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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 12-15992
Non-Argument Calendar
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D.C. Docket No. 1:10-cv-22032-KMW
SOUTH MIAMI HOLDINGS, LLC,
a Florida limited liability company,
Plaintiff-Appellant,
versus
FEDERAL DEPOSIT INSURANCE CORPORATION,
as receiver for Sun American Bank,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(August 12, 2013)
Before CARNES, Chief Judge, BARKETT and HULL, Circuit Judges.
PER CURIAM:
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In this civil loan-agreement case, Plaintiff-Appellant South Miami Holdings,
LLC, appeals from the district court’s grant of Defendant-Appellee Federal
Deposit Insurance Corporation’s (“FDIC”) motion to dismiss on mootness
grounds. The FDIC is the receiver of the failed Sun American Bank that entered
into the agreement that is the subject of this suit. After review, we affirm the
dismissal.
I. BACKGROUND
A. Factual Background & Proceedings in State Court
On February 25, 2008, Plaintiff South Miami Holdings, LLC (“SMH”)
entered into a $15 million Loan Commitment Agreement with Sun American Bank
(“Sun American”). On July 11, 2008, citing several reasons, Sun American
cancelled the Agreement and refused to fund the loan. SMH alleged that it suffered
monetary damages as a result of Sun American’s cancellation of the Agreement, as
SMH was forced to seek financing elsewhere at a higher interest rate with less
favorable terms and incurred other costs and expenses associated with the search.
After Sun American cancelled the Agreement, Plaintiff SMH sued Sun
American in Florida state court. In its complaint, as amended in December 2009,
SMH alleged state law claims against Sun American for (1) breach of express
contract; (2) breach of implied-in-fact contract; (3) breach of implied duty of good
faith and fair dealing; (4) negligent misrepresentation; and (5) promissory estoppel.
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While SMH’s state court suit against Sun American was pending, on March
5, 2010, the Florida Office of Financial Regulation closed Sun American and
appointed the FDIC as receiver of Sun American. On the same day, a separate
bank, First-Citizens Bank & Trust Company (“First-Citizens”), entered into a
Purchase and Assumption Agreement (the “P&A Agreement”) with the FDIC. In
the P&A Agreement, First-Citizens agreed to assume all of Sun American’s
deposits and assets, as well as some of Sun American’s liabilities. Under the P&A
Agreement, the FDIC retained some of Sun American’s contingent, unliquidated
liabilities, including those related to “all other defensive litigation.”
In light of its appointment as receiver, on May 12, 2010, the FDIC filed a
“Motion to Substitute Defendant” in Plaintiff SMH’s state court suit against Sun
American. In this motion, the FDIC noted that it had retained Sun American’s
“liabilities . . . arising from this action” and as Sun American’s successor-in-
interest, should be substituted as the Defendant in the suit. The state court entered
an “Agreed Order” granting the FDIC’s motion on June 9, 2010.
B. Initial Proceedings in Federal District Court
On June 17, 2010, the now-Defendant FDIC, as receiver, removed SMH’s
suit to federal district court, citing the statutory basis for federal question
jurisdiction, 28 U.S.C. § 1441(b) (2010), and 12 U.S.C. § 1819(b)(2)(A), which
provides that, subject to exceptions not relevant here, “all suits of a civil nature at
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common law or in equity to which the [FDIC], in any capacity, is a party shall be
deemed to arise under the laws of the United States.” Plaintiff SMH moved to
remand the action to state court, but it did not (1) challenge the FDIC’s substitution
as the proper defendant, based on the FDIC’s assumption of Sun American’s
potential liability to SMH, or (2) seek to join any additional defendants.
The district court denied Plaintiff SMH’s motion to remand on August 2,
2010, and the litigation proceeded in that district court. Following the district
court’s rulings on SMH’s and the FDIC’s cross-motions for summary judgment on
August 1, 2011, the case was set for a bench trial on SMH’s remaining claims of
breach of express contract, breach of implied-in-fact contract, and breach of
implied duty of good faith and fair dealing.
