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December 14, 1990


The opinion of the court was delivered by: Mishler, District Judge.


Federal Deposit Insurance Corporation ("FDIC"), as receiver of Guardian Bank, N.A., moves, pursuant to Fed.R.Civ.P. 12(f), to strike the Twelfth and Thirteenth Affirmative or Other Defenses asserted by Eckert Seamans Cherin & Mellott ("Eckert").

The Twelfth Affirmative Defense claims a failure on the part of the FDIC and "its current counsel, to pursue claims against the OCC, the FDIC, Ginnie Mae, and the Federal National Mortgage Association ("Fannie Mae") for the losses alleged in the complaint . . ."

The Thirteenth Affirmative Defense states:

  By reason (among others) of its conflict of
  interest in acting as receiver of a Bank which as
  a regulator it hoped to close, plaintiff FDIC has
  failed to marshall all the assets of the

The amended complaint recites the appointment of FDIC as receiver of the Guardian Bank, N.A. ("bank") on June 21, 1989, by the Office of the Comptroller of the Currency upon the determination of the insolvency of the bank. It alleges that on or about December 14, 1984, the bank retained defendant Robert C. Zimmer, then a member of the law firm of Lane & Edsen, as counsel; that subsequently, on or before September 30, 1986, Zimmer left Lane & Edsen and became a member of the Eckert firm; that Eckert became and remained as general counsel to the bank through the date of closing the bank on June 21, 1989.

The amended complaint alleges claims based on a breach of fiduciary duty, malpractice, fraud, and negligent misrepresentation. The basis for the claims is that while acting as counsel for the bank and its subsidiaries "Eckert was faced with a significant conflict between the interests of the Bank and the desire of Louis B. Bernstein ("Bernstein"), a director of the Bank and the owner of approximately 85% of the Bank's stock, to retain control of the Bank and to continue to use it as a source of funding for The New York Guardian Mortgagee Corporation ("NYGMC"), the Bank's mortgage servicing subsidiary, regardless of the harmful effects on the Bank. Eckert, while engaged as general counsel to the Bank, represented Bernstein and other persons and entities with interests adverse to the Bank. Eckert facilitated and advanced Bernstein's personal goals by, inter alia, structuring transactions designed to provide Bernstein with access to millions of dollars in cash for his personal use, free from the scrutiny of bank examiners." (¶ 2).


Motion to Strike Pursuant to Rule 12(f)

A motion to strike an affirmative defense pursuant to Rule 12(f) is not favored and will be granted only if it clearly appears that the plaintiff "`would succeed despite any state of facts which could be proved in support of the defense.'" William Z. Salcer, etc. v. Envicon Equities, 744 F.2d 935, 939 (2d Cir. 1984), quoting Durham Industries, Inc. v. North River Insurance Co., 482 F. Supp. 910, 913 (S.D.N.Y. 1979), quoting Lehmann Trading Corp. v. J. & H. Stolow, Inc., 184 F. Supp. 21, 22-23 (S.D.N.Y. 1960). Where the defense is insufficient as a matter of law, the defense should be stricken to eliminate the delay and unnecessary expense from litigating the invalid claim. Federal Deposit Ins. Corp. v. Berry, 659 F. Supp. 1475, 1478-79 (E.D.Tenn. 1987); Anchor Hocking Corp. v. Jacksonville Elec. Authority, 419 F. Supp. 992, 1000 (M.D.Fla. 1976). The extensive pre-trial discovery available to Eckert in these affirmative defenses could take many months. The extra cost and the delay in bringing the case to trial is substantial.

The Dual Capacity of the FDIC

The Federal Deposit Insurance Act (the "Act"), 12 U.S.C. § 1811 et seq., provided that the FDIC "shall insure, as hereinafter provided, the deposits of all banks . . ." Id. at § 1811. FDIC acts in its corporate capacity as an insurer under the provisions contained in section 1821 (Permanent Insurance Fund). The Act also authorized the FDIC to act as a receiver of insolvent banks pursuant to section 1822. The purpose of creating the FDIC was to lend stability and confidence in the national banking system, first by providing depositors with insurance for payment in the event of a bank's insolvency, and second by taking custody of a failed bank's assets through FDIC's authority as a receiver of the failed bank. Congress thus authorized the FDIC to act in its corporate capacity as insurer and in a separate capacity as a receiver of a failed bank. Gunter v. Hutcheson, 674 F.2d 862 (11th Cir.), cert. denied, 459 U.S. 826, 103 S.Ct. 60, 74 L.Ed.2d 63, reh'g denied, 459 U.S. 1059, 103 S.Ct. 477, 74 L.Ed.2d 624 (1982); First State Bank of Hudson County v. United States, 599 F.2d 558 (3rd Cir. 1979).

In Federal Deposit Ins. Corp. v. Jenkins, 888 F.2d 1537, 1539-40 (11th Cir. 1989), the court discussed the manner in which the FDIC is authorized to deal with the obligations of the FDIC in its corporate capacity as insurer and the alternative as a receiver. The court stated:

  When a bank fails, the FDIC will generally be
  appointed as a receiver. 12 U.S.C. § 1821(c),
  (e) (1982). The FDIC will then proceed to
  determine the future course of the failed bank.
  The FDIC has two alternatives: (1) a "deposit
  payoff" or liquidation where the bank is closed
  and the FDIC pays the depositors up to $100,000
  per account limit out of the deposit insurance
  fund, see 12 U.S.C. § 1821(d) (1982); or (2)
  a "purchase and assumption" transaction where the
  FDIC arranges for the sale of the failed bank's
  assets and deposit liabilities to another solvent
  bank. See 12 U.S.C. § 1823(c)(2), (c)(4)(A)
  (1982). The failed ...

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