Berco Investments v. FDIC

• Court: Court of Appeals for the Fifth Circuit
• Decided: July 11, 1996
• Docket: 95-50926
• Status: Unpublished

Opinion

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 95-50926 (Summary Calendar)

BERCO INVESTMENTS, INCORPORATED,

Plaintiff-Appellant,

versus

FEDERAL DEPOSIT INSURANCE CORPORATION, in both its Corporate capacity and as receiver for Texas Federal Savings Association,

Defendant-Appellee.

Appeal from the United States District Court for the Western District of Texas (SA-95-CV-472)

June 21, 1996

Before GARWOOD, WIENER and PARKER, Circuit Judges.

PER CURIAM:*

Plaintiff-Appellant Berco Investments, Inc. (Berco) appeals

from an order of the district court, made final pursuant to Fed. R.

Civ. P. 54(b), dismissing under Fed. R. Civ. P. Rule 12(b)(6) the

* Pursuant to Local Rule 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in Local Rule 47.5.4. Resolution Trust Corporation (RTC) in its corporate capacity (RTC-

Corporate) from Berco’s breach of contract suit against both RTC-

Corporate and the RTC as receiver (RTC-Receiver) of Texas Federal

Savings Association. Concluding that the district court’s

dismissal of RTC-Corporate was improvidently granted, we vacate

that order and remand the case for further proceedings.

I.

FACTS AND PROCEEDINGS

Berco filed suit in state court against RTC-Corporate and RTC-

Receiver, alleging that, in both capacities, the RTC

unconditionally accepted Berco’s offer to purchase a promissory

note for $198,000, then failed to complete the transaction. RTC,

in both capacities, removed the case to federal court where RTC-

Corporate and RTC-Receiver filed a joint motion to dismiss Berco’s

suit. In addition to issues that are not relevant to this appeal,

RTC-Corporate argued that it should be dismissed because it was not

the proper party to this dispute. The court was reminded by RTC-

Corporate that it was an entity separate and distinct from RTC-

Receiver, and that RTC-Receiver was the owner of the note in

question and thus had sole authority to sell it.

Berco responded to this motion by asserting that it had

entered into negotiations with the RTC for the purchase and sale of

the note. Berco noted that the negotiations proceeded through

written correspondence, which was ambiguous as to whether the RTC

was negotiating in its corporate capacity or strictly as the

2 receiver for Texas Federal Savings Association. In September

1995, the district court granted RTC-Corporate’s dismissal motion,

reasoning that “Berco’s complaint fails to allege that RTC-

Corporate was involved in the negotiations” regarding sale of the

note. In November 1995, the district court certified this order as

a final judgment pursuant to Fed. R. Civ. P. 54(b), and Berco

timely filed a notice of appeal. Later that month, the RTC filed

a notice of statutory succession and substitution which advised

that the RTC would dissolve on December 31, 1995, and that it would

be succeeded by the Federal Deposit Insurance Corporation (FDIC).

II

ANALYSIS

The sole issue of this appeal is whether the district court

erred in concluding that, for purposes of Rule 12(b)(6), Berco

failed to state a claim against RTC-Corporate on which relief could

be granted. We review the district court’s Rule 12(b)(6) dismissal

order de novo. McGrew v. Texas Bd. of Pardons & Paroles, 47 F.3d

158, 160 (5th Cir. 1995). Accepting all well-pleaded facts as true

and viewing them in the light most favorable to the plaintiff, we

will uphold a dismissal “only if it appears that no relief could be

granted under any set of facts that could be proven consistent with

the allegations.” Id. (quotation and citation omitted).

In granting the motion to dismiss, the district court

supported its conclusion that RTC-Corporate could not be held

3 liable for breach of contract on the sale of the note by citing

Howerton v. Designer Homes by Georges, Inc., 950 F.2d 281, 283 (5th

Cir. 1992) for the proposition that RTC-Corporate is a separate

legal entity which cannot be held liable for the acts of RTC-

Receiver. Berco does not dispute the rule in Howerton; rather,

Berco correctly points out that Howerton does not apply to the

dispute at hand, i.e., whether in fact RTC-Corporate ever

negotiated with Berco regarding the purchase and sale of the note.

If any possible set of facts would allow a finding that it had,

then RTC-Corporate could be held responsible for its own acts, not

just vicariously liable for the acts of RTC-Receiver.

RTC-Corporate urges that the district court did not err in

dismissing it from this suit, given Berco’s admission that all

negotiations relevant to the note occurred after the appointment of

RTC-Receiver. RTC-Corporate’s argument depends on the assumption

that once RTC-Receiver acquired ownership of the note RTC-Corporate

could not have negotiated with Berco regarding its sale. But this

assumption does not necessarily follow.

Berco concedes that it does not know whether it negotiated

exclusively with RTC-Receiver or RTC-Corporate, or both. Berco

also concedes that the evidence might ultimately prove that only

RTC-Receiver is responsible for the breach of contract.

Nevertheless, insists Berco, some of the transactional documents

indicate the possibility that RTC-Corporate may have been involved

in the negotiations involving the subject note.

4 An RTC document entitled Confidentiality Agreement for Review

of Assets was sent to Berco. Its preamble states that “[t]he

Resolution Trust Corporation, acting in its corporate capacity or

in its capacity as conservator or receiver of one or more

depository institutions (the “RTC”), has determined to offer for

sale certain assets (the “Assets”).” In Resolution Trust Corp. v.

Camp, 965 F.2d 25, 29 (5th Cir. 1992), we noted that the ownership

of a note could not be conclusively determined simply because the

RTC had taken over a failed institution. As an example, we noted

an unpublished decision in which the FDIC as receiver had conveyed

assets of a failed bank to another bank and to FDIC-Corporate.

See id. at 29 n.1 (citation omitted). There does, therefore,

appear to be a set of facts that would allow for the possibility

that RTC-Corporate was the entity (or conceivably one of two) that

was negotiating with Berco to purchase the note in question.

Consequently, the district court should not have dismissed the

claim against RTC-Corporate for failure to state a claim upon which

relief could be granted. It follows that we must vacate that

court’s Rule 54(b) order and remand the case for further

proceedings consistent with this opinion.

VACATED AND REMANDED.