Court Opinion

ID: 2962380
Source: CourtListenerOpinion
Date Created: 2015-09-21 20:57:03.595529+00
Date Added: 2024-06-11T11:42:28.657077
License: Public Domain

USCA1 Opinion

	

          February 3, 1994                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ___________________          Nos.  93-1427                93-1613                              RHETTA B. SWEENEY, ET AL.,                               Plaintiffs, Appellants,                                          v.                        RESOLUTION TRUST CORPORATION, ET AL.,                                Defendants, Appellees.                                 ____________________                                     ERRATA SHEET               The opinion  of this  court issued on  January 31,  1994, is          amended as follows:               Page 7, line  21, should read "January 11,  1991" instead of          "January 11, 1993."                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ___________________          Nos. 93-1427               93-1613                                          RHETTA B. SWEENEY, ET AL.,                               Plaintiffs, Appellants,                                          v.                        RESOLUTION TRUST CORPORATION, ET AL.,                                Defendants, Appellees.                                  __________________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                   [Hon. Edward F. Harrington, U.S. District Judge]                                               ___________________                                 ___________________                                        Before                                 Breyer, Chief Judge,                                         ___________                            Selya and Cyr, Circuit Judges.                                           ______________                                 ___________________               Rhetta B. Sweeney, on brief pro se.               _________________               Paul R. Gupta, Joseph F. Shea and  Nutter, McClennen & Fish,               _____________  ______________     _________________________          on brief for appellees.                                  __________________                                   January 31, 1994                                  __________________                 Per Curiam.  Appellants Rhetta Sweeney, individually and                 __________            as trustee of the Maple Leaf Realty Trust and of the Canadian            Realty  Trust, and  John Sweeney  [the  Sweeneys] appeal  the            final judgment entered by the United States District Court of            the  District of Massachusetts for appellees Resolution Trust            Corporation  [RTC], in  its capacity  as  receiver of  ComFed            Savings  Bank,  ComFed  Mortgage  Company,  Inc.  and  Comfed            Advisory Company,  Inc. [collectively  "ComFed"], and  Dennis            Furey,  an  employee of  ComFed Mortgage  Company, Inc.   The            Sweeneys also appeal  the district court award to  the RTC of            attorneys'  fees incurred  in responding  to  what the  court            found a frivolous motion to remand.  We affirm.                                      Background                                      Background                 In 1987,  the Sweeneys  borrowed $1,600,000  from ComFed            for construction  of single  family homes  and other work  on            their property in Hamilton, Massachusetts.  The obligation is            evidenced  by  a  promissory note,  a  loan  agreement  and a            construction loan agreement, all dated August  27, 1988.  The            Sweeneys  allege that  ComFed also  agreed  to an  additional            $900,000  in construction financing.   ComFed denies  that it            made  any agreement  as  to  a further  loan.   The  Sweeneys            defaulted on the note and, in November 1988, ComFed initiated            foreclosure proceedings.                   In April 1989, the Sweeneys filed a nine count complaint            in   Middlesex  Superior   Court  asserting   various  lender                                         -3-            liability  claims against ComFed  and Furey.   ComFed filed a            counterclaim  seeking   a  determination  of   the  Sweeney's            liability to ComFed under the terms of the $1,600,000 note on            which the Sweeneys had allegedly defaulted.  In October 1989,            the superior court  issued an injunction barring  ComFed from            foreclosing on the Sweeney's mortgaged property.                 In March  1990,  after a  twelve day  trial, a  superior            court  jury  returned  a   special  verdict  awarding  ComFed            $2,069,586.33  for  the  Sweeneys' breach  of  the  note, and            Rhetta   Sweeney  $65,000   for  intentional   infliction  of            emotional distress.  The court reserved to itself judgment on            two counts:  ComFed's alleged violation of Mass.  Gen. L. ch.            93A  and the  claim for  specific performance  of an  alleged            agreement by ComFed to a partial release of the mortgage.                   On  December 13, 1990, the RTC was appointed conservator            of Comfed and,  on January 11, 1991, removed the  case to the            United   States   District   Court   for   the  District   of            Massachusetts.1  No judgment had  yet been entered on the two            counts tried to the superior  court.  