Source: http://openjurist.org/157/f3d/1292/federal-deposit-insurance-corp-v-lacentra-trucking-incorporated-kjk
Timestamp: 2013-12-05 04:21:20
Document Index: 699562892

Matched Legal Cases: ['§ 1821', '§ 1821', '§ 1821', '§ 713', '§ 713', '§ 713', '§ 713', '§ 713', '§ 713', '§ 1821', '§ 1821', '§ 1821', '§ 1821', '§ 1821']

157 F3d 1292 Federal Deposit Insurance Corp v. Lacentra Trucking Incorporated Kjk | OpenJurist
157 F. 3d 1292 - Federal Deposit Insurance Corp v. Lacentra Trucking Incorporated Kjk	Home157 f3d 1292 federal deposit insurance corp v. lacentra trucking incorporated kjk
157 F3d 1292 Federal Deposit Insurance Corp v. Lacentra Trucking Incorporated Kjk 157 F.3d 1292
12 Fla. L. Weekly Fed. C 161
FEDERAL DEPOSIT INSURANCE CORP., as Receiver for FlaglerFederal Savings and Loan Association,Plaintiff-Counter-Defendant-Appellee.v.LACENTRA TRUCKING, INCORPORATED, a Florida corporation,Wenger Excavating, Incorporated, an Ohio corporation,Mayfair Plumbing, Incorporated, a Florida corporation, KJKEnterprises, Incorporated, a Florida corporation d.b.a. Mr.Electric, Defendants-Counter-Claimants-Appellants,Tarmac Florida, Incorporated, a Florida corporation,Defendant-Counter-Claimant.
Oct. 16, 1998.Rehearing En Banc Denied Oct. 20, 1998.
Richard Hugh Lumpkin, Karl Schumer, Keith, Mack, Lewis, Cohen & Lumpkin, Miami, FL, Reginald John Clyne, Clyne & Assoc., Coral Gables, FL, for F.D.I.C.
This case involves a dispute over priority between holders of mechanics' liens filed against a construction site and Resolution Trust Corporation (RTC)1, holder of a mortgage on that site. It requires application of provisions of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA"), Pub.L. No. 101-73, 103 Stat. 1839, (codified as amended in scattered sections of 12 U.S.C.). The Act provides for handling of claims of claimants to assets of failed depository institutions and persons seeking a declaration of rights with respect to such assets. It authorizes RTC as receiver to "determine [such] claims." 12 U.S.C. § 1821(d)(3)(A). Section 1821(d)(13)(D) provides that "no court shall have jurisdiction of [any such claim or action] 'except as otherwise provided in this subsection'." Id. § 1821(d)(13)(D). While not an explicit mandate for exhaustion of administrative remedies these provisions are accepted by the cases and by Congress as having that meaning. See Marquis v. FDIC, 965 F.2d 1148, 1151-52 (1st Cir.1992). In this case we must consider the interplay between § 1821(d)(13)(D) and the jurisdiction of a court over a pre-receivership claim that is pending in that court when receivership commences.
The district court held that the administrative exhaustion procedures of FIRREA apply to the appellant lienors and that they had not complied with those procedures; therefore it granted summary judgment to RTC. Flagler Federal Savings and Loan Association of Miami v. Greenview Apts., Ltd., 897 F.Supp. 1431 (S.D.Fla.1995). This court affirmed in an unpublished opinion. 116 F.3d 1492 (11th Cir.1997). The appellants moved for rehearing.
We hold, first, that the district court erred in finding that appellants had not complied with the requirements of FIRREA that their claims be presented to the receiver for administrative processing. Second, we hold that, even if appellants' claims had not been presented, the district court in which the pre-receivership claims were pending had jurisdiction over them and the receiver had the option to invoke the process of administrative review or to have the claims litigated by the court; the receiver chose the option of litigation and, having made that choice, it could not on the eve of trial invoke the administrative process it had eschewed and thereby have the case dismissed for failure to exhaust. In considering this first point, we hold that the jurisdiction of a federal court over pre-receivership claims pending in a pre-receivership case is not terminated by the appointment of a receiver. Next we address the interplay of the jurisdiction of the court over pending pre-receivership claims and the administrative exhaustion requirements of FIRREA. We hold that the receiver has the option of adjudicating the preexisting claims in the pending litigation or of following the administrative claims procedures of the Act. And we hold that in this case RTC chose to litigate the claims in the pending case, and having made that election, it could not on the eve of trial invoke the administrative complaint procedures it had foregone to require that the case be dismissed for want of jurisdiction. Additionally, we hold that the district court erred in holding that the claimants had not complied with the requirements of presenting their claims to the receiver.
