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Alkasabi v. Washington Mutual Bank

United States District Court, D. Columbia.

March 24, 2014

OSAMA A. ALKASABI et al., Plaintiffs,
v.
WASHINGTON MUTUAL BANK, F.A. et al., Defendants

Decided March  21, 2014

Page 102

OSAMA A. ALKASABI, Plaintiff, Pro se, La Jolla, CA.

NADIA HADDADA, Plaintiff, Pro se, La Jolla, CA.

For FEDERAL DEPOSIT INSURANCE COMPANY, In its receiver, and successor of interest, Defendant: Lori J. Searcy, LEAD ATTORNEY, SEARCY BUSINESS LITIGATION & EMPLOYMENT LAW, LLC, Alexandria, VA.

Page 103

MEMORANDUM OPINION[# 4]

RICHARD J. LEON, United States District Judge.

Plaintiffs Osama A. Alkasabi and Nadia Haddada, proceeding pro se, brought this suit against defendants Washington Mutual Bank, F.A., Washington Mutual Bank (together, " WAMU" ), and the Federal Deposit Insurance Corporation (" FDIC" ), as receiver for WAMU, in connection with plaintiffs' purchase of two condominiums in La Jolla, California. See generally Compl. [Dkt. # 1]. Plaintiffs, borrowers from WAMU, a failed bank, allege that WAMU misrepresented that Certificates of Occupancy for the properties would be issued by the city before the loans closed. Before the Court is defendant FDIC's Motion to Dismiss the complaint for lack of subject matter jurisdiction and for failure to state a claim. See FDIC-Receiver's Mot. to Dismiss and Mem. P. & A. in Supp. (" Def.'s Mot." ) [Dkt. # 4]. Upon consideration of the pleadings, record, and relevant law, I find that this Court lacks subject matter jurisdiction, and therefore FDIC's motion is GRANTED, and all claims against defendants WAMU and the FDIC are dismissed.[1]

BACKGROUND

Plaintiffs' suit stems from their purchase of two condominiums at the Seahaus development in La Jolla, California. See Compl. ¶ 35. On June 1, 2005, plaintiffs borrowed $1,199,925 from WAMU to purchase one unit, id. ¶ 9 and Ex. D (Deed of Trust), and on July 24, 2006, plaintiff Alkasabi borrowed $1,216,224 from WAMU to purchase a second unit, id. ¶ 10 and Ex. E (Deed of Trust).

Page 104

On December 14, 2012--more than eight years after the first condominium purchase and seven years after the second--plaintiffs filed their two-count complaint initiating this action, alleging that they did not receive " marketable title to their Seahaus Units because of the absence of a Certificate of Occupancy from the City of San Diego." Compl. ¶ 35. In the first count, entitled " Fraud and Deceit: Negligent Misrepresentation of Fact," plaintiffs allege that the issuance of Certificates of Occupancy was a condition precedent to closing the two loan transactions, id. ¶ ¶ 40, 52, but such certificates were not issued, id. ¶ 46. Further, plaintiffs allege that WAMU knew that no certificates had been issued at the time the loans were being negotiated, id. ¶ ¶ 37-38, made statements that such certificates had been issued while knowing, or being reckless in not knowing, that such statements were false, id. ¶ ¶ 41, 43-44, and thereby induced plaintiffs to enter into the loan contracts, id. ¶ ¶ 35, 59. Plaintiffs also assert that they did not discover that Certificates of Occupancy had not been issued until March 29, 2012 and May 18, 2012, when the Superior Court of San Diego County issued rulings in a related case. Id. ¶ ¶ 24, 48.[2] In the second count, plaintiffs seek a declaratory judgment that the FDIC (and Chase) assumed WAMU's alleged liability for the claim alleged in the first count. See id. ¶ ¶ 60-61.

Between the time when the loans closed and when plaintiffs initiated this action, WAMU collapsed. On September 25, 2008, the U.S. Department of the Treasury's Office of Thrift Supervision declared WAMU insolvent and appointed the FDIC as receiver pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act (" FIRREA" ), Pub. L. No. 101-73, 103 Stat. 183 (1989) (codified in various sections of Title 12 of the U.S. Code). See Compl. ¶ 2; Decl. of William A. Starnes (" Starnes Decl." ) [Dkt. # 4-1], at ¶ 3 and Ex. A (Order Appointing FDIC as Receiver); 12 U.S.C. § 1821(c). Pursuant to FIRREA's administrative claims process for handling creditors' claims against failed banks that are in receivership with the FDIC, discussed infra, the FDIC set December 30, 2008 as the deadline for filing claims against the WAMU receivership (hereinafter " Claims Bar Date" ). See Compl. ¶ 22; Starnes Decl. ¶ 5. Also pursuant to FIRREA's statutory requirements, the FDIC published notice of its appointment as receiver (and of the Claims Bar Date) in newspapers of general circulation in October and December of 2008. Starnes Decl. ¶ 5 and Ex. B (Publication Notices).[3]

Page 105

Nearly four years after the Claims Bar Date, on August 22, 2012, plaintiffs filed an administrative claim with the FDIC raising the misrepresentation claim that forms the basis of the instant suit. Compl. ¶ 21; Starnes Decl. ¶ 6 and Ex. C (Administrative Complaint). On October 16, 2012, the FDIC disallowed plaintiffs' claim as untimely filed. Compl. ¶ 22 and Ex. C (Notice of Disallowance); Starnes Decl. ¶ 7 and Ex. D (Notice of Disallowance). Thereafter, within the 60 day time limit allowed by statute to seek judicial review, plaintiffs filed their complaint in this case on December 14, 2012.

STANDARD OF REVIEW

Defendant FDIC has moved to dismiss plaintiffs' complaint for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) and for failure to state a claim under Rule 12(b)(6). In such a situation, a court should consider the Rule 12(b)(1) jurisdictional challenges before the Rule 12(b)(6) arguments. See United States ex rel. Settlemire v. District of Columbia, 198 F.3d 913, 920-21, 339 U.S.App.D.C. 166 (D.C. Cir. 1999) (citing United States ex rel. Kreindler & Kreindler v. United Techs. Corp., 985 F.2d 1148, 1155-56 (2d Cir. 1993)).

On a motion to dismiss under Rule 12(b)(1), " the plaintiff bears the burden of establishing the factual predicates of jurisdiction by a preponderance of the evidence." Erby v. United States, 424 F.Supp.2d 180, 182 (D.D.C. 2006) (citing, inter alia, Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)); see also Khadr v. United States, 529 F.3d 1112, 1115, 381 U.S.App.D.C. 408 (D.C. Cir. 2008) (" the party claiming subject matter jurisdiction . . . has the burden to demonstrate that it exists" ). " [Plaintiffs'] factual allegations in the complaint . . . will bear closer scrutiny in resolving a 12(b)(1) motion than in resolving a 12(b)(6) motion for failure to state a claim." United States ex rel. Digital Healthcare, Inc. v. Affiliated Computer Servs., Inc., 778 F.Supp.2d 37, 43 (D.D.C. 2011) (citation and internal quotation marks omitted). In deciding a 12(b)(1) motion, a court need not limit itself to the complaint; rather, it " may consider such materials outside the ...


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