*

Honorable Harlington Wood, Jr., Senior U.S. Circuit Judge for the Seventh Circuit, sitting by

designation. 

 1

The RTC filed this suit for the nominal plaintiff and defended against the Pauls'

counterclaims. Although the RTC's statutory authority expired during this litigation, and the

Federal Deposit Insurance Corporation formally succeeded to the RTC's interest in ongoing

cases, 12 U.S.C. § 1441a(m)(1), for clarity, we refer to the plaintiff/counter-defendant-appellee

as the RTC. 

United States Court of Appeals,

Eleventh Circuit.

No. 96-4177.

Warren J. STAMM, Receiver.

CenTrust Savings Bank, a savings and loan association organized under the laws of the USA,

under conservatorship of the Resolution Trust Corporation, Plaintiff-Counter-Defendant-Appellee,

v.

David L. PAUL, Sandra R. Paul, Defendants-Counter-Claimants-Appellants,

Geomatic Designs, Incorporated, The George Hyman Construction Company, M. Ecker &

Company of Florida, Incorporated, Miami Beach Awning Company, La Gorce Island Association,

Incorporated, Robert Sasso, Jack Logan Wilson, Blackwell Plumbing, et al., Defendants.

Sept. 9, 1997.

Appeal from the United States District Court for the Southern District of Florida. (No. 90-1052-CIVDLG), Donald L. Graham, Judge.

Before EDMONDSON, Circuit Judge, and KRAVITCH and WOOD*

, Senior Circuit Judges.

KRAVITCH, Senior Circuit Judge:

David L. Paul and Sandra R. Paul (collectively, "the Pauls") appeal the district court's orders

granting: (1) final judgment to the Resolution Trust Corporation ("RTC") on its claim for

foreclosure of the Pauls' residential mortgage; and (2) summary judgment to the RTC on the Pauls'

counterclaims for trespass, breach of contract and deprivation of due process.1 As to the first order,

the Pauls contend that the district court reversibly erred when it ruled that the RTC complied with

the conditions precedent of the mortgage upon which it sought to foreclose. For their second

assignment of error, the Pauls argue that the district court mistakenly determined that it lacked

jurisdiction over the Pauls' countersuit based on the Pauls' failure to exhaust administrative remedies
2

as required by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989

("FIRREA" or "the Act"), Pub.L. No. 101-73, 103 Stat. 183 (codified as amended in scattered

sections of 12 U.S.C.). They insist that late-arising, post-receivership claims, such as they have

asserted in this case, fall outside the reach of the RTC's administrative review process. We reject

the Pauls' arguments on both points and affirm the orders of the district court.

I.

The following facts are undisputed: David Paul chaired the board of directors of CenTrust

Bank when it failed in 1990. At that time, CenTrust Bank held a $6,000,000 mortgage on the Pauls'

residence. In response to CenTrust Bank's difficulties, the Office of Thrift Supervision set up a plan

which transferred some of CenTrust Bank's assets and liabilities, including the Pauls' mortgage, to

the newly-created CenTrust Federal Savings Bank which the RTC superintended. During this

reorganization, the Pauls failed to make a required payment on their mortgage. Pursuant to the terms

of the mortgage agreement, the mortgagee (by succession, the RTC) had the right to protect the

value of the property; however, pending an acceleration of the mortgage upon notice to the Pauls

of their right to cure the default, the RTC could not take possession of the property unless the Pauls

abandoned it. At some point prior to or during the 30-day, right-to-cure interval, the Pauls moved

out of the residence, but during all relevant times they continued intermittently to enter the property

and to maintain service personnel on site. After the Pauls' default, but before the expiration of the

right-to-cure period, the RTC hired security guards to patrol both the street in front of and the

waterfront behind the residence.

II.

The RTC filed suit against the Pauls seeking to foreclose upon their residential mortgage;

the Pauls countersued for trespass, breach of contract and deprivation of due process. The RTC

moved for summary judgment on the Pauls' counterclaims. The district court orally granted that

motion before the case went to trial. After a bench trial, the district court received proposed findings

of fact and conclusions of law and, thereafter, entered final judgment in favor of the RTC on its
 2

The RTC properly instituted this suit in federal court, see 12 U.S.C. §§ 1819; however,

except in limited instances, state law continues to govern the determination and vindication of

the rights the RTC has inherited from failed financial institutions, see O'Melveny & Myers v.

