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July 11, 1996

SUZAN TANTLEFF TRUSTS, et al., Plaintiffs,

The opinion of the court was delivered by: HOGAN

 In this action, the plaintiffs seek a judicial determination that they are owed additional deposit insurance coverage for trust assets lost when a federally insured bank was placed in receivership. Having carefully reviewed the parties' cross-motions for summary judgment, the Court will deny the plaintiffs' motion and grant the defendant's motion.


 The plaintiffs, trustees and beneficiaries of three trusts, have brought suit against the Federal Deposit Insurance Corporation ("FDIC") in its capacity as insurer of the bank in which the trust assets were deposited. When the bank was placed in receivership and the plaintiffs attempted to recover the trust assets from the FDIC, a dispute arose as to the appropriate amount of deposit insurance coverage on the trusts. The scope of coverage depends upon whether the trusts are properly characterized as revocable or irrevocable. If the trusts are determined to be revocable, they may be entitled only to the $ 100,000 deposit insurance coverage already paid by the defendant. If the trusts are found to be irrevocable, they may be entitled to additional coverage as to each beneficiary.

 The facts are undisputed and are found in the parties' joint Stipulation of Undisputed Facts ("Stip."). On June 24, 1985, Suzan Tantleff established three trusts for the benefit of her children and grandchildren. At that time, Tantleff placed $ 2,500.00 in each of three money market accounts at American Commerce National Bank of Anaheim, California ("ACNB"). The trust instruments were re-executed in 1992.

 The provisions of the trust instruments were identical except that each trust named a different life beneficiary--one each of Suzan Tantleff's three children. Each life beneficiary was entitled to the net income of the respective trust estate for life. Upon the death of the life beneficiaries, their issue, Suzan Tantleff's grandchildren, were to receive the balance of the principal. Tantleff's son Robert was named trustee of each of the three trusts.

 The parties' disagreement centers on two provisions in the trust instruments. Section 2.3, upon which the plaintiffs rely, declared the trusts to be irrevocable:

 (Stip. Ex. A, B, and C.) However, the defendant points out that § 2.2 reserved in the settlor the right to withdraw the trust principal without limitation:

The Settlor may withdraw part or all of the Trust principal at any one time, or from time to time, upon her request, and the same shall be distributed to such person or persons, and in such manner as the Settlor may from time to time specify. The decision of the Settlor as to the amount of distribution and the allocation shall be final and binding on all persons.

 Id. On June 25, 1985, the day after the trusts were established, an ACNB officer wrote a letter to Robert Tantleff stating that the trusts were irrevocable. (Stip. Ex. H.) The plaintiffs subsequently filed income tax returns in the trust names.

 When the Office of the Comptroller of the Currency ("OCC") seized the ACNB in April 1993, the three trusts held a total of $ 692,759.29 on deposit. The FDIC was appointed receiver. After initially deeming the trusts irrevocable, the FDIC ultimately revised its determination and characterized the trusts as revocable based on the language of § 2.2. Pursuant to its regulations governing deposit insurance coverage of revocable trusts, the FDIC aggregated the accounts and made one $ 100,000 insurance payment on the entire group of assets. Plaintiffs subsequently filed a claim with the FDIC for the remaining amount and received a pro rata share of the receivership estate--comprised of the aggregated remaining assets of the ACNB--totaling $ 353,165.99. These payments left $ 239,593.30 of the trust assets unrecovered.

 Plaintiffs filed a petition for review in the United States Court of Appeals for the District of Columbia Circuit. By agreement of the parties, a consent order was entered transferring this action to the United States District Court for the District of Columbia. *fn1"


 The plaintiffs claim that the trusts are irrevocable and that each account is eligible for separate insurance coverage. In the alternative, they seek to estop the FDIC from asserting that the trusts are revocable. Both parties have moved for summary judgment. In order for the Court to grant summary judgment under Federal Rule of Civil Procedure 56, the moving party must demonstrate that there is no genuine issue as to any material fact and that the party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). Material facts are those that "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). In considering the summary judgment issue, the Court must view all of the evidence in the light most favorable to the plaintiffs. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986). Even ...

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