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Koznarek v. Federal Deposit Insurance Corp.

United States District Court, N.D. Illinois, Eastern Division

July 21, 2015

NORA A. KOZNAREK, Plaintiff,
FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for DuPage National Bank, Defendant

For Nora A. Koznarek, Plaintiff: Jovan Radomia Ostojic, LEAD ATTORNEY, Ostojic & Scudder, Chicago, IL.

For Federal Deposit Insurance Corporation, as Receiver for DuPage National Bank, Defendant: Michael A. O'Brien, LEAD ATTORNEY, Leslie Gregory Bleifuss, O'Brien Law Offices, PC, Wheaton, IL; AUSA, United States Attorney's Office (NDIL), Chicago, IL.

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Gary Scott Feinerman, United States District Judge.

Pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (" FIRREA" ), when the Federal Deposit Insurance Corporation (" FDIC" ) is appointed as the receiver for a failed bank, the FDIC must " promptly publish a notice to the depository institution's creditors to present their claims, together with proof, to the receiver by ... not less than 90 days after the publication of such notice." 12 U.S.C. § 1821(d)(3)(B)(i). After such a claim is filed, the FDIC has 180 days to decide whether to allow or disallow the claim, and it may " disallow any portion of any claim ... which is not proved to [its] satisfaction." Id. § 1821(d)(5)(A)(i), (d)(5)(D)(i). FIRREA " explicitly forbids judicial review of [FDIC] disallowances made pursuant to § 1821(d)(5)(D)." Helm v. Resolution Trust Corp., 43 F.3d 1163, 1165 (7th Cir. 1995) ( " Helm I" ) (citing 12 U.S.C. § 1821(d)(5)(E), (d)(13)(D)).[*] However,

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FIRREA gives a dissatisfied claimant two options to challenge a disallowance, either of which much be exercised within 60 days of the FDIC's notice of disallowance. 12 U.S.C. § 1821(d)(6)(B).

First, the claimant may request additional administrative review by the FDIC of the disallowance. Id. § 1821(d)(6)-(7). If the FDIC agrees to conduct such review, its final determination is then subject to judicial review under the Administrative Procedure Act (" APA" ). Id. § 1821(d)(7)(A); see Miller v. FDIC, 738 F.3d 836, 841 (7th Cir. 2013) (" One option is to request further administrative review of the claim. A claimant who follows this route may, if unsuccessful or only partially successful, seek judicial review after the extra round of administrative process is complete. This form of judicial review proceeds under the Administrative Procedure Act." ) (citations omitted). Second, the claimant may " file suit on such claim" in federal district court, which decides the underlying claim de novo. 12 U.S.C. § 1821(d)(6)(A); see Miller, 738 F.3d at 841 (" An unsuccessful claimant's other option is to forego additional administrative review and proceed directly to federal court. If the claimant follows this route, the court conducts a de novo review of the merits of the claim." ) (citation omitted). This second option is known as filing a " FIRREA claim." Veluchamy v. FDIC, 706 F.3d 810, 817 (7th Cir. 2013).

Nora Koznarek filed this suit against the FDIC in its capacity as receiver for DuPage National Bank. Doc. 1. Her claim arises from a slip-and-fall incident that allegedly occurred at the bank's branch in Hinsdale, Illinois. Id. at ¶ ¶ 6-12. Count I, titled " Allowance of Claim," discusses the FDIC's proof-of-claim process and asks the court for " [a]llowance of Plaintiff Koznarek's personal injury claim as a valid claim ... against the FDIC." Doc. 1 at ¶ ¶ 13-20. As Koznarek describes it, Count I " seeks ... judicial review of the [FDIC's] disallowance of her personal injury claim." Doc. 15 at 1. Count II, titled " Negligence," alleges that the FDIC, as receiver, is liable for DuPage National Bank's negligent failure to maintain safe premises and seeks damages for the injuries that Koznarek allegedly suffered from her fall. Doc. 1 at ¶ ¶ 21-25. As Koznarek describes it, Count II " seeks ... relief for [Koznarek's] underlying personal injury claim against the FDIC as Receiver for DuPage National Bank." Doc. 15 at 1.

The parties' have filed cross-motions for summary judgment; Koznarek seeks summary judgment on Count I, while the FDIC seeks summary judgment on both counts. Docs. 11, 15. (At a recent hearing, FDIC suggested that it seeks summary judgment only on Count I, but its briefs argue for summary judgment on both counts. Doc. 13 at 6 (" For all of those foregoing reasons, FDIC properly disallowed the Claim. In a de novo adjudication, the Court has the ability to look at the evidence afresh and reach its own determination. FDIC urges the Court to reach the same conclusion, namely, that Plaintiff failed to substantiate her Claim. Therefore, FDIC urges the Court to disallow the Claim." ); Doc. 26 at 4 (" In a de novo review, the Court could review the undisputed material facts in this case, apply the provisions of FIRREA, and reach the same conclusion as FDIC did. ... FDIC urges the Court to do exactly that." ).) For the following reasons, Count I is dismissed for lack of jurisdiction, and the FDIC's motion for summary judgment on Count II is denied.


The court ordinarily draws the facts in a summary judgment opinion from the parties' Local Rule 56.1 statements and responses. Koznarek and the FDIC each filed a Local Rule 56.1(a)(3) statement,

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Docs. 12, 17, but neither filed a Local Rule 56.1(b)(3)(C) response to the other's statement. Both parties have thus functionally admitted all of the opposing party's proposed facts. See Keeton v. Morningstar, Inc., 667 F.3d 877, 884 (7th Cir. 2012) (" because Keeton failed to timely respond to Morningstar's Local Rule 56.1 statement of uncontested facts, we deem those facts admitted to the extent that Morningstar's statement is supported by evidence in the record" ). The following facts--pieced together from the complaint, the answer, the Local Rule ...

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