McAllister v. Resolution Trust Corp.

REVISED, FEBRUARY 14, 2000

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 98-50471

WALTER W. MCALLISTER, III, an Individual; GERRY SOLCHER, an
Individual; ROBERT CUYLER, an Individual,

Plaintiffs-Appellants,

v.

RESOLUTION TRUST CORPORATION, as Receiver for San Antonio
Savings Association, F.A.,

Defendant-Appellee.

_______________________________

Appeal from the United States District Court
for the Western District of Texas
_______________________________
January 21, 2000

Before GARWOOD, SMITH, and BENAVIDES, Circuit Judges.

BENAVIDES, Circuit Judge:

Appellants, three former executives of the now-defunct San

Antonio Savings Association, appeal from the district court’s

grant of summary judgment to the Resolution Trust Corporation1

(“RTC”) with respect to their claimed right to receive payment

1
The Resolution Trust Corporation ceased all operations on
December 31, 1995, pursuant to 12 U.S.C. § 1441a(m)(1). The
Federal Deposit Insurance Corporation is named in the relevant
statute as successor to the former RTC. This succession occurred
subsequent to the matters that give rise to this current
litigation. As such, for the sake of consistency, we refer to
the appellee throughout this opinion as the RTC.

1
under a Supplemental Executive Retirement Plan (“SERP”). Because

we find that the district court correctly determined the legal

issues in this case, and appellants have failed to raise any

genuine issues of material fact in support of their position, we

affirm.

I. Factual and Procedural Background

The background facts in this case are largely undisputed.2

This controversy is born of the demise of what was formerly known

as the San Antonio Savings Association (“SASA”), a federally

insured thrift. Appellants each held executive positions at the

thrift. Walter McAllister was Chairman of the Board and Chief

Executive Officer; Gerry Solcher was SASA’s President; and Robert

Cuyler was the thrift’s Operations Officer. As executives

employed by SASA, appellants each participated in a Supplemental

Executive Retirement Plan (“SERP”), designed to provide benefits

to top management in addition to those available to all eligible

employees under the usual qualified pension plans.

The SERP plan differed from usual pension plans in that the

executives made no contribution to it. The plan was funded

exclusively by an Umbrella Trust, containing life insurance

policies on the lives of the executives. As SASA owned the

2
It bears mentioning at the outset that this case is before us
for the second time on appeal. See McAllister v. FDIC, 87 F.3d
762 (5th Cir. 1996). While we do not now take issue with the
previous factual recitation offered by this Court, for the
purposes of examining the legal issues now before us, we offer a
restatement of the factual background leading up to this appeal,
with an emphasis on those matters the parties now contend should
result in different outcomes under the relevant law.

2
policies and paid all policy premiums, SASA was able to structure

the SERP as an unfunded “grantor” or “rabbi” trust. As an

unfunded, non-contributory plan, initial payments to the trust,

and income generated by the trust, remained taxable to the

employer rather than to the employee. This trust structure

allowed the participants to defer tax liability on their

individual shares until asset distribution under the terms of the

plan.

The thrift began experiencing financial difficulty in late

1988. These difficulties led to the transformation of the thrift

a number of times. The first such transformation occurred on

February 28, 1989, when SASA was placed in conservatorship. At

this time, the RTC chose to carry on SASA’s operations, and

requested SASA’s senior executives, appellants in this matter,

stay on in their former positions. As a result, appellants

managed the thrift in conservatorship for about six months, until

July 1989, when regulators decided to close SASA and replace the

conservator with a receiver.

A new institution, San Antonio Savings Association, Federal

Association (“SASA, FA”), was established at that time. SASA, FA

was chartered and placed in conservatorship by federal regulators

on July 13, 1989, to acquire substantially all of SASA’s assets

and deposit liabilities. The executives again stayed on as

employees of the successor conservatorship from July 1989, until

March 1990, when regulators closed SASA, FA, and appointed the

RTC as the thrift’s Receiver. The Receiver then proceeded to

3
liquidate SASA, FA’s assets for the benefit of depositors and

creditors.

