UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

ERNEST M. FLEISCHER, Plaintiff - Appellant,

v. FEDERAL DEPOSIT INSURANCE CORPORATION, in its capacity as receiver for FRANKLIN SAVINGS ASSOCIATION, Defendant - Appellee. 95-3143

ORDER Filed May 8, 1997
Before ANDERSON, HENRY, and MURPHY, Circuit Judges.
The Federal Deposit Insurance Corporation’s motion to publish opinion is granted. The order and judgment filed December 11, 1996 is reissued nunc pro tunc as a published opinion. Entered for the Court PATRICK FISHER, Clerk of Court by: Elisabeth A. Shumaker Chief Deputy Clerk

## F I L E D United States Court of Appeals Tenth Circuit 

### DEC 11 1996 

### PATRICK FISHER Clerk PUBLISH UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

ERNEST M. FLEISHER, Plaintiff-Appellant,

v. FEDERAL DEPOSIT INSURANCE CORPORATION, in its capacity as receiver for FRANKLIN SAVINGS ASSOCIATION, Defendant-Appellee. No. 95-3143

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF KANSAS (D.C. No. 92-4018-DES)
Jeffrey J. Simon (Michael Thompson with him on the briefs), Blackwell, Sanders, Matheny, Weary & Lombardi, Kansas City, Mo., for Ap pellant. Maria Beatrice Valdez, Federal Deposit Insurance Co rporation, Washington, D.C. (Ann S. DuRoss, Assistant General Counsel, Thomas L . Hindes, Senior Counsel, and Sheila Kraft Budoff, Federal Deposit Insurance Corporation, Washington, D.C., Cynthia C. Dunham, and Emily Jane Bailey Mart in, Leigh & Laws, Kansas City, Mo. with her on the brief), for Appellee FDIC , as receiver for Franklin Savings Association.
Before ANDERSON, HENRY, and MURPHY, Circuit Judges.
HENRY, Circuit Judge.1 The original defendant in this action was the RTC, in its capacity as

conservator for Franklin. On July 17, 1992, Frankl in was placed in receivership with the RTC as receiver. On December 31, 1995, th e Federal Deposit Insurance Corporation (“the FDIC”) succeeded the RTC as recei ver of Franklin pursuant to the Resolution Trust Corporation Completion Act, 12 U.S.C. § 1441a(m)(1). The FDIC filed a Notice of Statutory Succession and Sub stitution in this court on January 17, 1996. For the sake of convenience and clarity, throughout this opinion we refer to the defendant-appellee as “the RTC.” 3 Plaintiff-appellant Ernest M. Fleischer appeals fro m the district court’s order granting summary judgment to defendant-appell ee the Resolution Trust Corporation (“the RTC”) as receiver for Franklin Savings Association (“Franklin”). 1 Mr. Fleischer brought this action against the RTC , claiming that he was entitled under his contract of employment as ch airman of the board of Franklin to unpaid compensation and severance pay. The RTC contends that certain provisions of the federal regulations gover ning savings and loan associations preclude Mr. Fleischer’s claims. We a ccept jurisdiction under 28 U.S.C. § 1291 and affirm.

I. BACKGROUND Until at least February 15, 1990, Mr. Fleischer was chairman of the board of Franklin, a savings and loan association engagedin business in Kansas. Mr. Fleischer’s family controlled the majority of Frank lin’s stock and, as chairman,4

Mr. Fleischer received $500,000.00 in annual salaryplus fringe benefits. On February 15, 1990, the Director of the Office of Thrift Supervision (“the OTS”) determined that Franklin was in an unsa fe and unsound condition and appointed the RTC as conservator of Franklin. On t he same date, the RTC appointed John L. Carr as managing agent for the Fr anklin conservatorship. By letter dated February 16, the RTC requested that Mr . Fleischer turn over any “records or other property” in his possession belon ging to Franklin. Aplt. App. at 67. On February 23, 1990, the RTC removed Mr. Flei scher from Franklin’s payroll by placing him on an unpaid leave of absenc e retroactive to February 16, 1990. In a letter dated May 2, 1990, Franklin’s di rector of human resources referred to the leave of absence beginning February 16 and informed Mr. Fleischer that his paid insurance benefits would co ntinue only through May 31,
1990. In January 1992, Mr. Fleischer brought this suit ag ainst the RTC in the United States District Court for the District of Ka nsas. Mr. Fleischer claimed that (1) because it was unclear when, or whether, he had been terminated, he was entitled under his employment contract to compensat ion from February 15, 1990 until the date he was terminated; and (2) if he had in fact been terminated, he was entitled under Franklin’s policies to severance payas a result. The RTC moved for summary judgment as to both of Mr. Fleischer’s claims, initially arguing that5