The motion of the plaintiffs for rehearing is GRANTED. The decision of this court is VACATED, and this opinion is entered as the opinion of the court. The judgment of the district court is REVERSED and the case is REMANDED to the district court for further proceedings.
The liens held by claimants originated from construction of an apartment complex in Broward County Florida by Greenview Apartments, Ltd. Under Fla. Stat. Ann. § 713.13(1)(a), before "actually commencing" to improve real property an owner must file a Notice of Commencement in the Office of the Clerk of the Circuit Court of the county in which the property is located, and must post a copy thereof. Fla. Stat. Ann. § 713.13(1)(a) (West 1989). Under § 713.07 a lien for labor, services or materials furnished to the property attaches and takes priority at the time of recording the Notice of Commencement. Id. § 713.07. The Notice is of no effect, however, if the improvements described in the Notice are not commenced within 30 days after the recording thereof, and it is not effectual after one year from the date of recording. Id. § 713.13(2) & (5).
The events of this case are set out chronologically.
July 28, 1988: The Notice of Commencement for the Greenview site was recorded.
August 17, 1988: According to affidavits filed by the lienors in the summary judgment record of the Florida state court, where this case began, on August 17, 1988 a surveying firm performed work at the site consisting of surveying, staking, flagging, and verifying of property boundary and monuments.
December 14, 1988: Greenview Apartments obtained a construction loan from Flagler Federal Savings and Loan Association in the amount of $3,800,000 and executed a mortgage in favor of Flagler which was recorded the same date.
III. The state court proceeding
April 1989: Flagler filed suit in Florida state court to foreclose its mortgage on the construction site, alleging that the loan was in default. Flagler named as parties defendant some 16 entities that it alleged had supplied work or materials to the construction job, including the appellants appearing in this appeal. Flagler alleged:
The following parties have been joined in these proceedings, since they may claim some right, title, and interest in and to the subject property by virtue of being lienholders. Said entries, if any, is [sic] junior and inferior to Plaintiff's Mortgage and Security Agreement.
Each of these appellants was alleged to have filed a claim of lien on the property. A copy of each appellant's claim of lien, filed pursuant to Florida's mechanics' lien law, was attached to Flagler's complaint. Each claim of lien was sworn to as required by Florida law. Each briefly described the labor or services or materials supplied and the amount alleged to be unpaid. Each claim of lien had been filed in the Office of Records of Broward County, Florida.
Flagler prayed that the court "adjudge the lien of the Plaintiff's Mortgage and Security Agreement to be a valid first lien upon the property ... superior to the rights, claims and liens of all Defendants to this cause." Flagler also asked for appointment of a receiver to secure and protect the property with power to complete the improvements. In short, from the beginning of this case to the present the lienholders have been identified persons or entities having claims against the property that Flagler alleged to be junior to its claim. The nature of each claim, the amount claimed by each lienor to be due, and the type of work out of which it arose have been known to Flagler (and to RTC as its successor) from the claims of liens attached to Flagler's complaint.
October 16, 1989: Flagler moved for partial summary judgment of foreclosure on the ground that the liens were void because improvements had not been commenced within 30 days of July 28, 1988, when the Notice of Commencement was filed. It later moved for final summary judgment.
September 11, 1990: The Florida trial court granted summary judgment of foreclosure to Flagler on the ground that no visible improvements had commenced on the project within the 30 days following the recording of the Notice of Commencement; therefore, it held Flagler's mortgage had priority. Lienholders appealed.
