___________

No. 94-3780

___________

Tri-State Hotels, Inc.; Davcor *

Motor Inns, Inc.; Elite Hotel *

Associates, Inc.; Turnpike *

Motor Inns, Inc.; HMS Property *

Management Group, Inc.; *

Commerce Hotels, Inc.; Toledo *

Motor Inns, Inc.; Ottawa Motor *

Inns, Inc.; Amarillo Hotel *

Associates, Inc.; Economy *

Lodging Systems, Inc.; W. David *

Temel; Frank Leonetti, Jr., *

*

Appellants, *

* Appeal from the United States

v. * District Court for the 

* Western District of Missouri.

Federal Deposit Insurance *

Corporation, as Receiver for *

Merchants Bank Inc., and Metro *

North State Bank, Inc.; The *

Merchants Bank, Inc.; Metro *

North State Bank, Inc., *

*

Appellees, *

*

Eugene J. Pereira; Bradley W. *

Kreiger; Kirsten H. Mills; *

Marilyn J. Feingold, Co-Executor*

of the Estate and Last Will and *

Testament of Frank S. Morgan; *

Mark Morgan, Co-Executor of the *

Estate and Last Will and *

Testament of Frank S. Morgan; *

Thomas S. Morgan, Co-Executor *

of the Estate and Last Will and *

Testament of Frank S. Morgan; *

Jeff Johnson; David B. Feingold,*

*

Defendants, *

*

American Hotel Management *

Associates, Inc., *

*

Receiver, *

*
 The Honorable Dean Whipple, United States District Judge 1

for the Western District of Missouri.

-2-

Richard K. Rousch; Nassau *

Communications, Inc., *

*

Proposed Parties. *

__________

 Submitted: December 15, 1995

 Filed: March 21, 1996

__________

Before MAGILL, BRIGHT, and MURPHY, Circuit Judges.

___________

MAGILL, Circuit Judge.

Tri-State Hotels and other appellants (collectively, Tri-State)

appeal the district court's dismissal of defendant Federal Deposit

1

Insurance Corporation (FDIC), as receiver for two failed banks, for lack

of subject matter jurisdiction due to Tri-State's failure to exhaust

administrative remedies. Because prior administrative review of claims

against the FDIC is a prerequisite to judicial review of such claims, see

the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA),

codified in relevant part at 12 U.S.C. § 1821(d)(3)-(13) (1994), we affirm.

I.

During the period from 1988 to 1992, Tri-State entered into various

agreements with Merchants Bank (Merchants) and Metro North State Bank

(Metro North) to purchase and finance certain distressed motel and hotel

properties. As part of the agreement, Merchants and Metro North assured

Tri-State that they would provide additional refinancing to Tri-State when

requested, and they agreed to limit Tri-State's liability in the event of

default on any loans
 The FDIC was also appointed receiver for Metro North, which 2

went into receivership on November 13, 1992.

-3-

made in connection with the properties. 

Merchants consolidated the loans, and in June 1992, it agreed to

invest an additional $1 million in equity in the arrangement and to

refinance $1.3 million of the loans. Merchants breached the agreement

during the summer of 1992 by failing to complete the refinancing and

failing to provide the promised funding, but it continued to assure TriState that it would perform all of its obligations. Despite these

assurances, Merchants never fulfilled its obligations, and on December 2,

1992, Tri-State mailed notice to Merchants that it was revoking the

refinancing agreement due to Merchants' breach of the agreement.

Merchants went into receivership on November 20, 1992, and the FDIC

was appointed receiver. In December, January, and February, the FDIC

2

published notice in the Kansas City Star newspaper that creditors had until

March 16, 1993, to present to the FDIC any claims they had against

Merchants. The FDIC also mailed notice of the receivership to all

creditors of Merchants; however, because Tri-State is a debtor of

Merchants, notice was not mailed to Tri-State. Although Tri-State had

actual knowledge of the receivership, it did not file a timely claim with

the FDIC for the breach of contract by Merchants.

In August 1993, Tri-State and the FDIC began a review of Tri-State's

obligations under the agreements between Tri-State and Merchants. This

review consisted of face-to-face meetings and numerous phone calls and

correspondence between Tri-State and the FDIC. On February 17, 1994, the

FDIC finished its review and analysis of the agreements and concluded that

the loan agreements were enforceable. At no time did the FDIC inform TriState that it must present its claims to the FDIC under a formal

administrative
 The KLI lawsuit, still pending before the district court, 3

was later transferred to the Northern District of Ohio on

December 12, 1994.

