Federal Deposit Insurance Corp. v. Moss

1991 OK 116, 831 P.2d 613, 62 O.B.A.J. 3418, 1991 Okla. LEXIS 129, 1991 WL 226538

• Court: Supreme Court of Oklahoma
• Decided: November 5, 1991
• Docket: 69253
• Status: Published

Opinions

SUMMERS, Justice.

As a result of the downturn in Oklahoma’s economy during the 1980’s the Federal Deposit Insurance Corporation has become a major litigant in many courthouses. In today’s case the FDIC has functioned in two capacities: one as receiver of a failed bank to which money was owed on a note, and another as insurer of a second failed bank alleged to owe money to a depositor. The FDIC in these two capacities is brought together here because the debtor of the first failed bank happens to be the depositor of the second. Our issue is framed by FDIC’s claim that it must be treated separately in its dual capacities— that its suit on behalf of failed bank number one is not subject to any offset or counterclaim against failed bank number two. This is our first opportunity to examine the dual roles of the FDIC and how they fit into Oklahoma’s civil procedural establishment.

FACTS AND BACKGROUND

Moss borrowed money from the Bank of Newcastle and gave his promissory note. The Bank of Newcastle failed, and on May 16, 1985, the FDIC was appointed by the State Banking Commissioner as its liquidating agent. The Moss note went into default. FDIC filed this suit, attempting to collect the debt owed the bank. Moss answered, disputing the amount owed. He also counterclaimed, asserting that FDIC was holding funds belonging to him in excess of the total amount owed on his note. These funds were in the form of certificates of deposit owned by him and issued by the Dill State Bank. Dill State Bank had become insolvent on July 7, 1985, and FDIC had been appointed as liquidating agent for that failed bank. In other words, Moss wants to offset FDIC’s claim against him for his note to Bank of Newcastle, by using money he says is rightfully his but which is being withheld by FDIC for Dill State Bank, because FDIC is responsible for Dill State Bank’s deposits.

Moss filed a motion for summary judgment on his counterclaim. In his motion, he claimed that FDIC in its capacity as corporate insurer owes him the total amount of his certificates of deposit. He attached copies of the certificates of deposit held by FDIC. In response to the summary judgment motion, FDIC urged that the counterclaim of Moss should not be allowed because a debt owed by one receivership (Dill State) could not be set off against a debt due another receivership (Newcastle). FDIC also urged that the primary action filed involved FDIC as liquidating agent for Newcastle, rather than FDIC in its corporate capacity (or capacity as liquidating agent for Dill,)¹ and thus the counterclaim was not proper under the Oklahoma Pleading Code, 12 O.S.Supp.1984 § 2013.

Finally, FDIC stated there was a factual defense to the counterclaim, that the records of Dill State Bank show that Moss’ three certificates of deposit had been cashed by the president of the bank with the consent of Moss. As support for this, FDIC-Newcastle attached to its response the copy of a check made payable to Moss, endorsed by the bank president “as per telephone conversation with Moss.” One other certificate of deposit presented by Moss was not found in the Dill State Bank records.

The trial court granted Moss’ motion for summary judgment on his counterclaim. In doing so, the court stated that FDIC, in both its capacities as liquidating agent and corporate insurer, had been granted two extensions of time to produce evidence to dispute Moss’ claim that the certificates of deposit were owing. FDIC had failed to produce any evidence to refute this other than the endorsement mentioned above. The court made a factual determination that insofar as the certificates were concerned, the FDIC was acting in its capacity as corporate insurer and was responsible for the loss, regardless of how it occurred. Finding no material facts in dispute, the trial court granted summary judgment as to Moss’ claim. Still pending in the trial court is the original action filed by FDIC on the note to Bank of Newcastle.

On appeal, the Court of Appeals, in an unpublished opinion, summarily affirmed the judgment of the trial court. Having earlier granted certiorari, we now vacate the opinion of the Court of Appeals, hold that the counterclaim was procedurally proper but not winnable at the summary judgment stage, and remand to the trial court.

IS THE APPEAL PREMATURE?