Two executives, not appellants in this matter, opted for

early retirement during the first conservator phase. As the

thrift was not yet in insolvency and was not yet at the phase of

distribution, these executives received their vested SERP

benefits in full, without controversy.

It is clear that no written contract governed the employment

relationship between appellants and the SASA and SASA, FA

conservatorships. The RTC maintains that the conservatorships

continued to pay appellants their salaries, as well as their

health, vacation, and pension benefits, in the ordinary course of

business, as orally agreed to by the parties. Appellants do not

disagree with this contention, although there is some factual

dispute as to the amount of salary received.3

The factual recitations of the opposing parties diverge when

the discussion turns to representations made concerning the legal

status of the SERP benefits. The RTC maintains, as stated above,

that the only representation made concerning these benefits was

that the Conservator was committed to continue payment of all

salary and benefits in full, throughout the conservatorship

phase.

Appellants paint a different picture. Specifically, they

3
The RTC concedes that Solcher experienced a salary reduction
at some point during his employment with the SASA, FA
conservatorship.

4
maintain that the Conservator orally contracted to pay their SERP

benefits in full, as an expense of administration, as an

inducement for appellants to continue employment with the SASA

conservatorship and its successors.

Regardless of how these benefits were characterized by the

parties, it is clear that the SASA, FA conservatorship adopted

the SERP benefit plan as it existed prior to regulatory

intervention. Specifically, the Conservator executed documents

entitled “Adoption by San Antonio Savings Association, FA of the

Supplemental Executive Retirement Plan, The Executive Deferred

Compensation Plan, and the Umbrella Trust.” Importantly,

however, the document of adoption does not modify the plan’s

language in any respect, except with regard to the grantor-

employer: SASA, FA is substituted for SASA in the old document.

Additionally, loans on the various policies supporting the plan

were authorized to maintain the trust.

When SASA, FA was placed in receivership, the RTC notified

the trustee for the Umbrella trust that the policies in the trust

should be liquidated so the assets could be used to pay SASA,

FA’s creditors. Appellants received notice in December 1991,

after the placement of SASA, FA in receivership, as to the status

of their claims for payment under the SERP. Specifically, the

notice letter reminded all plan participants that the SERP was a

“nonqualified” retirement plan and all plan participants remained

unsecured general creditors. As such, continued the notice,

participants never acquired any rights to these policies and

5
accordingly would not receive any benefit from them, as the

assets were needed to pay creditors. Participants were invited,

however, to submit any claims or questions concerning the plan to

the Receiver.

Appellants each filed claims. McAllister claimed

$1,871,209.53; Solcher claimed $1,049,811.50; and Cuyler claimed

$457,234.57. In March 1993, the Receiver allowed the claims and

issued receiver’s certificates to each of the executives in the

full amount claimed. Following a Freedom of Information Act

request for information on the creditors of SASA, FA, Cuyler

learned that there were approximately $103,000.00 in outstanding

unsecured claims and that there would be several million dollars

available after all superior claims against the failed

institution were paid in full. However, this estimate proved

incorrect and in fact the RTC was still owed over one billion

dollars to pay depositors in full upon exhaustion of all existing

funds.

Appellants persisted, and filed new proofs of claims

approximately one year later. Again, in a letter dated April 4,

1994, Appellants were informed that although they held valid

certificates, “[a]ll claims of the depositors and all claims

subrogated to the RTC must be paid in their entirety before any

payment can be made on the claims of the general trade creditors.

. . [i]f deposit claims are paid in full, then [you] will be in

line with other unsecured creditors to begin receiving [your] pro

rata share of dividend payments. . . .”

6
Appellants filed suit, in November 1994, challenging the

7
RTC’s determination of the proper priority status to be accorded

their claims for payment under the SERP. The district court

granted the RTC’s motion to dismiss under Fed. R. Civ. P.

12(b)(6), in May 1995, as untimely, and thus for lack of

jurisdiction. This Court reversed the dismissal and remanded the

case to the district court for further proceedings. See

McAllister, 87 F.3d at 766.

