United States District Court, District of Columbia
LYNN FELDMAN, as Trustee of the Estate of Image Masters, Inc., et al., Plaintiffs,
FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for Washington Mutual Bank, Defendant.
SEGAL HUVELLE United States District Judge.
matter concerns mortgage payments that six bankrupt
businesses made to a failed bank in connection with a Ponzi
scheme. Plaintiff Lynn Feldman, Chapter 7 Trustee of the
estates of the businesses, filed this lawsuit against the
Federal Deposit Insurance Corporation (“FDIC”),
as receiver for the bank, to avoid and recover approximately
$11, 894, 719.17 in transfers Feldman alleges the bank knew
or should have known were fraudulent. (Am. Compl.
¶¶ 49-53, ECF No. 18.)
FDIC moves the Court to dismiss the amended complaint on
multiple grounds: lack of subject matter jurisdiction under
Federal Rule of Civil Procedure 12(b)(1), failure to state a
claim upon which relief can be granted under Rule 12(b)(6),
failure to plead facts with sufficient particularity under
Rule 9(b), and failure to join required parties under Rule
12(b)(7). (Def.'s Mot., Sept. 1, 2016, at 2-3, ECF No.
19). The FDIC further requests that the Court strike
Feldman's demand for a jury trial. (Id. at 28.)
consideration of the pleadings and for the reasons that
follow, the FDIC's motion to dismiss will be granted.
Because the Court finds that it does not have jurisdiction,
it need not address the FDIC's other arguments in favor
of dismissal or its argument that the jury demand should be
FDIC challenges this Court's jurisdiction on
administrative-exhaustion grounds, and for similar reasons,
it argues that Feldman's claim is time-barred. The
sequence of events leading up to the lawsuit is therefore
relevant to the disposition of the motion.
Snyder was the sole owner and operator of Image Masters,
Inc., and five other businesses through which Snyder
perpetuated a multi-million dollar Ponzi scheme from 1988 to
2007. (Am. Compl. ¶¶ 5, 10, 44.) As part of the
illegal scheme, Snyder convinced homeowners with existing
mortgages to take out new, larger mortgages and give the
proceeds of the refinancing to Snyder. (Id. ¶
Snyder did not use the proceeds of refinancing to make
investments or to immediately pay down the principal on the
new mortgages, as the homeowners believed he would.
(Id. ¶ 21.) Instead, Snyder used the money to
perpetuate his scheme, ultimately stealing tens of millions
of dollars from more than 800 homeowners. (Id.
¶¶ 23-24, 44.) Washington Mutual Bank was one of
the banks that extended new mortgages to the victims of
Snyder's scheme. (Id. ¶ 12.)
September 18, 2007, after the Ponzi scheme collapsed,
Snyder's business entities each filed a voluntary
petition for Chapter 7 bankruptcy. (Id. ¶
Feldman was appointed as interim Chapter 7 Trustee of the
estates of Snyder's businesses on September 19, 2007, the
day after they filed for bankruptcy. (Id. ¶
September 25, 2008, over a year after Feldman became the
Chapter 7 Trustee, the Office of Thrift Supervision closed
Washington Mutual and appointed the FDIC as receiver pursuant
to the Financial Institutions Reform, Recovery, and
Enforcement Act (“FIRREA”), Pub. L. No. 101-83,
103 Stat. 183 (1989) (codified in various sections of Title
12 of the U.S. Code). (Def.'s Mot. at 10; see
Am. Compl. ¶ 7.) The FDIC set December 30, 2008, as the
deadline for filing administrative claims in the receivership
and published notices of the receivership and claims deadline
in the Wall Street Journal on October 1, 2008, and October
31, 2008. (See Def.'s Mot., Ex. A.).
October 8, 2008, less than two weeks after Washington Mutual
closed, Feldman sent a letter addressed to Mr. David
Schneider, President of Washington Mutual Home Loan, Inc., to
“advise Washington Mutual of her . . . claims.”
(Am. Compl. ¶ 54.) Feldman did not receive a response to
her letter from the former bank or from the FDIC. (See
Id. ¶¶ 54-55.)
under ten months after sending the letter to Schneider,
Feldman filed a proof of claim with the FDIC, as receiver for
Washington Mutual, on August 3, 2009. (Id. ¶
55.) On or about September 18, 2009, the FDIC sent a letter
to Feldman, which she received on September 24, 2009,
disallowing the claim as untimely. (See Id. ¶
56.) Finally, on November 16, 2009, Feldman brought this
action against the FDIC, seeking review of the FDIC's
decision to disallow her claims. (Id. ¶¶
FDIC has moved, inter alia, to dismiss for lack of
subject-matter jurisdiction. When presented with a motion to
dismiss on jurisdictional and other grounds, courts should
first consider the Rule 12(b)(1) jurisdictional challenge.
See Loughlin v. United States, 393 F.3d 155, 170
(D.C. Cir. 2004) (“The federal courts are courts of
limited jurisdiction, and they lack the power to presume the
existence of jurisdiction in order to dispose of a case on
any other grounds.” (quoting Tuck v. Pan American
Health Organization, 668 F.2d 547, 549 (D.C. Cir.
1981))); United States ex rel. Settlemire v. Dist. of
Columbia, 198 F.3d 913, 920-21 (D.C. Cir. 1999)
(citation omitted) (declining to issue a ruling on the merits
after holding the court lacked jurisdiction).
jurisdictional challenge under Rule 12(b)(1) may be either
facial or factual. “If a defendant mounts a
‘facial' challenge to the legal sufficiency of the
plaintiff's jurisdictional allegations, the court must
accept as true the allegations in the complaint and consider
the factual allegations of the complaint in the light most
favorable to the non-moving party.” Erby v. United
States, 424 F.Supp.2d 180, 182 (D.D.C. 2006) (citing
I.T. Consultants, Inc. v. Pakistan, 351 F.3d 1184,
1188 (D.C. Cir. 2003)). In a factual challenge, “the
court may not deny the motion to dismiss merely by assuming
the truth of the facts alleged by the plaintiff and disputed
by the defendant.” Phoenix Consulting Inc. v.
Republic of Angola, 216 F.3d 36, 40 (D.C. Cir. 2000). It
must “go beyond the pleadings and resolve any disputed
issues of fact the resolution of which is necessary to a
ruling upon the motion to dismiss.” Id.
as here, the moving party has raised a factual challenge,
“the plaintiff bears the burden of establishing the
factual predicates of jurisdiction by a preponderance of the
evidence.” See Erby, 424 F.Supp.2d at 182
(citing Lujan v. Defenders of Wildlife, 504 U.S.
555, 561 (1992)). “While the district court may
consider materials outside the pleadings in deciding whether
to grant a motion to dismiss for lack of jurisdiction, the
court must still accept all of the factual allegations in
[the] complaint as true.” Jerome Stevens Pharm.,
Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005)
(citations and quotation marks omitted) (alteration in
invokes FIRREA as the basis of federal jurisdiction in this
case. (See Am. Compl. ¶ 1 (citing 12 U.S.C.
§ 1821(d)(6)).) The FDIC argues that this Court is
deprived of jurisdiction because, by not filing a timely
claim with the FDIC, Feldman failed to exhaust the
administrative remedies available to her. Feldman contends
that her failure to file a claim by the FDIC's deadline
is excused by the late-filed claims exception, 12 U.S.C.
§ 1821(d)(5)(C)(ii), and that she therefore fully
complied with FIRREA's administrative-claims process. The
THE FIRREA CLAIMS PROCESS ...