Court Opinion

ID: 2961800
Source: CourtListenerOpinion
Date Created: 2015-09-21 20:48:02.86977+00
Date Added: 2024-06-11T09:32:56.149910
License: Public Domain

USCA1 Opinion

	

          March 4, 1993                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                              _________________________          No. 92-1976                          OAKVILLE DEVELOPMENT CORPORATION,                        TRUSTEE OF THE 10-12 LOPEZ ST. TRUST,                                Plaintiff, Appellant,                                          v.                        FEDERAL DEPOSIT INSURANCE CORPORATION,                                 Defendant, Appellee.                              _________________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                    [Hon. Walter Jay Skinner, U.S. District Judge]                                              ___________________                     [Hon.  Mark  L.  Wolf,  U.S. District Judge]                                             ___________________                              _________________________                                        Before                                Selya, Circuit Judge,                                       _____________                            Bownes, Senior Circuit Judge,                                    ____________________                               and Cyr, Circuit Judge.                                        _____________                              _________________________               David Hoicka,  with whom  Hoicka & Associates,  P.C. was  on               ____________              __________________________          brief, for appellant.               Edward J.  O'Meara, Staff  Counsel, FDIC,  with whom  Ann S.               __________________                                    ______          DuRoss,  Assistant General  Counsel,  Richard  J. Osterman,  Jr.,          ______                                __________________________          Senior Counsel, John Houlihan, Sarianna T. Honkola, and Edwards &                          _____________  ___________________      _________          Angell were on brief, for appellee.          ______                              _________________________                                    March 4, 1993                              _________________________                    SELYA,  Circuit  Judge.   Plaintiff-appellant  Oakville                    SELYA,  Circuit  Judge.                            ______________          Development  Corporation (Oakville)  challenges orders  issued by          two different  district judges which  had the combined  effect of          allowing a foreclosure  sale to  proceed.  For  the reasons  that          follow, we dismiss Oakville's appeal as moot.                                          I                                          I                      Oakville borrowed $78,000  from First American  Bank.          The loan  was evidenced  by a  promissory note  and secured  by a          second mortgage on  a parcel  of real property  located at  10-12          Lopez Street, Cambridge, Massachusetts.  On October 19, 1990, the          bank  was declared  insolvent and  the Federal  Deposit Insurance          Corporation (FDIC)  was appointed  as receiver.   Oakville's loan          appeared on the bank's books as an asset.                    The  FDIC   published   notice  to   First   American's          creditors, setting  a 90-day deadline  for the filing  of claims.          Because  Oakville  was mired  in  a dispute  with  First American          regarding the  aforementioned loan,  it filed a  proof of  claim.          The FDIC  rejected Oakville's  claim as  untimely and  refused to          entertain administrative appeals.  Oakville did not seek judicial          review within the time  allotted.  See 12 U.S.C.    1821(d)(6)(A)                                             ___          (1988).  Some months later, however, Oakville sued in state court          based on First  American's alleged failure  to accept and  credit          payments on the loan.  The FDIC removed the case to federal court          and moved for dismissal.  The FDIC's motion remains undecided.                    Because  Oakville's  payments  were   substantially  in          arrears, the FDIC  also embarked on foreclosure proceedings.   It                                          2          scheduled a  foreclosure  sale for  May  20, 1992.    On May  15,          Oakville  moved to  enjoin the  proposed sale.   On  May  19, the          district court (Skinner, U.S.D.J.) issued a temporary restraining          order  (TRO) stalling the sale.   Oakville subsequently failed to          submit  documents and appear  at a  hearing.   Accordingly, Judge          Skinner dissolved the TRO on July 13, 1992.                    The FDIC readvertised the  foreclosure sale, this  time          stipulating  a  date  of August  12,  1992.    Oakville filed  an          emergency  motion to  reinstate  the TRO.1    The district  court          (Wolf, U.S.D.J.)  denied the  motion, determining that  the court          lacked  statutory authority  to grant  an injunction  against the          FDIC  qua receiver.   See 18 U.S.C.    1821(j) (1988).   Oakville                ___             ___          took  an appeal but did not request  a stay of the impending sale          (although  counsel  claims  that  he circulated  notices  at  the          auction, warning prospective bidders that an appeal was pending).          The property  was sold  to a  third party  and has  since changed          hands.                                          II                                          II                    It  is important  to  stress that  Oakville takes  this          appeal strictly and  solely from two interlocutory  orders of the          district court:   Judge Skinner's  order dissolving  the TRO  and          Judge  Wolf's order  refusing to  reinstate the  injunction (and,          thus, allowing  the  foreclosure sale  to proceed).   Hence,  the          merits are  not before us  and Oakville's action  remains pending                                        ____________________               1The motion was filed on August 11, 1992.  Judge Skinner was          on vacation.  In his absence, Judge Wolf presided.                                          3          below.  