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Richards Industrial Park, LP v. Federal Deposit Insurance Corporation

United States District Court, S.D. California

June 11, 2015

RICHARDS INDUSTRIAL PARK, LP, a California limited partnership; and MARC BARMAZEL, an individual, Plaintiffs,
v.
FEDERAL DEPOSIT INSURANCE CORPORATION, as receiver for La Jolla Bank, FSB; and NATIONSTAR MORTGAGE, a business entity, Defendants.

ORDER OF DISMISSAL

LARRY ALAN BURNS, District Judge.

Richards Industrial Park, LP and its general partner, Marc Barmazel, brought this lawsuit against the Federal Deposit Insurance Corporation (FDIC) based on its alleged breach of a real estate related agreement. (Docket no. 33.) Plaintiffs' remaining claims are for breach of contract and breach of the covenant of good faith and fair dealing. The FDIC has filed a motion to dismiss. (Docket no. 34.)

I. Factual Background

A. Pre-Receivership Claims

In their First Amended Complaint (FAC), Plaintiffs contend that ALB Properties and La Jolla Bank made misrepresentations in the course of several real estate transactions, causing Plaintiffs damages. (Docket no. 33, ¶¶ 6-10.) Thereafter, the FDIC was appointed receiver for La Jolla Bank. (Id., ¶ 11.) Based on La Jolla Bank's alleged pre-receivership misrepresentations, Plaintiffs filed with the FDIC a timely administrative claim for fraud and misrepresentation. (Id. ) The FDIC denied Plaintiffs' administrative claim. (Id., ¶ 24.)

B. Post-Receivership Claims

The FAC contains claims arising out of alleged post-receivership conduct by the FDIC. Plaintiffs allege that, in an effort to resolve their dispute with the FDIC without litigation, they negotiated, and reached an agreement for, a ten percent discount on certain real estate loans. (Id., ¶¶ 12-23.) Plaintiffs allege that, in reliance on their agreement with the FDIC, they changed their marketing, pricing, and strategy for the sale of one of their properties. (Id., ¶ 25.) They allege further that, after Plaintiffs found a buyer for the property, the FDIC refused to honor its earlier agreement to offer a ten percent discount. (Id., ¶¶ 26-27.) Based on these allegations regarding the FDIC's post-receivership conduct, the FAC asserts claims for breach of contract and breach of the implied covenant of good faith and fair dealing.

C. Exhaustion of Administrative Remedies

The FAC alleges that Plaintiffs "have complied with any pre-ligitation requirement that they submit a claim for breach of the Agreement by complying with the criteria set forth in Heno v. FDIC, 20 F.3d 1204 (1st Cir. 1994) ( Heno II ) for submitting a post receivership claim to the FDIC." (Id., ¶ 28.) However, Plaintiffs don't explain what they did to comply with Heno II, or even what they think Heno II requires. Thus, the FAC doesn't make clear whether Plaintiffs have filed an administrative claim dealing with their claims for breach of contract and breach of the implied covenant of good faith and fair dealing.

D. The FDIC's Motion to Dismiss

The FDIC contends that Plaintiffs are relying on their initial administrative claim for pre-receivership fraud and misrepresentation to exhaust their post-receivership causes of action. Thus, they argue that the Court lacks jurisdiction over the claims in the FAC because they haven't been administratively exhausted, and the FAC should be dismissed under Fed.R.Civ.P. 12(b)(1). In response, Plaintiffs contend that no post-receivership administrative claim was required because the May 26, 2010 claims bar date expired before their claims arose and, in any event, the FAC sufficiently alleges that they submitted a post-receivership administrative claim. (Docket no. 35.)

The FDIC's motion also seeks dismissal of Plaintiffs' breach of the implied covenant of good faith and fair dealing claim under Fed.R.Civ.P. 12(b)(6). The FDIC contends this claim should be dismissed because it's either based in contract, and therefore coextensive with Plaintiffs' breach of contract claim, or it's based in tort, and not available under California law.

II. Discussion

A. Legal ...


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