Court Opinion

ID: 6939036
Source: CourtListenerOpinion
Date Created: 2022-07-24 00:54:20.099154+00
Date Added: 2024-06-11T16:07:36.979155
License: Public Domain

ORDER
Family Federal Savings & Loan Association (Family Federal) was a federally insured thrift headquartered at Dallas, Oregon. On January 10, 1990, the Office of Thrift Supervision determined that Family Federal was insolvent. The Office, therefore, appointed the Resolution Trust Corporation as receiver for Family Federal, and on that date, RTC purchased all of Family Federal’s claims against its directors and officers. Over three years later, on September 8, 1993, RTC, as successor in interest to Family Federal, filed this action against Kenneth Smith, Richard Hoffman, Robert Bateman, William Dalton, Jack Darley, Stanley Hammer, and Robert Lorence. It alleged causes of action for negligence, breach of fiduciary duty, and breach of contract.
In January of 1984, Smith, Dalton, Darley, Hammer and Lorence were members of the board of directors of Family Federal. Bate-man became a member in 1984, after the death of another member. At all relevant times, they constituted the majority of the board of directors of Family Federal. Hoffman was the Family Federal’s Loan Manager at all relevant times.
In January of 1984, the Board of Directors approved the purchase of a $2,000,000 participation in a $31,000,000 loan to finance construction of a hotel, and by May of that year the directors and officers were aware of difficulties which had come to light; it then appeared that the loan had been ill advised.
In May of 1985, the directors agreed to fiind $2,900,000 of time share loan paper, which involved time share units located at Indian Wells Resort. That also turned out to be a poor investment, which was criticized by federal examiners as early as April of 1986.
Stephen Way, who did not participate in those transactions, became a director in August of 1987. Before that, he had beén an officer and had attended board meetings from at least November 1983 forward. Other officers also attended board meetings throughout that time.
The defendants asserted that the claims for negligence, breach of fiduciary duty, and breach of contract were barred by Oregon’s two-year statute of limitations because the wrongful acts, if any, were known to Family Federal long before the RTC became its receiver. See O.R.S. § 12.110; see also Jaquith v. Ferns, 297 Or. 783, 785 n. 1, 687 P.2d 1083, 1084 n. 1 (1984) (negligence); Securities-Intermountain, Inc. v. Sunset Fuel Co., 289 Or. 243, 259-60, 611 P.2d 1158, 1167 (1980) (contract claims tied to negligence claim); Sabre Farms, Inc. v. Jordan, 78 Or.App. 323, 327, 717 P.2d 156, 158-59 (breach of fiduciary duty), supplemented, 80 Or.App. 789, 723 P.2d 1078 (1986). It is clear that claims which are barred under state law are not revived upon the appointment of *1053RTC. See F.D.I.C. v. McSweeney, 976 F.2d 532, 534 (9th Cir.1992), cert. denied, 508 U.S. 950, 113 S.Ct. 2440, 124 L.Ed.2d 658 (1993).
The district court determined that although the Oregon statute of limitations would otherwise have run, the accrual of the causes of action in question was postponed because Oregon would apply the disinterest-' ed majority version of the adverse domination doctrine to those claims. See Resolution Trust Corp. v. Smith, 872 F.Supp. 805, 813-15 (D.Or.), amended, 879 F.Supp. 1059 (1995). Courts throughout the country have taken differing views on whether adverse domination theory should be applied to toll the statute of limitations for (or to prevent the accrual of) claims which are not based upon fraud. Compare Resolution Trust Corp. v. Grant, 901 P.2d 807, 814-16 (Ok. 1995) (does not apply to negligence) with Hecht v. Resolution Trust Corp., 333 Md. 324, 635 A.2d 394, 406 (1994) (the doctrine applies generally). Similarly, courts have disagreed on whether the version which should be applied is the “disinterested major- • ity version” or the “single disinterested director version.” Compare Grant, 901 P.2d at 816-18 (disinterested majority), with Resolution Trust Corp. v. Chapman, 895 F.Supp. 1072, 1079 (C.D.Ill.1995) (single disinterested director).
If the doctrine of adverse domination does not apply in this case, the defendants will be entitled to judgment because the statute of limitations will have run. If it does apply, the version used may itself be disposi-tive.
CERTIFICATION OF QUESTIONS
Questions of Oregon State Law may be determinative of this cause. We have, however, found no controlling precedent in the decisions of the Supreme Court of Oregon. We, therefore, respectfully request that the Supreme Court of Oregon exercise its discretion pursuant to the Uniform Certification of Questions of Law Act, ORS §§ 28.200-28.255, and answer the following questions:
(1) Under Oregon law does the doctrine of adverse domination delay the running of the statute of limitations for causes of action based upon negligence? Does it do so for causes of action based upon breach of fiduciary duty? Does it do so fpr causes of action based upon breach of contract?
(2) If the doctrine of adverse domination does apply to any or all of the mentioned causes of action, what version is applied, the disinterested majority version or the single disinterested director version?
OTHER ORDERS
(1) The Clerk of this Court shall transmit to the Supreme Court of Oregon a certified copy of this Order, as well as the appellate briefs for this case.
(2) Pursuant to Ore. R.App. Proc. 12.20(5)(c), the Clerk of this Court shall transmit to the Supreme Court- of Oregon all or any portion of the district court record in this case as that Court deems necessary or appropriate.
(3) The parties to this action and their counsel are:
Federal Deposit Insurance Corporation, a federal corporation, as manager of the FSLIC Resolution Fund, Plaintiff-Appellee William R. Tumbow, Esq. Hershner, Hunter, Moulton & Andrews P.O. Box 1475 Eugene, Oregon 97440-1475
Kathyrn R. Norcross, Esq. Federal Deposit Insurance Corp. 550-17th Street, N.W. Washington, D.C. 20429
Kenneth H. Smith Defendant-Appellant E. Joseph Dean, Esq. Stoel, Rives, Boley, Jones & Grey 900 S.W. Fifth Avenue Portland, Oregon 97204-1268
*1054Richard Hoffman Defendant-Appellant E. Joseph Dean, Esq. (see above) Richard Hoffman (pro se)
Robert Dene Bateman E. Defendant-Appellant 477-B N.W. Douglas Street Dallas, Oregon 97338-1022 Joseph Dean, Esq. (see above)
William M. Dalton Defendant-Appellant E. Joseph Dean, Esq. (see above)
Jack C. Darley Defendant-Appellant E. Joseph Dean, Esq. (see above)
Stanley N. Hammer Defendant-Appellant E. Joseph Dean, Esq. (see above)
Robert B. Lorence Defendant-Appellant E. Joseph Dean, Esq. (see above)
(4) The parties shall file a report with this Court on the status of this case 180 days after the date of this Order and every 180 days thereafter.
DATED: 5/7/96
/s/ Stephen Reinhardt Honorable Stephen Reinhardt, Presiding Ninth Circuit Court of Appeals