Court Opinion

ID: 988002
Source: CourtListenerOpinion
Date Created: 2013-07-03 18:12:32.432541+00
Date Added: 2024-06-11T13:05:38.604225
License: Public Domain

United States Court of Appeals
                        For the First Circuit

Nos. 11-2113, 11-2433

              FEDERAL DEPOSIT INSURANCE CORPORATION
        AS RECEIVER FOR R-G PREMIER BANK OF PUERTO RICO,

                         Plaintiff, Appellee,

                                  v.

   DIGNO EMÉRITO ESTRADA-RIVERA; EDITH DELIA COLÓN-FELICIANO;
               CONJUGAL PARTNERSHIP ESTRADA-COLÓN;
          EMÉRITO ESTRADA RIVERA-ISUZU DE PUERTO RICO, INC.,

                        Defendants, Appellants.

          APPEALS FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF PUERTO RICO

          [Hon. Gustavo A. Gelpí, U.S. District Judge]

                                Before

         Torruella, Lipez, and Thompson, Circuit Judges.

     Guillermo F. DeGuzmán, with whom DeGuzmán Law Offices was on
brief, for appellants.
     Kathleen V. Gunning, Counsel, Federal Deposit Insurance
Corporation, with whom Colleen Boles, Assistant General Counsel,
and Lawrence H. Richmond, Senior Counsel, were on brief, for
appellee.

                             July 3, 2013
          LIPEZ, Circuit Judge.    Appellants challenge the district

court's grant of summary judgment for the Federal Deposit Insurance

Corporation ("FDIC") in a collection action stemming from their

default on a $700,000 loan.   They contend that their lending bank

-- later taken over by the FDIC -- caused the default by failing to

follow through on a promised loan to a third-party.    The district

court also dismissed a counterclaim based on that contention for

lack of subject matter jurisdiction. Although we adopt a different

rationale for disposing of the counterclaim, we affirm both of the

court's rulings.1

                                  I.

          It is unnecessary to describe the financial transactions

underlying this case in detail, as both issues on appeal are

controlled by well established legal principles.    We thus briefly

sketch the background of the dispute, with elaboration provided

below as pertinent to our discussion.

          In early 2008, appellant Digno Emérito Estrada-Rivera

("Estrada-Rivera") signed a loan agreement with R-G Premier Bank of

Puerto Rico ("the Bank") for a $700,000 line of credit for his

business, Emérito Estrada Rivera-Isuzu de Puerto Rico ("EER-IPR").

Less than a year later, Estrada-Rivera defaulted on the loan, and

the Bank brought a collection action in commonwealth court against

     1
       Appellants filed a separate appeal of each ruling, and the
two actions were later consolidated.

                                  -2-
the four appellants in this appeal: Estrada-Rivera, his wife (Edith

Delia Colón-Feliciano), their conjugal partnership, and EER-IPR.

In   a   counterclaim,       appellants        asserted   that    the   Bank    was

responsible for the default because it had breached a financing

agreement    with    an    entity    that      was   purchasing   property     from

appellants for a shopping plaza project.               Appellants alleged that

they were to receive some of the proceeds from that financing to

complete the third party's purchase of appellants' property, and

appellants    would       then    have   used    those    funds   to    pay    their

outstanding loan commitments with the Bank, including the line of

credit. They asserted damages of "not less than" $50 million

resulting from the Bank's breach.

             The FDIC subsequently took over the Bank as receiver,

removed the litigation to federal court, and eventually obtained

summary judgment in its favor on the collection action.                         The

district court noted the absence of any dispute that the $700,000

debt was due and payable, and it found "nothing in the record that

made Defendants' payment under the note conditional upon [the

Bank]'s compliance with its obligation under the [third-party]

financing agreement."            Hence, because "Defendants have breached

their contractual obligations," the court granted summary judgment

for the FDIC.       The court also dismissed appellants' counterclaim,

finding a lack of subject-matter jurisdiction on the ground that

appellants had not taken the steps necessary, within the required

                                         -3-
time frame, to maintain an action against the FDIC.         See 12 U.S.C.

§ 1821(d)(6), (d)(13)(D).

           Appellants raise two issues on appeal.             First, they

contend   that   summary   judgment   was   improperly    granted   on   the

collection action because factual disputes remain concerning the

Bank's role in causing them to breach their loan agreement with the

Bank and whether, as a result, appellants should be released from

their obligations under that agreement.        Second, appellants argue

that the district court erred in rejecting their counterclaim on

jurisdictional grounds.     They assert that they met all applicable

requirements for pursuing the claim and that, in any event, their

action should not be barred because the FDIC gave them inadequate

notice of the need to file a proof of claim.

           We review an appeal from a grant of summary judgment de

novo, Johnson v. Univ. of P.R., 714 F.3d 48, 52 (1st Cir. 2013),

and likewise apply de novo review to the court's dismissal of the

counterclaim for lack of subject-matter jurisdiction, Alphas Co. v.

Dan Tudor & Sons Sales, Inc., 679 F.3d 35, 38 (1st Cir. 2012).            In

considering the propriety of the district court's rulings, we are

not limited to the rationales it adopted but may affirm its

judgment on any ground supported by the record.          Miles v. Great N.

