No. 92-1936.United States Court of Appeals, First Circuit.Argued March 22, 1994.
Decided April 22, 1994.
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Robert G. Wilson IV, with whom Robert G. Wilson III and Law Offices of Robert G. Wilson III, Boston, MA, were on brief, for appellant.
Richard J. Osterman, Jr., Sr. Counsel, with whom Ann S. DuRoss, Asst. Gen. Counsel, Marta W. Berkley, Counsel, Washington, DC, Adam J. Ruttenberg, Sr. Atty., F.D.I.C., Franklin, MA, and Russell F. Conn of Conn, Kavanaugh, Rosenthal Peisch, Boston, MA, were on brief, for appellee.
Appeal from the United States District Court for the District of Massachusetts.
Before BREYER, Chief Judge, CAMPBELL, Senior Circuit Judge, and CYR, Circuit Judge.
CYR, Circuit Judge.
[1] Plaintiff Floyd Heno appeals from a district court order dismissing claims for compensatory and injunctive relief brought against the Federal Deposit Insurance Corporation (“FDIC”) under the Financial Institutions Reform, Recovery, and Enforcement Act (“FIRREA”). In an earlier opinion, see Heno v. FDIC, 996 F.2d 429(1st Cir. 1993), we affirmed the district court order dismissing the claim for injunctive relief pursuant to Federal Rule of Civil Procedure 12(b)(6), but vacated its Rule 12(b)(1) order dismissing the claim for compensatory relief. Thereafter, we granted FDIC’s petition for panel rehearing on the claim for compensatory relief, see Fed.R.App.P. 40, and allowed further briefing, argument, and supplementation of the appellate record relating to the proper interpretation of FIRREA § 1821(d), (e), 12 U.S.C. § 1821(d), (e). We now withdraw our original opinion, and substitute the present opinion.
I [2] BACKGROUND[3] A. The “Claim”
[4] We review a Rule 12(b)(6) dismissal de novo, crediting all allegations in the complaint and drawing all reasonable inferences favorable to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974) Rumford Pharmacy, Inc. v. East Providence, 970 F.2d 996, 997
(1st Cir. 1992). Similarly, a Rule 12(b)(1) dismissal is reviewe de novo where, as here, the only issue is the legal sufficiency of undisputed jurisdictional facts. See Eaton v. Dorchester Dev., Inc., 692 F.2d 727, 732 (11th Cir. 1982); Mortensen v. First Fed. Sav. Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977).
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completion of roadwork in the project and to defray Balcol’s first mortgage interest payments to the Bank.
[7] Although Balcol conveyed Lots 82 and 111 to Heno on May 2, 1990, the Bank did not release its first mortgage liens on the lots. During April and May 1990, seven of the nine original lots were sold by the Bank after Heno had released his second mortgage liens. By June 1, 1990, more than $232,000 had been deposited in escrow with the Bank pursuant to the recapitalization agreement among Heno, Balcol, and the Bank. Ultimately, the eighth and ninth lots were sold, and the net proceeds, approximating $90,000, were deposited with FDIC.[1] The complaint alleges, hence we must assume, that $125,000 was to have been devoted to roadwork at the project.[2] [8] On June 1, 1990, the Bank was declared insolvent and FDIC was appointed receiver. At an unspecified later date, FDIC applied the escrow monies toward the principal due on Balcol’s first mortgage loan account with the Bank, contrary to the express terms of the recapitalization agreement. Heno’s counsel thereafter held discussions with FDIC, and was informed by Balcol that FDIC would determine, after obtaining an appraisal of the Prospect Heights project, whether to release the Bank’s first mortgage liens on Lots 82 and 111, the two additional lots at issue on appeal. On December 13, 1990,[3] and again on February 19, 1991, Heno submitted written requests for action by FDIC, but to no avail.[4] Subsequently, FDIC foreclosed on the Prospect Heights subdivision, including Lots 82 and 111. The escrow monies were neither redeposited nor applied toward the purposes agreed upon under the recapitalization agreement. [9] On October 18, 1991, Heno initiated the present action to enjoin FDIC’s sale of Lots 82 and 111 and to compel it to redeposit the escrow monies previously misapplied to Balcol’s first mortgage with the Bank. The complaint demanded an equitable accounting of the escrow monies, and compensatory relief for the loss occasioned by FDIC’s refusal to release the Bank’s first mortgage liens on Lots 82 and 111. FDIC moved to dismiss the claim for compensatory relief pursuant to Fed.R.Civ. 12(b)(1), and the claim for injunctive relief pursuant to Fed.R.Civ.P. 12(b)(6). The district court decided that it lacked jurisdiction to consider the claim for compensatory relief by virtue of 12 U.S.C. § 1821(d)(13)(D)(i), and that injunctive relief was precluded by 12 U.S.C. § 1821(j). [10] B. The Original Panel Opinion[11] FIRREA § 1821(d) regulates the filing, determination, and payment of “claims” against “assets” of failed financial institutions after FDIC has been appointed receiver. Subsections 1821(d)(3)(B) and (C) require FDIC to publish and mail notice of liquidation to “any creditor shown on the institution’s books” and to allow at least ninety days for filing “claims.”12 U.S.C. § 1821(d)(3)(B), (C). As FDIC points out, anyone with a “claim” against the assets of