Before trial, the FDIC issued a “Determination of Insufficient Assets To
Satisfy Claims Against Financial Institution in Receivership” (the “No-Value
Determination”) regarding Sun American. See 76 Fed. Reg. 52,663-01 (Aug. 23,
2011). The No-Value Determination announced that the assets of the Sun
American receivership estate, “together with maximum possible recoveries on
claims against directors, officers, and other professionals” was $86,789,915, while
the total “administrative expenses and depositor liabilities” owed by Sun American
equaled $220,441,349. Id. This approximately $86 million in assets, and $220
million in liability, left a net insolvency of $134 million.
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Accordingly, the FDIC, as receiver, determined that due to the statutory
order of priority given to administrative expenses and depositor liabilities,
“insufficient assets exist to make any distribution on general unsecured creditor
claims (and any lower priority claims) and therefore all such claims, asserted or
unasserted, will recover nothing and have no value.” 1 Id. (emphasis added).
C. Proceedings on the FDIC’s Motion to Dismiss
Following the issuance of the No-Value Determination, the Defendant
FDIC, as receiver, moved the district court to dismiss Plaintiff SMH’s suit for a
lack of subject matter jurisdiction due to mootness or, alternatively, on prudential
mootness grounds. The FDIC reasoned that (1) federal law limited the FDIC’s
liability to any creditor of a failed bank to the amount the creditor would have
recovered had the bank been liquidated; (2) the No-Value Determination meant
that there was no possibility of SMH ever recovering on a judgment against the
FDIC as receiver, as there were insufficient assets to satisfy any claims below the
depositor priority level, including those claims made by unsecured judgment
1
Pursuant to 12 U.S.C. § 1821(d)(11)(A), the “amounts realized from the liquidation or
other resolution of any insured depository institution by any receiver appointed for such
institution shall be distributed to pay claims (other than secured claims to the extent of any such
security) in the following order of priority”:
(1) “[a]dministrative expenses of the receiver”;
(2) “[a]ny deposit liability of the institution”;
(3) “[a]ny other general or senior liability of the institution . . .”;
(4) “[a]ny obligation subordinated to depositors or general creditors . . .”;
(5) “[a]ny obligation to shareholders or members arising as a result of their status as
shareholders or members (including any depository institution holding company or any
shareholder or creditor of such company).”
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creditors like SMH; and (3) the inability of Plaintiff SMH to ever recover from
Defendant FDIC meant there was no live case or controversy between the parties,
SMH’s lawsuit was moot, and the district court should dismiss it for a lack of
subject matter jurisdiction.
Alternatively, the FDIC argued that even if the district court found that a
case or controversy still existed between the parties, the district court should
nevertheless dismiss the case on prudential mootness grounds because a
proceeding on the merits would serve “no practical purpose” and a trial would be
no more than a “completely hollow act.”
SMH opposed the motion, arguing that it still had “a viable theory under
which recovery on a judgment would be possible.” SMH did not contend that it
could ever recover on a judgment against the FDIC. Instead, SMH stated that it
could pursue a separate action under the Florida Uniform Fraudulent Transfers Act
(“FUFTA”), Fla. Stat. §§ 726.101, et seq., against First-Citizens, which acquired
Sun American’s deposit liabilities and assets through the P&A Agreement. SMH’s
theory in this hypothetical suit would be that First-Citizens failed to “pay fair value
for one or more of the [Sun American] assets that it purchased from the FDIC.”
According to SMH, it could not pursue appropriate discovery on its FUFTA claim
against First-Citizens without first establishing itself as a creditor of the FDIC as
receiver. SMH required this discovery because the P&A Agreement between
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First-Citizens and the FDIC did not set out the prices that First-Citizens paid to
acquire Sun American’s assets.
The FDIC challenged SMH’s claim that it could even sue First-Citizens
under Florida law. Specifically, the FDIC argued that federal law, and in particular
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, Pub. L.
No. 101-73, 103 Stat. 183 (1989) (“FIRREA”), preempted any state-law fraudulent
conveyance claims against First-Citizens by SMH. The FDIC also argued that by
allowing an unsecured creditor like SMH to trace assets and recover damages
against third parties, the district court effectively would be giving SMH a
preference over other similarly-situated and higher priority creditors of the failed
bank, in contravention of the § 1821(d)(11)(A) claim priority order.