under 12 C.F.R. § 563.39(b)(5)(ii) (1991), Mr. Flei scher’s contract had terminated by operation of law on February 15, 1990, the date the conservatorship was imposed. In the alternative, the RTC argued that i t had repudiated his contract effective February 16, 1990, by placing him on unpa id leave of absence. The district court denied this initial summary judgmentmotion because, although the court opined that “the RTC’s argument has merit,” i t found that the record lacked certain threshold facts. Aplt. App. vol. II, at 52 5 (District Court Memorandum and Order dated March 31, 1995); see id. at 620 (District Court Order and Memorandum dated April 12, 1995). The parties thereafter agreed that the missing fact s were beyond dispute and requested leave to renew the RTC’s motion as supple mented with the previously omitted evidence. The court properly granted leave to file the renewed motion because it found that doing so would best secure “t he just, speedy, and inexpensive determination” of the claim, and becaus e Mr. Fleischer did not oppose the renewal. See id. ; Fed. R. Civ. P. 1. The district court granted th e RTC’s renewed motion for summary judgment, based onthe court’s interpretation of 12 C.F.R. § 563.39. Mr. Fleischer appealed the grant of summary judgment.

II. DISCUSSION Mr. Fleischer argues on appeal that the district co urt erred in granting the6

RTC’s motion for summary judgment because, he conte nds, he has raised a genuine triable issue as to both of his claims. We consider sequentially Mr. Fleischer’s claims that he is entitled to (1) compe nsation and (2) severance pay. Our review of the district court’s order granting s ummary judgment is governed by the following well-established standard: We review the grant or denial of summary judgment d e novo, applying the same legal standard used by the distri ct court pursuant to Fed. R. Civ. P. 56(c). Summary judgment is appr opriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show th at there is no genuine issue as to any material fact and that the moving p arty is entitled to judgment as a matter of law. When applying this st andard, we apply the factual record and reasonable inferences theref rom in the light most favorable to the party opposing summary judgme nt.

Wolf v. Prudential Ins. Co. , 50 F.3d 793, 796 (10th Cir. 1995) (citations omitted).

A. Compensation from February 15 until termination Mr. Fleischer argues first that the district court erred in granting summary judgment to the RTC with respect to his claim that he is entitled to receive compensation for the period from February 15, 1990, when the conservatorship was imposed, until the date of his termination. He claims to have raised a genuine triable issue as to whether he was terminat ed as of February 15. The RTC responds that the applicable federal regulations preclude this argument in two ways. First, the RTC argues that M r. Fleischer did not have an2 Sections 563.39(a) and (b), on their terms, apply o nly to contracts

between a savings association and its “officers andother employees.” See 12 C.F.R. § 563.39(a). The parties agree that Mr. Fle ischer, as chairman of the board, was an officer for purposes of these provisi ons. Aplt’s Br. at 22; Aple’s Br. at 14; see 12 C.F.R. § 561.35 (defining “officer”). 7 enforceable employment contract because it was not “in writing and . . . approved specifically by [the] association’s board of direct ors.” 12 C.F.R. § 563.39(a). Second, it contends that, if Mr. Fleischer did have an enforceable employment contract, it was terminated by operation of law on February 15. Because we hold that whatever contract Mr. Fleischer had was indeed terminated by operation of law under § 563.39(b)(5), we need not consider whether the contract met the “in writing” requirement of § 563.39(a). Part 563 of Title 12 of the Code of Federal Regulat ions sets forth regulations governing the operations of savings ass ociations. See 12 C.F.R. §§ 563.1-563.191 (1991). Section 563.39 sets forth mandatory conditions for employment contracts between a savings association and its personnel. 2 See 12 C.F.R. § 563.39(a)-(b). Section 563.39(b)(5) place s the following condition on a savings association’s employment contracts: (5) All obligations under the contract shall be term inated, except to the extent determined that continuation o f the contract is necessary of [sic] the continued operat ion of the association

. . . (ii) by the Director [of the OTS] or his or her designee, . . . when the association is8 determined by the Director to be in an unsafe or unsound condition. Any rights of the parties that have already vested, however, shall not be affected by such action. 12 C.F.R. § 563(b)(5). It is undisputed that the OTS determined Franklin t o be in an unsafe and unsound condition on February 15, 1990. Thus, unle ss the Director or his designee had determined that Mr. Fleischer’s contin ued employment was necessary to the continued operation of the association, Mr. Fleischer’s contract would have terminated on February 15. See Romines v. Great-West Life
Assurance Co. , 73 F.3d 1457, 1461 (8th Cir. 1996) (“[A]ll employ ment contracts entered by savings and loans . . . automatically te rminate in the event the institution was found unsafe.”); Aronson v. RTC , 38 F.3d 1110, 1113 (9th Cir. 1994) (denying a claim for pension benefits on the grounds that the governing employment agreement had terminated by operation of § 563.39(b)); Modzelewski
v. RTC , 14 F.3d 1374, 1378-79 (9th Cir. 1994). The distr ict court held that Mr. Fleischer had produced no evidence sufficient to ra ise a genuine issue as to whether the OTS had determined that his continued e mployment was necessary. Mr. Fleischer argues that, although no such express determination was made, he has presented sufficient evidence from whi ch a jury could infer that the RTC, as designee of the OTS, did decide that his co ntinued employment was9