On remand, upon conducting extensive discovery, the district

court granted summary judgment in favor of the RTC. This timely

appeal followed.

II. Standard of Review

This Court reviews the grant of summary judgment de novo,

evaluating the case under the same standards employed by the

district court. S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d

489, 494 (5th Cir. 1996).

Summary judgment is proper, “if the pleadings, depositions,

answers to interrogatories, and admissions on file, together with

the affidavits, if any, show that there is no genuine issue as to

any material fact and that the moving party is entitled to

judgment as a matter of law.” Fed.R.Civ.P. 56(c); Celotex Corp.

v. Catrett, 477 U.S. 317, 322 (1986). Disputed facts preclude

summary judgment if the evidence would allow a reasonable jury to

return a verdict for the non-movant. Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 248 (1986). “Although we consider the

evidence and all reasonable inferences to be drawn therefrom in

the light most favorable to the nonmovant, the nonmoving party

8
may not rest on the mere allegations or denials of its pleadings,

but must respond by setting forth specific facts indicating a

genuine issue for trial.” Rushing v. Kansas City S. Ry. Co., 185

F.3d 496, 505 (5th Cir. 1999), petition for cert. filed (Dec. 28,

1999) (No. 99-1090).

III. Analysis

In this case, appellants assert several grounds upon which

summary judgment was improper. As their primary objection,

appellants assert that an oral contract existed which classified

the SERP benefits as an expense of administration. Such a

classification, they further contend, should result in a first

priority debt, payable by the RTC prior to payment of any

depositor claims. Alternatively, appellants contend that

estoppel and law of the case require this Court to overturn

summary judgment. As appellants bear the burden of demonstrating

that there exist genuine issues of material fact, we first

address the language of the agreements now at issue, then address

the specific arguments appellants offer as demonstrative of error

on the part of the district court.

A. The language of the plan

As stated above, the Supplemental Executive Retirement Plan

was designed by SASA executives with a particular goal in mind:

deferment of tax liability. To this end, the SERP was structured

such that all plan assets would be maintained in an unfunded

“grantor” trust. Grantor trusts of this nature permit

participants to postpone tax liability to be assessed against

9
SERP benefits until trust assets are actually distributed,

presumably at the time of retirement.

In order to maintain this deferred tax status, the Internal

Revenue Code requires beneficiaries to hold only a limited

interest in the trust assets prior to distribution.

Specifically, the Code requires that all trust assets be property

of the employer, and therefore subject to the claims of creditors

of the employer. 26 U.S.C. § 671 et sec. This requirement

renders trusts so formed unfunded.

In accordance with the mandates of the Internal Revenue

Code, the SERP agreement requires that in the event of insolvency

all SERP assets be available to pay the thrift’s creditors.

Specifically, the Umbrella trust directs the trustee to “hold the

trust fund for the benefit of the general creditors of the

Company” during any periods of insolvency. In accordance with

this language, plan participants are explicitly classified as

unsecured general creditors.4

Appellants, under the plain terms of the SERP and Umbrella

4
At paragraph 10.1, the SERP agreement states:
Unsecured General Creditor. Benefits to be provided under
this Plan are unfunded obligations of the Employer.
Participants . . . shall have no legal or equitable rights,
interests or claims in any property or assets of Employer,
nor shall they be beneficiaries of, or have any rights,
claims or interest in any life insurance policies, annuity
contracts or the proceeds therefrom owned or which may be
acquired by Employer . . . . Such policies or other assets
of Employer shall not be held under any trust, except a
grantor trust established by Employer . . . or be considered
in any way as collateral security for the fulfilling of the
obligations of Employer under this plan.

10
trust agreements, attained the legal status of unsecured general

creditors at the time SASA, FA was placed into receivership. The

preference status accorded appellants’ rights stems from two

sources in law: the Internal Revenue Code and the Texas Civil

Statutes concerning savings and loans. As previously noted, the

Internal Revenue Code permits grantor trusts only if trust

beneficiaries are assigned the status of unsecured general

creditors and only if trust assets remain available to the

grantor’s creditors in the event they are needed. It is clear

that appellants intended to establish and participate in a

grantor trust to receive this favorable tax status.

