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Sidney R. Miller v. Federal Deposit Insurance Corporation

September 29, 2011


The opinion of the court was delivered by: Judge Robert M. Dow, Jr.


Plaintiff filed this action asserting claims under the Financial Institutions Reform Recovery and Enforcement Act of 1989 ("FIRREA") [1]. Before the Court are Defendant's motion to dismiss [16] pursuant to Federal Rule of Civil Procedure 12(b)(1) and Plaintiff's motion for leave to file a sur-reply [28]. For the reasons stated below, Defendant's motion to dismiss [16] is granted and Plaintiff's motion for leave to file a sur-reply [28] is granted.


Plaintiff Sidney R. Miller ("Plaintiff") owned eleven currency exchanges, each of which maintained several different accounts with Corus Bank N.A. ("Corus Bank"). On September 11, 2009, Corus Bank failed and Defendant FDIC ("Defendant" or "the FDIC") was appointed receiver. The FDIC mailed a letter to individuals with potential claims against Corus Bank, including Plaintiff, notifying them of their right to file claims with the FDIC pursuant to FIRREA. See 12 U.S.C. § 1821(d)(3)(B) (2010). Plaintiff submitted a claim to the FDIC on December 17, 2009.

On May 18, 2010, the FDIC mailed Plaintiff a notice of disallowance of his claim. The notice was sent by certified mail to the post office box address that Plaintiff had provided to Corus Bank. Plaintiff acknowledges that the address was valid, and further alleges that he directed the post office to forward mail from that address to another address of his through the end of May 2010. However, Plaintiff alleges that he never received the May 18 notice, and suggests that it may never have been delivered. Plaintiff also alleges that the FDIC never received a return receipt indicating that the notice had been delivered successfully.

Plaintiff alleges that he was in regular telephone and e-mail contact with the FDIC during May 2010 and that the FDIC never mentioned to him in the course of their communications that his claim had been denied. Plaintiff contends that he believed that the FDIC had not resolved his claim, and that, accordingly, he waited until July 9 to check on the status of the claim. Plaintiff states that on August 12, an FDIC claim representative advised him that another FDIC employee was checking on the status of his claim and would contact him the following day. On August 13, FDIC Supervisor Paul Patterson informed Plaintiff that the FDIC had mailed a notice of denial to him on May 18. According to Plaintiff, Patterson also advised that the letter notification had been returned as undeliverable. On August 16, Plaintiff filed a complaint seeking judicial review of the FDIC's decision to deny his claim.


A. Whether the Court Should Construe Defendant's Motion as a Rule 12(b)(1) Motion to Dismiss for Lack of Subject Matter Jurisdiction or a Rule 56 Motion for Summary Judgment

As a preliminary matter, the Court addresses Plaintiff's argument that Defendant's motion is improperly styled as a Rule 12(b)(1) motion and should instead be converted to a Rule 56 motion for summary judgment. Plaintiff's argument centers on an Illinois Appellate Court order upholding the liquidation of two of Plaintiff's currency exchanges, which Defendant attached as an exhibit to its motion. Plaintiff argues that Defendant's inclusion and discussion of the Illinois Appellate Court order goes beyond the pleadings and touches upon the merits of the case, effectively rendering it a motion for summary judgment rather than a motion to dismiss. Defendant counters that its motion to dismiss is concerned only with Plaintiff's failure to meet the FIRREA filing deadline -- which Defendant contends is a jurisdictional matter inappropriate for summary judgment -- and that its discussion of the Appellate Court order functions solely to demonstrate that Plaintiff has substantial experience in receivership proceedings and litigation and thus must be aware of FIRREA deadlines.