-4-

review process. 

On February 18, 1994, Tri-State filed a complaint in the Western

District of Missouri against the FDIC, Merchants, Metro North, and several

officers of the banks (the Tri-State lawsuit). Tri-State sought three

different forms of relief: (1) declaratory relief adjudicating the

respective rights and obligations of the parties under the purchase

agreements and loan documents; (2) rescission of the purchase agreements

and loan documents; and (3) damages for breach of contract, breach of the

duty of good faith, breach of fiduciary obligations, and fraud.

On July 13, 1994, the district court dismissed the FDIC, Merchants,

and Metro North for lack of subject matter jurisdiction. The court noted

that under FIRREA, a claimant must exhaust the administrative review

process before a court has jurisdiction to hear the claims. 12 U.S.C.

§ 1821(d)(6)(A), (d)(13)(D). Because Tri-State did not present its claims

to the FDIC for administrative review during the ninety-day period ending

March 16, 1993, dismissal was appropriate.

On September 20, 1994, the FDIC filed suit in the Western District

of Missouri, FDIC v. Knights Lodging, Inc. (the KLI lawsuit), against

certain appellants, asserting a claim for failure to repay the debt

obligations and alleging that appellants had fraudulently transferred funds

to avoid paying the FDIC. 

The district court consolidated the KLI lawsuit and the Tri-State

lawsuit on September 23, 1994. On October 18, 1994, the district court

dismissed the remaining defendants in the original Tri-State lawsuit. On 3

November 9, 1994, Tri-State appealed the
 Because the individual defendants in the Tri-State lawsuit 4

were not dismissed until October 18, the July 13 order dismissing

the FDIC, Merchants, and Metro North was not a final order for

purposes of 28 U.S.C. § 1291 appellate jurisdiction until October

18. Therefore, this appeal is timely. We note that Tri-State

moved to have the July 13 order certified as final and appealable

pursuant to Federal Rule of Civil Procedure 54(b), but this

motion was denied by the district court on August 5, 1994.

-5-

July 13 dismissal of the FDIC. It is this appeal that is presently before 4

the Court.

II.

The FDIC argues that this Court lacks jurisdiction to hear this

appeal under 28 U.S.C. § 1291 because the July 13 order dismissing the FDIC

as a defendant was not an appealable final order when appeal was taken on

November 9. The FDIC notes that the KLI lawsuit, which had been

consolidated with the Tri-State lawsuit, was still pending before the

district court when appeal was taken in the Tri-State lawsuit. The FDIC

contends that an open question in the consolidated suit still existed,

precluding appeal in the absence of Rule 54(b) certification. 

We disagree with the FDIC. Only when "two actions [are] really

consolidated and merged into one," Mendel v. Production Credit Ass'n of the

Midlands, 862 F.2d 180, 182 (8th Cir. 1988), does the presence of an open

question in one of the formerly separate suits preclude appeal on any issue

in the consolidated suit. Id.; see also Soo Line R.R. v. Escanaba & Lake

Superior R.R., 840 F.2d 546, 548 (7th Cir. 1988). However, when "technical

consolidation into a single action [does] not occur, but rather [the

consolidation is] an arrangement for joint proceedings and hearings, for

convenience," Mendel, 862 F.2d at 182, then each suit retains its

individual nature, and appeal in one suit is not precluded solely because

the other suit is still pending before the district court. Id.; see also

Soo Line, 840 F.2d at 548.
 Our appellate consideration would be made considerably 5

easier if the district court could regularly state on the record

whether consolidated cases have been "formally merged, for all

purposes," or whether the consolidation is "informal, for

convenience only." Such a statement would provide a very useful

bright line in this area. See, e.g., Ivanov-McPhee v. Washington

Nat'l Ins. Co., 719 F.2d 927, 930 n.2 (7th Cir. 1983) (requesting

that district courts state on the record whether consolidated

cases have been merged "for all purposes").

 The district court did mention that both suits involve the 6

determination of rights of the parties with regard to the same

properties. Order of Consolidation at 2-3 (reprinted in

Appellee's Addendum at 7-8). The FDIC argues that this language

implies that the court intended to formally merge the two related

litigations into one suit. However, we believe that the district

court offered the fact of similarity between the cases merely as

support for its consolidation for convenience.

