Kansas Public Employees Retirement System v. Reimer & Koger Associates, Inc.

61 F.3d 608
Court of Appeals for the Third Circuit·Decided September 6, 1995·No. 94-3063·Published·Cited by 1 cases

Opinion

61 F.3d 608

KANSAS PUBLIC EMPLOYEES RETIREMENT SYSTEM, Plaintiff-Appellee,
v.
REIMER & KOGER ASSOCIATES, INC., a Kansas corporation;
Ronald Reimer, an individual; Kenneth H. Koger, an
individual; Clifford W. Shinski, an individual; Brent
Messick, an individual; Robert Crew, an individual; Defendants,
Frank Morgan, an individual; Sherman Dreiseszun, an
individual; Leland Gerhart, an individual; I.I. Ozar, an
individual; Raymond Gifford, an individual; Harry S.
Jonas, an individual; Ralph E. Kiene, an individual;
Randall M. Nay, an individual; Defendants-Appellants,
Frank Sebree, an individual; Defendant,
Tony Salazar, an individual; Philip Pistilli, an
individual; Defendants-Appellants,
Michael K. Russell, an individual; Gage & Tucker, a law
partnership; Peat, Marwick, Mitchell & Co., an accountancy
firm; KPMG Peat Marwick, an accountancy firm; Robert
Spence, an individual, Defendants,
Frank Morgan; Sherman Dreiseszun; Leland Gerhart; I.I.
Ozar; Raymond Gifford; Ralph E. Kiene; Randall
M. Nay; Tony Salazar; Philip Pistilli,
Third-party plaintiff,
Resolution Trust Corporation, Third-party defendant.

No. 94-3063.

United States Court of Appeals,
Eighth Circuit.

Submitted Oct. 12, 1994.
Decided July 27, 1995.
Rehearing and Suggestion for Rehearing En Banc Denied Sept. 6, 1995.

Charles Walter German, Kansas City, MO, argued (Brant M. Laue and Robert J. Campbell, on the brief), for appellants.

Kenneth Philip Ross, Chicago, IL, argued (Robert F. Coleman, Eugene J. Schiltz, Eugene I. Pavalon, Geoffrey L. Gifford, and Robin R. LaFollette, on the brief), for appellee.

Before MCMILLIAN, Circuit Judge, JOHN R. GIBSON, Senior Circuit Judge, and HANSEN, Circuit Judge.

JOHN R. GIBSON, Senior Circuit Judge.

The former directors of Home Savings Association, a savings and loan now in receivership, appeal from a district court order denying their motion for summary judgment on the claims of Kansas Public Employees Retirement System, a creditor of Home Savings. The directors argue that KPERS' claims are barred by the statute of limitations. The district court held that Kansas limitations law applied, that the relevant Kansas statute of limitations, Kan.Stat.Ann. Sec. 60-522 (1994), was ten years, and that the claims were not time-barred. We reverse.

KPERS sued the former Home Savings Association directors,1 alleging common law fraud and other torts and violations of the Kansas Securities Act in connection with KPERS' 1986 purchase of $65 million in debentures from Home Savings. After Home Savings was placed in receivership in March 1991, KPERS filed suit in state court in Kansas, joining the directors as defendants in December 1991. KPERS claimed, among other things, that the directors made misrepresentations in selling KPERS the debentures. The directors impleaded the RTC, asserting that the RTC's negligence caused the debentures to become worthless after the RTC took over as receiver for Home Savings. Acting under special authority granted it in 12 U.S.C. Sec. 1441a(l )(3) (Supp. V 1993), the RTC removed the case from the Kansas state court to the federal district court for the Western District of Missouri, Home Savings' principal place of business.2

The directors moved for summary judgment on the theory that KPERS' claims against them were barred under the Missouri law of limitations, which they argue became the applicable law at the time the RTC removed the case to the Missouri federal court, there being no applicable federal statute of limitations. The directors also argued that even if the law of Kansas should apply, the claims were still barred. At the time KPERS brought its suit, Kansas law prescribed a two-year statute of limitations for torts, Kan.Stat.Ann. Sec. 60-513(a), and a three-year statute for statutory claims, Kan.Stat.Ann. Sec. 60-512(2). While still in state court, the directors had moved to dismiss on the basis of the statute of limitations. The Kansas legislature promptly passed a ten-year statute of limitations applicable to civil actions brought by KPERS. Kan.Stat.Ann. Sec. 60-522, L.1992, ch. 321, S. 21. After the directors raised the argument that the new statute was inapplicable to causes that were already barred, the legislature amended the ten-year statute to provide that it should be "construed and applied retroactively." Kan.Stat.Ann. Sec. 60-522(c), as amended by 1993 Kan.Sess.Laws ch. 227 (H.B. 2211). The directors argued that the added language was not sufficient to revive KPERS' lapsed claims. They also argued that the ten-year statute violated the Kansas Constitution and the federal Equal Protection clause.

Regarding the choice of law question, the district court considered the effect of 12 U.S.C. Secs. 1441a(l )(1) and (3)(A).3 Under section 1441a(l )(1), any suit to which the RTC is a party is "deemed to arise under the laws of the United States," and the district courts therefore have original jurisdiction over such suits. This grant of jurisdiction includes the entire suit, even though the RTC was only a third-party defendant. KPERS v. Reimer & Koger, 4 F.3d 614, 619, 620 (8th Cir.1993) (KPERS I ), cert. denied, --- U.S. ----, 114 S.Ct. 2132, 128 L.Ed.2d 862 (1994). Under section 1441a(l )(3)(A), the RTC can remove any action to which it is a party to its choice of three district courts: (1) the district with jurisdiction over the place where the case was pending before removal; (2) the district that was the principal place of business for the failed savings and loan in the case; or (3) the District of Columbia. The directors argued that whichever of these three districts the RTC chose became the "forum" for choice of law purposes. KPERS, on the other hand, argued that section 1441a(l )(3) is merely a venue provision, and that federal law dealing with change of venue retains the original place of filing as the "forum" for choice of law purposes.

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Kansas Public Employees Retirement System v. Reimer & Koger Associates, Inc., 61 F.3d 608 (3d Cir. 1995).

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