September 25, 1991: The Florida District Court of Appeals, Fourth District, reversed the judgment of foreclosure and remanded for trial. Lacentra Trucking, Inc. v. Flagler Sav. & Loan Assoc. of Miami, 586 So.2d 474 (Fla.Dist.Ct.App.1991). The court characterized the dispute as a familiar one, concerning priorities between a mortgagee and mechanics lienors, raising a precise question not previously answered in any Florida decision: whether surveying, flagging and staking a construction site for an improvement within 30 days of recordation of the Notice of Commencement can constitute actual commencement within the meaning of Fla. Stat. Ann. § 713.13. Id. at 475. The court held that the trial court had mistakenly relied upon a prior version of the mechanics' lien statute that had required "visible commencement" within 30 days of the Notice. Applying the current statutory standard of "actual commencement," the court reversed:
There is no legal reason under the statute why the ascertainment of boundary monuments and flagging and staking might not be the exact moment of a beginning. There is some evidence in this record suggesting that this particular survey was for mortgage financing, but there is other evidence suggesting that it might have been to lay out the dimensions of the foundation of the apartment building. There is certainly nothing here establishing that, for this kind of improvement, the process of physically altering the land with a permanent structure can never begin when lines are denoted by stakes and flags on the land itself. The mere fact that for some kinds of improvements it is always later does not mean, as a matter of legal construction of the statute, that for this one and others it cannot be earlier--e.g. when the stakes and flags are laid out. The essential meaning here is that the issue is to be determined by the facts of the particular improvement and its construction.
We therefore conclude that a trial is required to establish what the facts are. As we are reversing for a trial, we think that the parties should be given leave to file amended pleadings with all of their precise legal claims and defenses, if they so desire.
Id. at 477. The case lay quiescent for six months until March 1992.
March 25, 1992: By letter, counsel for lienors submitted to counsel who had been appearing for Flagler written confirmation of the amount claimed by each lienor. These amounts were said to have been previously furnished to the addressee on February 21, 1992. Accrued interest was added to each claim producing a total for each. Also, "as requested by Flagler" the letter submitted a proposed compromise settlement figure for each claim.
March 26, 1992: RTC was appointed receiver for Flagler. Counsel for Flagler became counsel for RTC and, on March 26, received the March 25 letter describing lienors' claims.
April 5, 1992: As provided by the Act, 12 U.S.C. § 1821(d)(3)(B), RTC began publishing in local newspapers a notice to creditors of the institution to present claims to RTC as receiver within 90 days of its appointment, which the notice identified as expiring July 6, 1992. The Act also requires RTC to mail a similar notice to creditors as shown on the books of the institution, 12 U.S.C. § 1821(d)(3)(C). RTC failed to mail notices to lienors.2
April 13, 1992: According to the briefs, the parties agreed on this date to a 30-day stay of the case. The record discloses no court order to this effect; apparently this stay was not officially entered.
May 27, 1992: RTC moved to be substituted for Flagler as plaintiff in the state court proceeding, and, pursuant to § 1821(d)(12)(A), requested a stay of litigation not to exceed 90 days. The motion to stay made no reference to administrative exhaustion.
June 1, 1992: In state court RTC was substituted as plaintiff and the case stayed for 90 days.3
IV. Federal court proceedings
June 17 or 18, 1992: RTC removed the case to the United States District Court.4 During the life of the 90-day stay the parties proceeded with the pending case as though the stay were not in effect.
July 6, 1992: The time for filing claims as set by the RTC newspaper notices expired.
August 20, 1992: Pursuant to Federal Rules of Civil Procedures 26(f) and Local Rule 14 of the United States District Court, counsel conducted a scheduling meeting. As later noted in their Report of this meeting, they met, defined the issues for trial, exchanged documents, exchanged lists of witnesses, and discussed a discovery schedule. They discussed the likelihood of settlement, which they said they could not appraise until discovery was completed. They estimated trial time as three days. They described the principal issue to be as of what date construction was actually commenced within the meaning of the Florida statute, the issue remanded by the Florida District Court of Appeals. Other issues were identified as whether RTC could foreclose; whether defendants' liens were valid and perfected; whether fabrication of materials within 30 days of the notice of commencement constituted actual commencement; whether work done on easements or on appurtenant land constituted actual commencement; whether Flagler had funded the loan without compliance with Florida law concerning recommencement of interrupted construction; whether waiver, estoppel or the D'Oench doctrine barred the lienors from recovering on their claims.
August 29, 1992: The 90-day stay expired.