Additionally, applicable Texas law assigns priority to all

claims against a failed thrift association. Under this statute,

appellants’ claims as unsecured general creditors are subordinate

by law to all depositors’ claims. Relying on this statutory

language and the status of this trust as a grantor trust, the RTC

classified appellants as unsecured general creditors for the

purpose of liquidation priority.

Under the Texas Savings and Loan Act,5 the claims of general

5
The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989 (“FIRREA”) establishes and defines the statutory
mandate of the RTC. The depositor preference section, 12 U.S.C.
1821(d)(11), which displaces state law to the extent of any
inconsistency, was added by amendment August 10, 1993. The
amendment, however, applies only “with respect to insured
depository institutions for which a receiver is appointed after
the date of the enactment of this Act [Aug. 10, 1993].” Act Aug.
10, 1993, P.L. 103-66, Title III § 3001(c) 107 Stat. 337.
Because the institution we are concerned with on this appeal went
into receivership in 1990, we look to state law to determine the
relevant depositor preference for an insolvent institution.

11
creditors are assigned fourth priority, behind expenses of

liquidation, secured creditor claims, and depositor claims.6 As

the receiver for the failed SASA, FA lacks adequate funds to

fully compensate all depositors, appellants, under the plain

terms of the SERP agreement, are not entitled to receive any

funds in exchange for their certificates.

Appellants contend, however, that an oral contract existed,

which explicitly mandated that their rights to payment under the

SERP would be considered an expense of administration or

liquidation. If this is the case, they now argue, their benefits

are entitled to treatment as a first priority debt, one that

should have been satisfied prior to the payment of any depositor

claims. Alternatively, appellants assert rights in equity to

payment of their benefits. Under each theory, appellants

maintain that the transformative event asserted renders summary

6
The Texas statute provides:
On liquidation of an association, claims for payment have
the following priority:
(1) obligations incurred by the commissioner or the
liquidating agent, fees and assessments due the Savings and Loan
department, and expenses of liquidation, all of which may be
covered by the proper reserve of funds;
(2) approved claims of creditors, to the extent that the
claims are secured by, or constitute a lien on, the assets or
property of the association;
(3) approved claims of depositors against the general
liquidating account of the association;
(4) approved claims of general creditors and the unsecured
portion of any creditor obligation described in Subdivision (2);
(5) otherwise approved claims that were not filed within the
time prescribed by Section 66.305;
(6) approved claims of subordinated creditors; and
(7) claims of shareholders of the association.
Tex. Fin. Code Ann. § 66.306 (West 1998).

12
judgment inappropriate. Each claim, and why it ultimately fails

to override our understanding of the plain terms of the SERP

agreement, is addressed below.

B. Oral Contract

It must be made clear that this is not a dispute about

whether appellants are entitled to their benefits. The RTC

concedes that the SERP benefits at issue were fully vested and

are in fact owed appellants as unsecured general creditors. In

fact, appellants received certificates representing their

respective interests. The critical dispute between the RTC and

appellants in this matter concerns the determination of exactly

what was bargained for in this case: the maintenance of the SERP

and Umbrella trust agreements as they existed prior to

conservatorship, or additional contract rights, bargained for to

guarantee the receipt of SERP benefits in the event of

insolvency.

Despite the clear terms of the Plan and governing statutes,

appellants contend they entered into an oral employment contract

with the Conservator and that this contract governs this dispute.

Appellants assert that the critical term of this contract

transformed their SERP benefits into an expense of

administration. In essence, appellants contend they were induced

into staying on in their former positions at SASA and SASA, FA by

this term. In support of this claim, appellants assert they were

continually promised they would receive their SERP benefits in

full as service providers.

13
 Our careful review of the record and all summary judgment

evidence indicates otherwise. We find no evidence of any promise

that appellants’ SERP benefits would be paid in full. Rather,

the unequivocal conclusion to be drawn from the deposition

testimony and the documents submitted in support of appellants’

claim is that they received exactly what they were promised: the

maintenance of their benefits package as it existed prior to the

financial difficulties experienced at San Antonio Savings.

