Opinion ID: 212039
Heading Depth: 3
Heading Rank: 3

Heading: Branch Sales

Text: 30 The government asserts that GAAP also required Home to write off supervisory goodwill when it sold savings and loan branches after the passage of FIRREA. According to this argument, the Court of Federal Claims should have accounted for this mandatory write-off in its damages award. Because the court did not do this, the government argues that the court's figures for supervisory goodwill that remained after the branch sales were too high. 31 The plaintiffs respond that the branch sales occurred after the government's breach, so they are irrelevant for purposes of calculating damages. Also, the plaintiffs contend that the Illinois/Texas and Florida/Missouri transactions were precluded from being subjected to a write-off requirement for the additional reason that the Resolutions covering those transactions specified a forty-year goodwill amortization period. 32 We affirm the Court of Federal Claims' conclusion that Home was not required by GAAP to write off supervisory goodwill when it sold the branches acquired in the supervisory mergers between 1993 and 1995. As the court found, the contract, not GAAP, controlled the amortization period for Home's supervisory goodwill and set that period at forty years. See Home III, 57 Fed. Cl. at 707. Thus, Home was not required by GAAP to write off supervisory goodwill related to branch sales prematurely. 33 Furthermore, the Court of Federal Claims correctly determined that Home's post-FIRREA branch sales did not affect the damages. FIRREA had breached the government's promise to count supervisory goodwill in 1989 — over four years before Home started selling the branches it had acquired in the supervisory mergers in question. Id. at 707. These sales were [u]nrelated events and remote consequences that are not appropriate to incorporate into damages for breach of contract. See LaSalle Talman Bank, F.S.B. v. United States, 317 F.3d 1363, 1373 (Fed.Cir.2003). Additionally, FIRREA had already been phasing out Home's ability to count supervisory goodwill when it began selling the branches, and by the time Home sold the Florida and Century branches, Home had already fully written off the supervisory goodwill from these purchases. Thus, neither the Florida nor the Century branch sales had any effect on Home's recording of supervisory goodwill. See Home III, 57 Fed. Cl. at 705-06.