necessary to the continued operation of the association. Mr. Fleischer contends that “the RTC believed that the complex nature of [ Franklin’s] operations and investment strategies required [that he] be availab le for consultation and advice.” Aplt’s Br. at 24-25. He also claims that he “conti nued performing tasks” for Franklin during the first week of the conservatorsh ip. Id. at 7. Furthermore, he asserts that the words and actions of agents of the RTC suggest that they believed they needed to take affirmative steps to terminate him, casting doubt on the RTC’s argument that he was terminated on February 1 5 by operation of law. To support these claims, Mr. Fleischer cites evidence that Franklin’s personnel list did not indicate that he was terminated; that the appointed managing agent, Mr. Carr, took steps under RTC procedures to seek autho rity from Washington to terminate him; and that he continued to receive COB RA benefits through May 1990. Id. at 23-25. None of this evidence raises a genuine issue as to whether the RTC deemed Mr. Fleischer’s continued employment necessary. Mr . Carr, the managing agent of the conservatorship, avers that “[he] made the d etermination that the continuation of any employment contract which Ernes t Fleischer may have had with [Franklin] was not necessary for the continuedoperation of the association .” Aplt. App. vol. II, at 588 (emphasis added). Mr. F leischer does not dispute that he was (1) asked to turn over his records; (2) remo ved from the payroll effective10

February 16, 1990; (3) given his COBRA notification ; and (4) not paid for the seventeen months preceding his initiation of this l awsuit. Given this barrage of rejection, we cannot discern any reasonable basis f or a determination that the RTC considered Mr. Fleischer necessary to the conti nued operation of Franklin. Cf. Federal Savings and Loan Ins. Corp. v. Quinn , 922 F.2d 1251, 1253, 1257 (6th Cir. 1991) (holding that the FSLIC “triggered the exception” to the termination provision of § 563.39 by recruiting andhiring newbank officers after a conservatorship had been imposed and emphasizing that these contracts “were negotiated by the FSLIC with the hope of securing n ew managers who could” guide the association out of its “unsafe” condition ). We conclude that Mr. Fleischer’s employment contract was terminated on F ebruary 15, 1990 by operation of § 563.39(b)(5) and that the district c ourt properly granted summary judgment to the RTC on this claim. See MacDonald v. Delta Air Lines, Inc. , 94 F.3d 1437, 1440 (10th Cir. 1996) (affirming the grant of summary judgment for the defendant because no reasonable jury could retu rn a verdict for the plaintiff).

B. Severance pay Mr. Fleischer argued in the district court that if he was legally terminated, then he is eligible to receive severance pay under Franklin’s severance pay policy. The parties agree that the severance pay policy req uires that, in order for an11

employee to be eligible, his termination must have been “based upon reduction of the work force.” Aplt’s Br. at 26; Aple’s Br. at 2 9. The district court noted that Mr. Fleischer had not specifically alleged that his termination was based on a reduction of the work force and concluded that he d id not qualify for severance pay anyway because he had been terminated by operat ion of law and not due to a reduction in the work force. On appeal, Mr. Fleischer argues that the record con tains sufficient evidence for a jury to conclude that he was indeed terminate d based upon a reduction in the work force, citing principally the RTC’s decision t o place him on an unpaid leave of absence instead of explicitly terminating him “f or cause.” See Aplt’s Br. at 26- 27. Because Mr. Fleischer did not make this argume nt in the district court, we need not consider it. See Farmers Ins. Co. v. Hubbard , 869 F.2d 565, 570 (10th Cir. 1989) (holding that “[t]his court will general ly not address issues that were not considered and ruled upon by the district court ” and stating the “narrow exceptions” to this rule). In any event, as stated above, Mr. Fleischer was terminated by operation of law. See Crocker v. RTC , 839 F. Supp. 1291, 1295-96 (N.D. Ill. 1993) (termination of an employment agre ement by operation of § 563.39(b) precludes collection of severance benefit s); see also Aronson , 38 F.3d at 1113 (denying a claim for pension benefits undera contract that was terminated12

by operation of § 563.39(b)). Our de novo review o f the record reveals no evidence that he was laid off for purposes of work force reduction.

III. CONCLUSION For the reasons fully discussed above, that is, that Mr. Fleischer raised no genuine issue either as to whether he was terminate d by operation of law on February 15, 1990 or as to whether he was eligible for severance pay, we AFFIRM the order of the district court.