After holding oral argument, the district court granted the FDIC’s motion to
dismiss. The district court noted that SMH did not challenge (1) the FDIC’s No-
Value Determination, of which the district court took judicial notice after an
earlier, unopposed motion to do so by the FDIC; (2) the unsecured status of its
potential claim against the FDIC; (3) the FDIC’s retention of Sun American’s
defense litigation liabilities under the P&A Agreement; and (4) that the Sun
American receivership would “at no point . . . recover assets sufficient to pay
[SMH’s] claim in this litigation.” In light of these undisputed facts, the district
court concluded that SMH was plainly “without a viable means of recovery,” and
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this lack of redressability of SMH’s claims “deprived [the district court] of
jurisdiction to continue hearing [those] claims.”
Turning to SMH’s asserted “viable means of utilizing a judgment” in the
event that one were ever entered against the FDIC in this suit, the district court
held that SMH’s purported fraudulent transfer theory in the hypothetical case
against First-Citizens was preempted by federal law, stating:
[w]hile innovative, even if [SMH] could prove the elements of
such a claim, and even if the facts at this juncture were not a
circumvention of the rights of other superior creditors, . . . Florida’s
fraudulent transfer law would be preempted by federal law governing
transfers of assets by the FDIC[].
....
The authority conferred on the FDIC under [12 U.S.C. §] 1823(c) to
effectuate asset transfers in purchase and assumption agreements
trumps any state law that would otherwise invalidate or call into
question such transfers.
The district court also noted, as conceded by SMH’s counsel at oral argument, that
a judgment against the FDIC in SMH’s favor in this action was not a necessary
precondition to SMH pursuing a suit against First-Citizens under FUFTA, even
assuming such an action was not preempted by federal law.
Thus, because allowing SMH “to obtain judgment against the FDIC would
do no more than transform [SMH] from a contingent unsecured creditor that could
not recover to a judgment creditor that could not recover,” the district court
dismissed as moot SMH’s complaint with prejudice and closed the case. SMH
timely appealed.
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II. DISCUSSION
We review the question of mootness de novo. Troiano v. Supervisor of
Elections in Palm Beach Cnty., Fla., 382 F.3d 1276, 1282 (11th Cir. 2004). “[I]f a
case is moot, plainly we lack subject matter jurisdiction to evaluate [its]
merits. . . .” Id. at 1281 n.3.
Article III of the Constitution limits the jurisdiction of federal courts to live
“Cases” and “Controversies.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 559,
112 S. Ct. 2130, 2136 (1992). To satisfy the case or controversy requirement, a
plaintiff “must have suffered some actual injury that can be redressed by a
favorable judicial decision.” Iron Arrow Honor Soc’y v. Heckler, 464 U.S. 67, 70,
104 S. Ct. 373, 375 (1983).
Even if a suit presented a live controversy when filed, if events occur
subsequent to the filing of the suit that deprive a court of the ability to provide the
plaintiff with meaningful relief, then the case is moot and must be dismissed for
lack of jurisdiction. Troiano, 382 F.3d at 1281–82; see also Arizonans for Official
English v. Arizona, 520 U.S. 43, 68 n.22, 117 S. Ct. 1055, 1069 n.22 (1997) (“The
requisite personal interest that must exist at the commencement of the litigation
(standing) must continue throughout its existence (mootness).” (internal quotation
marks omitted)). “A case is moot when the issues presented are no longer ‘live’ or
the parties lack a legally cognizable interest in the outcome. As this Court has
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explained, put another way, a case is moot when it no longer presents a live
controversy with respect to which the court can give meaningful relief.” Troiano,
382 F.3d at 1282 (alteration omitted) (quoting Al Najjar v. Ashcroft, 273 F.3d
1330, 1335–36 (11th Cir. 2001) (per curiam)).
We agree with the district court that the FDIC’s No-Value Determination
rendered SMH’s claims moot. Under 12 U.S.C. § 1821(i)(2), a claimant’s
recovery against the FDIC acting as a receiver is limited to the amount the
claimant would have received in liquidation of the closed bank; a claimant may not
look to the FDIC’s coffers for relief. See 12 U.S.C. § 1821(i)(2); see also First Ind.
Fed. Sav. Bank v. FDIC, 964 F.2d 503, 507 (5th Cir. 1992). Any possible recovery
by SMH against the FDIC must therefore come from the receivership estate, and
SMH does not dispute this point.