To support their claim that an oral contract existed and

governs these issues, appellants rely on their own declarations

and little else. Appellants, in fact, fail to assert exactly

when this oral contract arose or when the critical term was

agreed upon. In fact, appellants seem to concede that the

Conservator merely contracted for appellants’ services in

exchange for “payment of their salary and benefits, including

their SERP benefits.” There does not seem to be any dispute with

respect to this duty, as the RTC readily conceded an obligation

to pay these salaries and maintain these benefits packages.7

7
An issue not explicitly discussed in any of the briefs is
whether the parties may legitimately alter the status of the SERP
plan by oral agreement. While the Plan agreement states that it
may be amended by the Board at any time, the amendment provision
makes no mention of the results should the Plan be modified such
that it no longer accords with the Internal Revenue Code. If the
Plan was modified as appellants assert, then the Plan would no
longer comply with the strict requirements of the Code. It seems
unlikely that the parties could legitimately orally contract to
form a grantor trust with first priority in the event of
insolvent distribution, as the Code requires grantor trust
beneficiaries to be classified as unsecured general creditors and
Texas law requires that general creditors receive fourth priority
in the event of distribution. However, as we find no evidence of

14
 By all appearances, appellants, in claiming a contract right

to their benefits, conflate a promise that they would receive

their benefits in full with a promise that they would actually

receive a money payment from the Plan in the event of insolvency.

As previously noted, there is nothing in the Plan’s language or

in the statutes governing this type of trust that guarantees

distribution of the trust’s assets to the beneficiaries. Mere

assertion of a belief that the plan was somehow transformed, and

that this transformation would lead to payment subsequent to the

unfortunate event of insolvency, is not enough to defeat summary

judgment.

Appellants further maintain that an oral contract

representing the transformation of their legal status of

employment is evidenced on these facts by the behavior of the

Conservator. Specifically, appellants repeatedly assert that

during the conservatorship they were classified as service

providers and that their salaries and benefits constitute

expenses of administration. As expenses of administration,

appellants maintain that their SERP benefits should have received

first priority at the time of liquidation.

Appellants, however, fail to marshal evidence to support

their conclusory statements. Appellants repeatedly draw our

attention to the adoption of the SERP plan by SASA, FA. They

assert that this manifests an intent to pay Plan benefits in

an oral contract in the first instance, it is unnecessary to
resolve this thorny issue.

15
full. While it is true that the Conservator took steps to

transfer the SERP agreement to SASA, FA, this evidence better

supports the RTC’s reading that Plan adoption represented an

effort to maintain the benefit programs as they existed prior to

conservatorship, as well as an effort to preserve the Plan’s

funds for all the thrift’s creditors. Standing alone, the

transfer of the SERP plan to SASA, FA is not enough to defeat

summary judgment.

Aside from relying on SASA, FA’s adoption of the SERP,

appellants draw upon a small number of conversations and the

circumstances of their ongoing employment to claim that their

SERP benefits should be paid in full as expenses of

administration. The RTC maintains that a promise to characterize

SERP benefits as expenses of liquidation could not have been made

in the first instance, as a conservator, by definition, does not

incur any expenses of liquidation.8 As appellants rely on the

circumstances of their ongoing employment to contest summary

judgment, it is necessary to examine these competing conclusions.

In essence, the RTC asserts that appellants have confused

the legal functions of a conservator with those of a receiver.

8
Under 12 U.S.C. § 1821(d)(2)(D), the RTC as conservator is
empowered to “take such action as may be (i) necessary to put the
insured depository institution in a sound and solvent condition;
and (ii) appropriate to carry on the business of the institution
and preserve and conserve the assets and property of the
institution.” The RTC as receiver, under 12 U.S.C. § 1821
(d)(2)(E), is empowered to “place the insured depository
institution in liquidation and proceed to realize upon the assets
of the institution, having due regard to the conditions of credit
in the locality.”

