Paul v. Federal Deposit Insurance

91 F.3d 110, 1996 U.S. App. LEXIS 20311, 1996 WL 425916
CourtCourt of Appeals for the Eleventh Circuit
DecidedAugust 14, 1996
Docket94-4740
StatusPublished
Cited by4 cases

This text of 91 F.3d 110 (Paul v. Federal Deposit Insurance) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Paul v. Federal Deposit Insurance, 91 F.3d 110, 1996 U.S. App. LEXIS 20311, 1996 WL 425916 (11th Cir. 1996).

Opinion

CUDAHY, Senior Circuit Judge:

This proeedurally complicated case involves a challenge to administrative action regarding property held by the Resolution Trust Corporation (RTC) in its capacity as receiver for a failed savings institution. The district court dismissed the challenge on the grounds that it lacked subject matter jurisdiction in light of the undisputed facts of the case. The plaintiff, David L. Paul appealed this dismissal, and, after initially contesting the appeal, the RTC filed a Stipulation of Reversal with this court. After the dissolution of the RTC at the end of last year, the FDIC succeeded to the RTC’s position and adopted the RTC’s Stipulation. We accept the stipulation, which we construe as a confession of error, and we remand the case to the district court. But the nature of our order reflects a careful consideration of the facts of the case, and we believe it appropriate to explicate our consideration here.

We begin with the factual background of the case. Between 1983 and 1990, Paul was the Chairman and Chief Executive Officer of CenTrust Savings Bank. In February 1990, the RTC became conservator of CenTrust and was later named as its receiver. When the RTC took control of the institution, it removed Paul from his official positions, and it seized all of the property contained in CenTrust’s offices.

Paul claims that some of this property belonged to him personally and that, as the receiver, the RTC was not entitled to it. The items that Paul identifies as his personal property have a total value of approximately $250,000, and they include family photographs, paintings, prints and other artwork. Within a few weeks of his removal from the bank, Paul began a correspondence with the RTC regarding the property. He asked for its return, and the RTC responded with a request for documentation of his ownership. This correspondence regarding the property and the proof of its ownership continued into 1991. During the early stages of this correspondence, the RTC published notice of its status as receiver and of the deadline for filing claims for the return of property. The deadline was set for October 6, 1990. In August 1991, Paul filed a Notice of Claim Form with the RTC pursuant to the prescriptions of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), which controls how the RTC will conduct its receivership. In December 1991, the RTC ruled on the merits of Paul’s claims, finding that he had not adequately proven his ownership of the property in question.

Paul filed a lawsuit in the district court challenging the denial of his claim. 1 The RTC sought the dismissal of his complaint on the ground that the district court lacked subject matter jurisdiction. Under the terms of FIRREA, a district court can review the RTC’s denial of a claim only if the claimant has exhausted his administrative remedies. See 12 U.S.C. § 1821(d)(13)(D). The RTC insisted that Paul had not done so because his formal Notice of Claim was not filed until long after the deadline for claims. The district court agreed and dismissed the case. As we have noted, Paul appealed this *112 decision and we have received briefing and have heard oral argument in the matter.

After the oral argument, on November 13, 1995, the RTC filed a Stipulation of Reversal with us. The Stipulation asserted that the RTC had “reexamined the circumstances of the filing of Appellant[ ] David Paul’s administrative claim[ ] and has concluded that it is appropriate to exercise its discretion pursuant to 12 U.S.C. 1821(d)(5)(C)(ii) to consider [A]ppellant’s claim as timely filed.” The RTC thereby confessed that Paul was entitled to a reversal of the district court’s dismissal of his complaint. After the submission of the Stipulation, on December 31, 1995, the RTC dissolved and was succeeded by the Federal Deposit Insurance Corporation (FDIC), which adopted the RTC’s Stipulation and now substitutes for the RTC in this matter.

We do not compel litigants to pursue disputes against their will. We therefore are inclined to accept the Stipulation of Reversal and to remand the ease to the district court. This is not, however, a simple matter, given the facts of the case, the course of the proceedings, and the nature of the FDIC’s Stipulation. In light of these factors, the Stipulation raises a number of problems that we must resolve if this order of reversal is to be properly instructive.

As the Stipulation is written, we cannot immediately determine what it is that the FDIC stipulates. The FDIC describes the Stipulation as emerging from its discretion to consider Paul’s claim as timely filed, noting that this discretionary authority is created by § 1821(d)(5)(C)(ii). Viewed in the light of this description, the Stipulation seems to be a legal concession by the FDIC, forgiving the untimely filing of Paul’s claim and waiving the exhaustion of administrative remedies as a prerequisite to the district court’s subject matter jurisdiction. Indeed, in another paper submitted to us after the filing of the Stipulation by the RTC, the FDIC seems to confirm this impression. It denied that the Stipulation was a confession of error and asserted that the RTC was correct in making its initial determination that Paul’s claim was untimely filed. The FDIC thus seems to maintain that Paul’s claim was, in fact, untimely, but that the legal consequences of this jurisdictional fact can be waived.

We hesitate to accept this characterization of the Stipulation, however. In ordinary circumstances, the parties to a challenge to administrative action under FIR-REA may not waive conditions to subject matter jurisdiction. See Brady Dev. Co., Inc. v. RTC, 14 F.3d 998, 1007 (4th Cir.1994); Meliezer v. RTC, 952 F.2d 879, 883 (5th Cir.1992). But, like the RTC before it, the FDIC is a government agency with specifically delegated legal powers that could, in some circumstances, permit it to cure problems of subject matter jurisdiction. Section 1821(d)(5)(C)(ii) may create those powers for the FDIC in some cases (a question we need not and do not decide here), but we cannot conclude that this provision has any relevance to this case. This section of the statute gives the FDIC discretion to hear claims filed after the filing deadline if the claimant did not have notice of the identity of the receiver before the deadline. The parties here do not dispute that Paul had such notice long before October 6,1990. Indeed, the fact of this notice is obvious from copies of the correspondence in the record. The discretion conferred by § 1821 (d) (5) (C) (ii) is narrowly drawn, and the FDIC loses this discretion after the claimant has notice of its status as receiver. See Hudson United Bank v. Chase Manhattan Bank of Connecticut, N.A., 43 F.3d 843, 851 n. 20 (3d Cir.1994); Brady, 14 F.3d at 1007.

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Bluebook (online)
91 F.3d 110, 1996 U.S. App. LEXIS 20311, 1996 WL 425916, Counsel Stack Legal Research, https://law.counselstack.com/opinion/paul-v-federal-deposit-insurance-ca11-1996.