-6-

Although the district court did not clearly state whether the two

lawsuits were formally merged for all purposes, it appears that they were

merged for the purposes of convenience only and were not formally merged.5

While the district court grouped both suits under a single docket number,

this grouping appears to have been only to "simplify the filing process."

Order of Consolidation at 3 (reprinted in Appellee's Addendum at 8).

Further, the district court referred to future filings "in these two

suits," and it noted that consolidation "will best use scarce judicial

resources" and was to "accommodate the convenience of the parties." Id.6

Finally, in dismissing the remaining defendants in the Tri-State lawsuit

on October 18, 1994, the district court stated that there was "still other

related litigation pending with this same case number." Order of Dismissal

at 1 n.1 (reprinted in Appellee's Addendum at 9) (emphasis added). That

the district court termed the KLI lawsuit "related litigation" rather than

"other matters in this case" indicates that the two lawsuits, while

consolidated, were never merged for all purposes and they retained their

individual identity.

Because the two lawsuits were merged for the sake of
 Under this review process, the FDIC must first publish a 7

notice "to the depository institution's creditors" specifying a

date by which claims must be presented for review, not less than

90 days after publication. 12 U.S.C. § 1821(d)(3)(B). In

addition, the FDIC must mail a "similar" notice to "any creditor

shown on the institution's books." 12 U.S.C. § 1821(d)(3)(C). 

The FDIC has 180 days after a claim is filed to allow or disallow

it. 12 U.S.C. § 1821(d)(5)(A). Claims not timely filed must be

disallowed unless "the claimant did not receive notice of the

appointment of the receiver in time to file such claim before

such date"; in that case, a late-filed claim "may be considered

by the receiver," provided the claim is "filed in time to permit

payment." 12 U.S.C. § 1821(d)(5)(C).

-7-

convenience, the Tri-State lawsuit was immediately appealable on October

18, 1994, when the remaining defendants in that suit were dismissed.

Accordingly, we have jurisdiction under 28 U.S.C. § 1291 to hear this

appeal.

III.

Under FIRREA, Congress established a comprehensive claims review

process for claims against the assets of failed banks held by the FDIC as

receiver. See 12 U.S.C. § 1821(d)(3)-(13). Claimants must initially

submit their claims to the FDIC for review, thus "enabl[ing] the FDIC to 7

dispose of the bulk of claims against failed financial institutions

expeditiously and fairly . . . without unduly burdening the District

Courts." H.R. Rep. No. 101-54(I), 101st Cong., 1st Sess., at 418-19,

reprinted in 1989 U.S.C.C.A.N. 86, 215.

Judicial review of claims governed by FIRREA is contingent on the

completion of this administrative review process. Section 1821(d)(13)(D)

states that, except as otherwise provided, no court shall have jurisdiction

over

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 [FDIC] has been appointed

receiver . . . . 
-8-

The only exception is found in § 1821(d)(6)(A), which provides that courts

have jurisdiction over claims that have first been presented to the FDIC

under its administrative review process. Read together, these two

provisions mandate that "administrative exhaustion is required before any

court acquires subject matter jurisdiction over a claim" against the FDIC

as receiver for a failed thrift. Bueford v. Resolution Trust Corp., 991

F.2d 481, 484 (8th Cir. 1993). 

Tri-State did not submit its claims to the FDIC for formal review.

Nevertheless, Tri-State argues that the jurisdictional bar is not

applicable because (1) Tri-State's claims arose postreceivership, as a

result of management decisions made by the FDIC, and so the claims are not

covered by this section, and (2) this section applies only to creditors

with monetary claims and not to debtors, especially those seeking

declaratory and rescissory relief. 

Further, Tri-State contends that if administrative review was

required, the failure to undergo such review is excused because (1) the

extensive prelitigation discussions and negotiations between Tri-State and

the FDIC satisfies this requirement because the FDIC has undertaken the

review process contemplated by 12 U.S.C. § 1821(d), and (2) the FDIC's

failure to provide proper notice, and the FDIC's actions in affirmatively

misleading Tri-State regarding the notice procedures, amounts to a waiver

by the FDIC, estopping the FDIC from asserting the jurisdictional bar.

None of these contentions has merit.

A.

Tri-State contends that the administrative review requirement does

not apply to it because its claims against Merchants and the FDIC arose

postreceivership, as a result of management decisions made by the FDIC.