16
Receivers and only receivers incur expenses of liquidation, as

only receivers have the power to liquidate a failed thrift. We

are persuaded by this reading of the relevant statute.9

Conservators may incur expenses of administration, through the

course of administering the conservatorship. However, these

expenses are not relevant to our resolution of this case, as it

is the receiver who failed to pay under the terms of the SERP.

Critically, appellants were never employed by the

receivership at issue in this case. As described in the facts,

appellants were employed by the SASA and the SASA, FA

conservatorships, but all employment relationships ceased in

March 1990, when the RTC was appointed receiver for SASA, FA.10

As such, they never assisted with the liquidation process and

their salaries and benefits cannot correctly be classified as

expenses of liquidation.

Appellants maintain that 12 U.S.C. § 1821(e)(7) governs and

mandates the conclusion that service providers are to be paid as

9
The statute at issue is 12 U.S.C. § 1821(d), Powers and
duties of Corporation as Conservator or Receiver. In the
interest of brevity, the full text is not quoted here.
10
Appellants emphasize the fact that McAllister, who served
as Chairman of the Board of San Antonio Federal Savings Bank, a
banking subsidiary of SASA and later SASA, FA, maintained his
position as Chairman after SASA, FA entered receivership. He
apparently was not compensated for his work in this position, and
in fact apparently incurred personal financial losses canvassing
the country in search of an investment group to acquire SAFSB.
McAllister’s actions taken in this position, however, are
irrelevant to his claim for SERP benefits, as his participation
in the SERP plan was independent of his duties as Chairman of
SAFSB.

17
expenses of administration.11 In their reading of the relevant

statute, however, appellants fail to acknowledge 12 U.S.C. §1821

(d)(2)(D), which states explicitly that a conservator only has

the power to take actions necessary to restore a financially

troubled institution to solvency. Expenses of liquidation cannot

be incurred by a conservator as a matter of law, as liquidation

is not a function of the conservator. See RTC v. United Trust

Fund, Inc., 57 F.3d 1025, 1033 (11th Cir. 1995) (“The

11
The text of the statute reads:
(7) Provisions applicable to service contracts
(A) Services performed before appointment
In the case of any contract for services between any
person and any insured depository institution for whish
the Corporation has been appointed conservator or
receiver, any claim of such person for services
performed before the appointment of the conservator or
the receiver shall be—
(i) a claim to be paid in accordance with
subsections (d) of this section; and
(ii) deemed to have arisen as of the date the
conservator receiver was appointed.
(B) Services performed after appointment and prior to
repudiation
If, in the case of any contract for services described
In subparagraph (A), the conservator or receiver
accepts performance by the other person before the
conservator or receiver makes any determination to
exercise the right of repudiation or such contract
under this section—
(i) the other party shall be paid under the terms
of the contract for the services performed; and
(ii) the amount of such payment shall be treated
as an administrative expense of the
conservatorship or receivership.
(C) Acceptance of performance no bar to subsequent
repudiation
The acceptance by an conservator or receiver of
services referred to in subparagraph (B) in connection
with a contract described in such subparagraph shall
not affect the right of the conservator or receiver to
repudiate such contract under this section at any time
after such performance.

18
conservator’s mission is to conserve assets which often involves

continuing an ongoing business. The receiver’s mission is to

shut down and sell off its assets.”).

The RTC is correct in noting that a receiver is obliged to

pay for services as administrative expenses under 12 U.S.C. §

1821(e)(7) only where the receiver has actually accepted

performance of services subsequent to appointment, but prior to

the repudiation of any existing service contracts. This is a

question of timing. Section 1821(e)(7) requires both

conservators and receivers to make full payment under existing

service contracts, and to treat those obligations as expenses of

administration. However, the two entities - conservatorships and

receiverships - are separate, with separate obligations, and

separate expenses of administration. Only the expenses incurred

by a receiver constitute expenses of liquidation. As appellants

never performed any services for the Receiver, they are not

entitled to any preferential treatment for the services they

performed for the Conservator. These provisions function to

guarantee payment under existing service contracts to those

individuals who perform services for a failed, and liquidating,

institution. Here, only the Conservator accepted the executives’

services, and in so doing adopted, not repudiated, their pre-

existing terms of employment. Pursuant to this adoption,

appellants received their salaries, and all benefit packages were

maintained intact. When the proper claims were made to the

receiver, certificates were issued in the full amounts due.