Federal Deposit Ins. Corp., 512 U.S. 79, 86, 114 S.Ct. 2048, 2054, 129 L.Ed.2d 67 (1994). 

Accordingly, the parties do not contend that federal decisional rules apply to the RTC's

foreclosure claim; instead, they agree that the substantive law of Florida controls. 

 3

Appellants' Br. at 26. 

3

foreclosure claim. The district court then memorialized by written order its prior oral disposition

of the counterclaims. This appeal followed.

 The district court's conclusions of law and findings of fact underlying its order of final

judgment for the RTC on the foreclosure claim are subject to de novo and clear error review,

respectively. See, e.g., National Shipping Co. of Saudi Arabia v. Omni Lines, Inc., 106 F.3d 1544,

1545 (11th Cir.1997). The district court's grant of summary judgment against the Pauls on their

counterclaims due to their failure to exhaust administrative remedies raises a question of subject

matter jurisdiction that we examine de novo. See McMillian v. Federal Deposit Ins. Corp., 81 F.3d

1041, 1045 (11th Cir.1996). In this light, we consider the two distinct aspects of the Pauls' appeal.

A.

 The Pauls argue that the district court erroneously granted final judgment to the RTC on its

foreclosure claim. They base this contention on the assertion that the RTC failed to satisfy the

conditions precedent of the mortgage agreement as usually required for a foreclosure action under

Florida law. See generally Voght v. Galloway, 291 So.2d 579, 581 (Fla.1974).2

 Specifically, the

Pauls maintain that the RTC's agents entered the property in question prior to the end of the

right-to-cure period, and that the RTC, thereby, "breached the express terms of the loan documents,

barring its recovery in the foreclosure action."3 The RTC denied that it violated the terms of the

mortgage contract and the district court agreed.

 The Pauls' argument on this point revolves around the conduct of certain security guards.

The district court determined that the RTC hired the security personnel in question to patrol outside

the Pauls' residence for the contractually allowed purpose of protecting the property. It also found
 4

The fact that the security detail that the RTC engaged ultimately may have failed to prevent

damage to the Pauls' residence does not convert the RTC's decision to retain the guards into a

violation of the mortgage agreement. The provision of the contract at issue, read reasonably,

authorized the RTC to take steps designed to protect the property; it did not condition the RTC's

right to act upon its ability to make a future showing that its efforts succeeded. Given that the

RTC could not take full control over the premises at the relevant time, we conclude that its

posting of guards constituted a good-faith effort to protect the property, as permitted by the

mortgage agreement. 

4

that the RTC expressly had directed the guards with whom it contracted not to trespass at the Pauls'

residence during the relevant period of time. The record reveals no clear error as to these factual

findings by the district court and we detect no legal error in its construction of the mortgage

agreement.4

The Pauls point out that at least one guard under contract with the RTC actually entered onto

the residential compound. The district court indeed found that one member of the waterfront

security patrol retained by the RTC wrongfully tied his boat to the Pauls' dock and fell asleep on

their property. As the district court noted, however, the record indicates that the individual in

question so acted against the RTC's direct instructions. As a result, the district court refused to

impute to the RTC that trespass. The Pauls insist that Davis v. Charter Mortgage Co., 385 So.2d

1173 (Fla.App. 4th Dist.1980), makes the RTC liable for the guard's conduct. They further argue

that, as the party responsible for the trespass, the RTC breached the mortgage contract and, thereby,

lost the right to foreclose.

Assuming, arguendo, that such a nominal breach of a mortgage contract as that alleged by

the Pauls would impair a mortgagee's right to seek foreclosure under Florida law, we still reject the

Pauls' assignment of error on this point. The Davis court declared that, in this context, a principal

may be charged with the unauthorized acts of an independent contractor only if she "is hired to do

an act that constitutes a tort...." Id. at 1174. The RTC contends that because it explicitly directed

the security personnel at issue to remain off the mortgaged property, it cannot be found to have hired

them to commit an act that would qualify as a trespass or some other related tort. The RTC insists

that, therefore, it has no derivative liability under Davis. We agree. The Pauls make much of the
 5

As a result, even if we construed the record to support an inference that the guards in

question committed other technical trespasses during the relevant time period, the RTC would

have incurred no vicarious liability for such incidents. 