In this case, the FDIC, as receiver, has determined that general, unsecured
creditor claims against the receivership of Sun American “have no value,” meaning
there are not and never will be sufficient assets to pay any dividend, distribution, or
payment to claims of general creditors. See 76 Fed. Reg. 52,663-01 (Aug. 23,
2011). This determination is a final agency action, and is therefore subject to
challenge only pursuant to the Administrative Procedures Act (“APA”), 5 U.S.C.
§ 701. See, e.g., Santopadre v. Pelican Homestead & Sav. Assoc., 937 F.2d 268,
272 (5th Cir. 1991). The FDIC’s finding that claims such as those raised in SMH’s
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complaint are worthless is therefore binding on this Court and is preclusive as to
whether there are now or ever will be assets sufficient to satisfy the claims. 2 See
Adams v. Resolution Trust Corp., 927 F.2d 348, 354 (8th Cir. 1991).
Because no assets remain in the receivership, nor will the receivership ever
obtain assets necessary to satisfy a judgment in SMH’s favor, SMH’s claims
against the FDIC as receiver for Sun American are moot. See Henrichs v. Valley
View Dev., 474 F.3d 609, 615 (9th Cir. 2007); Maher v. FDIC, 441 F.3d 522, 526
(7th Cir. 2006) (“Since the FDIC’s corporate liability is limited to the assets of the
receivership, and since the receivership is now . . . without assets, there is no
possible relief for this court to order . . . against the FDIC in its corporate capacity.
We therefore dismiss for lack of a justiciable case or controversy.”); FDIC v.
Kooyomjian, 220 F.3d 10, 15 (1st Cir. 2000) (“The FDIC’s worthlessness
determination is unchallenged and, in the absence of a recoupment remedy,
2
To the extent that SMH seeks to challenge the FDIC’s No-Value Determination through
this suit, such a collateral challenge to a final agency action is impermissible. See 281-300 Joint
Venture v. Onion, 938 F.2d 35, 38 (5th Cir. 1991) (“While the [Federal Home Loan Bank
Board’s] findings and conclusions regarding the worthlessness of unsecured creditor claims
constitute final agency action, they are subject to review under the Administrative Procedure Act
(APA). Joint Venture, however, never sought judicial review of the FHLBB’s determination of
worthlessness. Instead, it argues that the determination alone is insufficient to prove that there
will never be any assets in the receivership to satisfy the claims of unsecured creditors.
Previously we have determined that such a collateral attack on the FHLBB’s determination is
improper and that, absent evidence to the contrary, we are bound by its decision.” (citation
omitted)); Adams v. Resolution Trust Corp., 927 F.2d 348, 354 n.15 (8th Cir. 1991) (“A . . .
determination of worthlessness is a final agency action, which is reviewable under the provisions
of the Administrative Procedure Act in an action against the [FDIC], but not subject to collateral
attack through discovery or other means in individual lawsuits against the receiver.” (internal
quotation marks and citation omitted)).
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precludes any relief for defendants even if they were successful on their . . . claim
and obtained a favorable judgment.”); Adams, 927 F.2d at 354 (holding that where
the Federal Savings and Loan Insurance Corporation would never possess any
assets to satisfy the plaintiff’s claim, the claim was moot).
On appeal, SMH does not contend that it could ever recover on a judgment
against the FDIC. Instead, SMH argues that the district court’s mootness finding
was flawed for three reasons that are only indirectly related to its claims against the
FDIC as receiver: (1) the district court failed to account for the possibility that
First-Citizens, through the P&A Agreement, assumed liability for SMH’s claims
against Sun American (and that if this were true, SMH could therefore potentially
recover on a judgment in this case against First-Citizens); (2) SMH required a
judgment against the FDIC to establish standing as a “wronged party” to challenge
the FDIC’s worthlessness determination under the APA; and (3) the district court’s
determination that any potential state-law fraudulent transfer claim against First-
Citizens would be preempted was erroneous. 3
As to the first two arguments, SMH never made them to the district court,
despite having the opportunity to do so in its response to the FDIC’s motion to
3
As to the third argument, SMH challenges the district court’s preemption ruling on the
specific grounds that (1) it amounted to a taking of SMH’s property; (2) the FDIC bound itself,
under the P&A Agreement, to pay fair market value for Sun American’s assets, thereby
circumscribing the FDIC’s otherwise broad discretion to dispose of the assets of failed banks;
and (3) the P&A Agreement contained a choice-of-law clause in which First-Citizens and the
FDIC agreed to be bound by Florida law.
