Opinion ID: 195925
Heading Depth: 2
Heading Rank: 1

Heading: The Simon Guaranty

Text: 12 Simon contends that FDIC surrendered all claims to the collateral pledged to secure his personal guaranty because the Bank's (and FDIC's subsequent) breach of the Modification Agreements discharged Simon from all liability. 13 Section 1821(d)(13)(D)(i) bars all claims against the assets of a failed financial institution which have not been presented under the administrative claims review process (ACRP), see 12 U.S.C. Sec. 1821(d)(3)-(10), governing the filing, determination, and payment of claims against the assets of failed financial institutions following FDIC's appointment as receiver. Heno v. FDIC, 20 F.3d 1204, 1206-07 (1st Cir.1994). Upon its appointment as receiver, FDIC is required to publish notice that the failed institution's creditors must file claims with FDIC by a specified date not less than ninety days after the date of publication. 12 U.S.C. Sec. 1821(d)(3)(B). FDIC is also required to mail notice to all known creditors of the failed institution. Id. Sec. 1821(d)(3)(C). It has 180 days from the date of filing to allow or disallow claims. Id. Sec. 1821(d)(5)(A)(i). Claimants have sixty days from the date of disallowance, or from the expiration of the 180-day administrative decision deadline, within which to seek judicial review in an appropriate United States district court. Id. Sec. 1821(d)(6)(A). Failure to comply with the ACRP deprives the courts of subject matter jurisdiction over any claim to assets of the failed financial institution. See id. Sec. 1821(d)(13)(D)(i). 14 Simon argues that the instant claim for the return of all collateral securing his personal guaranty is not subject to the ACRP because it is not a creditor's claim against the Bank's assets but merely a defense to the contingent loan guaranty held by the Bank. Cf. In re Purcell, 141 B.R. 480, 485 (Bankr.D.Vt.1992), aff'd, 150 B.R. 111 (D.Vt.1993). But see Deera Homes, Inc. v. Metrobank for Sav., FSB, 812 F.Supp. 375, 377-78 (E.D.N.Y.1993). As Simon sees it, therefore, he is entitled to a judgment declaring that the Modification Agreements were breached by the Bank and, consequently, his personal guaranty is unenforceable and the collateral pledged to secure it must be surrendered. 15 Throughout the litigation, Simon has maintained that the Bank breached the Modification Agreements the day before the Bank closed, by refusing to honor the Borrowers' October 18 construction loan requisition. At oral argument, he conceded that the personal guaranty was no longer executory by the time FDIC became receiver on October 19, 1990. Cf. infra Section II.B. Similarly, his claim to the collateral securing the personal guaranty consistently has been based on the Bank's October 18 breach of the Modification Agreements. Moreover, Simon's November 27 letter to FDIC demanded both that the Bank release the collateral securing his personal guaranty and that the Bank honor the Borrowers' requisitions from October 18. 16 Thus, Simon's position is and always has been that the Bank's pre-receivership refusal to honor the Borrowers' October 18 loan requisition constituted a material breach of the Modification Agreements, entitling him to recover his collateral. It is clear, therefore, that the claim to the collateral securing the personal guaranty is barred as a claim or action for payment from ... the assets of a failed financial institution for which FDIC has been appointed receiver. See 12 U.S.C. Sec. 1821(d)(13)(D)(i). 17 Simon concedes that the two real estate mortgages securing his personal guaranty are bank assets. Claims for the recovery of bank assets are barred absent compliance with the ACRP. Id. Simon was aware of FDIC's appointment as receiver on October 19, 1990, well before the ACRP bar date. Furthermore, Simon concededly knew, before the bar date, that he had a claim against FDIC for the return of the collateral. In these circumstances, the failure to comply with the ACRP deprived the district court of jurisdiction over Simon's claim for recovery of the collateral securing his personal guaranty. 1