St. Hillaire v. FDIC, 14 F.3d 44, 1st Cir. (1994)

14 F.
3d 44
NOTICE: First Circuit Local Rule 36.2(b)6 states unpublished

opinions may be cited only in related cases.
ST. HILAIRE & ASSOCIATES, INC., D/B/A Corso Electric
Co., Et
Al., Plaintiffs, Appellants,
v.
FEDERAL DEPOSIT INSURANCE CORPORATION, ETC.,
ET AL.,
Defendants Appellees.
No. 93-1648.
United States Court of Appeals,

First Circuit.
January 19, 1994
Appeal From The United States District Court For the District of New
Hampshire
Gray H. Reiner, Reiner and Bouffard on brief for appellants.
Ricky L. Brunette, Law Office of Susan J. Szwed on brief for appellees.
D.N.H.
VACATED AND REMANDED
Before Cyr, Boudin and Stahl, Circuit Judges.
Per Curiam.
Appellant, St. Hilaire & Associates, Inc., D/B/A Corso Electric Co., and Albert
St. Hilaire, appeal the dismissal of their action against the Federal Deposit
Insurance Corporation [FDIC], as receiver for Numerica Bank, Federal Savings
Bank [Numerica], and the Resolution Trust Corporation [RTC], as conservator
for Homebank Federal Savings Association [Homebank FSA]. We vacate the
dismissal and remand to the district court for further proceedings.

2
We take the following facts from the record, accepting the facts pleaded in the
complaint as true. In 1987 or 1988, Albert St. Hilaire [St. Hilaire], president of
St. Hilaire, Inc. [the corporation], sought financing from Numerica Bank of
Manchester, New Hampshire. Subsequently, officers and agents of Numerica
indicated to St. Hilaire that they had transferred to Homebank, Federal Savings
Bank [Homebank FSB], a fully owned subsidiary of Numerica. They also
requested that he allow them to transfer the financing arrangements for the
corporation to Homebank FSB as well. St. Hilaire agreed, and in 1988,
financing totalling approximately $450,000 was provided by Homebank FSB.
In 1991, Homebank FSB refused to extend further credit to the corporation,
and, as a result, the corporation was forced to cease business operations.
Effective October 10, 1991, Numerica was declared insolvent and the FDIC
was appointed receiver. Homebank FSB was closed on the same date. The RTC
was appointed receiver of Homebank FSB. In its capacity as receiver, the RTC
entered into a Purchase and Assumption Agreement with Homebank FSA,
whereby essentially all of the assets and some of the liabilities of Homebank
FSB were transferred to Homebank FSA. Among the assets transferred were the
St. Hilaire notes. The RTC was appointed conservator of Homebank FSA.
In 1992, the RTC as conservator of Homebank FSA brought suit against the
corporation and against St. Hilaire in the United States District Court for the
District of Maine seeking collection of the notes. In their answer to the
complaint, St. Hilaire and the corporation raised various affirmative defenses.
St. Hilaire asked, in particular, that, if he were found personally liable on the
note, he be allowed to set off any claims which he would have against the
Numerica and Homebank as a result of administrative claims which he had
already initiated pursuant to 12 U.S.C. Sec. 1821(d). On October 23, 1992, the
court granted summary judgment to the RTC and found St. Hilaire personally
liable.
On October 5, 1992, St. Hilaire and the corporation initiated the instant suit in
the United States District Court for the District of New Hampshire. The
complaint seeks damages from the FDIC as receiver of Numerica and against
the RTC as conservator of Homebank FSA for breach of an implied covenant
of good faith and fair dealing; for violation of a joint venture agreement; and
for breach of an oral contract. The RTC as conservator filed a motion to dismiss
alleging that appellants had failed to file a claim under the administrative
claims process prior to commencing suit and that, therefore, the federal court
was without jurisdiction to hear the claim pursuant to 12 U.S.C. Sec. 1821(d)
(13)(D). The RTC also sought dismissal on the grounds of res judicata. The
district court dismissed the entire case on the ground of lack of jurisdiction. It
did not address the issue of res judicata.
6
As the FDIC notes in its brief, "[t]his appeal comes to this Court in a state of
procedural confusion." First, the FDIC advises this court that it never moved
for dismissal below. Not only should the district court not have dismissed the
complaint against the FDIC without such a motion, see Greene v. Union Mut.
Life Ins. Co., 764 F.2d 19, 21-22 (1st Cir. 1985), but the FDIC also admits that
it is not entitled to such relief since appellants did file an administrative claim
with the FDIC. The claim was denied and hence is properly before the district
court. 12 U.S.C. Sec. 1821(d)(6)(A).
Second, the RTC as conservator now concedes that the ground on which its
motion to dismiss was granted was improper. 12 U.S.C. Sec. 1821(d)(13)(D)
limits the jurisdiction of federal courts to those parties who have exhausted
their administrative remedies as regards claims against the RTC as receiver.
Since appellants in the instant case have sought relief only against the RTC in
its capacity as conservator, the court erred in granting dismissal for failure to
exhaust administrative remedies.1
The RTC now asks this court to affirm the dismissal on the alternate ground of
res judicata. The essential elements of res judicata are a final judgment on the
merits in an earlier action between identical parties or their privies and an
identity of causes of action in the earlier and later suits. See, e.g., Kale v.
Combined Ins. Co., 924 F.2d 1161, 1165 (1st Cir), cert. denied, 112 S.Ct. 69
(1991). The decision by the United States District Court of the District of
Maine is clearly a final judgment between the RTC as conservator and the
appellants.
However, we think it is unwise to attempt to determine the res judicata issue in

the first instance. It was not addressed by the district court and has not been
extensively briefed in this court. Accordingly, we vacate the dismissal as to the
RTC without prejudice to its right to assert the res judicata defense on remand
in the district court.
10
The order dismissing the action against the FDIC and against the RTC is
vacated and the case is remanded for further proceedings. No costs.
Appellants do not appear to accept this concession since they continue to argue
that they in fact did exhaust their administrative remedies

St. Hillaire v. FDIC, 14 F.3d 44, 1st Cir. (1994)

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14 F.

NOTICE: First Circuit Local Rule 36.2(b)6 states unpublished

United States Court of Appeals,

dismissal and remand to the district court for further proceedings.

However, we think it is unwise to attempt to determine the res judicata issue in

that they in fact did exhaust their administrative remedies

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