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the failed institution must submit an administrative claim to FDIC within the prescribed statutory period. Id. § 1821(d)(5)(C). “[P]articipation in the administrative claims review process [is] mandatory for all parties asserting claims against failed institutions. . . .” Marquis v. FDIC, 965 F.2d 1148, 1151 (1st Cir. 1992). Failure to participate in the administrative claims review process (hereinafter “ACRP”) is a “jurisdictional bar” to judicial review. Id.; see also 12 U.S.C. § 1821(d)(13)(D); FDIC v. Shain, Schaffer Rafanello, 944 F.2d 129, 132 (3d Cir. 1991) (“Congress expressly withdrew jurisdiction from all courts over any claim to a failed bank’s assets that are [sic] made outside the procedure set forth in section 1821.”).[5] The subsection 1821(d) bar date for filing administrative claims in the present case was September 6, 1990. Since neither letter detailing Heno’s “claims” predated the bar date, see supra notes 3 and 4, the district court ruled that Heno could no longer file a timely administrative claim under subsection 1821(d), and that his “claims” therefore were not entitled to judicial review.
[12] Heno consistently has advanced two contentions on appeal. First, he argues that neither FIRREA § 1821(j), see infra note 8, nor the ACRP established under subsection 1821(d), applies to “non-creditors” — including Heno — who assert claims to property, such as the alleged escrow account, which, though held by the failed bank, is held “in trust” for third parties and is not a bank “asset.”[6] See, e.g., Purcell v. FDIC (In re Purcell), 141 B.R. 480 (Bankr.D.Vt. 1992), aff’d, 150 B.R. 111, 113-15 (D.Vt. 1993). Second, and in the alternative, Heno contends that his claim for compensatory relief should not have been dismissed for failure to comply with the administrative claim procedure established under subsection 1821(d). [13] The “task of interpretation begins with the text of the statute itself, and statutory language must be accorded its ordinary meaning.” Telematics Int’l, Inc. v. NEMLC Leasing Corp., 967 F.2d 703, 706 (1st Cir. 1992) (interpreting FIRREA § 1821(j)) (emphasis added) (citations omitted). The original panel opinion rejected FDIC’s contention that Heno was required to file an administrative claim before the bar date even though the “claim” was grounded in a pre-receivership agreement with the Bank and remained executory and unrepudiated both at the time of FDIC’s appointment and throughout the entire 90-day bar period prescribed in subsections 1821(d)(3)(B)(i) and 1821(d)(5)(C)(i). As our opinion pointed out, FIRREA § 1821(d) prescribes a single exception to the pre-bar date filing requirement: it permits late-filed claims only if “the claimant did not receive notice of the appointment of the receiver in time to file such claim before such date; and . . . such claim is filed in time to permit payment of such claim.” 12 U.S.C. § 1821(d)(5)(C)(ii). Because Heno — no doubt like many others who assert claims arising out of executory contracts with a failed bank — concededly had actual notice of FDIC’s appointment, but held no assertablePage 1208
or provable “claim” until after the bar date, the original panel opinion reasoned that the ACRP established under subsection 1821(d) rationally could not have been intended to preclude judicial review of post-receivership “claims” which arise after
the expiration of the 90-day administrative-claim filing period. Rather, inasmuch as FDIC received two post-bar date requests from Heno that it either affirm or repudiate the alleged reaffirmation agreement within a “reasonable period following [FDIC’s] appointment,” see 12 U.S.C. § 1821(e)(2); supra notes 3 and 4, we held Heno’s claim for contract repudiation subject instead to the more flexible time constraints established in FIRREA § 1821(e). See, e.g., Ceguerra v. Secretary of Health and Human Servs., 933 F.2d 735, 742 (9th Cir. 1991) (“[W]hen an administrative agency interprets its governing statute to require such an absurd result, we owe that interpretation no deference.”)[7]
[15] The petition for rehearing represents that but for the fact that these claims were never considered claims based on contract repudiation, FDIC would have invoked its extant internal agency manual procedures for processing such post-bar date claims (hereinafter: “internal manual procedures”). Accordingly, FDIC urged remand to permit the district court to determine whether Heno had complied with the internal manual procedures first disclosed in FDIC’s petition for rehearing. At reargument, FDIC withdrew its request for remand, as unnecessary, after conceding that Heno’s detailed letter requests to FDIC in December 1990 and February 1991, see supra notes 3 and 4, placed FDIC on notice of the existence and nature of Heno’s post-bar date claims well within the time allotted under FDIC’s internal manual procedures.
