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BEAL BANK v. NASSAU COUNTY

August 5, 1997

BEAL BANK, SSB, as Assignee of the FEDERAL DEPOSIT INSURANCE CORPORATION AS RECEIVER OF DOLLAR DRY DOCK BANK, Plaintiff,
v.
NASSAU COUNTY, MEDCOR HOLDING CO., and PETER PEKICH, Defendant.



The opinion of the court was delivered by: WEXLER

 Plaintiff, Beal Bank, SSB (hereinafter "plaintiff") brings this action against defendants, Nassau County, Medcor Holding Co. (hereinafter "Medcor"), and Peter Pekich (hereinafter "Pekich"), collectively hereinafter the "defendants," for declaratory relief challenging Nassau County's transfer of property owned by the Federal Deposit Insurance Corporation (hereinafter "FDIC"). More specifically, plaintiff alleges a violation of the Financial Institutions Reform, Recovery and Enforcement Act, 12 U.S.C. § 1825(b)(2). Presently before this court is the plaintiff's motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Fed. R. Civ. P. 56(c). For the reasons set forth below, the court grants this motion.

 I. BACKGROUND

 The following material facts are not in dispute. On or about November 20, 1987, Suffolk Place Associates, Inc. executed in favor of and delivered to Dollar Dry Dock Bank (hereinafter "DDDB") a promissory note and mortgage on the real property at issue, I Julian Place, Island Park, New York (hereinafter "the property"). The mortgage was duly recorded in the Office of the Clerk of the County of Nassau on April 18, 1988. However, as a result of having defaulted on tax payments, on February 18, 1992, defendant Nassau County held a tax lien sale of all of the tax liens from 1991, including those of the aforementioned property. At this sale, defendant Medcor by its principal, Peter Pekich, purchased the tax liens on the property at issue. Three days later, on February 21, 1992, the FDIC was appointed receiver of Dollar Dry Dock Bank, and acting pursuant to 12 U.S.C. § 1821, assumed by operation of law, ownership and control over all of DDDB's assets including the promissory note and mortgage on the real property at issue.

 Soon thereafter, pursuant to Section 5-53-0 of the Nassau County Administrative Code, defendant Medcor, sent the FDIC a Notice to Redeem to which the FDIC failed to respond. On approximately July 28, 1994, following the expiration of the redemption period, the Treasurer of Nassau County issued a tax deed to defendant Medcor transferring title to the property to Medcor. This transfer was completed without the consent of the FDIC. Notwithstanding the transfer of title by Nassau County to Medcor, the FDIC subsequently assigned its mortgage interest to Beal Bank on September 21, 1995.

 A. Summary Judgment

 A party seeking summary judgment must demonstrate to the Court that "there is no genuine issue of any material fact and that the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548(1986); Donahue v. Windsor Locks Bd. of Fire Comm'rs, 834 F.2d 54, 57 (2d Cir. 1987). The non-moving party may defeat the summary judgment motion by producing sufficient evidence to establish a genuine issue of material fact for trial. Celotex at 322. In ruling on a motion for summary judgment, the court is required to resolve all ambiguities and draw all reasonable inferences in favor of the non-moving party. Donohue at 57. Once the moving party has brought forth and supported a motion for summary judgment, the burden shifts to the non-moving party to "set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986) (quoting Fed. R. Civ. P. 56(e)). If this burden is satisfied the motion must be denied. However, "where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no 'genuine issue for trial.'" Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986).

 Presently, both parties are in agreement as to all of the material facts. The point at which the parties disagree is with respect to the interpretation of relevant statutory provisions. More specifically, the statute in question, 12 U.S.C. § 1825(b)(2) reads as follows:

 
When acting as a receiver, the following provisions shall apply with respect to the [FDIC]: ...
 
(2) No property of the [FDIC] shall be subject to levy, attachment, garnishment, foreclosure, or sale without the consent of the [FDIC], nor shall any involuntary lien attach to the property of the [FDIC].

 12 U.S.C. § 1825(b)(2). With respect to this section, defendants claim that the relevant statutory provision does not offer protection to the FDIC, and by succession Beal Bank, because the FDIC did not have an interest in the property until as late as February 21, 1992, exactly three days after the defendant sold the tax lien to Medcor.

 On the other hand, Beal Bank asserts that the statute encompasses all property held by the FDIC, regardless of which party was first in time. This argument is based upon a literal interpretation of the relevant statutory provision. Additionally, Beal Bank claims that as an assignee of the FDIC it is entitled to claim the protections equivalent to those available to ...


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