5

district court's description of the guards' presence outside the residence as "somewhat intimidating

and intrusive in nature," CenTrust Fed. Savings Bank v. Paul, No. 90-1052-CIV-Graham, slip op.

at 16 (S.D.Fla. July 12, 1995), but they have failed to identify any evidence that would indicate that

the RTC engaged the security personnel to perform an act that constituted a tort.5

The foregoing analysis leads us to conclude that the RTC did not breach its mortgage

agreement with the Pauls. In light of that conclusion, we discern no error by the district court as to

its order of foreclosure in favor of the RTC.

B.

 In response to the RTC's complaint in this case, the Pauls countersued for trespass, breach

of contract and deprivation of due process. The district court ruled that it could not entertain those

counterclaims because the Pauls had failed to exhaust the relevant, statutorily-mandated,

administrative process. Resolution of the Pauls' challenge to this holding requires a close

examination of certain of FIRREA's provisions.

In enacting FIRREA, Congress anticipated that, as a receiver for failed lending entities, the

RTC would face numerous claims from various parties. Accordingly, it sought to reduce the volume

of formal litigation that otherwise would have resulted by providing for administrative review of

such claims by the RTC before judicial proceedings could commence. See 12 U.S.C. §§

1821(d)(3)-(13). The Act's exhaustion proviso applies to:

(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 [RTC] has been appointed

receiver, including assets which the [RTC] may acquire from itself as such receiver; or

(ii) any claim relating to any act or omission of such institution or the [RTC] as receiver.

12 U.S.C. § 1821(d)(13)(D) (emphasis added). This court has held that this "statutory exhaustion

requirement [ ] generally applies to post-receivership as well as pre-receivership claims." Damiano

v. Federal Deposit Ins. Corp., 104 F.3d 328, 333 (11th Cir.1997) (emphasis added). In this case,
6

we must determine whether FIRREA's administrative exhaustion prerequisite, generally applicable

to post-receivership claims, bars the Pauls' particular, post-receivership claims.

Post-receivership claims encompass at least two rough classes: (1) claims related to conduct

by the failed financial institution that the aggrieved party neglects to assert until after the RTC

assumes control over the lending entity; and (2) claims based on the RTC's actions as receiver. The

Pauls' counterclaims fall in the second category. This court recently recognized a split in the circuits

on the question of whether the Act's exhaustion requirement applies in such cases, but reserved

decision of the issue. See RPM Inv., Inc. v. Resolution Trust Corp., 75 F.3d 618, 621 & n. 3 (11th

Cir.1996). Because this appeal turns upon that previously deferred question, we now must choose

which line of authority to follow.

Rosa v. Resolution Trust Corp., 938 F.2d 383 (3d Cir.), cert. denied, 502 U.S. 981, 112 S.Ct.

582, 116 L.Ed.2d 608 (1991), and Homeland Stores, Inc. v. Resolution Trust Corp., 17 F.3d 1269

(10th Cir.), cert. denied, 513 U.S. 928, 115 S.Ct. 317, 130 L.Ed.2d 279 (1994), stand as the two key

cases on point. In Rosa, the RTC, as receiver, terminated a benefit plan at a failed financial

institution and an employee enrolled in the program sued without seeking relief through the RTC.

The Third Circuit ruled that the jurisdictional bar underlying the exhaustion requirement precluded

courts from entertaining the claim. See Rosa, 938 F.2d at 392-93. In Homeland Stores, the plaintiff

held a commercial lease from a financial institution that forbade the lessor from renting adjacent

space to competing retailers. When the lending entity failed, the RTC entered into a tenancy

agreement with another business allegedly in violation of the first store's lease. The Tenth Circuit

held that the lessee's failure to file a claim directly with the RTC did not bar a suit for breach of the

lease because FIRREA's administrative scheme only enabled the RTC to deal with claims by

creditors of failed financial institutions, not with claims based on the RTC's post-receivership

conduct. See Homeland Stores, 17 F.3d at 1274-75.

The RTC objects to the Tenth Circuit's approach on the ground that it conflicts with the plain

language of FIRREA's exhaustion provision, which explicitly refers to "any claim relating to any
 6

The decision of the Heno case originally appeared at 996 F.2d 429 (1st Cir.1993) ("Heno I

"). In Heno I, the First Circuit questioned whether FIRREA's administrative exhaustion

requirement applied to post-receivership claims that arose beyond what it construed as the

statutory bar date for administrative claims because such an approach might preclude both

administrative and judicial review. The Tenth Circuit relied upon the Heno I court's analysis in

Homeland Stores. The First Circuit, thereafter, withdrew Heno I and superseded it with Heno II.