Plaintiff's contentions rest on a misapprehension of the nature of a motion to dismiss for lack of subject matter jurisdiction. As the Seventh Circuit explained in Capitol Leasing Co. v. FDIC, 999 F.2d 188, 191 (7th Cir. 1993), while a grant of summary judgment is a decision on the merits, "a court must dismiss the case without ever reaching the merits if it concludes that it has no jurisdiction." Because jurisdiction is separate from the merits, a motion to dismiss for want of jurisdiction under Rule 12(b)(1) cannot "evolve into a dismissal pursuant to Rule 56," and "discussing the interplay of Rule 12(b)(1) and Rule 56 verges on non sequitur." Id. Contrary to Plaintiff's supposition, a court may go outside the pleadings in considering whether to grant a motion to dismiss for lack of jurisdiction: "The district court may properly look beyond the jurisdictional allegations of the complaint and view whatever evidence has been submitted on the issue to determine whether in fact subject matter jurisdiction exists." Id. (quoting Grafon Corp. v. Hausermann, 602 F.2d 781, 783 (7th Cir. 1979)). The Court thus considers the motion as construed -- that is, as one seeking dismissal for lack of subject matter jurisdiction.*fn2

Federal courts are courts of limited jurisdiction; "they have only the power that is authorized by Article III of the Constitution and the statutes enacted by Congress pursuant thereto." Transit Express, Inc. v. Ettinger, 246 F.3d 1018, 1023 (7th Cir. 2001). Pursuant to 28 U.S.C. § 1331, "[t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." The burden of establishing that a district court has proper jurisdiction over an action lies with the plaintiff. Transit Express, 246 F.3d at 1023. A defendant arguing that a plaintiff has not met this burden with respect to an action (or a claim) may move for dismissal under Rule 12(b)(1) on the ground that the court lacks subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1).

B.Whether the FIRREA Filing Deadline Establishes a Jurisdictional Limit or a Statute of Limitations

In 1989, Congress enacted FIRREA as a response to a national banking crisis. See RTC Commercial Assets Trust 1995-NPR-1 v. Phoenix Bond & Indem. Co., 169 F.3d 448, 456 (7th Cir. 1999). Congress designed the act "to give the FDIC power to take all actions necessary to resolve the problems posed by a financial institution in default." FDIC v. Wright, 942 F.2d 1089, 1096 (7th Cir. 1991) (citing H.R. Rep. No. 54(I), 101st Cong., 1st Sess. 330, reprinted in 1989 U.S. Code Cong. & Admin. News 126). Under FIRREA, the FDIC may be appointed as a receiver for a failing financial institution. 12 U.S.C. § 1821(c)(2)(A)(ii). An individual who alleges that the failed financial institution had outstanding obligations to him may file a claim against the FDIC in its capacity as receiver. See Maher v. FDIC, 441 F.3d 522, 525 (7th Cir. 2006); see also 12 U.S.C. § 1821(d)(3). The FDIC then has 180 days to allow or deny the claim. Maher, 441 F.3d at 525; 12 U.S.C. § 1821(d)(5)(A)(i). If the FDIC denies the claim, then the claimant has 60 days to seek judicial review of that determination in federal court; if the FDIC fails to render a decision within the 180-day period, the claimant has 60 days from the conclusion of the 180-day period to file suit. Maher, 441 F.3d at 525; 12 U.S.C. § 1821(d)(6)(A)(i)-(ii). In either case, if a claimant fails to file suit before the end of the 60-day period, "the claim shall be deemed to be disallowed" and that determination cannot be reviewed by the courts. 12 U.S.C. § 1821(d)(6)(B)(ii). "Federal courts lack jurisdiction to address claims that fail to comply with FIRREA's administrative claims process." Maher, 441 F.3d at 525 (citing 12 U.S.C. § 1821(d)(6)(A)); Maher v. Harris Trust & Sav. Bank, 75 F.3d 1182, 1191 (7th Cir. 1996); Capitol Leasing Co. v. FDIC, 999 F.2d 188, 193 (7th Cir. 1993).

Defendant argues that the 60-day FIRREA deadline for seeking judicial review of a claim determination (or lack thereof) should be understood as a threshold jurisdictional requirement, not as a statute of limitations. Under Defendant's interpretation, a plaintiff's failure to comply with the deadline renders the FDIC determination (or lack thereof) of a plaintiff's claim unreviewable by federal courts. A court would be required to ...

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