However, on January 30,            1991, the superior court purported to enter judgment on those            two counts.   The court purported to find for the Sweeneys on                                            ____________________            1.  On January  31, 1991, the  RTC was appointed  receiver of            ComFed  and  conservator of  ComFed, F.A.   On  September 13,            1991, the RTC was appointed receiver of ComFed, F.A.  The RTC            as  receiver of ComFed  retains the liabilities  in this case            while the RTC as receiver of ComFed, S.A. retains the assets.            "RTC" as used in this opinion  refers to the RTC in both  its            roles.                                         -4-            their  chapter 93A claim in the amount of $2,998,931.44, plus            interest  and costs,  and  attorneys' fees  of  $97,704.   No            copies or notices of this  opinion were mailed to the parties            by the court clerk.                 On January 31, 1991, counsel  for the RTC learned of the            purported  opinion when  he went  to  the Middlesex  Superior            Court Clerk's office to transport  the record to the  federal            district court.2   Believing  the opinion  to  be a  nullity,            counsel contacted the Massachusetts Attorney General's Office            to urge  that the opinion  be withdrawn.  The  superior court            refused  to do  so and  instead released  the opinion  to the            Sweeneys  on February  25, 1991.   Counsel  for the  RTC then            filed  the opinion  with the  district court  under seal  and            moved to  expunge  it from  the  record.   On  March  1,  the            Sweeneys filed  a motion to  remand the case to  the superior            court   on  the  ground   that  the  district   court  lacked            jurisdiction.                 After  a series  of  evidentiary hearings,  the district            court  determined that the  case had been  removed on January            11, 1991 and found that the Sweeneys' objection, which was in            the court's view an objection to venue not jurisdiction,  was            untimely.    On January  9,  1992,  the  RTC moved  that  the            district  court enter the superior court  jury verdict in its                                            ____________________            2.   Testimony was  presented before the district  court that            this was in conformity with Middlesex Court practice.                                         -5-            entirety and grant the RTC summary judgment on the two counts            which had been  tried to  the superior court.   On April  14,            1992, the district court entered the jury verdict and granted            summary  judgment to the RTC.   On April  27, 1992, the court            vacated  the superior court  injunction.  Final  judgment was            entered on  February 9, 1993.   On February 13,  1993, Rhetta            Sweeney, purporting to act on  behalf of all the  plaintiffs,            filed  a third  motion to  remand  the case  to the  superior            court.  Finding that the motion made no new factual  or legal            argument,  the  district  court  allowed  the RTC's  request,            pursuant to Fed. R. Civ.  P. 11, for attorneys' fees incurred            in responding to  this motion.  The Sweeneys  now appeal both            the final  order of  the court and  the grant  to the  RTC of            attorneys' fees.                                     Discussion                                      Discussion                 The Sweeneys contend first that the district court erred            in  denying their  motion to  have the  case remanded  to the            superior  court.   According to  appellants,  removal to  the            United  States   District   Court   for   the   District   of            Massachusetts was  improper since  12 U.S.C.    1441(a)(l)(3)            allows for  removal only to the United  States District Court            for  the  District  of  Columbia.3   Construing  this  as  an                                            ____________________            3.    At  the  time  of  appellants'  motion,     1441a(l)(3)            provided that venue was proper in:                 the  United States District  Court for the District                 of  Columbia, or if the action, suit, or proceeding                                         -6-            objection to venue,  the district court denied the  motion on            the ground that it had been filed more than thirty days after            removal.  See 28 U.S.C.    1447(c).  The Sweeneys argue  that                      ___            this period should have been tolled because of the RTC's "bad            faith" in  withholding  from  them  a copy  of  the  superior            court's  purported  judgment,  the  existence  of  which  the            Sweeneys discovered only on February 25, 1991.4                 Even  if we  grant  arguendo that  venue  in the  United                                     ________            States District Court  for the District of  Massachusetts was            improper  pursuant  to   1441(a)(l)(3) and  that  appellants'            motion  is subject  to equitable  tolling, we  still find  no            error in the district court's denial of appellants' motion to            remand.  