Tri-State concedes that the underlying breach of
 We note that at least one other circuit has reached a 8

conclusion contrary to Homeland Stores, holding that FIRREA's

jurisdictional bar does encompass a claim arising from

postreceivership actions of the RTC. See Rosa v. RTC, 938 F.2d

383, 392 (3d Cir.), cert. denied, 502 U.S. 981 (1991). Because

these cases are distinguishable from the instant case, we need

not here decide which of our sister circuits has correctly

resolved this issue.

-9-

contract and fraud that led to this lawsuit occurred before the FDIC took

over as receiver. However, Tri-State contends that its claims arose only

after the FDIC, as receiver, refused to honor the refinancing agreements.

Tri-State relies on Homeland Stores, Inc. v. Resolution Trust Corp.,

17 F.3d 1269 (10th Cir.), cert. denied, 115 S. Ct. 317 (1994), which held

that the jurisdictional bar of § 1821(d)(13)(D) does not apply to claims

arising out of management actions of the Resolution Trust Corporation (RTC)

after taking over a depository institution. In Homeland Stores, the RTC, 8

as part of its receivership, took over management of Belmont Square

shopping center. Homeland Stores, a tenant in the shopping center, was

guaranteed in its lease that the anchor tenant of the center would be of

a specific character and would be "acceptable" to Homeland. In selecting

a new, impermissible anchor tenant, RTC breached this lease agreement with

Homeland. The court accepted jurisdiction, noting that when claims arise

solely from RTC's management of the receivership asset and bear no relation

to the failed institution for which the RTC was receiver, FIRREA does not

apply. Id. at 1275. The court reasoned that such actions, because they

could arise at any time after the RTC takes over as receiver (and possibly

well after the claims bar date), were not susceptible to the standard

administrative review provided for by FIRREA.

Homeland Stores does not apply to the situation presented in this

case. Although Tri-State, in an attempt to come under the Homeland Stores

jurisdictional exception, asserts that it is solely
 Permitting Tri-State to recharacterize its claims as such 9

would, as appellees note, effectively eviscerate the claims

process, because every plaintiff could (and would) simply

challenge the FDIC's failure to reverse the failed bank's

fraudulent actions rather than challenge the bank's fraudulent

actions directly. Thus, in order to effectuate the stated

congressional purpose in enacting FIRREA, namely "enabl[ing] the

FDIC to dispose of the bulk of claims against failed financial

institutions expeditiously and fairly," H.R. Rep. No. 101-54(I),

at 418-19, reprinted in 1989 U.S.C.C.A.N. at 215, courts should

look to the underlying substance of the challenged events. If

plaintiff brings an action against the assets of the failed

institution, then FIRREA's exhaustion requirement is applicable,

regardless of how plaintiff styles its claim.

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challenging the management decisions of the FDIC (that the FDIC, in

managing the failed banks, did not remedy the breach of contract and fraud

and did not honor the loan obligations), the genesis of its claim is the

prereceivership misconduct by the failed banks. Unlike in Homeland Stores,

in this case the actions taken by the FDIC as receiver cannot be separated

from the underlying prereceivership misconduct by the failed banks.9

Because Tri-State asserts prereceivership claims against the assets of

Merchants, arising out of the misconduct of Merchants, Tri-State was

required to submit its claims to the FDIC for administrative review.

B.

Tri-State next contends that the administrative review process is not

applicable to it because this process only applies to creditors with claims

against the assets of the failed institutions and not to debtors,

especially those seeking declaratory and rescissory relief. We reject this

contention.

The great weight of authority holds that FIRREA requires debtors as

well as creditors to undergo the administrative review process. See, e.g.,

Freeman v. FDIC, 56 F.3d 1394, 1401-02 (D.C. Cir. 1995) (noting that the

jurisdictional bar applies to "all manner of 'claims' and 'actions seeking

a determination of rights
 For example, § 1821(d)(3)(B)(i) requires that the receiver 10

publish "notice to the depository institution's creditors to

present their claims," and § 1821(d)(3)(C) requires the receiver

to "mail a notice . . . to any creditor shown on the

institution's books . . . ."

-11-

with respect to' the assets of failed banks, whether those claims and

actions are by debtors, creditors, or others"); National Union Fire Ins.

