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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