19
 Our reading of the relevant law and our interpretation of

the legal consequences that flow from the formation of the SERP

agreement as a grantor trust conform with the reading of other

courts to have considered the issue. The leading cases

concerning grantor trusts in bank liquidations all hold that the

trust funds are available to general creditors and depositors of

the bank; all find the language of the trusts to be decisive;

and, none treat grantor trusts as expenses of liquidation. See

Westport Bank & Trust Co. v. Geraghty, 90 F.3d 661, 669 (2d Cir.

1996) (“By virtue of this beneficial tax treatment, . . . ‘the

recipient receives only the company’s unsecured promise to pay

benefits and has no rights against any assets other than the

rights of a general unsecured creditor of the company.’”

(citations omitted)); RTC v. MacKenzie, 60 F.3d 972, 978 (2d Cir.

1995) (“The fact that the Plan assets remained in the trust

corpus, thus in the possession of [the institution], at the time

RTC was appointed Receiver alone compels our holding that RTC has

a superior right to the Plan assets at this time.”); Goodman v.

RTC, 7 F.3d 1123, 1129-30 (4th Cir. 1993) (“Appellants are really

asking for a preference over other creditors; unfortunately, the

recipients of grantor or “rabbi” trusts are unsecured creditors,

who took the risks of being subject to the claims of general

creditors for the benefits of favorable tax treatment-a gamble

which failed to pay off in this case.”).

Furthermore, the relevant statutes make clear that the

receiver, not the conservator, “has the authority to liquidate

20
the assets and pay the obligations of the insured institution on

behalf of the depositors and creditors.” RTC v. Cheshire

Management Co., 18 F.3d 330, 333 (6th Cir. 1994). See also RTC

v. Cedarminn Bldg. Ltd Partnership, 956 F.2d 1446 (8th Cir.

1992). Pursuant to this authority, “[t]he RTC receiver

liquidates an institution and distributes its proceeds to

creditors according to the priority rules set out in

regulations.” Del E. Webb McQueen Dev. Corp. v. RTC, 69 F.3d

355 (9th Cir. 1995).

It is inconceivable under the relevant law that the

Conservator in this case could have contracted with appellants to

transform their SERP benefits into expenses of liquidation. The

Conservator contracted for assistance with the administration of

the conservatorship - and it promptly and fully compensated

appellants for their work in this regard according to the terms

of the previously existing service contract. It was not in the

power of the Conservator to transform these benefits into

expenses of liquidation incurred by the receiver in this case.

As there is no evidence that language to this effect was ever

used by the Conservator, there is no evidence that the

Conservator intended to do so or intended to mislead appellants

that it in fact had been done.

Appellants, in a final attempt to persuade us their claims

deserve treatment as expenses of liquidation, analogize the facts

of their case to the law of bankruptcy. We are not convinced.

Not only is bankruptcy law inapplicable to this matter, relevant

21
Bankruptcy Code definitions lead to the same conclusion reached

above: expenses of liquidation include only those “wages,

salaries, or commissions for services rendered after the

commencement of the case.” 11 U.S.C. § 503(b)(1)(A). The

services at issue here were not rendered after the start of the

analogous case. Further, appellants would have to persuade us

that SERP benefits of the type at issue here are properly

considered wages, salaries or commissions. As we need not

explicitly make a finding on this issue to resolve the case

before us, we decline to do so. However, we do note that

appellants’ brief and argument standing alone are unpersuasive in

this regard. They cite to no case law or governing statutes that

require such a finding. The lone affidavit submitted in support

of this loose analogy is not enough to defeat summary judgment.