28 U.S.C.   1441(a) provides that                                             ____________________                 arises out of  the actions of the  Corporation with                 respect to  an institution for which  a conservator                 or a receiver has been appointed, the United States                 district   court  for   the   district  where   the                 institution's principal business is located.            Since this  suit did  not arise  "out of  the actions  of the            Corporation,"  venue was  proper only  in  the United  States            District  Court  for  the  District  of  Columbia.    Section            1441a(l)(3)  was amended effective  February 1, 1992.   Under            the  amended section, venue would be proper in Massachusetts.            We express no opinion as  to whether this amendment should be            applied retroactively.            4.  The  Sweeneys  appear   to  concede  that  12   U.S.C.               1441a(l)(3) is a venue not  a jurisdictional statute.  See In                                                                   ___ __            re 5300 Memorial  Investors, Ltd., 973  F.2d 1160, 1163  (5th            ________________________________            Cir. 1992) (federal  courts "consistently have  construed the            former provision in  section 1441a(l)(3) . . .  as concerning            solely venue and  not jurisdiction").  The district court had            jurisdiction  over  this  action  pursuant  to  12  U.S.C.               1441a(l)(1).                                         -7-                 [e]xcept as otherwise expressly  provided by Act of                                       _________                 Congress, any civil action brought in a State court                 of which the  district courts of the  United States                 have original jurisdiction may be  removed . . . to                 the district  court of  the United  States for  the                 district  and  division embracing  the  place where                 such action is pending. (emphasis added)          Since nothing  in 12 U.S.C.   1441a(l)(3) expressly limits venue,          the general venue provision of  28 U.S.C.   1441(a) is applicable          to this case.  See Hellon & Assoc., Inc. v. Phoenix Resort Corp.,                         ___ ____________________     ___________________          958 F.2d 295, 298 (9th Cir. 1992) (removal proper under   1441(a)          since "[n]othing  in the statutory language provides  that RTC is          limited  to the  specific  removal  provision  found  in  section          1441a(l)(3)");  Resolution Trust Corp. v. Lightfoot, 938 F.2d 65,                          _____________________     _________          68  (7th Cir.  1991) (finding  removal provision  of 12  U.S.C.            1441a(l)(3)  "to supplement, rather  than to replace,  those of            1441(a)").   Given that the RTC removed this case to the district          court of  the United States  where the action was  pending, venue          was proper pursuant to 28 U.S.C.   1441(a) and appellants' motion          to remand was properly denied.                 The Sweeneys next contend that the district court erred in          not  entering the  purported judgment  of the  superior court  in          their favor.  However, the district court supportably  found that          this case had been  removed to the federal  court on January  11,          1991.   "At  that  point,  the jurisdiction  of  the state  court                                         -8-          'absolutely ceased, and  that of the [federal  court] immediately          attached,'"  Hyde Park Partners.  L.P. v. Connolly, 839 F.2d 837,                       ________________________     ________          841 (1st  Cir. 1988) (quoting  Steamship Co. v. Tugman,  106 U.S.                                         ____________     ______          118,  122 (1882)), and the state court was under an obligation to          "proceed no  further unless and  until the case  [wa]s remanded,"          28 U.S.C.   1446(e); see also Tugman,  106 U.S. at 122 (once case                               ___ ____ ______          removed,  state court  had "duty .  . . to  proceed no further").          Consequently, the purported judgment of the state court was "void          ab initio," Hyde Park Partners, 839 F.2d at 842, and the district          __ ______   __________________          court committed no error in  refusing to enter judgment in accord          with it.                 The  Sweeneys' third contention is that the district court          improperly granted summary  judgment to the RTC  on the Sweeneys'          claim  under chapter  93A    2(a).5   Appellants  argue that  the          district court  erred when  it found that  their claim  relied on          alleged  promises not  in writing  and  hence was  barred by  the          doctrine enunciated  in D'Oench, Duhme  & Co. v.  Federal Deposit                                  ____________________      _______________          Ins.  Corp., 315  U.S. 447  (1942) and  codified  at 12  U.S.C.            __________          1823(e).                  