable against the RTC. In

pledged a condominium development to General Federal Savings Bank

as security for debts and mortgages, was in default on the loans

and mortgages in excess of $10 million. RTC instituted foreclosure

proceedings and was awarded a foreclosure judgment.

In its search for a purchaser for the foreclosure judgment and

loan documents, the RTC approached Homero Meruelo. According to

Meruelo, the RTC led him to believe that if he or an agent of RPM,

a company through which Meruelo sought to acquire the property,

would execute the purchase agreement and tender the requisite

escrow monies to the RTC, a deal would be struck between the RTC

and Meruelo in which Meruelo would purchase the foreclosure

judgment, RTC's rights to the property, the loan documents, and all

related rights of action (collectively the "foreclosure judgment").

Meruelo executed the purchase agreement and delivered the funds to

the RTC. The purchase agreement, however, required execution by

the RTC, which never occurred.

Nevertheless, it appeared to Meruelo and apparently to RTC's

local attorneys that a meeting of the minds was in place. Meruelo

and RPM were given due diligence rights of access to the property,

and they made certain expenditures to complete due diligence.

Before executing the contract, however, the RTC demanded

modification of the purchase agreement. When the appellants

rejected the modifications, the RTC refused to close on the

properties. RPM and Meruelo then filed this suit seeking specific

performance.1
Count II, appellants allege that they have an enforceable

unilateral contract and seek specific performance to enforce the

contract. Count III alleges that the RTC is estopped from

repudiating the purchase agreement and seeks enforcement of the

purchase agreement. Count IV seeks declaratory relief and

alleges that appellants' rights to the property are superior to

those of Crystal Lake pursuant to Florida law. Although these

are all state law claims, 12 U.S.C. § 1441a(a)(11) confers

original jurisdiction on the United States district courts to

hear cases involving the RTC.

Although appellants seek declaratory relief in Count

IV, were the district court to declare their rights to the

interests in the property at issue superior to the rights

and interests of Crystal Lake, the result would be

tantamount in effect to the specific performance sought in

the earlier counts. Thus, we treat Count IV as we do Counts

I through III, as a request for specific performance and as

such subject to the jurisdictional bar of § 1821(j). See

Carney v. Resolution Trust Corp., 19 F.3d 950, 957-58 (5th

Cir.1994) (refusing to grant declaratory relief where such

relief was sought to avoid § 1821(j)'s jurisdictional bar to

injunctive relief but would have the same effect as an

injunction). We do not mean to indicate that every claim

for declaratory relief against a failed institution would be

subject to the jurisdictional bar of § 1821(j). 

RTC filed a motion to dismiss on the ground that the district

court lacked subject matter jurisdiction because the appellants had

failed to exhaust administrative remedies as required under FIRREA,

12 U.S.C. § 1821(d), and on the additional ground that 12 U.S.C. §

1821(j) limits the district court's remedial jurisdiction by

prohibiting any action that would "restrain or affect" the RTC in

exercising its powers and functions as receiver of a failed

institution.

The magistrate judge to whom this case was referred

recommended that the motion to dismiss be granted on grounds that

the plaintiffs' claims were subject to the jurisdictional bar of §

1821(d) and also noted that § 1821(j) deprived the district court

of jurisdiction to grant the specific performance sought. The
 2

The "exceptions" to § 1821(j)'s jurisdictional bar are

extremely limited. See Abbott Bldg. Corp., Inc. v. United

States, 951 F.2d 191 (9th Cir.1991) (concluding that the

predecessor of § 1821(j), 12 U.S.C. § 1464(d)(6)(C), did not

preclude court from issuing an injunction in order to determine

district court adopted the magistrate judge's report and

recommendation. RPM and Meruelo then brought this appeal. Because

this is an appeal from a motion to dismiss, we accept the

allegations of the complaint as true and construe the facts alleged

in the complaint in the light most favorable to the appellants.

ICA Constr. Corp. v. Reich, 60 F.3d 1495, 1497 (11th Cir.1995).

II. Application of 12 U.S.C. § 1821(j)

 As noted above, RPM and Meruelo seek only equitable relief in

the form of specific performance of their contract. Our

jurisdiction is limited by § 1821(j), which states:

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.