Appellants have failed to demonstrate the existence of an

oral contract, relevant to the distribution status properly

accorded their SERP benefits. Appellants have further failed to

convince us that these benefits properly deserved treatment as

expenses of administration. Summary judgment, based on the plain

terms of the SERP agreement and underlying trust, was proper with

respect to each of these arguments.

C. Estoppel and Law of the Case

Appellants final argument rests in equity. As noted at the

outset, this is not the first time this dispute has reached this

Court. In McAllister v. FDIC, 87 F3d 762 (5th Cir 1996), this

Court held that the FDIC was equitably estopped from asserting a

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limitations defense, because representations made to appellants

concerning the status of their claims led them to delay filing

suit against the RTC.12 This Court reasoned that as certain

assurances offered by the RTC induced Appellants into waiting to

file suit, the statute of limitations was equitably tolled, and

the case was properly filed.

Appellants now assert that this holding disposes of the

present issue. Specifically, Appellants maintain that as this

Court already found evidence of oral misrepresentations, this

panel may not now reexamine this issue. This is a clear

misreading of not only the previous holding, but of our duty

under the doctrine of the law of the case. While we remain ever

mindful of our obligation to adhere to previous findings of this

Court, we refuse the invitation to contort our prior holding to

reach appellants’ view of this matter.

Our prior holding, in essence, settled a jurisdictional

matter: whether the suit was timely filed. By finding that

appellants delayed filing due to representations concerning their

claims, this Court said nothing about the merits of the claims

themselves. While it is true that this Court did find that

representations were made by the RTC that appellants would be

12
Typically, the RTC responds to claims against it within 180
days. The claiming party then has 60 days to file suit against
the RTC in the event of a negative disposition. Appellants
failed to meet this 60 day deadline and the RTC asserted this
failure as a bar to this litigation. This Court held that the
180/60 day time period was equitably tolled, as the RTC orally
informed Appellants that their claims would be allowed.

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paid in full, those representations are distinct from any oral

contract appellants now assert may have been formed from the

outset. In short, while “the RTC’s false assertions that the

plaintiffs would be paid in full induced them not to file suit

within the 60 day period following the issuance of the Receiver’s

Certificates,” those false assertions by no means dispose of the

issue concerning the proper status afforded to those claims in

the first instance. McAllister, 87 F.3d at 767 (emphasis added).

The doctrine of the law of the case does not resolve the issues

here.

In so holding, we fully acknowledge the language of our

prior opinion, quoted above, which clearly found false assertions

attributable to the RTC. However, timing is crucial. The

assertions found to be misleading by this Court were made after

the total collapse of the SASA, FA conservatorship. The

assertions found to be false related only to whether the claims

would be paid, after the employment relationship ceased to exist.

Appellants cannot now claim that they were induced into working

for the SASA and SASA, FA conservatorship by promises made

subsequent to the termination of this employment relationship.

Concerning representations made prior to the end of the SASA, FA

conservatorship, our previous opinion offers no insight.

In fact, our previous opinion reiterates the language of the

SERP agreement, to conclude that “trust assets could also be used

to pay creditors if the bank became insolvent” Id. at 763.

Further, and most critically, our previous opinion indicates that

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the assurances made by the RTC concerning who would be paid in

full, which later turned out to be false, related mainly to

miscalculations on the part of RTC employees concerning the

amount of funds available to pay all creditors of the bank. We

are not now bound by the conclusion that false assertions were

made, subsequent to the end of the employment relationship,

concerning whether there would be enough funds left to pay

appellants as unsecured general creditors.

IV. Conclusion

We note in closing that appellants were issued certificates

for the full value of their SERP benefits. Those certificates

entitle the executives to exactly what they bargained for -

payment of their SERP benefits if and when the failed thrift’s

liquidated assets exceed the aggregate value of the claims of the

thrift’s depositors and secured creditors. Because we find no

genuine issues of material fact concerning the legal status

properly accorded appellants’ rights to obtain payment under the

SERP plan, we AFFIRM the district court’s grant of summary

judgment, based on the plain language of the SERP and Umbrella

trust agreements, and the applicable Texas state depositor

preference law.

The judgment of the district court is AFFIRMED.

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