- Case Type:
- Case Status:
- Affirmed in part and Reversed in part
- 14-4297/15-3324/17-3162 (6th Circuit, Aug 11,2017) Published
- District Court correctly enjoined defendants, accused of fraudulently obtaining loans from Credit Union, from disposing of assets other than as necessary for living expenses. District Court erred in dismissing tort claims brought by Plaintiff as liquidating agent for failed Credit Union where Court did not determine which of two statutes of limitations applied. District court also erred in dismissing Unjust Enrichment claim.
- Procedural context:
- Plaintiff was appointed as liquidating agent for a failed Credit Union, and brought action in District Court claiming that defendants fraudulently obtained loans from Credit Union. District Court entered injunction against Defendants disposing of assets pending outcome of action but dismissed counts for Unjust Enrichment, Fraud and Conversion. On appeal, Circuit Court affirmed injunction but reversed dismissals.
- Defendants, allegedly in conspiracy with employees of Credit Union, fraudulently obtained loans from Credit Union in exxcess of $1 million. Credit Union was later declared insolvent and National Credit Union Administration (NCUA) assumed control and began liquidating assets. NCUA then brought suit against Defendants and requested injunction against Defendants' disposing of assets. District Court entered injunction but then dismissed various counts of complaint seeking recover for fraud, conversion and unjust enrichment on basis of statute of limitations. For purposes of liquidating assets of failed financial institution, FIRREA, 12 USC Section 1787, does not require NCUA to prove irreparable or immediate harm, instead requiring only that NCUA prove likelihood of success, some harm to Board, relative harm to enjoined party, and public interest. NCUA estblished allelements for injunctiove r elief and District Court acted within discretion in mpostgin injucntiona gasint Defendants. Statute of LImitations for action brought by NCUA is the longer of 3 years from appointment of NCUA as liquidator or period under applicable state law. District Court did not correctly determine when state statute of limitations would have run . Although action was brought more than 3 years after appointment of NCUA, there was no evidence at pleading state that state limitations had run and dismissal of those counts was error.
- Sutton, McKeague, Thapar
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