II [16] DISCUSSION
[17] Given the concession that Heno’s post-bar date claims were timely filed under FDIC’s internal manual procedures, the one remaining question is whether judicial deference is due the FDIC interpretation of subsections 1821(d)(5)(C)(ii) and 1821(d)(13) implicit in its internal manual procedures.[8]
[19] Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984) (emphasis added). Under the statutory interpretation implicit in its internal manual procedures, FDIC construes the pivotal statutory bar-date exception in subsection 1821(d)(5)(C)(ii) — “the claimant did not receive notice of the appointment of the receiver in time to file such claim before [the bar] date” — as permitting late filing even by claimants who were on notice of FDIC’s appointment but could not file their claim because it did not come into existence until after the bar date prescribed in subsections 1821(d)(3)(B)(i) and 1821(d)(5)(C)(i). [20] Although we concur in FDIC’s candid assessment that its proposed interpretation is far from the most natural reading of subsection 1821(d)(5)(C)(ii) itself, we cannot say that it does not represent a “permissible” reading of an ambiguous provision viewed in the broader context of the statute as a whole under the deferential standard required by Chevron. See Chevron, 467 U.S. at 844, 104 S.Ct. at 2782 (agency construction is “permissible” unless “arbitrary, capricious, or manifestly contrary to the statute”) (emphasis added). In this vein, neither we nor the parties have found any other FIRREA provision governing agency treatment of claims that do not arise until more than 90 days after the claimant has notice of FDIC’s appointment as receiver. Additionally, Congress has delegated to FDIC the authority to “prescribe regulations regarding the allowance or disallowance of claims by the receiver and providing for administrative determination of claims and review of such determination.”12 U.S.C. § 1821(d)(4). The extant FDIC internal manual procedures applicable to Heno’s claims comport with the FDIC’s interpretation of subsection 1821(d)(5)(C)(ii), by explicitl dispensing with any requirement — intrinsic to the pre-bar date ACRP — that holders of post-bar date claims establish that they had no actual or constructive notice of FDIC’s appointment Compare infra Appendix, Exhibits G and 4-F with Exhibit 5-K. [21] Further, FDIC advances sound policy grounds for affording it an opportunity to evaluate post-bar date claims in the first instance, including contract repudiation claims that do not arise within the initial ninety-day period following notice of its appointment as receiver. For one thing, a reasonably designed and fairly administered post-bar date ACRP should optimize prospects for expeditious resolution of these claims against failed banks, make maximum use of FDIC’s cumulative administrative expertise, and minimize burdensome litigation in the federal courts. See Marquis, 965 F.2d at 1152 (“Quite plainly, Congress intended the ACRP to provide a streamlined method for resolving most claims against failed institutions in a prompt, orderly fashion, without lengthy litigation.”) (citing H.R. Rep. No. 101-54(I), 101st Cong., 1st Sess., at 418-19 (1989) U.S. Code Cong. Admin.News pp. 86, 214, 215). Lastly, absent a clear signal from Congress to the contrary, we must credit an administering agency’s reasoned interpretation of its enabling statute. See Chevron, 467 U.S. at 843 n. 11, 104 S.Ct. at 2782 n. 11 (noting that judicial deference is not dependent on a determination “that the agency construction was the only one it permissibly could have adopted to uphold the construction, or even the reading the court would have reached if the question initially had arisen in a judicial setting”); see also FDIC v. Philadelphia Gear Corp., 476 U.S. 426, 439, 106 S.Ct. 1931, 1938, 90 L.Ed.2d 428 (1986) (accordin Chevron deference to established FDIC administrative practice, even though FDIC had not yet reduced its statutory interpretation to “specific regulation”); cf. Colorado ex rel. Colorado State Banking Bd. v. Resolution Trust Corp., 926 F.2d 931, 944 (10th Cir. 1991) (“[T]he RTC’s expert `judgments about the way the real world works . . . are precisely the kind that agencies are better equipped to make than the courts.'”) (citation omitted). [22] Since FDIC concedes that its treatment of Heno’s administrative requests that his allegedFirst, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at
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issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation.