Co. v. City Sav., F.S.B., 28 F.3d 376, 389 (3d Cir. 1994) (noting that the

bar against "any action" in § 1821(d)(13)(D) "includes actions by debtors

as well as creditors"); Lloyd v. FDIC, 22 F.3d 335, 337 (1st Cir. 1994)

(suit by debtor seeking equitable reformation or cancellation of mortgage

agreement is a "determination of rights with respect to an asset" subject

to the jurisdictional bar).

We reject Tri-State's contention that, because the notice provisions10

of FIRREA apply only to creditors, § 1821(d)(13)(D)'s exhaustion

requirement should be similarly limited to creditors bringing claims.

While the notice provisions do apply only to creditors, such limiting

language is conspicuously absent in the jurisdictional bar provision.

Rather than mention creditors or limit its application to creditors,

§ 1821(d)(13)(D) bars "any claim or action for payment from, or any action

seeking a determination of rights with respect to the failed institution's

assets" (emphasis added), unless administrative remedies have been

exhausted. Thus, "FIRREA's very text appears to contemplate claims beyond

those by 'creditor[s] . . . on the . . . books' to whom statutory notice

must be sent." Office & Professional Employees Int'l Union, Local 2 v.

FDIC, 962 F.2d 63, 67 (D.C. Cir. 1992). We "assume Congress meant what it

said when it included a jurisdictional bar to 'any action,'" National

Union, 28 F.3d at 389, and thus we conclude that § 1821(d)(13)(D) was

intended to
 In so holding, we reject Tri-State's reliance on a line of 11

bankruptcy cases holding that debtors are not covered by FIRREA. 

The Ninth Circuit, after reviewing FIRREA's legislative history, 

held that, in bankruptcy proceedings, "a 'claim' under FIRREA

means an obligation owed by the failed institution, and not an

obligation owing to it," and debtors are thus not covered by

FIRREA. In re Parker North Am. Corp., 24 F.3d 1145, 1153 (9th

Cir. 1994) (quoting Scott v. RTC, 157 B.R. 297, 310-11 (Bankr.

W.D. Tex. 1993) (withdrawn at request of the parties, 162 B.R.

1004 (Bankr. W.D. Tex. 1994))).

Although the construction placed upon § 1821(d)(13)(D) by

the Parker court does not "quite square[] with the statutory

text," Freeman, 56 F.3d at 1401, we have no need in this case to

decide the applicability of FIRREA to bankruptcy cases. Assuming

arguendo that Parker was correctly decided, we decline to extend

this approach to nonbankruptcy court contexts. Such an extension

to nonbankruptcy cases "would not advance the purposes of the

Bankruptcy Code, while it would undercut Congress' core purpose

in enacting FIRREA." Id.

-12-

apply to debtors as well as creditors. Therefore, Tri-State's damages

11

action for fraud and the breaches of contract, duty of good faith, and

fiduciary obligations is barred because Tri-State did not exhaust

administrative remedies.

Tri-State's request for declaratory relief likewise does not render

the exhaustion requirement inapplicable. Section 1821(d)(13)(D) bars any

action seeking a determination of rights with respect to the assets of any

depository institution. As noted by the Third Circuit, 

a declaratory judgment action is an "action seeking a

determination of rights." . . . No reasonable argument can be

offered that the plain meaning of the "any action seeking a

determination of rights" language of § 1821(d)(13)(D) does not

include complaints requesting declaratory relief.

National Union, 28 F.3d at 385; see also id. at 385-92 (discussing, in

depth, application of § 1821(d)(13)(D) to declaratory judgment actions).

Thus, declaratory judgment actions are covered by
 The National Union Court declined to decide whether 12

declaratory judgment actions could be submitted for

administrative review under § 1821(d)(6)(A). If not, then

§ 1821(d)(13)(D)'s inclusion of declaratory judgment actions is a

jurisdictional bar rather than an exhaustion requirement. See

National Union, 28 F.3d at 387 n.12. While we do not have

occasion to decide this issue (Tri-State's failure to submit the

issue for administrative review divests the court of subject

matter jurisdiction in any event), we do note that the Third

Circuit appears to have resolved this issue. In Hudson United

Bank v. Chase Manhattan Bank of Conn., 43 F.3d 843, 849-50 (3d

Cir. 1994), the court held that the administrative claims

procedures and the jurisdictional bar have concurrent scope,

which suggests that declaratory judgment actions could be raised

in the administrative forum.

