Court Opinion

ID: 70434
Source: CourtListenerOpinion
Date Created: 2010-04-26 07:02:07+00
Date Added: 2024-06-11T11:50:31.437375
License: Public Domain

United States Court of Appeals,

                          Eleventh Circuit.

                       Nos. 94-2929, 94-2930.

   Gonzalo AGUILAR, M.D., Doroteo C. Audije, M.D., Doroteo M.
Barnes, M.D., Juan Bauer, M.D., Leonardo Del Rosario, M.D., et al.,
Appellants-Plaintiffs,

                                 v.

 FEDERAL DEPOSIT INSURANCE CORP., as Receiver for Southeast Bank,
N.A., etc., Receiver-Appellee,

 SOUTHEAST BANK, N.A., a national banking association, fka First
Federal Savings and Loan Association of Jacksonville, Defendant.

   Morteza YAVARI, M.D., St. Jude Medical, Home Health Systems,
Inc., Plaintiffs-Appellants,

   Gonzalo Aguilar, M.D., Doroteo C. Audije, M.D., Doroteo M.
Barnes, M.D., Juan Bauer, M.D., Leonardo Del Rosario, M.D., et al.,
Plaintiffs,

                                 v.

 FEDERAL DEPOSIT INSURANCE CORP., a Receiver for Southeast Bank,
N.A., a national banking association, formerly known as First
Federal Savings and Loan Association of Jacksonville, Defendant-
Appellee,

  Southeast Bank, N.A., a national banking association fka First
Federal Savings and Loan Association of Jacksonville, Defendant.

                           Sept. 12, 1995.

Appeals from the United States District Court for the Middle
District of Florida. (No. 91-747-CIV-J-20), Harvey E. Schlesinger,
Judge.

Before HATCHETT and EDMONDSON, Circuit Judges, and GIBSON*, Senior
Circuit Judge.

     PER CURIAM:

     These two appeals involve the interpretation and application

of the section of the Financial Institutions Reform, Recovery, and

     *
      Honorable John R. Gibson, Senior U.S. Circuit Judge for the
Eighth Circuit, sitting by designation.
Enforcement     Act   ("FIRREA")   on   agency   review    and   judicial

determination of claims against the Federal Deposit Insurance

Corporation ("FDIC").      12 U.S.C. § 1821(d)(6).        These separate

appeals began as a single state court action brought by fourteen

plaintiffs against Southeast Bank.         Before removal to federal

court, the state court granted Southeast's motion for summary

judgment against eleven of the plaintiffs (the Aguilar case),

leaving three plaintiffs to continue the case (the Yavari case).

Because the district court erred in its interpretation of section
1821(d)(6), we reverse the district court's dismissal of both

cases.

The Aguilar Case

         The Aguilar plaintiffs ("Plaintiffs") appealed the summary

judgment granted against them in state court.      During the pendency

of the appeal, Southeast Bank was declared insolvent; and the FDIC

was appointed receiver.      The FDIC properly removed the case to

federal district court, and Plaintiffs filed a motion to modify or

to vacate judgment in the district court to appeal to this Court.1

     1
      In Resolution Trust Corp. v. Bakker, 51 F.3d 242 (11th
Cir.1995), we said that when a financial institution receivership
case is removed to federal court following the entry of a state
court judgment, the dissatisfied party must make a Civil Rule of
Procedure 59 motion to vacate or to modify the judgment within
ten days of the removal date. Id. at 245. This rule was first
set out in Jackson v. American Savings Mortgage Corp., 924 F.2d
195, 199 n. 9 (11th Cir.1991).

          In the present case, Plaintiffs filed their motion to
     modify or to vacate judgment thirteen days after the FDIC
     served its notice of removal to federal district court.
     Until 1993, we had not decided that Civil Rule of Procedure
     6(e), which adds 3 days to the prescribed time to act or to
     respond after notice is served by mail, was not applicable
     to Rule 59. See Cavaliere v. Allstate Ins. Co., 996 F.2d
1111 (11th Cir.1993). So, we hold that in actions removed
         The FDIC moved for summary judgment or alternatively for a

stay on the grounds that Plaintiffs could not go forward with the

suit until they had exhausted their administrative remedies before

the FDIC.         On January 15, 1992, the district court stayed the

action     for     180    days   to   allow   Plaintiffs     to    exhaust    their

administrative           remedies.        The     FDIC     denied        Plaintiffs'

administrative claim on June 19, 1992;                   on July 15, 1992, the

court-ordered 180-day stay expired.                On January 28, 1993, the

district court held a status conference;             and on May 11, 1994, the

district court granted the FDIC's motion to dismiss with prejudice.

According        to   the   district    court's   reading     of    12    U.S.C.    §

1821(d)(6), Plaintiffs—within 60 days after their administrative

claims were denied—were required to take some action "to continue,"

that is, to go on with, the case.             We review the district court's

interpretation and application of section 1821(d)(6) de novo.                      Lee

v. Flightsafety Servs. Corp., 20 F.3d 428, 431 (11th Cir.1994).

        Under FIRREA, federal courts generally lack the authority to

decide claims against an institution in federal receivership until

the claimant has exhausted his administrative remedies against the

FDIC.     See Marquis v. Federal Deposit Ins. Corp.,                965 F.2d 1148

(1st Cir.1992). Where a lawsuit against a financial institution is

        to federal court before July 28, 1993, litigants filing Rule
        59 motions had thirteen days from the date the FDIC served
        by mail notice that the action was removed. We note that
        the FDIC never argued in district court that Plaintiffs'
        motion to modify or to vacate was made too late.