The  Sweeneys' principal claim  under chapter 93A  is that          the  closing loan  documents  were  "misleading, oppressive,  and          unconscionable" in that they led  the Sweeneys to understand that          ComFed would provide them with construction financing in addition                                            ____________________            5.  Mass.  Gen. L.  c. 93A    2  protects against  "unfair or            deceptive acts  or practices in  the conduct of any  trade or            commerce."                                         -9-          to  the  $1,600,000   loan  actually  provided.     According  to          appellants, ComFed knew that without the additional financing the          Sweeneys would be forced to default on the original agreement, as          in fact happened.                   The D'Oench doctrine  applies to the RTC when  it acts, as                     _______          in the instant case, in its capacity as receiver, see 12 U.S.C.                                                              ___          1441a(b)(4)(A), and  extends to  the financial  interests of  any          wholly owned subsidiaries of a failed institution,  see Oliver v.                                                              ___ ______          Resolution  Trust  Corp., 955  F.2d 583,  585-86 (8th  Cir. 1992)          _______________________          (citing  cases).6  It  bars affirmative claims,  whether sounding          in  contract or  tort, when  they  are premised  on an  unwritten          agreement.  Timberland Design,  Inc. v.  First  Service Bank  for                      _______________________      ________________________          Sav., 932 F.2d 46, 50 (1st Cir. 1991) (citing cases).  To satisfy          ___          the strictures of  D'Oench and   1823(e) appellants  must show an                             _______          agreement in writing  to provide the additional loans.   The mere          fact that  the appellants  relied in good  faith on  an unwritten          agreement is not enough.  Federal Deposit Ins. Corp. v. Caporale,                                    _________________________     ________          931 F.2d 1, 2 (1st Cir. 1991).                   In  the  instant  case, the  Sweeneys  have  identified no          written  provision of any  loan document which  explicitly states          that such  additional financing  would be  forthcoming.   Rather,          they  claim  that  they "reasonably  understood"  ComFed  to have          committed itself to  such financing based on the  language of the          agreements.  Yet, the only  provisions which they cite in support                                            ____________________            6.  Furey is not a defendant in the chapter 93A claim.                                         -10-          of  this  position  are  far  too  ambiguous,  absent  extraneous          support,   to   establish   an   agreement    to   fund   further          construction.7   At  most, they reflect  an intention  to provide          further funds.   However, they  are insufficient to  establish an          obligation  on   the  part  of   ComFed  which  would   meet  the          requirements  of D'Oench.  See, e.g.,  Federal Sav.  &  Loan Ins.                           _______   ___  ___    __________________________          Corp. v.  Two Rivers Assoc., Inc., 880 F.2d 1267, 1276 (11th Cir.          ____      ______________________          1989) (requirements of  D'Oench not met where  written provisions                                  _______          reflect only intent to  loan additional funds but  not obligation          to do so);  Beighley v. Federal Deposit Ins. Corp., 868 F.2d 776,                      ________    _________________________          783 (5th Cir. 1989) (even  though one might derive inference from          documents that bank would cooperate in attempt to sell  property,          requirements of    1823(e) not  met since "not a  single document          states in writing" that bank agreed to finance buyer).                   The Sweeneys also seek to  base their chapter 93A claim on          ComFed's alleged violation of 12 C.F.R.   545.32.  This provision                                            ____________________            7.   The Sweeneys rely (1) on a clause  of the loan agreement            which  requires them  to pay a  "1% nonuse  fee in  the event            COMFED does not  finance the development and  construction of            the 7  plus/minus additional  lots;" (2) on  a clause  in the            construction loan  agreement which  states  that the  "Lender            shall no[] longer  be bound by this  Agreement . . .  if said            building or buildings and improvements shall not be completed            on or  before twelve  (12) months from  the date  hereof, but            Lender may advance payments but  shall not be bound to  do so            after  the date for said completion;" and  (3) on a clause in            the  construction loan agreement which gave ComFed "the right            to  withhold 10% of the final  advance until forty-three (43)            days .  . . after  the full completion of  the construction."            