The district court correctly reasoned that the First Circuit's ultimate disposition of the Heno case

undermined the persuasiveness of Homeland Stores. 

7

act or omission of ... the [RTC] as receiver." 12 U.S.C. § 1821(d)(13)(D)(ii). The Tenth Circuit

acknowledged that this passage appeared to encompass claims based on the RTC's alleged,

post-receivership misdeeds, but it concluded that the administrative process set out elsewhere in the

Act prevented the RTC from providing administrative review for claims based on its own actions

as receiver. See Homeland Stores, 17 F.3d at 1274 & n. 5 (discussing FIRREA's time limits for

filing administrative claims and noting that, because they essentially run from date the RTC becomes

receiver, administrative claims based on the RTC's conduct as receiver often would be time-barred).

The Pauls reiterate this argument. The RTC counters that it has construed FIRREA to allow it to

address administratively such late-arising, post-receivership claims and that, therefore, the district

court properly enforced the jurisdictional bar in the instant case.

In support of this contention, the RTC cites Heno v. Federal Deposit Ins. Corp., 20 F.3d

1204, 1208-10 (1st Cir.1994) ("Heno II ") (deferring to the RTC's view that FIRREA authorized

administrative review of late-arising claims).6

 In related, parallel litigation between David Paul and

the RTC, this court cited the Heno II court's ruling that the RTC's internal procedures legitimately

could accommodate these type of post-receivership administrative claims, but we disposed of that

case on another ground in part because the RTC failed to clarify its position. See Paul v. Federal

Deposit Ins. Corp., 91 F.3d 110, 113 (11th Cir.1996) ("If the [RTC] had alerted us to regulations or

a manual of procedures pertaining to [FIRREA's administrative claim schedule], these administrative

provisions might have helped us understand how that section is relevant...."). Upon further review

of FIRREA and the pertinent administrative materials, we now adopt the First Circuit's view that the
8

RTC's policies grounded upon its construction of FIRREA provide the RTC a sufficient basis to

review claims, such as the Pauls assert.

The Act states that the RTC "may, as receiver, determine claims in accordance with the

requirement of this subsection and regulations prescribed [by the RTC]." 12 U.S.C. § 1821(d)(3).

The cited subsection mandates that the RTC notify potential claimants by publication and mail that

it will entertain accrued claims filed within 90 days of the notice. 12 U.S.C. §§ 1821(d)(3)(B)-(C).

FIRREA further provides that "claims filed after the date specified in the notice published under the

[above-cited subsection] shall be disallowed...." 12 U.S.C. § 1821(d)(5)(C)(i). Based on these

portions of the Act, the Homeland Stores court held and the Pauls now contend that the RTC has no

choice but to disallow as untimely claims, such as the instant counterclaims, that arise beyond the

90-day window that follows shortly after the RTC's appointment as receiver.

As the RTC points out, however, this view ignores an ambiguous exception to FIRREA's

otherwise rigid administrative claims schedule. That exception refers, in pertinent part, to cases

where a "claimant did not receive notice of the appointment of the receiver in time to file such claim

before such date." 12 U.S.C. § 1821(d)(5)(C)(ii)(I). According to the Pauls, this exception pertains

only to situations in which a claimant has notice of the RTC's appointment as receiver after the

above-cited, 90-day administrative claims period has run. We agree with the RTC, however, that

the language of the exception is too ambiguous to bear only the construction urged by the Pauls.