Seen in  this light, it  is readily apparent that,  since          the  foreclosure  sale  has now  taken  place  and  title to  the          property rests  with  a  third  party, reversing  the  orders  in          question would give Oakville no more than a moral victory.  Ergo,          its appeal is moot.                       Article  III of  the Constitution confines  the federal          courts'  jurisdiction  to those  claims  which  embody an  actual          "case" or "controversy."  U.S. Const.  art. III,   2, cl. 1.   It          is well established  that, in circumstances where  a court cannot          provide  effectual relief,  no justiciable  case remains  and the          court must dismiss the appeal  as moot.  See Mills v.  Green, 159                                                   ___ _____     _____          U.S. 651, 653 (1895).  This doctrine applies with full force  and          effect  where, as here, a  plaintiff appeals from the dissolution          of an injunction or the denial of injunctive relief, but neglects          to  obtain a stay.  When, as will often happen, the act sought to          be  enjoined actually  transpires,  the court  may thereafter  be          unable  to fashion  a   meaningful anodyne.   In  such straitened          circumstances, the appeal becomes moot.  See, e.g., In re Stadium                                                   ___  ____  _____________          Management  Corp., 895 F.2d 845, 847 (1st Cir. 1990) (holding, in          _________________          analogous circumstances,  that "[a]bsent  a stay, the  court must          dismiss  a  pending  appeal as  moot  because  the  court has  no          remedy"); In re Continental Mortgage Investors, 578 F.2d 872, 877                    ____________________________________          (1st Cir. 1978) (explaining that "[a]n appeal  is considered moot          if it cannot affect the matter in issue or cannot grant effectual          relief"); see  also Railway Labor Executives  Ass'n v. Chesapeake                    ___  ____ _______________________________    __________          W. Ry., 915 F.2d 116,  118 (4th Cir. 1990), cert. denied,  111 S.          ______                                      _____ ______                                          4          Ct. 1312 (1991); In re Kahihikolo, 807 F.2d 1540, 1542 (11th Cir.                           ________________          1987) (per  curiam); Holloway  v. United  States, 789  F.2d 1372,                               ________     ______________          1374  (9th Cir. 1986); In  re Combined Metals  Reduction Co., 557                                 _____________________________________          F.2d 179, 189 (9th Cir. 1977); In re Information Dialogues, Inc.,                                         _________________________________          662 F.2d 475, 476 (8th Cir. 1981); In re Cantwell, 639 F.2d 1050,                                             ______________          1053-54 (3d Cir. 1981).                                         III                                         III                    Appellant offers  three counter arguments in  an effort          to ward off the inevitable.  We consider them seriatim.                                                           ________                                          A                                          A                    Oakville  contends that we  can grant  effective relief          even at this late date.  Its contention assumes that the sale can          be   voided  because  prospective  purchasers  were  notified  of          Oakville's pending appeal.2  Oakville's premise is wrong.                    Oakville furnishes no authority to contradict the black          letter  law that  a  sale to  a good  faith  purchaser cannot  be          rescinded  in these circumstances.  See, e.g., Mass. Gen. L. Ann.                                              ___  ____          ch. 106,   2-702 (West 1990) (explaining that a seller's right to          reclaim   goods  is  subject  to  the  rights  of  a  good  faith          purchaser).   Generally speaking, a  good faith purchaser  is one          who  purchases assets  for value,  without fraud,  misconduct, or          knowledge of adverse  claims.  In re  Bel Air Assocs., Ltd.,  706                                         ____________________________          F.2d  301,  304-05  (10th  Cir.  1983);  Greylock Glen  Corp.  v.                                                   ____________________                                        ____________________               2We address this  argument even though  the record does  not          contain  a  copy of  the supposed  notice  or any  other specific          information as  to its contents or  as to the manner  in which it          was distributed.                                          5          Community Sav. Bank, 656 F.2d 1, 3-4 (1st Cir. 1981).   Knowledge          ___________________          of a pending appeal,  without more, does not deprive  a purchaser          of good faith status.   Put another way, claims asserted in  such          an  appeal are  not "adverse  claims" within  the meaning  of the          rule.   See Greylock  Glen, 656 F.2d  at 4 (holding  that a bank,                  ___ ______________          although  a party  to a  pending appeal,  was nonetheless  a good          faith purchaser); In re Dutch Inn of Orlando, Ltd., 614 F.2d 504,                            ________________________________          506  (5th  Cir. 1980)  (holding  that  a third-party  purchaser's          knowledge  of claims asserted in a pending appeal did not deprive          the  purchaser  of  good  faith  protection);  see  also  Stadium                                                         ___  ____  _______          Management, 895  F.2d at 848  n. 4;  cf. 11 U.S.C.    363(m)  (an          __________                           ___          appeal  of the authorization to  hold a bankruptcy  sale does not          affect the good faith  status of an ensuing transaction).   Thus,          Oakville  takes nothing simply  by reason  of having  told likely          bidders about its pending appeal.                                          B                                          B                    Oakville's  second  basis for  claiming  that  we could          still grant  effective relief is  predicated on the  notion that,          under  Massachusetts law, it has a right to redeem the foreclosed          property.3  Thus, its thesis runs, the appeal is alive because an          affirmative exercise of redemptive  rights will unravel the sale.          