Rather, if the statute is silent or ambiguous with respect to a specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.
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capitalization agreement with the Bank be assumed by FDIC was tantamount to administrative review under FDIC’s internal manual procedures,[9] and consequently that the district court had jurisdiction to review Heno’s claims, we have no occasion to determine the sufficiency of FDIC’s internal manual procedures. These matters must await some future occasion when FDIC asserts a jurisdictional bar to judicial review under FIRREA § 1821(d)(13)(D) based on a claimant’s alleged failure to comply with the internal manual procedures.
[23] At the same time, however, we note that though amply invested with rulemaking authority to promulgate regulations under subsection 1821(d)(4), FDIC has not done so, nor has it taken reasonable steps to forewarn potential claimants of th existence of its internal manual procedures for filing “late” claims, thus contributing indispensably to the convoluted travel of this case. Cf., e.g., Lawson v. FDIC, 3 F.3d 11, 14 (1st Cir. 1993) (noting that FDIC’s “litigating style has some role in [creating] confusion” in the district courts).[10] Accordingly, the FDIC internal manual procedures are appended to this opinion see infra Appendix, to lessen the likelihood that future claimants experience a similar ordeal. [24] The district court order dismissing appellant’s claims for compensatory relief is vacated. The case is remanded to the district court for further proceedings consistent with this opinion. In all other respects, the district court order is affirmed. Finally, the present opinion is to be substituted for our original opinion published at 996 F.2d 429. So ordered.Heno should receive either the lot releases or that portion of the escrow account attributable to his participation in the agreement. Under well established fiduciary and equitable principles, if the FDIC is not going to honor the purposes of the escrow account, that portion of the escrow account attributable to Heno’s participation should be returned to him, and not used by the Receiver to reduce Balcol’s obligation.
(Emphasis added.) Heno’s complaint demands an equitable accounting of the escrow monies, and, accordingly, does not specify the exact amount claimed. However, were Heno to establish a repudiation of the recapitalization agreement, he could be expected to assert a claim for the difference between the $19,125 originally agreed upon, and the $5,000 he later agreed to accept under the recapitalization agreement for releasing his second mortgage liens on the nine lots sold by Balcol (or approximately $127,000).
(D) Limitation on judicial review
Except as otherwise provided in this subsection, no court shall have jurisdiction over —
(i) any claim or action for payment from, or any action seeking a determination of rights with respect to, the assets of any depository institution for which the Corporation has been appointed receiver, including assets which the Corporation may acquire from itself as such receiver; or
(ii) any claim relating to any act or omission of such institution or the Corporation as receiver.
12 U.S.C. § 1821(d)(13)(D).
(e) Provisions relating to contracts entered intobefore appointment of conservator or receiver
(1) Authority to repudiate contracts
In addition to any other rights a conservator or receiver may have, the conservator or receiver for any insured depository institution may disaffirm or repudiate any contract or lease —
(A) to which such institution is a party;
(B) the performance of which the conservator or receiver, in the conservator’s or receiver’s discretion, determines to be burdensome; and
(C) the disaffirmance or repudiation of which the conservator or receiver determines, in the conservator’s or receiver’s discretion, will promote the orderly administration of the institution’s affairs.
(2) Timing of repudiation
The conservator or receiver appointed for any insured depository institution in accordance with subsection (c) of this section shall determine whether or not to exercise the rights of repudiation under this subsection within a reasonable period following such appointment.
Except as provided in this section, no court may take any action, except at the request of the Board of Directors by regulation or order, to restrain or affect the exercise of powers or functions of the Corporation as a conservator or a receiver.
12 U.S.C. § 1821(j) (emphasis added); see Telematics Int’l, 967 F.2d at 707 (“holding that the district court lacks jurisdiction to enjoin FDIC when FDIC is acting pursuant to its statutory powers as receiver”) (emphasis added).
after the dates of FDIC’s “discovery” of Heno’s claims, or whether Heno’s letters were proper administrative claims implicitly “disallowed” when FDIC failed to respond within 180 days after their receipt.
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