We first address the question of whether the trial court’s grant of summary judgment as to Moss’ counterclaim is a final disposition from which an appeal may lie. Generally, summary adjudication of less than all issues of a single cause of action is beyond the reach of review. See 12 O.S.1981 § 681; Mann v. State Farm. Mut. Auto. Ins., 669 P.2d 768, 771 (Okl.1983). This rule, however, does not include the situation wherein there are two distinct claims which arise out of separate transactions or wrongs. Oklahomans for Life, Inc. v. State Fair, 634 P.2d 704, 706 (Okl. 1981); see also Eason Oil Co. v. Howard Engineering, 755 P.2d 669, 671 (Okl.1988).²

In Eason, we addressed the question of whether the adjudication of a counterclaim may result in a final appealable disposition:

The rule is different when “multiple claims” in a case — whether denominated as claims, cross-claims or counterclaims — tender issues that address themselves to legal rights derived from a single occurrence or transaction. In those latter instances no judgment will result from the resolution of any single claim. All interrelated claims must be decided before judgment will be deemed to have been rendered. Conversely, when none of the multiple claims pressed in - the same action is interrelated with another, the trial court’s decision determining all the issues in a single claim will be deemed to constitute a judgment. The “interrelated claims” rule rests on the principle that issues pressed in multiple interrelated claims cannot be completely decided until all of the issues raised in each of the claims stand resolved. (Emphasis Added) (Id. at 671-72)

In our present case, Moss’ counterclaim against the FDIC in its capacity as Dill/corporate insurer is separate and distinct from the original claim of the FDIC as Newcastle/Liquidating Agent. Similarly, in Oklahomans for Life, 634 P.2d at 706, we held that summary judgment as to one cause of action was a final judgment that could be appealed. There, the petition stated two causes of action — one for tortious breach of a lease and one for acts of conspiracy. Because these two causes of action were based on “separate transactions or wrongs,” we held them to be separate and distinct from one another thereby allowing appeal of the summary disposition of one of the causes of action. Here, the two events giving rise to the different claims occurred at different times, in different towns and at different banks. The only relation between the two claims is the parties. On appeal, the FDIC urges that there is not even this common fact between the two actions.

Hence, under Eason and Oklahomans for Life, we find that the order of the trial court sustaining Moss’ request for summary judgment is a final appealable disposition. In granting the summary judgment the trial court ruled on all issues presented by Moss’ claim. Because his counterclaim was based on a separate and distinct occurrence, unrelated to the subject of the original suit, the appeal is properly before this Court.

PROCEDURAL ISSUES

Appellant FDIC raises several objections to the propriety of granting summary judgment. First, FDIC argues that Moss’ counterclaim should have been dismissed because it fell outside the boundaries of Federal Rule 13(b). FDIC also urges that dismissal was required because the “remedy” of setoff was not available to Moss. If we determine that the counterclaim was proper, FDIC then asserts that summary judgment was improper because factual disputes remain below.³

A. PERMISSIVE COUNTERCLAIMS AND THE “OPPOSING PARTY” REQUIREMENT

FDIC urges that Moss’ claim is not a proper counterclaim because it was not brought against an “opposing party.” The original action against Moss was brought by FDIC as receiver for Bank of Newcastle. Moss in turn filed a claim against FDIC as corporate insurer of Dill State Bank. Throughout the proceedings below, Moss treated the action as if it were a counterclaim. FDIC treated it as if it were a third-party cross-claim filed against FDIC-Dill in its corporate insurer capacity. On appeal, FDIC urges that it is not a proper counterclaim under the Oklahoma Pleading Code. Before we answer this question, it is necessary to explain the dual capacities of the FDIC and the impact of these different capacities on the “opposing party” requirement for a permissive counterclaim.

