- Case Type:
- Business
- Case Status:
- Reversed
- Citation:
- 17-5009 (D.C. Circuit, Jan 12,2018) Published
- Tag(s):
-
- Ruling:
- A chapter 7 trustee's amended complaint sufficiently alleged the basis for her excusable neglect to file a proof of claim against the FDIC, as the receiver for Washington Mutual Bank. Therefore, the district court's Rule 12(b)(1) dismissal of the Chapter 7 trustee's amended complaint was improper and reversed.
- Procedural context:
- The Chapter 7 trustee for six business that allegedly had been engaged in a mortgage-related Ponzi scheme sued the FDIC, in its capacity as the receiver for Washington Mutual Bank, after the FDIC disallowed the trustee's claim. The FDIC argued that the district court lacked subject matter jurisdiction because the trustee filed the proof of claim after the bar date. The trustee argued that the FDIC's interpretation was contrary to 12 U.S.C. § 1821(d)(5)(C)(ii).
The district court agreed with the FDIC, and dismissed the trustee's amended complaint under Rule 12(b)(1). The district court found, among other things, that the Chapter 7 trustee was not entitled to written notice from the FDIC of the claims bar date and that she had received adequate notice of the receivership by virtue of the FDIC's publication notice in the Wall Street Journal.
- Facts:
- On September 18, 2007, six businesses which allegedly were engaged in a mortgage-related Ponzi scheme filed for bankruptcy in the Eastern District of Pennsylvania. Washington Mutual Bank (WaMu) was one of the banks that had extended mortgages to the businesses' customers.
On September 25, 2008, the FDIC was appointed as the receiver for WaMu. The FDIC set December 30, 2008, as the deadline for filing proofs of claim with the FDIC for claims against WaMu.
On October 8, 2008, the Chapter 7 trustee sent a demand letter addressed to the (former) president of Washington Mutual Home Loans Inc., the registered agent for WaMu, and the trustee's attorney.
On August 3, 2009, the trustee filed a proof of claim, which the FDIC disallowed. The trustee then filed a complaint in the US District Court for the District of Columbia for reconsideration of the disallowance of the claim. The FDIC moved to dismiss the complaint under Rules 12(b)(1), 12(b)(6), 12(b)(7), 9(b) and 19. The district court granted the Rule 12(b)(1) motion,
- Judge(s):
- ROGERS, TATEL, and EDWARDS
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