IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF MISSOURI

CENTRAL DIVISION
FEDERAL DEPOSIT INSURANCE
CORPORATION,
Plaintiff,
vs.
AIR CHARTERS & SALES, LLC, and
JERRY D. KENNETT,
Defendants.

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Civil Case No.: 10-CV-04261-NKL

MOTION FOR STAY OF LITIGATION

The Federal Deposit Insurance Corporation (FDIC), in its capacity as Receiver for Premier
Bank, Jefferson City, Missouri (referred to at times as the FDIC or FDIC-R), by and through its
undersigned counsel, does hereby move the Court for its Order staying the litigation in this matter.
In support of this request and motion, the FDIC states:
1.

On Friday, October 15, 2010, the Division of Finance for the State of Missouri took

possession of the business and property of Premier Bank pursuant to Section 361.300, RSMo., and
appointed the FDIC as the receiver and liquidating agent for Premier Banks assets.
2.

The FDIC has accepted its appointment as receiver.

3.

Prior to October 15, 2010, Premier Bank had initiated litigation in the Circuit Court

for Boone County, Missouri against Defendant Air Charters & Sales, LLC (Air Charters) and
Defendant Jerry D. Kennett (Kennett).
4.

Kennett is represented in this matter by Attorney Wally Bley, who accepted service

and filed responsive pleadings on behalf of Kennett in the State Court.

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5.

Air Charters has not been served with a copy of the State Courts Petition and

Summons, and is not currently represented by counsel at this time.

6.

The FDIC filed its notice of removal with this Court on December 8, 2010.

7.

Because Kennett has asserted various affirmative defenses in the State Court Action,

the FDIC views these as claims alleged by Kennett and against Premier Bank. As such, these
claims may become subject to FDICs receivership certain statutory proceedings must be followed.
8.

The Financial Institutions, Reform, Recovery and Enforcement Act of 1989

(FIRREA or the Act), more specifically at 12 U.S.C. 1821(d)(3)-(13), provides a claim

procedure for all claims asserted against the assets of the failed institution, regardless as to whether
lawsuits enforcing those claims were initiated prior to the appointment of a Receiver. See Marquis
v. FDIC, 965 F.2d 1148 (1st Cir. 1992). Claims against the assets of failed institution are claims that
seek payment from the failed institutions assets. See Elmco Properties, Inc. v. Second National
Federal Savings Association, 94 F.3d 914 (4th Cir. 1996).
9.

The Act requires mandatory compliance with the administrative claims review

process. Brown Leasing Co. v. FDIC, 833 F.Supp. 672 (N.D. Ill. 1993). All creditors having claims
against the failed institution must first present them to the FDIC for an administrative determination
of whether they should be paid. 12 U.S.C. 1821(d)(3)-(5). Maher v. Harris Trust and Savings
Bank, 75 F.3d 1182 (7th Cir. 1995).
10.

Creditors have ninety (90) days to present their claims against the assets of the failed

institution upon receiving notice from the FDIC. 12 U.S.C. 1821(d)(3)(B)(i). Once the claim is
presented, the FDIC-R has 180 days within which to consider the claim and notify the claimant
whether it has been allowed or disallowed, 12 U.S.C. 1821(d)(5)(A)(i). When the creditor has
2

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been notified of the Receivers determination, or when the 180 day period has expired, the creditor
may either request administrative review or file suit on the claim (or continue an action commenced
before the appointment of a receiver) in the federal district court where the failed banks principal
place of business is located. 12 U.S.C. 1821(d)(6)(A).
11.

In the instant action, Kennett is asserting a claim against Premier Bank, and for which

the FDIC is now Receiver, and over which the FDIC may retain control. As a result, Kennett is
seeking recovery from a failed institution that is now subject to the FDICs receivership, and should
be submitted to the FDIC for administrative review.
12.

There is unanimity among the circuits that Congress intended a mandatory exhaustion

of administrative remedies before a litigant may seek relief in federal district court for a claim
against a failed institution. See e.g. Simon v. FDIC, 48 F.3d 53, 57 (1st Cir. 1995; RTC v. Elman, 949
F.2d 624, 627 (2nd Cir. 1991); RTC v. W.W. Dev. & Management, Inc., 73 F.3d 1298, 1304 (3rd Cir.
1996); Brady Dev. Co., Inc. v. RTC, 14 F.3d 998, 1007 (4th Cir. 1994); Bueford v. RTC, 991 F.2d
481, 484 (8th Cir. 1993).
13.