October 21, 1992: As required by Rule 26, the parties filed their joint report of their scheduling meeting. It set out the issues described above. It did not mention administrative exhaustion.
December 17, 1992: The court set the case for trial on May 3, 1993. Dates were set for a final pretrial conference, filing of discovery, and filing of pretrial motions. The parties were directed to file proposed findings of fact and conclusions of law.
From December 1992 to December 1994: The parties engaged in a blizzard of amended pleadings, briefs, reply briefs and supplemental briefs, interrogatories, depositions, objections and protective orders, motions to continue, motions to produce, motions to strike and counter-motions, requests for additional time, requests for status conference, and a panoply of other filings.
February 23, 1993: Around this time, seven months after the stay expired, counsel for RTC orally called to the attention of an attorney for the lienholders that no claim had been filed with RTC as provided by the statute. At no time previously had RTC notified the lienholders that, despite the pending case, it was insisting on the use of administrative procedures. RTC had not furnished its usual forms for filing claims or usual instructions. With leave, lienors filed their Fifth Amended Answer, Affirmative Defenses and Counterclaim. They re-filed copies of their recorded claims of liens, and by counterclaim, asked the court to adjudicate the priority of their liens and hold that, because they had timely filed Notice of Commencement, their liens were prior to Flagler's mortgage. Each claim was accompanied by a copy of the contract pursuant to which the work reflected by the claims was done. By this stage of the case issues identified included claims of equitable subordination of Flagler's mortgage to lienors' liens, waiver and estoppel by Flagler, whether offsite fabrication of materials constituted actual commencement of improvements, failure of Flagler to give statutory notice of recommencement of work after it was shut down, the effect of Flagler's knowledge of inchoate liens when it closed its loan, alleged equitable liens, effect of title insurance, the D'Oench doctrine, the effect of the Florida Court of Appeals decision on issues not addressed--and more. Lienors attached to their pleadings copies of contracts under which they had furnished labor and materials and additional copies of their sworn recorded claims of liens. The amount alleged as owed to each lienor was shown and the nature of its work described.
Early March, 1993: Additional proceedings continued.
March 17, 1993: RTC filed a Reply to the Lienors' Affirmative Defenses and an Answer and Affirmative Defenses to Lienors' Counterclaims, setting out eight affirmative defenses. Neither FIRREA nor the matter of filing a claim was mentioned.
March 22, 1993: RTC moved to continue the trial.
On or about April 1, 1993: RTC announced readiness for trial.
April 2, 1993: A year after it was appointed receiver, ten months after it was substituted as plaintiff and the 90-day stay entered, nine months after the date for filing claims expired on July 6, 1992 and seven months after the stay expired, RTC filed a supplemental motion to dismiss, asserting for the first time that the district court had no jurisdiction of the case because the lienors had "failed to allege compliance with FIRREA, or allege any reason why compliance with FIRREA is excused."
April 15, 1993: Lienors moved for an order of court permitting them to file administrative claims. They requested forms for filing proof of claims and asked for a stay of the action until administrative procedures were completed. This was denied after the court's final order.
May 17, 1993: Lienors filed claims with RTC, ten months after the expiration date of July 6, 1992. These claims were never acted upon.
May 19, 1993: Pursuant to 12 U.S.C. § 1821(d)(6)(A) the lienors, relying on the May 17 filings, filed a motion to continue the pending action. We cannot determine that this was ever denied.
September 10, 1993: RTC wrote one of the lienors noting that its records showed that 180 days from filing claims ( the time allowed for approval or disapproval) would expire November 17, 1993, which necessarily referred back to claims that had been filed May 17. RTC asked for an extension of time to March 17, 1994 for it to allow or disallow the lienor's claim. According to the briefs all lienors received the letter. The letter also represented that if the lienor did not agree to the extension of time it could exercise its rights to judicial determination of its claim pursuant to § 1821(d)(6)(A).
July 5, 1995: More than three years after the case was remanded to the Florida trial court and stayed, the district court struck lienors' affirmative defenses and counterclaims and granted summary judgment to RTC on the ground that lienors had not complied with administrative provisions that required them to present their claims to RTC. It held that RTC's failure to mail notice to the lienors did not violate due process because the lienors had actual notice of the appointment of RTC as receiver and of the 90-day stay.