It is generally recognized by federal caselaw that the FDIC operates in two distinct capacities: (1) receiver or liquidating agent of insolvent banks, Jones v. F.D.I.C., 748 F.2d 1400, 1402 (10th Cir.1984), and (2) corporate insurer of deposits. To avoid inconvenience to the customers of the failed bank and the significant problems of liquidation, the FDIC, whenever feasible, employs a Purchase and Assumption Agreement in which the FDIC arranges for another bank to purchase the failed bank and reopen the failed bank without interruption of banking operations. Gunter v. Hutcheson, 674 F.2d 862, 864 (11th Cir.1982). The P & A Agreement involves three entities: (1) FDIC as Receiver or liquidating agent, (2) the purchasing bank and (3) FDIC as corporate insurer. When the FDIC is appointed as liquidating agent of a failed state bank, it is then called upon to act in dual capacities — as liquidating agent and as corporate insurer. Id.; F.D.I.C. v. Ashley, 585 F.2d 157, 160 (6th Cir.1978). “[T]he division of authority between the F.D.I.C. as receiver and F.D.I.C. as corporate insurer [sic] is statutorily mandated.... Section 1823 [12 U.S.C. § 1823], moreover, clearly contemplates transactions between the F.D.I.C. as receiver and F.D.I.C. as corporate insurer [sic].” Gunter, 674 F.2d at 862; see also F.D.I.C. v. Buttram, 590 F.Supp. 251, 254 (N.D.Ala.1984).

One central problem arises in a P & A agreement. Because the agreement must be carried out with great speed, the purchasing bank often does not have sufficient time to review and evaluate the risks of the failed bank. Thus, to accomplish a speedy transition, the P & A agreement provides that the purchasing bank need purchase only those assets of high quality. Those which are not purchased are returned to the FDIC as liquidating agent. FDIC as liquidating agent then sells those bad assets to FDIC in its corporate capacity. Id. The FDIC, in its corporate capacity, then attempts to collect on these returned assets.

While on its face the FDIC appears to be only one entity, federal statutes mandate the distinction in capacity. See 12 U.S.C. § 1823. FDIC in its corporate capacity is not responsible for the wrongs of FDIC as receiver. F.D.I.C. v. Roldan Fonseca, 795 F.2d 1102, 1109 (1st Cir.1986). The FDIC does not act in its receiver capacity after the assignment of “bad assets,” but rather in its corporate capacity. Batsakis v. F.D.I.C., 670 F.Supp. 749, 753 (W.D.Mich.1987). After FDIC in its corporate capacity acquires assets from the FDIC as receiver, FDIC-corporate may bring suit to recover on those assets “in its own right.” F.D.I.C. v. Bank of Boulder, 911 F.2d 1466, 1470 (10th Cir.1990).

The distinct capacities become relevant when Moss’ counterclaim is considered. In order to fall within the parameters of a permissive counterclaim under both Federal Rule 13(b) and 12 O.S.Supp. 1984 § 2013(B), the claim must involve an “opposing party.”⁴ See, e.g., Corning, 696 F.Supp. at 1247. A party may bring a permissive counterclaim “against an opposing party not arising out of the transaction or occurrence that is the subject matter of the opposing party’s claim.” See 12 O.S.Supp.1984 § 2013(B); Federal Rule 13(b). The “opposing party” requirement with respect to a counterclaim means that when a plaintiff has brought suit in one capacity, the defendant may not counterclaim against him in another capacity. Banco Nacional De Cuba v. Chase Manhatten Bank, 658 F.2d 875, 885 (2nd Cir. 1981). A counterclaim against the FDIC in a capacity other than as the original claimant cannot be sustained. F.D.I. C. v. Corning Savings & Ln. Ass’n, 696 F.Supp. 1245, 1247 (E.D.Ark.1988). See also Dove v. F.D.I.C., 154 Ga.App. 667, 269 S.E.2d 516 (1980). In this case, Moss’ counterclaim is procedurally legitimate only if the counterclaim involved the FDIC in the same capacity as the original claim.

Here, the FDIC was appointed as liquidating agent of both the Newcastle Bank and the Dill State Bank. In both cases, a P & A agreement was made, and banking operations never ceased. At the trial level, FDIC urged that it was not present in court in its capacity as corporate insurer, but was only present as a liquidating agent for Newcastle. It is this factual assertion which was the basis of FDIC’s argument that the counterclaim was not proper within the original action because there was no mutuality of parties.