The infertility of this theory is starkly apparent.                     As  previously  remarked,  Oakville  appeals  only the                                        ____________________               3Whether Oakville has such a right is far from pellucid.  In          general, Massachusetts law does not provide a right of redemption          where  the  "land has  been  sold pursuant  to  a  power of  sale          contained in the mortgage deed,"   Mass. Gen. L. Ann. ch.  244,            18 (West 1988), as would appear to be the case here.                                          6          dissolution  of  the  TRO  and the  district  court's  subsequent          refusal to  reinstate it.   But,  redemption assumes  a completed          foreclosure   not a stalled sale.  Thus, whatever state-law right          of redemption Oakville might have is independent of the merits of          the challenged  orders.  Indeed, it is the lifting of the TRO and          the consequent happening of  the foreclosure that allows Oakville          to pursue its  claimed redemptive  remedies.  What  is more,  our          contemplation  of  whatever  as-yet-unexercised redemptive  right          Oakville  may enjoy  would contravene  Article III's  prohibition          against  advisory opinions.    See  Holloway,  789 F.2d  at  1374                                         ___  ________          (refusing to reach merits  of redemption argument where purchaser          of  property was  not  a party  because  to do  so  would be  "an          advisory opinion upon a moot question") (citations omitted).                                           C                                          C                    Appellant  also  argues  that  its  appeal  skirts  the          jurisdictional bar because the  question presented is "capable of          repetition, yet evading  review."  Southern Pac. Terminal  Co. v.                                             ___________________________          ICC,  219  U.S. 498,  515  (1911).   Although  this  asseveration          ___          fastens  upon a  recognized  exception to  general principles  of          mootness, see, e.g., Caroline  T. v. Hudson Sch. Dist.,  915 F.2d                    ___  ____  ____________    _________________          752, 757 (1st  Cir. 1990); In re Grand Jury Proceedings, 814 F.2d                                     ____________________________          61, 68 (1st Cir. 1987); Anderson v. Cryovac, Inc., 805 F.2d 1, 4-                                  ________    _____________          5 (1st  Cir.  1986), the  exception  is not  a  juju, capable  of          dispelling mootness  by mere  invocation.  Rather,  the exception          applies  only  if  there  is  "a 'reasonable  expectation'  or  a          'demonstrated probability'  that the same  controversy will recur                                          7          involving  the same complaining party."  Murphy v. Hunt, 455 U.S.                                                   ______    ____          478, 482 (1982) (quoting Weinstein v. Bradford, 423 U.S. 147, 149                                   _________    ________          (1975)).                      Appellant's case  does not  come within the  margins of          this  definition.    Unlike  pregnant women,  who  are  likely to          conceive again,  see Roe v.  Wade, 410 U.S.  113, 125  (1973), or                           ___ ___     ____          handicapped  children, who  are  likely to  require placement  in          subsequent school years, see  Honig v. Doe, 484 U.S.  305, 317-23                                   ___  _____    ___          (1988),  it is highly unlikely that appellant will again secure a          mortgage with a federally insured bank that then fails, prompting          FDIC  involvement and  ensuing foreclosure.4   Appellant  has not          shown, or even  alleged, that  it has the  slightest prospect  of          suffering  this fate anew.   Instead, appellant contends that the          FDIC's arbitrariness  will imperil  other property owners.   But,          even  if  this  contention  is  true,  it  is  irrelevant:    the          possibility   or even the probability   that others may be called          upon  to  litigate similar  claims  does  not  save a  particular          plaintiff's case from mootness.   See Lane v. Williams,  455 U.S.                                            ___ ____    ________          624,  634 (1982); Pallazola v.  Rucker, 797 F.2d  1116, 1129 (1st                            _________     ______          Cir. 1986).   Thus, appellant  cannot bring its  case within  the          narrow  confines  of  the  "capable of  repetition,  yet  evading          review" exception.                                          IV                                          IV                    While  most  of  appellant's  claims against  the  FDIC                                        ____________________               4The record in this  case does not show that  appellant owns          any  other property, has any other mortgage loans, or retains any          borrowing power.                                          8          remain to be litigated below, its claims pertinent to  injunctive          relief  became  moot  when  the property  was  sold  at  auction.          Although the transgressions of the FDIC may be a tempting subject          for soliloquy, for us to pronounce judgment in the absence of any          effective remedy would be to wander impermissibly  into the realm          of the advisory and           the hypothetical.   Because jurisdictional concerns  prevent this          court  from  rendering  judgment   where  no  relief  is  legally          possible, we must go no further.5                    The appeal is dismissed as moot.  Costs to appellee.                    The appeal is dismissed as moot   Costs to appellee                    _______________________________   _________________                                        ____________________               5The  FDIC  has  asked  that  we   order  appellant  to  pay          attorneys' fees and double costs.  While the question is not free          from  doubt, we decline, on balance, to impose sanctions.  We do,          however, award the FDIC its ordinary costs.                                          9