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dismiss. It is well-settled that “[a]rguments raised for the first time on appeal are
not properly before this Court.” Hurley v. Moore, 233 F.3d 1295, 1297 (11th Cir.
2000); see Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1331 (11th Cir.
2004) (“This Court has repeatedly held that an issue not raised in the district court
and raised for the first time in an appeal will not be considered by this [C]ourt.”
(internal quotation marks omitted)). Accordingly, we decline to address these
arguments further.
As with its first two arguments, SMH also never raised its third argument
before the district court. We note, however, that the preemption issue only arose in
the government’s reply to SMH’s response to the motion to dismiss, and thus, there
was never an opportunity for SMH to rebut the FDIC’s preemption argument. In
any event, we need not address the merits of the district court’s preemption ruling.
Even assuming arguendo that a Florida state law fraudulent transfer claim brought
by SMH against First-Citizens would not be preempted, this determination
ultimately does not affect our examination of whether the claims asserted by SMH
against the FDIC in this case are moot. Instead, the mootness inquiry turns on
whether the district court can provide redress, or “meaningful relief,” with respect
to the particular claims asserted by SMH against a particular party, the FDIC.
Troiano, 382 F.3d at 1282.
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In its “viable theory under which recovery on a judgment would be
possible,” SMH addresses the redressability of its claims against the FDIC by
attempting to show that it could use a money judgment against the FDIC as a
“sword” in a yet-to-be-filed fraudulent transfer suit against First-Citizens. This
attempted showing misses the mark.
“Redressability is established when a favorable decision would amount to a
significant increase in the likelihood that the plaintiff would obtain relief that
directly redresses the injury suffered.” Fla. Wildlife Fed’n, Inc. v. S. Fla. Water
Mgmt. Dist., 647 F.3d 1296, 1303–04 (11th Cir. 2011) (emphasis added) (internal
quotation marks omitted). However, Florida’s fraudulent transfer statute, FUFTA,
“does not distinguish between creditors who hold judgments and those who do
not.” Mied, Inc. v. Summit Healthcare Inc., 849 So. 2d 397, 398 (Fla. 4th DCA
2003); see Friedman v. Heart Inst. of Port St. Lucie, Inc., 863 So. 2d 189, 193 (Fla.
2003) (noting “the well-settled principle that a claim under [FUFTA] may be
maintained even though contingent and not yet reduced to judgment.” (internal
quotation marks and alterations omitted)); see also Fla. Stat. § 726.102(4)–(5)
(defining, for purposes of FUFTA, a “claim” as “a right to payment, whether or not
the right is reduced to judgment” and a “creditor” as “a person who has a claim”).
Because FUFTA permits claims by non-judgment-holding creditors, and assuming
arguendo there is some FUFTA claim out there, SMH could pursue First-Citizens
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under FUFTA without a judgment against the FDIC. Therefore, a judgment
against the FDIC in this case would not result in a “a significant increase in the
likelihood that [SMH] would obtain relief that directly redresses the injury [it]
suffered.” Fla. Wildlife, 647 F.3d at 1304.
In sum, even assuming arguendo that (1) SMH obtained a judgment in its
favor on its claims against the FDIC in the present case, and (2) SMH could pursue
First-Citizens in a separate FUFTA action (i.e., that SMH’s FUFTA claims were
not preempted by federal law), this speculative sequence of events does not satisfy
the redressability requirement. This is because SMH could pursue a claim (if it has
one) against First-Citizens even without obtaining a judgment against the FDIC.4
Accordingly, SMH’s claims against the FDIC are moot. 5
III. CONCLUSION
In light of the foregoing, we affirm the district court’s dismissal on mootness
grounds of SMH’s complaint against the FDIC.
AFFIRMED.
4
Nothing herein shall be construed as suggesting SMH even has a claim, much less a
viable one, against First-Citizens.
5
In addition, we retain significant doubts as to whether SMH’s redressability theory—a
collateral use against a non-party of an otherwise non-recoverable judgment—is the type of
“meaningful relief” that is even contemplated by the mootness inquiry, insofar as such collateral
relief would not “directly redress[]” SMH’s alleged injury. Fla. Wildlife, 647 F.3d at 1304
(emphasis added); Troiano, 382 F.3d at 1282.
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