The RTC essentially has interpreted the phrase, "in time to file such claim," within the

exception to mean "at a time when the claimant could have filed such a claim." According to the

RTC, therefore, where, as here, a claim arises after the initial 90-day, claim-filing period, the

claimant did not receive notice of the RTC's appointment at a time when he or she could have filed

that claim and thus, the exception to the administrative bar date applies. We concur with the First

Circuit's conclusion that although the RTC's "proposed interpretation is far from the most natural

reading of subsection 1821(d)(5)(c)(ii) itself, we cannot say that it [fails to] represent a "permissible'

reading of an ambiguous provision viewed in the broader context of the statute as a whole under the
 7

That regulation remained in effect until November 5, 1990, when the FDIC removed it as

unnecessary in light of FIRREA's provisions mandating administrative exhaustion. See Removal

of Regulations Transferred from Fed. Savings and Loan Ins. Corp., 55 Fed.Reg. 46495, 46496

9

deferential standard required by [Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.,

467 U.S. 837, 844, 104 S.Ct. 2778, 2782-83, 81 L.Ed.2d 694 (1984) ]." Heno II, 20 F.3d at 1209.

Like the First Circuit, we draw support for our decision to accept the RTC's approach and the

resulting expanded range of claims subject to administrative process from the fact that Congress

explicitly delegated authority to the RTC to develop claims procedures and that it expressed a clear

intent that the RTC and not the courts serve as the first line of review under FIRREA. See id.

 At oral argument, the Pauls asserted that, regardless of the merits of the RTC's construction

of FIRREA's administrative review scheme advanced in this case, the RTC previously had failed to

inform potential claimants that it would entertain administrative claims related to its conduct as a

receiver. As a result, the Pauls insisted that this court should not treat their counterclaims as subject

to the administrative exhaustion requirement. The Pauls did not articulate this specific contention

in their briefs and therefore, pursuant to well-established authority, we have no obligation to

consider it. See, e.g., Bigby v. United States Immigration and Naturalization Serv., 21 F.3d 1059,

1063 n. 6 (11th Cir.1994). Notwithstanding this fact, we note that the Pauls' argument on this point

lacks merit. To the extent FIRREA's provision that claimants should exhaust administrative

remedies for "any claim relating to any act or omission of ... the [RTC] as receiver," 12 U.S.C. §

1821(d)(13)(D)(ii), insufficiently notified the Pauls that they had to present their claims to the RTC

before seeking judicial relief, applicable administrative regulations and policy statements afforded

them further guidance.

At the time the RTC allegedly committed the acts upon which the Pauls base their

counterclaims (March and April of 1990), the regulations of the Federal Deposit Insurance

Corporation ("FDIC"), which FIRREA made applicable to the RTC, see 12 U.S.C. § 1441a(a)(7),

directed all claimants aggrieved by the actions of financial institution receivers to seek

administrative relief before going to court. See 12 C.F.R. Pt. 393 (1990).7

 Moreover, on March 7,
(1990). 

 8

The Pauls moved for permission to file an amended answer containing the counterclaims at

issue on March 7, 1994, but the district court did not grant that motion until April 5, 1994, at

which time the counterclaims actually were filed. 

10

1994, a date preceding the filing of the Pauls' countersuit in this case,8 the RTC issued an Interim

Statement of Policy Regarding Procedures To Be Used with Regard to Claims Based Upon Acts or

Omissions of the Receiver, 59 Fed.Reg. 10663 (1994). In that statement, the RTC confirmed that

it did not consider late-arising claims "to be subject to the published bar date for filing claims with

the [RTC] as receiver and set[ ] forth the circumstances under which the [RTC] will consider these

claims to be timely filed." Id. The RTC further indicated therein that claimants who do not receive

notice from the RTC of a potential claim can file an administrative claim at any time up to 30 days

after the RTC "publishes notice of its intention to terminate the receivership." Id. at 10664. See also

Heno II, 20 F.3d at 1210 (appending RTC form designated "for claims discovered after expiration

of the [administrative] bar date"). Accordingly, both when the acts underlying the counterclaims

occurred and when the Pauls sought judicial relief, they had constructive notice, not only by statute,

but also pursuant to administrative edict, that the RTC made such review available and that they

should pursue it before filing suit.

 In summary, then, we defer to the RTC's construction of FIRREA's provisions related to

administrative claims. This decision alleviates the potential internal inconsistency within the Act

that led the Tenth Circuit to look beyond the plain language of the jurisdictional bar. With that

concern removed, we join the Third Circuit in holding that claimants, such as the Pauls, aggrieved

by the actions of the RTC as receiver must exhaust their administrative remedies before they seek

relief in court. The district court, therefore, properly granted judgment as a matter of law to the RTC

on the Pauls' counterclaims because it lacked subject matter jurisdiction over them.

III.

For all these reasons, the district court's orders of final judgment in favor of the RTC on its

foreclosure claim and summary judgment on the Pauls' counterclaims are AFFIRMED.
11