Section 1821(d)(2)(E) grants the receiver the power to dispose

of the assets of a failed banking institution. In disposing of a

foreclosure judgment which was the property of the failed

institution (or choosing not to sell the judgment to a particular

prospective buyer as the case was here), the RTC was exercising a

receivership function. See National Trust for Historic

Preservation v. F.D.I.C., 995 F.2d 238, 240 (D.C.Cir.1993) ("In

disposing of the assets of a bank, the FDIC is performing a routine

"receivership' function...."), modified and reinstated in relevant

part on rehearing, 21 F.3d 469 (D.C.Cir.), cert. denied, --- U.S.

----, 115 S.Ct. 683, 130 L.Ed.2d 615 (1994).2
whether foreclosure law was followed where property allegedly was

deeded to the receivership by someone without authority to do

so); Sierra Club, Lone Star Chapter v. FDIC, 992 F.2d 545 (5th

Cir.1993) (holding that where FDIC acts in its corporate capacity

rather than as receiver, court is not subject to jurisdictional

limitations of § 1821(j)). Some courts have also held that

automatic bankruptcy stays against the RTC in its receivership

capacity are not barred by § 1821(j) because such actions are

"imposed by Congressional mandate and not by court order." In re

Colonial Realty Co., 980 F.2d 125 (2d Cir.1992). 

 The only remaining question, therefore, is whether ordering

specific performance in this case would "restrain or affect" the

exercise of this function. Courts have determined that various

equitable remedies "restrain or affect" the exercise of the RTC's

powers and are, thus, prohibited by § 1821(j). For example, courts

have held that § 1821(j) renders district courts without authority

to issue against the Corporation injunctions that would interfere

with the exercise of its statutory powers. See, e.g., Tillman v.

Resolution Trust Corp., 37 F.3d 1032 (4th Cir.1994); Carney v.

Resolution Trust Corp., 19 F.3d 950 (5th Cir.1994); Telematics

Int'l, Inc. v. NEMLC Leasing Corp., 967 F.2d 703 (1st Cir.1992);

Rosa v. Resolution Trust Corp., 938 F.2d 383, 397-400 (3d

Cir.1991), cert. denied, 502 U.S. 981, 112 S.Ct. 582, 116 L.Ed.2d

608 (1991). At least one court has held that "[l]ike injunction,

rescission is a "judicial restraint' that is barred by 1821(j)."

Ward v. Resolution Trust Corp., 996 F.2d 99, 104 (5th Cir.1993).

Another circuit concluded that the district court had no power

under § 1821(j) to rescind an asset transfer made by the RTC

pursuant to its powers under § 1821(d)(2)(G)(i)(II). United

Liberty Life Ins. Co. v. Ryan, 985 F.2d 1320, 1328-29 (6th

Cir.1993). Like rescission, injunctions, and orders rescinding
asset transfers, the specific performance requested in this case

would "restrain or affect" the RTC in the exercise of its statutory

powers.

 The appellants' allegations that the RTC breached a contract

does not affect our holding. Even claims seeking to enjoin the RTC

from taking allegedly unlawful actions are subject to the

jurisdictional bar of 1821(j). In National Trust v. F.D.I.C., 995

F.2d at 240, the D.C. Circuit concluded that "[i]n disposing of the

assets of a bank, the FDIC is performing a routine "receivership'

function that § 1821(j) unequivocally removes from judicial

restraint." Thus, the court refused to enjoin a real estate

transaction even though plaintiffs alleged that the sale would

violate the National Historic Preservation Act. And, in a case

similar to the case at bar, Volges v. Resolution Trust Corp., 32

F.3d 50 (2d Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 2618,

132 L.Ed.2d 860 (1995), the Second Circuit held that a breach of

contract claim did not give the district court jurisdiction to

grant an injunction against the RTC. The plaintiff in that case

alleged that the RTC breached a contract to sell him certain

mortgages, and he sought to enjoin the RTC from selling or

otherwise transferring the mortgages. The district court granted

injunctive relief over the RTC's argument that the court lacked

subject matter jurisdiction to grant such relief. Id. at 51.

Noting that selling assets of the failed institution is squarely

within the RTC's power as a receiver, the Second Circuit concluded

that "the fact that the RTC's actions might violate some other

provision of law does not render the anti-injunction provision
 3

Section 1821(d) sets forth the procedures through which

those with potential rights to the assets of a failed institution

may present administrative claims to the RTC. Section

1821(d)(13)(D) then provides that

[e]xcept as otherwise provided in this subsection, no

court 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....

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

institution or the Corporation as receiver.