Ins. Co., 634 F.3d 61, 65 n.5 (1st Cir. 2011).

                                  -4-
A. The Collection Action

           Appellants attempt to demonstrate that summary judgment

was   improperly   granted   against    them   by   highlighting   factual

disputes related to the financing that the Bank had agreed to

provide for the shopping plaza project.        They state that the Bank

structured the deal so that final payment to appellants would be

withheld until after the Bank released additional funds to the

buyer, Empresas Cerromonte Corp. ("ECC"), for construction.2

Appellants claim, however, that the Bank subsequently refused to

disburse the additional monies, breaching its financing agreement

with ECC along with a commitment made to appellants that they would

receive full payment for their property within a year of the sale.3

           Appellants thus assert that their default on the line of

credit was attributable to the Bank's breach of both the ECC

financing deal and its obligations to appellants themselves.         They

argue that a factfinder must evaluate their contention that the

Bank's culpability overrides their own breach, and they insist that

the district court would be authorized to modify their obligations

under the line of credit if the Bank is found to have acted in bad

faith.    Hence, because further development of the facts may show

that the Bank bears responsibility for their default, appellants

      2
         Appellants were therefore required to temporarily self-
finance part of the purchase price.
      3
       Appellants state that the balance due was to be paid
directly by the Bank to them from ECC's construction loan proceeds.

                                  -5-
maintain that summary judgment for the FDIC on the collection claim

was improper.

             The problem for appellants is that, whatever the merits

of their defense as a matter of contract or promissory estoppel,

their contentions are unavailing against the FDIC.                    Enforcement

against the FDIC of unwritten promises or agreements is barred by

12 U.S.C. § 1823(e)(1), which provides, in pertinent part:

             No agreement which    tends to diminish or defeat
             the interest of       the [FDIC] in any asset
             acquired by it .       . . as receiver of any
             insured depository    institution, shall be valid
             against the [FDIC]    unless such agreement--

             (A) is in writing . . . [and]

             (D) has been, continuously, from the time of
             its execution, an official record of the
             depository institution.

See also D'Oench, Duhme & Co. v. FDIC, 315 U.S. 447 (1942)

(establishing the common law "D'Oench doctrine," which "prevents

plaintiffs from asserting as either a claim or defense against the

FDIC oral agreements or 'arrangements,'" FDIC v. LeBlanc, 85 F.3d

815, 821 (1st Cir. 1996) (internal quotation marks omitted));

McCullough    v.   FDIC,   987    F.2d    870,    874   n.6   (1st    Cir.    1993)

(describing § 1823(e) as "D'Oench's statutory partner").

             The   district      court    found    no   written       proof    that

appellants' obligation to repay the line of credit was contingent

on   ECC's   independent   financing       agreement     with   the    Bank,    and

appellants point to no such explicit documentation.               Instead, they

                                         -6-
rely on inferences to be drawn from the collection of documents

executed by the Bank, ECC and themselves in connection with the

sale       of   appellants'       property    to    ECC.        Appellants     depict    an

arrangement        in     which   all     parties   understood         that   appellants'

partial self-financing of the ECC purchase would be short-term and

that the Bank would soon provide the additional funds enabling ECC

to pay off that debt.              But such a de facto arrangement, although

plausible as alleged, is not enough.                     Section 1823(e)(1) protects

the    FDIC        from    facing       precisely        that   kind     of    unrecorded

understanding as a defense to a debt that is otherwise due and

collectible.         See, e.g., Beal Bank, SSB v. Pittorino, 177 F.3d 65,

68 (1st Cir. 1999); LeBlanc, 85 F.3d at 821.

                Because appellants have not produced any written evidence

that       their    obligation       to    pay     the    line-of-credit       debt     was

conditioned on the Bank's provision of financing to ECC, and they

do not contest that their debt is due and payable,4 they have

failed to identify a material fact affecting their obligation that

remains in dispute.           See Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 248 (1986) ("Only disputes over facts that might affect the

       4
       Appellants assert that there is a factual dispute about the
number and timing of the payments they made on the line of credit,
but this argument is both undeveloped and unsupported by the
evidence they cite.      See App. at 112-116 (highlighting six
payments, all of which were acknowledged by the FDIC).       It is
therefore waived. See Cruz v. Bristol-Myers Squibb Co., PR, 699
F.3d 563, 572 (1st Cir. 2012) (deeming waived a "woefully
undeveloped" argument that was "not supported by reference to
either legal authority or evidence in the record").

                                             -7-
outcome of the suit under the governing law will properly preclude

the entry of summary judgment."); Calero-Cerezo v. U.S. Dep't of

Justice, 355 F.3d 6, 19 (1st Cir. 2004) ("[A] 'material fact' is

one that has the potential of affecting the outcome of the case.").