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FIRREA.12

Plaintiff further requests that the court rescind the purchase

agreements and loan documents. However, under FIRREA's anti-injunction

provision, 12 U.S.C. § 1821(j), "[e]xcept as otherwise provided, no court

may take any action . . . to restrain or affect that exercise of the powers

or functions of the [FDIC] as a conservator or receiver." Because FIRREA

grants the FDIC the power to "collect all obligations and money due the

institution," 12 U.S.C. § 1821(d)(2)(B)(ii), rescinding the agreements

would act as an impermissible restraint on the ability of the FDIC to

exercise its powers as receiver. See Freeman, 56 F.3d at 1399 (§ 1821(j),

which is "a sweeping ouster of courts' power to grant equitable remedies,"

prevents the courts from granting "nonmonetary remedies, including

injunctive relief, declaratory relief, and rescission of [a] promissory

note."); see also Ward v. Resolution Trust Corp., 996 F.2d 99, 104 (5th

Cir. 1993) ("Like injunction, rescission is a 'judicial restraint' that is

barred by 1821(j)."). This Court therefore lacks jurisdiction to grant the

requested equitable relief.

Finally, we write to address one concern raised at oral argument:

if we prevent Tri-State from obtaining declaratory and rescissory relief

in this case, then Tri-State will be defenseless
 In support of this proposition, the Third Circuit noted 13

that § 1821(d)(13)(D) bars "any claims" seeking payment or "any

action seeking a determination of rights"; thus, affirmative

defenses, which technically are "responses" and not "claims" or

"actions," are not covered by FIRREA and need not first be

submitted for administrative review. National Union, 28 F.3d at

393. 

Further, this interpretation finds support in the policies

undergirding FIRREA. In barring declaratory judgment actions,

"Congress apparently . . . determined that the societal benefits

resulting from the right to bring . . . declaratory judgment

actions, are outweighed by the societal benefits resulting from

the RTC being able to avoid costly and perhaps unnecessary

litigation." Id. at 388. However, when the FDIC has completed

its administrative review, and has chosen a judicial forum in

which to prosecute its rights, the policy of avoiding unnecessary

litigation is no longer applicable, and the party's Due Process

rights to defend the claims in the FDIC's lawsuit become

paramount. Id. at 394. 

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in the KLI lawsuit if the FDIC attempts to enforce the loan agreements.

This is not true. In National Union, supra, the Third Circuit held that,

while petitioner was barred from offensively bringing a declaratory

judgment action or suit for rescissory relief, it could still raise any

affirmative defenses it had against the RTC in any suit by the RTC to

enforce the loan obligations. National Union, 28 F.3d at 392-395; see

13

also RTC v. Midwest Fed. Sav. Bank, 36 F.3d 785, 792 (9th Cir. 1993)

(§ 1821(d)(13)(D) applies to "claims" and "actions" and not to "defenses").

We agree with the Third and Ninth Circuits that true affirmative defenses

may still be asserted by Tri-State in the KLI lawsuit.

C.

Tri-State next argues that, even if the exhaustion requirement is

applicable, the extensive discussions and negotiations between Tri-State

and the FDIC regarding the financing and debt agreements at issue satisfies

this requirement because the FDIC has undertaken the review process

contemplated by 12 U.S.C. § 1821(d). Tri-State relies on Praxis Properties

v. Colonial Sav. Bank, 947 F.2d 49, 64
-15-

(3d Cir. 1991), which allowed prolonged negotiations between the parties

to substitute for formal review and thus provide the court with

jurisdiction.

Praxis is distinguishable from the present case. Praxis arose during

the nascent stages of FIRREA. FIRREA was enacted on August 9, 1989, and

when the RTC was appointed receiver in that case on November 9, 1989, it

"lacked a fully developed, standardized claims process." Id. Praxis

informally presented its claims to the RTC and engaged in extensive

discussions with the RTC. Given the RTC's lack of standardized procedures,

the court determined that "under the circumstances Praxis did all it could

do to exhaust its administrative remedies." Id. 

However, the Praxis court intimated that, had the case arose when the

RTC had such standardized procedures in place, the informal negotiations

would not have been sufficient to provide the court with jurisdiction. Id.

("We do not mean to imply, however, that under today's regime [of

formalized claims procedures], a mere breakdown of negotiations between RTC

and a claimant would entitle the claimant to proceed in court."). Of

course, the claims in the present case arose several years after the

enactment of FIRREA, at a time when the FDIC had formalized procedures for

claims review. Tri-State cannot rely on Praxis to excuse its failure to

formally present its claims to the FDIC.