Courts have largely construed this to mean that they have no

jurisdiction to adjudicate claims to institutional assets

unless such claims were first passed through the

administrative claims process provided for in the remainder

of § 1821(d).

Courts have generally held that claims arising from

actions taken by a failed institution before the RTC's

appointment as receiver are subject to the exhaustion

requirement. Capitol Leasing Co. v. F.D.I.C., 999 F.2d 188

(7th Cir.1993) (pre-insolvency breach of lease); Meliezer

v. Resolution Trust Corp., 952 F.2d 879 (5th Cir.1992)

(pre-insolvency negligence); F.D.I.C. v. Shain, Schaffer &

Rafanello, 944 F.2d 129, 136 (3d Cir.1991) (attorney's fees

incurred before insolvency). Some circuits have required

exhaustion even where the RTC's own actions in the course of

managing the assets of failed institutions gave rise to the

claims at issue. See, e.g., Rosa, 938 F.2d 383 (where

employees brought monetary claims for RTC's failure as

receiver to make payments to pre-insolvency pension plan).

At least two circuits, however, declined to apply the

exhaustion requirement where parties brought claims to

institutional assets arising from the RTC's receivership

actions. See Resolution Trust Corp. v. Titan Financial

inapplicable." Id. at 52.

III. The Administrative Claims Procedure

The appellants also presented the following issue: whether 12

U.S.C. § 1821(d)(13)(D) requires exhaustion of the administrative

process provided for under § 1821(d)(3)-(13) as a jurisdictional

prerequisite in this case. We need not reach this issue.3
Corp., 22 F.3d 923 (9th Cir.1994) (attorney's fees claim

against institutional assets resulting from F.D.I.C. action

but based on terms of pre-insolvency guaranty); Homeland

Stores, Inc. v. Resolution Trust Corp., 17 F.3d 1269 (10th

Cir.) (where RTC allegedly violated terms of pre-insolvency

lease of property to retailer), cert. denied, --- U.S. ----,

115 S.Ct. 317, 130 L.Ed.2d 279 (1994). The case at bar

presents a situation where, as in Homeland Stores and Titan,

the RTC as receiver, not the insolvent institution, took the

action being challenged. And, unlike Homeland Stores and

Titan, here the RTC as receiver created the contract at

issue, potentially further complicating the exhaustion

analysis. As noted in the text, we need not reach this

issue. 

Even if, as appellants allege, their claims were not

susceptible to the administrative claims process and thus should

not be subject to the jurisdictional bar set forth in the

administrative exhaustion requirement, the court does not have

jurisdiction to grant the remedy appellants seek because § 1821(j)

bars such relief. Courts have held that § 1821(j)'s bar applies

even in cases where the claim before the court was not susceptible

to the administrative claims process. See Rosa, 938 F.2d at 395,

398-400. Such a rule might seem extreme because it potentially

leaves plaintiffs without a remedy against the RTC acting as a

receiver, and the appellants argue as much. The Rosa court,

however, did not hold that an order restraining or affecting the

RTC's exercise of its powers as receiver or conservator could never

issue. Id. at 400. Rosa alludes to the possibility that such an

order might issue where the RTC lacked any cognizable grounds for

an action taken or where plaintiffs had no alternative remedy. Id.

An exception to § 1821(j) need not be invoked in this case,

however, because the appellants had a potential alternative remedy:

they could have filed a claim for monetary damages.
IV. Conclusion

Section 1821(j) limits our jurisdiction such that we cannot

grant relief that would restrain or affect the RTC's exercise of

its statutory powers. As noted earlier, 12 U.S.C. § 1821(d)(2)(E)

grants the Corporation acting as receiver the power to dispose of

the assets of a failed banking institution. Thus, the RTC was

acting within its statutory powers in disposing of the mortgage

judgment at issue (and, in the course of doing so, choosing not to

sell the judgment to appellants). Although the limitation on the

court's jurisdiction in this case "may appear drastic, it fully

accords with the intent of Congress at the time it enacted FIRREA"

in that it allows the RTC "to expeditiously wind up the affairs of

literally hundreds of failed financial institutions throughout the

country." Freeman v. F.D.I.C., 56 F.3d 1394 (D.C.Cir.1995) (citing

as support H.R.Rep. No. 101-54(I), 101st Cong., 1st Sess. 291, 307,

reprinted in 1989 U.S.C.C.A.N. 86, 87, 103).

AFFIRMED.