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Landwehr v. Federal Deposit Insurance Corp.

September 3, 2010

TIMOTHY JAMES LANDWEHR ET AL., PLAINTIFFS,
v.
FEDERAL DEPOSIT INSURANCE CORPORATION, AS RECEIVER FOR INDYMAC BANK, F.S.B. AND INDYMAC FEDERAL BANK, F.S.B., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge

Re Document Nos. 44, 47, 68

MEMORANDUM OPINION

GRANTING IN PART AND DENYING WITHOUT PREJUDICE IN PART THE FDIC'S MOTION TO DISMISS; GRANTING THE PLAINTIFFS'MOTION TO DISMISS IMR'S ORIGINAL COUNTERCLAIM; GRANTING IN PART AND DENYING IN PART IMR'S MOTION TO AMEND ITS COUNTERCLAIM

I. INTRODUCTION

The plaintiffs are former employees of IndyMac Bank, F.S.B. ("IMB"), IndyMac Federal Bank, F.S.B. ("IMFB") and IndyMac Resources, Inc. ("IMR"). They commenced this action against IMR and the Federal Deposit Insurance Corporation ("FDIC"), in its capacity as receiver for IMB and IMFB, to recover severance, deferred compensation and bonus payments to which they were allegedly entitled. The plaintiffs also seek to prevent the defendants from taking any actions to seek the repayment of "retention loans" extended to the plaintiffs during their employment.

The FDIC has moved to dismiss the plaintiffs' claims against it for lack of subject matter jurisdiction and failure to state a claim for which relief can be granted. In addition, the plaintiffs have moved to dismiss IMR's original counterclaim, which is premised on the plaintiffs' alleged anticipatory repudiation of their obligations under the retention loans. Finally, IMR has moved for leave to amend its original answer and counterclaim. For the reasons discussed below, the court grants in part and denies in part the FDIC's motion to dismiss, grants the plaintiffs' motion to dismiss IMR's original counterclaim and grants in part and denies in part IMR's motion for leave to amend.

II. FACTUAL & PROCEDURAL BACKGROUND

The plaintiffs are former employers of IMB, a bank that, prior to its collapse, was one of the largest mortgage originators in the United States. 3d Am. Compl. ¶¶ 3-22. During the term of his or her employment, each plaintiff was promised a compensation package that included a "generous severance package . . . which they would collect in the event of an involuntary termination." Id. ¶ 29. Additionally, at least one plaintiff was offered a "deferred compensation plan . . . wherein some of his salary was loaned back to IndyMac with a promised repayment and an annual rate of return at a later date." Id. ¶ 31.

In 2007, the nationwide decline in mortgage lending severely impacted IMB. Id. ¶ 32. To induce the plaintiffs to stay with IMB and "try to the build the company back to solvency," IMB offered the plaintiffs "retention loans," memorialized in promissory notes executed by the plaintiffs and IMB. Id. According to the plaintiffs, the parties understood that these loans "would be set-off against their severance and other compensation at the end of their employment" but "would not [need to be paid] in the event of termination without cause." Id. ¶ 33-34.

On July 11, 2008, the Office of Thrift Supervision closed IMB and authorized the creation of IMFB. FDIC's Mot. to Dismiss ("FDIC's Mot.") at 3-4. The FDIC was then appointed as Receiver for both IMB and IMFB, and the bulk of IMB's assets and deposit liabilities were transferred to IMFB. Id. As a result, the plaintiffs became employees of IMFB and were notified that their employment would terminate on September 15, 2008. 3d Am. Compl. ¶¶ 42, 47.

"After the takeover, [IMB] and the [FDIC] continually promised that the plaintiffs' compensation and benefits would remain intact" because the plaintiffs' continued work was important to the FDIC's ability to effectively manage the takeover of IMB. Id. ¶ 48. Yet in March 2009, the FDIC began steps "to collect on [the retention loans] executed by the plaintiffs with [IMB] before [it] went into receivership." Id. ¶ 55. Likewise, the plaintiff who had allegedly loaned part of his salary back to IMB as a form of deferred compensation was not reimbursed for those monies, despite the fact that his deferred compensation plan entitled him to payment of those funds upon the termination of his employment. Id. ¶ 56.

The plaintiffs commenced this action in April 2009. See generally Compl. In November 2009, the FDIC made a formal determination "that insufficient assets exist in the receivership of [IMB] . . . and the receivership of [IMFB] to make any distribution to general unsecured claims, and therefore such claims will recover nothing and have no value." 74 Fed. Reg. 59, 540 (Nov. 18, 2009) (hereinafter, "the insufficient assets determination"). The insufficient assets determination also recognized that the total liabilities in the receiverships of IMB and IMFB far exceeded the assets available in those receiverships, though it did not make any determinations with respect to the value of any claims senior to general unsecured claims. Id.

In January 2010, the plaintiffs filed a third amended complaint against the FDIC, in its capacity as receiver for IMB and IMFB; IMR, an entity affiliated with IMB that also functioned as the plaintiffs' employer;*fn1 and OneWest Bank, F.S.B., a bank that had purchased a large portion of IMB.*fn2 See generally 3d Am. Compl. The plaintiffs have asserted claims for monetary relief based on the severance, deferred compensation and bonus payments to which they were allegedly entitled. Id. ¶ 128. The plaintiffs have also asserted claims for declaratory and injunctive relief prohibiting the defendants from seeking repayment of the "retention loans." Id.

On January 29, 2010, the FDIC moved to dismiss all claims against it in the third amended complaint. See generally FDIC's Mot. The FDIC argues that this court lacks subject matter jurisdiction over the plaintiffs' claim for monetary relief because the insufficient assets determination establishes that the plaintiffs cannot recover anything through this action, resulting in the absence of a live claim or controversy. Id. at 9-14. The FDIC also contends further that even if this court had jurisdiction, the fact that the plaintiffs cannot recover through this action means that their claims for monetary relief should be denied on the grounds of prudential mootness. Id. at 14-19. Furthermore, the FDIC asserts that the plaintiffs' claims against it for declaratory and injunctive relief must be dismissed because such relief is barred as a matter of law. Id. at 20-22.

Rather than moving to dismiss, IMR filed an answer to the third amended complaint, in which it included a counterclaim based on the plaintiffs' alleged anticipatory repudiation of their obligations under the retention loans. See generally IMR's Countercl. The plaintiffs have moved to dismiss that counterclaim for failure to state a claim for which relief can be granted. See generally Pls.' Mot. to Dismiss IMR's Countercl. ("Pls.' Mot."). On July 29, 2010, IMR filed a motion for leave to amend its original answer and counterclaim. See generally IMR's Mot. to Amend Countercl. ("IMR's Mot."). Through that motion, IMR seeks leave to supplement the allegations underlying its anticipatory repudiation counterclaim, raise an additional affirmative defense of anticipatory breach and assert an additional counterclaim based on the plaintiffs' purported breach of the promissory notes. See generally id. The plaintiffs oppose IMR's motion for leave to amend, arguing that granting leave to amend would be futile because the proposed amendments do not state a claim for relief. See generally Pls.' Opp'n to IMR's Mot.

The FDIC's motion to dismiss, the plaintiffs' motion to dismiss IMR's first counterclaim and IMR's motion for leave to amend its counterclaim are now ripe for adjudication. The court now turns to the ...


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