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American First Federal, Inc., a Nevada Corporation, Plaintiff-Counter-Defendant-Appellee v. Lake Forest Park, Inc., a Florida Corporation, Michael Vazquez, Individually, Rosa B. Vazquez, Individually, and Osmara Vazquez, Individually, Defendants-Counter-Claimants-Appellants

Citations: 198 F.3d 1259; 1999 U.S. App. LEXIS 33623Docket: 98-5206

Court: Court of Appeals for the First Circuit; December 22, 1999; Federal Appellate Court

Narrative Opinion Summary

In this case, Lake Forest Park, Inc., along with individual defendants, appealed a district court's summary judgment in favor of American First Federal (AFF) concerning the enforceability of a promissory note. Initially, Lake Forest argued that the note was unenforceable due to the absence of Florida documentary tax stamps, as required by Section 201.08(1) of the Florida Statutes. However, the court allowed AFF to pay the tax before the final judgment, rendering the note enforceable. Lake Forest also contended that AFF's predecessor, Professional, wrongfully failed to release loan proceeds, which they claimed should offset AFF's recovery. This claim was dismissed due to Lake Forest's failure to exhaust administrative remedies under FIRREA, which is a jurisdictional prerequisite under 12 U.S.C. § 1821(d)(13)(D). The court distinguished between counterclaims and affirmative defenses, indicating that while counterclaims require exhaustion, affirmative defenses do not. Ultimately, the court affirmed the district court's decision, concluding that Lake Forest's counterclaim was indeed a claim against the failed institution's assets, necessitating exhaustion. The ruling highlighted AFF's rights under FIRREA and emphasized that late payment of documentary stamps does not impede the enforceability of a note once paid.

Legal Issues Addressed

Distinction between Claims and Affirmative Defenses

Application: Affirmative defenses are not subject to the exhaustion requirement, but Lake Forest's counterclaim was not an affirmative defense.

Reasoning: An affirmative defense responds to a plaintiff's claim without needing to satisfy the administrative exhaustion requirement.

Enforceability of Promissory Notes under Florida Law

Application: The promissory note became enforceable once the documentary tax was paid, even though it was initially unpaid.

Reasoning: The statute does not prohibit the entry of judgment once the taxes are paid, and Florida courts have established that late payment of documentary stamps does not affect enforceability.

Exhaustion of Administrative Remedies under FIRREA

Application: Lake Forest's counterclaim was dismissed for lack of exhaustion of administrative remedies as required by FIRREA.

Reasoning: The district court acknowledged this request but determined that Lake Forest had not exhausted its administrative remedies by failing to submit its claim to the RTC as required by 12 U.S.C. § 1821(d).

Holder in Due Course Status under FIRREA

Application: AFF, as a non-holder in due course, was subject to defenses Lake Forest could assert against the original note holder.

Reasoning: AFF, having acquired the note from the RTC, maintains this protected status under FIRREA, meaning if Lake Forest cannot assert a claim against the RTC, it also cannot do so against AFF.

Jurisdictional Bar under 12 U.S.C. § 1821(d)(13)(D)

Application: The court lacked jurisdiction over Lake Forest’s claim due to non-exhaustion of administrative remedies.

Reasoning: Section 1821(d)(13)(D) explicitly restricts court jurisdiction over claims related to assets of any depository institution for which the RTC has been appointed receiver.