Neither the references  to possible future financing  nor the            references   to  the   project's   completion  establish   an            obligation on the part of ComFed to fund the entire project.                                         -11-          requires,  in relevant part,  that a federal  savings association          may  not  make a  real estate  loan  if the  loan  "exceed[s] the          applicable maximum loan-to-value ratio limitations prescribed [by          the   association's  board   of  directors]."      12  C.F.R.              545.32(d)(4).   According to appellants, the $1,600,000 loan they          received was more than the 75% loan to value ratio established by          the Board of Directors of ComFed.8                 Even  if the loan  granted the Sweeneys  violated ComFed's          own limitation, and hence 12 C.F.R.    545.32, we are aware of no          authority which would  indicate that this violation would  be, as          appellants assert,  a "per se  violation" of chapter 93A.   While                                 ___ __          violations  of certain  federal consumer protection  statutes may          come within  the purview of chapter 93A    2,9 12 C.F.R.   545.32          is not a  consumer protection statute but a  "means of protecting          insured  depositors,  the  [FDIC] fund,  and  ultimately  federal          taxpayers."   Saratoga Sav.  & Loan Ass'n.  v. Federal  Home Loan                        ___________________________      __________________          Bank Bd.,  879 F.2d 689, 693 (9th Cir. 1989).  We are aware of no          _______          authority supporting the  claim that  an alleged  violation of             545.32 suffices  to state  a cause of  action under  chapter 93A.                                            ____________________            8.   The property was appraised at $1,960,000.            9.   According to Mass. Regs. Code tit. 940,   3.16.4:                 an act or practice is a violation of M.G.L. c. 93A,                    2 if  .  .  . [i]t  violates  the Federal  Trade                 Commission Act, the Federal Consumer Protection Act                 or  other  federal   consumer  protection  statutes                 within the purview of M.G.L. c. 93A,   2.                                         -12-          The  district court  did  not  err in  granting  the RTC  summary          judgment on the chapter 93A claim.10                 The  Sweeneys  also  assert  that,  if  the  case  is  not          remanded,  they are entitled to  a new trial  in federal court on          the claims decided by the jury in the state action and entered by          the federal district  court after removal.   The district  court,          relying on  Fed. R.  Civ. P.  63,   entered judgment  on all  the          claims  which had  been  tried to  the jury  in  the state  court          action.11   The Sweeneys do  not contend that the  district court          was without  authority to  so enter the  judgment.   Instead they          assert  that  they  suffered  prejudice from  the  entry  of  the          verdict.  See  Fed. R. Civ.  P. 63.   They argue  that they  were                    ___          prejudiced first because the jury verdict was clearly against the          weight of the evidence.  The Sweeneys also contend that the entry          of the verdict  prejudiced them because  the parties had  agreed,          prior to the superior court trial, that the jury claims and those                                            ____________________            10.   Since the Sweeneys  make only passing reference to  the            grant  of  summary  judgment  on  their  claim  for  specific            performance,  any objection to this judgment has been waived.            See Ryan v. Royal Ins. Co., 916 F.2d 731, 734 (1st Cir. 1990)            ___ ____    _____________            (issue  referred to  in  perfunctory  manner  on  appeal  and            without developed argumentation deemed waived).            11.  Rule 63 provides, in relevant part, that:                      If a trial  or hearing has been  commenced and                 the judge is unable to proceed, any other judge may                 proceed with  it upon  certifying familiarity  with                 the  record and determining that the proceedings in                 the  case may be completed without prejudice to the                 parties.                                         -13-          presented to the  court would be tried  on the same set  of facts          simultaneously.  Therefore, the district court should either have          entered both  the jury  verdict and the  state court  judgment or          granted a new trial on all counts.                  We find  no prejudice from  the court's entry of  the jury          verdicts.  As to the first argument, the Sweeneys are entitled to          have the jury verdict set aside only if they demonstrate that the          verdict  was a  "manifest miscarriage  of justice."12   Milone v.                                                                  ______          Moceri  Family, Inc.,  847 F.3d  35, 37  (1st Cir.  1988) (citing          ___________________          cases).  The Sweeneys have failed to meet this exacting standard.          As to the second, the jury reached  its verdict after hearing the          facts  presented at  trial; summary judgment  was granted  by the          district court to the RTC as a matter of law and on  the basis of          federal  defenses which  arose only  after  the trial.   