However, on appeal, the FDIC has changed its position, apparently realizing that only the holder of Moss’ note has standing to bring suit. See, e.g., Dove, 269 S.E.2d at 517. In the reply brief, FDIC states that Moss’ promissory note was sold by FDIC as liquidating agent for Newcastle to FDIC in its corporate capacity. FDIC in its corporate insurer capacity is therefore the holder of the promissory note.

Moss’ counterclaim is against FDIC in its corporate insurer capacity. Because FDIC now clarifies on appeal that it appears in this lawsuit in its corporate insurer capacity, we agree that Moss’ counterclaim properly falls within Federal Rule 13(b) and 12 O.S.Supp.1984 § 2013(B). Moss’ claim arises out of a completely separate transaction, but involves the same party — FDIC in its corporate insurer capacity.

FDIC asserts on appeal that the counterclaim should not be permitted as it involves the failure of the Dill State Bank whereas the original action involved the Newcastle Bank. Relying on F.D.I.C. v. Berry, 659 F.Supp. 1475 (E.D.Tenn.1987), FDIC asserts that claims arising out of one receivership cannot be imputed to another receivership. However, because we have determined that the Plaintiff is FDIC in its corporate capacity rather than FDIC as receiver, which is also the proper party against whom the counterclaim lies, we need not address this question.

B. SETOFF

FDIC also asserts that setoff is not proper in this case because Moss’ counterclaim did not arise until after FDIC had been appointed as receiver for the Newcastle Bank. Relying on Bailey v. Lankford, 154 P. 672, 674 (Okl.1916) and FDIC v. McKnight, 769 F.2d 658 (10th Cir.1985), FDIC claims that a debtor cannot assert any rights to offset for debts or claims arising after the bank’s receiver is in place because the relationship between the parties is frozen as of the time of insolvency.

In McKnight, the FDIC was called in to be receiver of the failed Penn Square Bank. Immediately, FDIC reprogrammed the bank computers to reject any payment of more than $100,000.00. However, FDIC failed to program the computers to reject cashier’s checks above this amount. Before the computer error was corrected, two cashier’s checks in excess of the limit were cashed. An action was brought by the FDIC to recover the excessive payment. The defendants urged that the payment was final and restitution for the excess was not required. The Tenth Circuit held that at the time of the insolvency, the relation of the parties became “cast in stone”. Id. at 661. Regardless of the excessive payment, at the time of insolvency FDIC was bound by federal banking law which insured deposits only up to the amount of $100,000.00. Hence, the FDIC was entitled to recovery of all amounts in excess of $100,000.00.

We agree that as for the loan held by Newcastle, the relationship between FDIC as receiver of Newcastle and Moss was frozen when Newcastle became insolvent. However, we disagree that the Newcastle relationship extends and affects the relationship which later arose between FDIC as corporate insurer of Dill State Bank and Moss. If such were the case, Moss’ certificate of deposit at Dill State would in effect be “uninsured” because of the earlier insolvency of Newcastle. We decline to extend McKnight to cover the present factual situation.

As for Bailey, we agree that prior to the adoption of the present pleading code, the general rule for setoff was that a debtor could not assert any claim arising after the bank’s insolvency. See also Beams v. Young, 222 P. 952, 954 (Okla.1923). However, under the pleading code enacted in 1984, a party may file as a counterclaim “any claim against an opposing party” regardless of whether it arises out of a transaction separate from the initial claim. See 12 O.S.Supp.1984 § 2013(B). The purpose of such a broad rule is to allow the disposition of all claims at once. Mayes v. Local 106, Int’l Union of Operating Engineers, 739 F.Supp. 744, 748 (N.D.New York 1990). Permissive counterclaims include those claims that were formerly known as setoffs in Oklahoma practice. See Committee Comment to Section 2013; see also 12 O.S.1981 § 272 (now repealed and replaced by 12 O.S.Supp.1984 § 2013). A trial court has ancillary jurisdiction of a permissive counterclaim in the form of a setoff. United States v. Thermo Contracting Corp., 437 F.Supp. 195, 199 (D.New Jersey 1976). Furthermore, Section 2013(E) provides that a claim which matured or was acquired after the serving of a pleading may, with the court’s consent, be added and presented as a counterclaim.