Strict compliance with the Act is mandated before a litigant may seek relief in federal

district court. See Capitol Leasing Co. v. FDIC, 999 F.2d 188, 192 (7th Cir. 1993); Brown Leasing
Co. v. FDIC, 833 F.Supp. 672 (N.D. Ill. 1993); Maher v. Harris Trust and Savings Bank, 75 F.3d
1182 (7th Cir. 1996).
14.

Congress specifically deprived federal courts of subject matter jurisdiction over

claims not presented for administrative review. Specifically, the Act provides:
Limitation on judicial review
Except as otherwise provided in this subsection, no court shall have
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jurisdiction over
(i)

any claim or action for payment from, or any action seeking a

determination of rights with respect to the assets of any depository
institution for which the [FDIC] has been appointed Receiver, including
assets which the [FDIC] may acquire from itself as such Receiver; or

(ii)

any claim relating to any act or omission of such institution or the

[FDIC] as Receiver.

12 U.S.C. 1821(d)(13)(D).
15.

Thus, the pending action against the FDIC must be stayed until Kennetts claims have

been submitted to the FDIC for administrative review and the FDIC has either made a determination
to disallow the claim, or the 180 day administrative review period has expired. See 12 U.S.C.
1821(d)(5)(A)(i). See also FDIC v. Glynn, Nos. 91 C 3723, 91 C 3726, 1993 WL 413958, at 34
(N.D. Ill. Oct. 15, 1993).
16.

Courts are empowered to stay pending litigation until the administrative process has

been exhausted. FDIC v. Glynn, Nos. 91 C 3723, 91 C 3726, 1993 WL 413958, at 3-4 (N.D. Ill. Oct.
15, 1993) (district court retains subject matter jurisdiction over continued lawsuit if plaintiff exhausts
the administrative claims review process).
17.

Since Congress manifested an intent to require mandatory compliance with the

administrative review process in the Act, it follows that Congress manifested an intent to require a
stay of all claims against a failed institution pending review of those claims by the FDIC. See Brown
Leasing Company v. FDIC, 833 F.Supp. 672 (N.D. Ill. 1993); FDIC v. Glynn, Nos. 91 C 3723, 91
C 3726, 1993 WL 413958, at 3-04 (N.D. Ill. Oct. 15, 1993); Tuxedo Beach Club Corporation v. City

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Federal Savings Bank, 737 F.Supp. 18, 19-20 (D.N.J. 1990); International Fidelity Insurance Co.
v. Yorkville Federal Savings and Loan Association, 1990 WL 165720 at *2 (S.D.N.Y. 1990).
CONCLUSION
18.

Since Defendant Kennett has a pending claims against Premier Bank, which is a failed

institution under the receivership of the FDIC, his participation in the FDICs administrative review
process is mandated. Because the administrative review process is a prerequisite to seeking relief
before this Court, a stay of the instant case until all Defendants exhaust their administrative remedies
with the FDIC is also mandated.
19.

This request is made in good faith, and not to delay these proceedings for any

improper purpose.
Accordingly, the FDIC respectfully requests that the Court enter its Order and Judgment
staying this litigation for a period commencing on the date that the Order is entered on the docket
and ending, at a minimum of 120 days from the entry of such Order; and for such other and further
relief, legal or equitable, this Court deems necessary and proper.

Case 2:10-cv-04261-NKL Document 3 Filed 12/09/10 Page 5 of 6

Respectfully Submitted,
MARIEA & SIGMUND , L.L.C.
By /s/ Jonathan C. Browning
Jonathan C. Browning
#52820
310 Monroe Street
Jefferson City, Missouri 65101
Telephone:
(573) 635-7699
Facsimile:
(573) 635-7425
E-Mail:
jonbrowning@marieasigmund.com
ATTORNEYS FOR FEDERAL DEPOSIT INSURANCE
CORPORATION AS RECEIVER FOR PREMIER BANK,
JEFFERSON CITY, MISSOURI

CERTIFICATE OF SERVICE
The undersigned attorney and firm, counsel for Plaintiff Premier hereby certify that a copy
of the foregoing pleading was served, on December 9, 2010, either electronically or by United States
Mail, postage prepaid, to the following:
Mr. Wally Bley
Bley Law Firm, P.C.
1000 West Nifong Blvd., Building 4, Suite 200
Columbia, MO 65203
Via email to: Bley@socket.net

____________________________________
Jonathan C. Browning

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