             In the light of the above, Plaintiffs' motion to strike
        the post-argument letter of supplemental authority and
        alternative motion for leave to submit additional briefing
        are moot.
pending when the FDIC is appointed receiver and the FDIC timely

insists on the use of its administrative processes, the court

action will be suspended, but only suspended;           the court retains

jurisdiction     while   the    plaintiff   exhausts   the   administrative

remedies.    Id. at 1155;      Whatley v. Resolution Trust Corp., 32 F.3d
905, 907-908 (5th Cir.1994);         12 U.S.C. § 1821(d)(12).

     Section 1821(d)(6)(A) of FIRREA provides that within 60 days

of the date the administrative claim is denied or within 60 days of

the date on which the 180-day period for administrative review

expires, whichever is earlier, the claimant may "file suit on such

claim (or continue an action commenced before the appointment of

the receiver)" in district court.           If the claimant fails to file

suit (or continue an action commenced before the appointment of the

receiver) before the end of that 60 day period, the claim is

disallowed;     and the claimant has no further rights to relief.        12

U.S.C. § 1821(d)(6)(B).

         None of the plain language of section 1821(d)(6) requires an

affirmative act in a case like this one;         the statute does not say

what a claimant must do to "continue," that is, to go on with, an

action.     Congress was precise in its choice of words in other

sections. For example, section 1821(d)(8)(D) specifically requires

a "motion to renew" a previously filed suit after the FDIC denies

a claim for expedited review.2        12 U.S.C. § 1821(d)(8).     Given the

     2
      The legislative history focuses on giving the FDIC time to
settle claims administratively. The focus is not on what
claimants must do to "continue" an action after the FDIC denies
their administrative claims. See H.R.Rep. No. 54(l ), 101st
Cong., 1st Sess. 418 (1989), reprinted in 1989 U.S.C.C.A.N. 86,
214. In the Aguilar case, Plaintiffs filed their administrative
claim on December 24, 1991, and the claim was denied on June 19,
lack of express congressional direction, we hold that, where the

district court entered a stay of definite duration, claimants need

not take affirmative action to "continue" a suit which was filed

before the appointment of the receiver:    the suit goes on when the

stay expires.

      This   interpretation   is   consistent   with   the   purpose   of

FIRREA—quick and efficient processing of claims. Marquis, 965 F.2d

at 1154.     Congress was clear in providing the FDIC with the

opportunity to settle claims on its own before federal judicial

intervention;   the FDIC has 180 days in which to process the claim

administratively. 12 U.S.C. § 1821(d)(5). These provisions mostly

benefit the FDIC.   But, nothing in the statute explicitly provides

the FDIC with the additional benefit of requiring a claimant to

take additional affirmative steps to let the FDIC and the federal

court know the claimant is serious about its preexisting (but

temporarily suspended) lawsuit;      filing a lawsuit is enough to

signal seriousness and to protect a claim so long as the claimant

does not fail to participate (for example, fails to attend a

conference or a deposition) in the action once the court-ordered

stay expires.

     The Plaintiffs' failure to exhaust administrative remedies is

1992. The FDIC had its statutory opportunity to review this
claim administratively.

          We know that there is one line in the legislative
     history that suggests a motion to renew was contemplated in
     a case like this one. But, we think this isolated statement
     buried in the legislative history is not enough to amend the
     language used (or not used) in the statute, nor enough to
     alter the well-established expectations of litigants that
     when a stay expires, a suit is automatically active.
for the FDIC to assert.        Whatley, 32 F.3d at 908.     When a court

enters a definite stay (as in this case, a 180-day stay), the case

becomes active when the stay expires.          This result reflects the

usual practice in American courts when stays are issued.3         Applying

the usual practice seems fair to the claimants and does not hurt

the FDIC, unless one counts as "hurt" having to defend a claim on

its merits.         If Congress directs us to depart from the usual

practice, we will;       but we are unwilling to depart without clear

instructions, especially when Congress has given clear instructions

in other contexts.       If the administrative remedies have still not

been exhausted when the stay expires, it is for the FDIC to tell

the court so;       otherwise the suit just goes on.

     Reversed and remanded.

The Yavari Case

     This      appeal    involves   three    plaintiffs    (the   "Yavari

Plaintiffs") against whom summary judgment was not granted in state

court    in   the   original   combined   action.   The   district   court

dismissed the Yavari Plaintiffs' suit with prejudice, upon motion

of the FDIC, for failing to take affirmative action within the 60

day period following denial of their administrative claim.4

         Because nothing in section 1821(d)(6) explicitly requires a

claimant to take affirmative action to "continue" its case, we hold

     3
      See, e.g., Monatt v. Pioneer Astro Indus., Inc., 42
Colo. App. 265, 592 P.2d 1352 (1979) (stating that upon a stay's
termination an action proceeds).
     4
      In the Yavari case, the district court entered a 180-day
stay on November 22, 1991. The Yavari Plaintiffs filed their
administrative claim on December 24, 1991. The court-ordered
stay expired on May 22, 1992; their administrative claims were
denied on June 19, 1992.
that the district court erred in dismissing this case.    If, as in

this case, administrative remedies have not been exhausted upon the

expiration of a court-ordered stay of definite duration, the FDIC

should tell the court of the failure to exhaust these remedies.

The FDIC did not do so here.   Therefore, when the stay expired, the

case went on:   by the time Yavari Plaintiffs' case was dismissed,

the administrative remedies had been exhausted and the preexisting

lawsuit was in no sense suspended at that time.

     REVERSED and REMANDED.