Here, the initial action was filed on December 5, 1985. When Moss answered, he reserved the right to plead further with regard to counterclaims. On July 14, 1986, he amended his answer to assert his counterclaim. Dill State Bank was declared insolvent several months after Newcastle’s insolvency. Clearly the counterclaim did not mature until the failure of Dill State Bank on July 7,1985. However, we believe that regardless of the fact that it accrued or matured after the Newcastle failure, Section 2013 allows for such a counterclaim by way of setoff to be filed. Bailey is not determinative of this issue because it was decided long before the enactment of our current Pleading Code.

FACTUAL DISPUTES

The central factual question surrounding Moss’ counterclaim is whether Moss consented to the bank president’s actions of withdrawing the certificates of deposit, and depositing them into the president’s account. Moss states that he had no knowledge of and did not consent to such actions. However, the endorsement on the back of the cheek stated that the action was taken with the consent of Moss.

Summary judgment is a procedural tool used to reach a final judgment in those cases where there is no dispute as to any material fact. Manora v. Watts Regulator Co., 784 P.2d 1056, 1058 (Okl.1989). The court may not weigh evidence, but may only review the evidence presented to determine whether there is a factual dispute. Stuckey v. Young Exploration Co., 586 P.2d 726, 730 (Okl.1978). All inferences in the evidence must be taken in favor of the opposing party. Erwin v. Frazier, 786 P.2d 61 (Okl.1989). Summary judgment will be denied if under the evidence, reasonable men could reach a different conclusions. Runyon v. Reid, 510 P.2d 943, 946 (Okl.1973). The issue is not proper for summary judgment and must be presented to a jury if different conclusions as to the facts may be drawn with regard to a particular fact question. Anderson v. Falcon Drilling Co., 695 P.2d 521, 524 (Okl.1985).

Here, the facts surrounding Moss’ certificates of deposit are cloudy. Moss claims that the bank president was not authorized to cash them or to deposit them in the president’s personal account. In its reply brief, FDIC asserts that no evidence was ever presented to the trial court as to the whereabouts of the money, or as to whether it was embezzled by the bank president. FDIC also claims that Moss consented to whatever the president did. Remembering that the trial court may not, at this stage, weigh the evidence, we find that summary judgment was not properly granted. There is evidentiary material before the court that Moss consented to the Dill Bank President’s cashing in his certificates. At least one material factual dispute remains as to Moss’ counterclaim.

The opinion of the Court of Appeals is vacated. The summary judgment of the district court is reversed and the matter remanded for further proceedings on the counterclaim.

HODGES, Y.C.J., and LAVENDER, DOOLIN, HARGRAVE and ALMA WILSON, JJ., concur. OPALA, C.J., and SIMMS, J., dissent. KAUGER, J., not participating.

1 . In this opinion we use "receiver" and “liquidating agent" interchangeably for FDIC in its first capacity. We use "corporate” or "corporate insurer” to describe it in its second.

2 . There are statutory exceptions to the general rule; (1) interlocutory orders appealable by statutory right, see 12 O.S.1981 §§ 952, 953 and (2) orders certified for appeal prior to final judgment. See 12 O.S.1981 § 993. These are not at issue here.

3 . We do not address the remainder of the issues raised by FDIC because they were not presented in the amended petition for certiorari. See Ford v. Ford, 766 P.2d 950, 952 (Okl.1988).

4 . We address this issue under both federal and state procedural rules because of the complications involved when the FDIC acts in dual capacities with regard to a state bank. Federal law applies if the action involves FDIC — corporate, but state law may apply if it is the receiver capacity in which the FDIC appears. See F.D.I.C. v. Roldan-Fonseca, 795 F.2d 1102, 1106 (1st Cir.1986); F.D.I.C. v. Ashley, 585 F.2d 157, 161-62 (6th Cir.1978).