The district court therefore properly granted summary judgment in

favor of the FDIC on the collection action.5

     5
       For the first time on appeal, appellants argue summarily
that neither Colón-Feliciano nor EER-IPR may be held responsible
for the $700,000 debt because only Estrada-Rivera signed the
promissory note and other loan documents.          The argument is
untimely, and thus forfeited. See Randall v. Laconia, N.H., 679
F.3d 1, 5 (1st Cir. 2012) ("[Appellant's] perfunctory treatment, as
well as his raising this argument for the first time on appeal,
waives the issue.").
     Moreover, appellants have repeatedly acknowledged EER-IPR's
responsibility for the debt. For example, their opposition to the
motion for summary judgment states that "[t]he loan . . . subject
of this litigation, was granted to EER-IPR, but under the name of
Mr. Digno Emérito Estrada Rivera at the behest of [the] Bank."
The opposition also states that "R-G Premier Bank effectively
impeded EER-IPR from fulfilling its payment obligations under the
credit facility subject of this lawsuit." Appellants' Opposing
Statement of Material Facts reports that all payments on the loan
were made by EER-IPR.
     Colón-Feliciano's liability arises from her status as Estrada-
Rivera's wife. See P.R. Laws Ann. tit. 31, § 3661 (stating that
"[a]ll debts and obligations contracted during the marriage by
either of the spouses" are "[c]hargeable to the community
property"); see also Dyno Nobel, Inc. v. Amotech Corp., 959 F.
Supp. 109, 113, 115 (D.P.R. 1997) (recognizing exceptions,
inapplicable here, to liability for conjugal partnership, and
noting that wife and conjugal partnership must be included as
parties for judgment to be executed against them). In addition,
appellants stated in their counterclaim that EER-IPR was controlled
by Estrada-Rivera, Colón-Feliciano, and their conjugal partnership.

                                -8-
B.   Counterclaim

           The district court dismissed the counterclaim on the

ground that appellants failed to follow the mandated administrative

process for maintaining a court action against the FDIC.                  Although

they filed a timely proof of claim with the agency, the district

court found that they took no further action within the sixty-day

period   after   the    FDIC    disallowed   the    claim.        See    12   U.S.C.

§ 1821(d)(6) (providing that disallowance will be final unless

claimant requests administrative review, or files or continues an

action in district court, within sixty days of FDIC notice of

disallowance).      The court held that their inaction divested the

federal courts of jurisdiction to consider the claim.                     See id.

§ 1821(d)(13)(D); see also Acosta-Ramírez v. Banco Popular de P.R.,

712 F.3d 14, 19-20 (1st Cir. 2013) (describing the governing

administrative claims process).

           We    find   it     unnecessary   to    delve   into    the    parties'

arguments about appellants' compliance, or lack thereof, with the

statutory claims procedures. About a week after the district court

issued its ruling on the counterclaim, the FDIC published notice of

its determination that the Bank has insufficient assets to make any

distribution on the claims of general unsecured creditors, a

category that would include appellants if they prevailed on their

counterclaim. The FDIC stated that, accordingly, "all such claims,

asserted or unasserted, will recover nothing and have no value."

                                      -9-
See Determination of Insufficient Assets To Satisfy Claims Against

Financial Institution in Receivership, 76 Fed. Reg. 50733-01, 2011

WL 3562786 (Aug. 16, 2011).     The FDIC's no-value determination,

unchallenged by appellants, "precludes any relief for [claimants]

even i[f] they . . . obtained a favorable judgment" on their claim.

FDIC v. Kooyomjian, 220 F.3d 10, 15 (1st Cir. 2000).       Without a

redressable claim, appellants cannot satisfy the constitutional

case or controversy requirement.       Id. (noting that the case or

controversy requirement means that claimants must have "'suffered

some actual injury that can be redressed by a favorable judicial

decision.'" (quoting Iron Arrow Honor Soc'y v. Heckler, 464 U.S.

67, 70 (1983))).

          Moreover, as the FDIC observes, even if "some theoretical

case or controversy exists," dismissal of the counterclaim would

still be warranted as a matter of prudential mootness.      Numerous

courts have reached that conclusion in equivalent circumstances.

See, e.g., Henrichs v. Valley View Dev., 474 F.3d 609, 615 (9th

Cir. 2007); Maher v. FDIC, 441 F.3d 522, 525-26 (7th Cir. 2006);

First Ind. Fed. Sav. Bank v. FDIC, 964 F.2d 503, 507 (5th Cir.

1992); Adams v. Resolution Trust Corp., 927 F.2d 348, 354 (8th Cir.

1991); Wallis v. IndyMac Fed. Bank, 717 F. Supp. 2d 1195, 1198-1200

(W.D. Wash. 2010).

          The   district    court   therefore   properly   dismissed

appellants' counterclaim.

                                -10-
                                     II.

             For the reasons we have explained, the district court

properly abbreviated this case.            Appellants' attempt to escape

summary judgment on the collection action by positing a factual

dispute over the Bank's conduct founders on the requirements of

section 1823(e). Their effort to revive the dismissed counterclaim

is   blocked   by   the    FDIC's   determination   that   the   Bank   has

insufficient assets to pay any judgment in favor of general

unsecured creditors.        We therefore affirm the district court's

judgments.

             So ordered.

                                    -11-