under Section 1441(a)(a)(11). It did so without any discussion of D'Oench, Duhme or the policies behind its codification into 12 U.S.C. § 1823(e).
Finally, In RTC Commercial Loan Trust 1995- NP1A v. Winthrop Management, 923 F. Supp. 83 (E.D. Va. 1996), the court, after reviewing both Vanderbilt Mortgage and National Enterprise, as well as the D'Oench, Duhme doctrine and its codification, held that the RTC's right to file suit in or remove to federal court any action in which it is a party pursuant to Section 1441(a)(a)(11) was a right personal to RTC which could not be assigned.
"A legal assignment is a transfer or setting over of property . . . and unless some way qualified, it is properly the transfer of one's whole interest." National Enterprise, 892 F. Supp. at 951 (citing 6 Am Jur 2d, § 1 at 185 (1963)). Typically, an assignee acquires all of the assignor's rights and liabilities in the assignment. Id. Some rights are so personal to the assignor, however, that they are not assignable. See Soderberg v. Gens, 652 F. Supp. 560 (N.D. Ill. 1987). A classic example is a personal service contract. Ames v. Sayler, 267 Ill. App. 3d 672, 205 Ill. Dec. 223, 642 N.E.2d 1340 (4th Dist. 1994). Whether RTC's statutory right to file suit in federal court is so personal as to preclude assignment requires examination of the D'Oench Duhme doctrine, its codification, and FIRREA.
In D'Oench, Duhme, the Court held that under federal common law a debtor is estopped from asserting any defense based on a side agreement that would tend to mislead a federal insurance agency about the terms of an insured note. Congress codified and supplemented the doctrine in 12 U.S.C. § 1823(3), which established a four-prong test for invalidating a debtor's secret agreement defenses. Winthrop Management, 923 F. Supp. at 86. Both D'Oench, Duhme and Section 1823(3) have been extended to third parties like plaintiff who have purchased delinquent notes from the FDIC, and later the RTC. Id. Courts have also extended the doctrine to allow assignment of certain substantive statutory rights given to the FDIC. National Enterprise, 892 F. Supp. at 950-51. For example, in Mountain States Financial Resources v. Agrawal, 777 F. Supp. 1550, 1552 (W.D. Okla. 1991), the court held that the six year limitations period in 12 U.S.C. § 1821(d)(14)(A) was assignable by FDIC. See also FDIC v. Bledsoe, 989 F.2d 805 (5th Cir. 1993) (same). According to Mountain States, the policy behind the extension of the D'Oench, Duhme doctrine to allow the FDIC to assign its defenses compelled allowing assignment of the six year limitations period. That policy, unidentified in Mountain States, was to encourage purchasers to acquire assets from the RTC and thus ease RTC's ability to protect the assets of failed institutions. Bledsoe, 989 F.2d at 810-811. In contrast to these decisions, however, is WAMCO, III Ltd. v. First Piedmont Mortg. Corp., 856 F. Supp. 1076 (E.D. Va. 1994), in which the court determined that the six year limitation period was a right personal to RTC and, therefore, not assignable.
This court agrees with the well-reasoned analysis and conclusions of the Winthrop Management court that the grant of federal jurisdiction in Section 1441(a)(11) is a right personal to the governmental agency that is not assignable. Extending certain defenses, and even statutory limitations periods, is decidedly different than extending this court's original jurisdictional. Congress explicitly stated that federal subject matter jurisdiction would exist when the RTC is a party to the lawsuit. It could have identified RTC or its assigns, but did not. The right to sue in federal court is a benefit that is generally personal unless a statute dictates otherwise. As the Winthrop Management court noted, diversity of citizenship cannot be assigned. The public policy behind D'Oench, Duhme, and the establishment of RTV can be upheld and enforced equally well in the state courts. State courts are certainly capable of and do apply the federal common and statutory law expressed by the D'Oench, Duhme doctrine and its codification in 12 U.S.C. § 1823. See Twenty First Century Recovery, Ltd. v. Mase, 279 Ill. App. 3d 660, 216 Ill. Dec. 513, 665 N.E.2d 573 (5th Dist. 1996).
Because Section 1825 is the only asserted basis for federal jurisdiction, the instant complaint must be dismissed. It may be possible, however, for a plaintiff to plead another basis for subject matter jurisdiction. Accordingly, the dismissal is without prejudice. Should plaintiff so choose, it shall file an amended complaint asserting proper grounds for federal subject matter jurisdiction on or before the status report set for October 17, 1996.
ENTER: October 11, 1996
Robert W. Gettleman
United States District Judge
© 1992-2004 VersusLaw Inc.