United States Court of Appeals, Eleventh Circuit.
No. 94-4740.
David L. PAUL, Plaintiff-Appellant,
v.
FEDERAL DEPOSIT INSURANCE CORPORATION, Defendant-Appellee.
Aug. 14, 1996.
Appeal from the United States District Court for the Southern
District of Florida. (No. 94-442-CV-FAM) Federico A. Moreno, Judge.
Before EDMONDSON and DUBINA, Circuit Judges, and CUDAHY*, Senior
Circuit Judge.
CUDAHY, Senior Circuit Judge.
This procedurally 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.
*
Honorable Richard D. Cudahy, Senior U.S. Circuit Judge for
the Seventh Circuit, sitting by designation.
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
1
denial of his claim. 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 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.
1
All of the claims in Paul's complaint address the legality
of the RTC's administrative action in denying his claim, not the
RTC's authority to seize the property or its authority to take
original jurisdiction over the claims. The complaint notes that
Paul has filed a separate lawsuit in state court for conversion
and replevin, and we assume that this litigation has addressed or
will address the RTC's authority to seize property and to make
initial decisions about those claims.
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 case 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 FIRREA 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. Consequently, given the undisputed facts in this case, the
FDIC has no power under § 1821(d)(5)(C)(ii) here, and the
Stipulation cannot be the product of any power created by that
statute.
We do note that one circuit court has found that the FDIC can
exercise broad discretion under § 1821(d)(5)(C)(ii). In Heno v.
FDIC, the First Circuit noted that, as a federal agency, the FDIC
has extensive power to interpret § 1821(d)(5)(C)(ii). 20 F.3d
1204, 1208-10 (1st Cir.1994) (relying on Chevron U.S.A., Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct.
2778, 81 L.Ed.2d 694 (1984)). According to Heno, the FDIC could
effectively broaden its discretion under § 1821(d)(5)(C)(ii) by
interpreting that section broadly in a manual of procedures. If
the FDIC had alerted us to regulations or a manual of procedures
pertaining to § 1821(d)(5)(C)(ii), these administrative provisions
might have helped us understand how that section is relevant to
this case and to the Stipulation of the Reversal. Because we do
not have any such regulations or official procedures before us, we
cannot find that § 1821(d)(5)(C)(ii) pertains to this case.
This brings us to another problem associated with the
Stipulation of Reversal. During oral argument, we asked the RTC's
counsel whether it had any regulations defining the procedures for
filing claims and when these regulations might have been in force.
On January 2, 1996 we ordered the RTC to produce these regulations,
pointing out that we would not act on the Stipulation of Reversal
without them. As the RTC's successor, the FDIC responded to this
order by reminding us (unnecessarily) that it had discretion to
establish the procedures for filing administrative claims and by
insisting (without apparent basis) that the Notice of Claim form
itself told us everything that we needed to know about its
regulation of the administrative claims process. The FDIC appended
a copy of the Notice of Claim form to their response. Although the
tone of the FDIC's response borders on the disrespectful, we must
assume that the response constitutes its compliance with—not its
defiance of—our order of January 2. We must therefore presume that
this form constitutes the entirety of the regulations pertaining to
the administrative claims process. These "regulations" are not
broad or specific enough to convince us that the FDIC has the
authority to cure any jurisdictional problems with Paul's claims.
Because the FDIC does not have the power here to waive any
objection to subject matter jurisdiction, we must construe the
Stipulation to be a confession of error that implies a fact that
would be essential to finding subject matter jurisdiction in the
district court. The only fact that would appear to confer subject
matter jurisdiction on the district court is the fact that Paul's
claim was timely filed. Therefore, the Stipulation must be an
admission of this fact, but the Stipulation is not clear about the
precise nature of the fact that it admits. The FDIC asserts that
Paul's claim was timely filed, but what constitutes his claim? It
may consist of the entire course of correspondence between Paul and
the RTC that began in February 1990 or, alternatively, only of the
Notice of Claim form that he filed in August 1991. If the district
court is to review the RTC's treatment of Paul's claim, it must
recognize what that claim was and what actions of the RTC were
relevant to it. Because these factual matters are not clear from
the face of the Stipulation, as an aid to the district court on
remand, we will provide clarification.
We must conclude that the claim to which the Stipulation
refers consists of the correspondence between Paul and the RTC
beginning in February 1990. We reach this conclusion by a process
of elimination. It is undisputed that Paul had notice of the RTC's
status as receiver, and he had notice of the existence of the
claims process long before the deadline for filing claims. Given
these facts, it would be impossible to find that his filing of the
Notice of Claim form in August 1991 was timely. That filing could
be considered timely only if § 1821(d)(5)(C)(ii) applied here, but,
as we have noted, that section cannot apply. Therefore, we must
read the Stipulation of Reversal as an admission that Paul's
correspondence with the RTC, which began in February 1990, was his
claim and that it was timely filed. The admission of this fact is
enough to confer subject matter jurisdiction on the district court
and to mandate our reversal of the dismissal of Paul's complaint.
This is the only legal basis for establishing subject matter
jurisdiction in the district court. On remand, Paul can challenge
the legality of the entire course of conduct by the RTC with
respect to his claims for the return of property.
The judgment of the district court dismissing Paul's complaint
for lack of jurisdiction is REVERSED and the case is REMANDED for
further proceedings not inconsistent with this opinion.