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Liberty Bankers Life Insurance Co. v. First Citizens Bank & Trust Co.

Court of Appeals of Colorado, Fifth Division

November 6, 2014

Liberty Bankers Life Insurance Company, Third-Party Defendant-Appellant,
v.
First Citizens Bank & Trust Company, Defendant-Appellee.

Eagle County District Court No. 11CV227 Honorable R. Thomas Moorhead, Judge

Recht Kornfield, P.C., Heather R. Hanneman, Denver, Colorado; The Law Offices of Mitchell Madden, Mitchell Madden, Dallas, Texas, for Third-Party Defendant-Appellant

Stinson, Leonard, Street, LLP, Perry L. Glantz, Daniel C. Wennogle, Greenwood Village, Colorado, for Defendant-Appellee

OPINION

BOORAS JUDGE

¶ 1 Appellant, Liberty Bankers Life Insurance Company (Liberty), appeals the judgment and dismissal with prejudice of its counterclaims against appellee, First Citizens Bank & Trust Company (FCBT). We affirm the judgment.

I. Background

¶ 2 The underlying claims in this case relate to Liberty's participation in two loans with Colorado Capital Bank (CCB) for the purpose of funding the development of a townhome project, with one loan entered into on June 2, 2009, and the other entered into on March 12, 2010. CCB was closed by the Colorado Division of Banking on July 8, 2011, and the Federal Deposit Insurance Corporation (FDIC) was named its receiver (FDIC-R). On the same day, FCBT purchased the assets and assumed the liabilities of CCB in a purchase and assumption agreement. As required by the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), 12 U.S.C. § 1821(d)(3)(B) (2012), the FDIC published notices in the Denver Post in July, August, and September of 2011 that advised potential claimants to submit proofs of claims in writing to the FDIC before October 13, 2011. The FDIC also provided Liberty with an individual notice on October 12, 2011, that failure to file a claim prior to the bar date would result in a final disallowance of the claim.

¶ 3 Liberty timely submitted its proof of claim with the FDIC on October 12, 2011, which stated, in pertinent part:

After maturity and prior to July 8, 2011, Colorado Capital Bank took no action to foreclose on the collateral or pursue any other enforcement action. In addition to the foregoing, Colorado Capital failed to make interim interest payments from available escrows and failed to facilitate the sale of Townhome units to third parties. Such conduct was in breach of the covenants of good faith and fair dealing. Colorado Capital Bank's conduct or omissions rises to the level of gross negligence or willful misconduct.

The FDIC denied this claim on November 21, 2011, and on January 20, 2012, Liberty filed suit against FCBT and the FDIC-R in federal court.

¶ 4 In the federal litigation, the FDIC-R moved to dismiss Liberty's complaint against it on the grounds that "[u]nder the plain terms of the Purchase & Assumption Agreement, all of Colorado Capital's rights, interests, liabilities and obligations under these agreements were transferred to [FCBT] on July 8, 2011. This transfer extinguished any liability of FDIC-R for the claims asserted by [Liberty]." On April 18, 2012, after a stipulation by FCBT to this representation, Liberty sought leave to amend its complaint to delete the declaratory relief sought against the FDIC-R. Liberty was added as a third party to the state court proceedings[1] by way of a claim for declaratory relief by FCBT in June 2012.

¶ 5 In the state court proceedings, Liberty filed twelve counterclaims against FCBT — Counts One through Three included claims for breach of contract, breach of the implied duty of good faith and fair dealing, and gross negligence, which had each generally appeared in the proof of claim. Counts Four through Ten and Twelve did not appear in Liberty's Proof of Claim, and included claims of fraud, fraudulent inducement, securities fraud, negligent misrepresentation, promissory estoppel, unjust enrichment, breach of fiduciary duty, money had and received, and attorney fees and costs.

¶ 6 The district court dismissed with prejudice Counts One through Three of Liberty's counterclaims on the grounds that, with the additional facts and assertions, they no longer appeared to be the same claims as those articulated in its proof of claim. The district court dismissed with prejudice Counts Four through Ten and Twelve because they were not contained in Liberty's proof of claim.[2] Together, the court found that it was thereby deprived of subject matter jurisdiction over the matter because Liberty had failed to exhaust its administrative remedies.

II. Lack of Subject Matter Jurisdiction

¶ 7 Liberty argues that the district court incorrectly dismissed its Counts One through Three for lack of subject matter jurisdiction. Liberty argues first that it included in its proof of claim, and thereby properly exhausted, the claims found in its counterclaims. Second, Liberty argues that the doctrine of administrative exhaustion does not apply because its pursuit of relief would have been futile after substantially all assets and liabilities of CCB were transferred to FCBT on the same day as the FDIC was appointed receiver. We disagree.

A. Exhaustion of Administrative Remedies

1. Preservation & Standard of ...


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