Further, the plaintiff in Praxis presented its claims informally to

the RTC during the ninety-day presentation period mandated by FIRREA. In

the present case, while Tri-State mailed a letter to the FDIC in December

1992 apprising them of the existence of the claims, negotiations did not

begin until August 1993, several months after the expiration of the claims

presentation period, which ended on March 16, 1993, for Merchants.

Therefore, even if informal negotiations could satisfy the exhaustion

requirement--a proposition we reject--such informal negotiations in
-16-

this case were untimely. 

D.

Tri-State's final argument is that the FDIC's failure to provide

proper notice, and the FDIC's actions in affirmatively misleading Tri-State

regarding the notice procedures, amounts to a waiver by the FDIC, estopping

the FDIC from asserting the jurisdictional bar. This contention is without

merit, for several reasons.

First, the mailed-notice provisions under § 1821(d)(3)(B)-(C) do not

apply to Tri-State. These provisions provide that the FDIC must publish

written notice (which it did) and also mail notice to all creditors listed

on the books of the failed bank. Because Tri-State is not a creditor, and

is not listed on the books of Merchants as a creditor, it was not entitled

to receive notice by mail.

Second, even supposing that the notice provisions applied to TriState, this Circuit has expressly held that receivers under FIRREA cannot

be estopped from asserting the jurisdictional bar. In Bueford, this Court

stated:

Lack of subject matter jurisdiction, unlike many other

objections to the jurisdiction of a particular court, cannot be

waived. . . . FIRREA contains an exhaustion requirement as a

pre-requisite for suit in any court, and the statute contains

no waiver provision. Therefore, the RTC cannot, by its own

conduct or otherwise, be estopped from raising the issue of

subject matter jurisdiction.

Bueford, 991 F.2d at 485 (citation omitted). Thus, the FDIC's failure to

provide proper notice "does not relieve the claimant of the obligation to

exhaust administrative remedies, because the statute does not provide for

a waiver or exception under those
 Bueford's language that "the RTC cannot, by its own 14

conduct or otherwise, be estopped from raising the issue of

subject matter jurisdiction," 991 F.2d at 485, seems to support

the proposition that the FDIC's affirmative misconduct is

irrelevant, although Bueford was not an affirmative misconduct

case. One court has intimated that the FDIC's affirmative

misconduct could, in appropriate circumstances, toll the ninetyday bar date. See Intercontinental, 45 F.3d at 1285.

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circumstances." Freeman, 56 F.3d at 1402 (citing Meliezer v. RTC, 952 F.2d

879, 882-83 (5th Cir. 1992)); see also Intercontinental Travel Mktg. v.

FDIC, 45 F.3d 1278, 1284-85 (9th Cir. 1994) (FDIC's failure to mail notice

does not exempt claimant from administrative review requirement). The only

exception to the strict requirement of exhaustion of remedies, where the

claimant does not receive notice of the appointment of the receiver in time

to file his claim, see 12 U.S.C. § 1821(d)(5)(C), is inapplicable here

because Tri-State had actual knowledge of the receivership.

Finally, the FDIC did not affirmatively mislead Tri-State into

foregoing the required administrative review. Although under Bueford we

question whether the FDIC's affirmative misconduct could estop it from

asserting jurisdictional bar, we need not decide this issue today because 14

in this case the FDIC did not affirmatively mislead Tri-State into

believing that the claims review process did not apply to it. 

The FDIC stated that it would not mail notice to Tri-State because

it did not consider Tri-State to be a creditor or claimant. However, the

FDIC never mentioned that it believed that the jurisdictional bar, a

completely separate and independent subsection of FIRREA, did not apply to

Tri-State. Tri-State may have misinterpreted the FDIC's statement that the

notice provisions were not applicable to mean that administrative

exhaustion was not required. However, this error by Tri-State does not

amount to evidence that the FDIC affirmatively misled Tri-State. 
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V.

The district court's order of July 13, 1994 dismissing the FDIC for

lack of subject matter jurisdiction became final on October 18, 1994, and

we have jurisdiction to hear this appeal under 28 U.S.C. § 1291. Because

Tri-State failed to exhaust the mandatory administrative remedies before

filing suit, the district court's order is affirmed.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.