In  such          circumstances, appellants suffered no  prejudice from the failure          to try both sets of claims simultaneously to the judge and jury.                 The  remaining substantive claims  raised by  the Sweeneys          merit  only brief  responses.   Since the  opinion issued  by the          superior court on January 31, 1991,  was void ab initio, there is                                                        __ ______          no basis  for entering it  nunc pro tunc.   For the  same reason,                                     ____ ___ ____                                            ____________________            12.  The Sweeneys moved for a new trial in the state court on            the ground  that the jury  verdict was against the  weight of            the evidence.  This motion  was not acted upon before removal            and,  therefore,  was  arguably pending  before  the district            court.   The district court,  however, made no ruling  on the            motion.                                           -14-          that  opinion cannot affect the propriety of the district court's          entrance of the jury verdict.                   The RTC did not engage in impermissible forum shopping  in          removing  this  action  to  the  federal  court.    12  U.S.C.             1441a(l)(3)(A) allows the RTC to remove an action brought against          it  in its  capacity  as receiver  even while  a state  appeal is          pending.  Resolution Trust Corp.  v. Nernberg, 3 F.3d 62,  68 (3d                    _____________________      ________          Cir. 1993);  Lester v.  Resolution Trust  Corp.,  994 F.2d  1247,                       ______     ______________________          1251-52 (7th Cir. 1993); In re 5300 Memorial Investors, Ltd., 973                                   __________________________________          F.2d 1160, 1162  (5th Cir. 1992); see also,  Federal Deposit Ins.                                            ___ ____   ____________________          Corp.  v. Keating, No. 93-1230,  slip. op. at 4-7 (1st Cir.  Dec.          ____      _______          29, 1993)  (12 U.S.C.    1819(b)(2), the removal statute  for the          Federal Deposit Insurance Corporation, identical in relevant part          to  the RTC removal provision, allows  removal while state appeal          is pending).                 The Sweeneys have failed to  make a showing that they have          discovered  new evidence  relating  to the  issues  tried to  the          superior court  jury which would be "of such nature that it would          probably change the result if a new trial is granted."  Nickerson                                                                  _________          v. G.D.  Searle and Co., 900 F.2d 412,  417 (1st Cir. 1990).  The             ___________________          only  evidence they  have  adduced  does  not appear  related  to          actions which form the basis of their complaint.                 The Sweeney's request for an injunction preventing the RTC          from foreclosing on the real property securing their $1.6 million          dollar  note is barred  by 12 U.S.C.    1821(j).   See Telematics                                                             ___ __________                                         -15-          Int'l, Inc. v.  NEMLC Leasing Corp., 967 F.2d  703, 707 (1st Cir.          __________      __________________          1992).                 None of the other contentions raised by the Sweeneys as to          the disposition of their claims possesses any merit.                 Finally, the  Sweeneys appeal  the grant  by the  district          court, pursuant to Fed.  R. Civ. P. 11, of the  RTC's request for          attorneys'  fees  incurred  in responding  to  appellants'  third          motion to  remand the case to  the superior court.   The district          court previously denied two almost identical motions and had made          detailed findings of fact as to both the date of the  removal and          the  RTC's  right  to  remove.    The court  did  not  abuse  its          discretion in imposing sanctions for this repetitive motion.  See                                                                        ___          Mariani v. Doctors Assoc.,  Inc., 983 F.2d 5, 7-8 (1st Cir. 1993)          _______    ____________________          (affirming imposition  of Rule 11  sanction for filing  of second          motion which "consisted of virtually verbatim argumentation" from                                               ________          a prior motion on which appellants had not prevailed).13                   The judgment of the district court is affirmed.  The grant                                                       ________          of  attorneys' fees to the RTC pursuant to  Fed. R. Civ. P. 11 is          affirmed.          ________                                            ____________________            13.  Local  Rule 54.3  is inapplicable  since  this is  not a            "case[] where  the  law  makes provision  for  the  award  of            attorneys'  fees" but  one  in  which  attorneys'  fees  were            imposed as a sanction under Fed. R. Civ. P. 11.                                         -16-