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Greenspon v. Deutsche Bank National Trust Company as Trustee

United States District Court, D. Hawaii

October 16, 2019

MICHAEL C. GREENSPON, Plaintiff,
v.
DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE, et al., Defendants. DEUTSCHE BANK NATIONAL TRUST COMPANY, Third-Party Plaintiff,
v.
FEDERAL DEPOSIT INSURANCE CORPORATION, et al., Third-Party Defendants.

          ORDER (1) GRANTING MOTION TO REMAND AND (2) REMANDING ACTION TO STATE CIRCUIT COURT

          Derrick K. Watson United States District Judge.

         On August 2, 2019, Third-Party Defendant Federal Deposit Insurance Corporation (FDIC) removed this action from the Second Circuit Court for the State of Hawai'i. Dkt. No. 1. Almost a month later, Plaintiff Michael Greenspon filed a motion to remand on the ground that the FDIC's removal was untimely. Dkt. No. 16. In response, the FDIC argues that removal was timely, pursuant to Section 1819 of Title 12, because it removed this action within 90 days of being properly served with the Third-Party Complaint. After considering the parties' arguments and reviewing the record, as explained below, the Court finds that this action was not timely removed. As a result, the Court GRANTS the motion to remand to the extent that this action is remanded to the Second Circuit Court.

         RELEVANT BACKGROUND

         In its notice of removal, the FDIC asserts that this case was removable under 12 U.S.C. Section 1819(b)(2)(B) because the FDIC “has the right to remove any action…from a State court to the appropriate United States district court before the end of the 90-day period beginning on the date the action…is filed against the FDIC or the FDIC is substituted as a party.” Dkt. No. 1 at ¶ 7 (quotation and alterations omitted). With the issue framed in that light, the following background is relevant.

         This case was removed on August 2, 2019. Ninety days before that date is May 4, 2019. A copy of the Third-Party Complaint and Amended Summons was delivered to (1) the Executive Secretary of the FDIC on May 7, 2019, Dkt. No. 1-2 at 4, (2) the U.S. Attorney General on January 4, 2019, Dkt. No. 16-4 at 4, (3) the U.S. Attorney's Office for the District of Hawai'i on December 31, 2018, Dkt. No. 16-3 at 3, and (4) A. James Wriston, Jr. on December 31, 2018, Dkt. No. 16-3 at 1. Third-Party Plaintiff, Deutsche Bank National Trust Company (DBNTC), filed the Third-Party Complaint in the Second Circuit Court on May 14, 2018. Dkt. No. 1-1. Therein, the FDIC is named as a third-party defendant. Id. at ¶ 4.

         On August 31, 2019, Greenspon filed the instant motion to remand. Dkt. No. 16. In his opening memorandum, Greenspon argues that, for various reasons, this case was untimely removed, including the failure to remove within 90 days of the Third-Party Complaint being filed, the failure to remove within 90 days of the FDIC's “local agent” receiving the Third-Party Complaint, and the failure to remove within 90 days of the FDIC's counsel being given copies of the Third-Party Complaint. See generally Dkt. No. 16-1.

         In opposition, Dkt. No. 20, the FDIC responds that removal was timely under Section 1819 because the 90-day window for removal did not begin to run until May 7, 2019 when the FDIC's Executive Secretary received the Third-Party Complaint and summons. The FDIC further argues that, even if removal was untimely, remand would be “futile” because neither this Court nor the Second Circuit Court have jurisdiction over the claims asserted against the FDIC. The FDIC asserts that, as a result, it should be dismissed from the Third-Party Complaint.

         RELEVANT LEGAL PRINCIPLES

         Because the FDIC relies solely upon Section 1819 for its removal of this case, the Court recites the relevant statutory language from that provision only.[1]Section 1819(b)(2)(B) provides that the FDIC may “remove any action, suit, or proceeding from a State court to the appropriate United States district court before the end of the 90-day period beginning on the date the action, suit, or proceeding is filed against [FDIC] or the [FDIC] is substituted as a party.”

         Further, because the FDIC also relies on when it was served with the Third-Party Complaint, the Court also recites Federal Rule of Civil Procedure 4(i)(2), which governs service of a summons and complaint on a United States corporation, such as the FDIC. Specifically, Rule 4(i)(2) provides that, to serve the FDIC, “a person must serve the United States and also send a copy of the summons and of the complaint by registered or certified mail to the [FDIC].”

         DISCUSSION

         Based upon the briefing, there is much on which the relevant parties agree.[2]There is no dispute, for instance, that the Executive Secretary of the FDIC received the Third-Party Complaint and summons on May 7, 2019. There is no dispute that the U.S. Attorney General received the Third-Party Complaint and summons on January 4, 2019. There is no dispute that the U.S. Attorney's Office for Hawai'i received the Third-Party Complaint and summons on December 31, 2018. There is no dispute that A. James Wriston, Jr. received the Third-Party Complaint and summons on December 31, 2018. There is no dispute that Mr. Wriston is and was an FDIC agent for service of process in Hawai'i.[3] There is no dispute that the Third-Party Complaint was filed in State court on May 14, 2018. There is also no argument from the FDIC that its Executive Secretary, the U.S. Attorney General, the U.S Attorney for Hawai'i or Mr. Wriston did not properly receive the Third-Party Complaint and summons.

         What is in dispute is which of the foregoing events is relevant to assessing the timeliness of the FDIC's removal on August 2, 2019. Greenspon asserts, inter alia, that it is either the May 14, 2018 filing of the Third-Party Complaint or the December 31, 2018 receipt of the Third-Party Complaint and summons by Mr. Wriston. The FDIC asserts that it is the May 7, 2019 receipt of the Third-Party Complaint and summons by its Executive Secretary. This Court disagrees with the FDIC.

         In support of its position, the FDIC cites, inter alia, Section 309.7(a) of Title 12 of the Code of Federal Regulations. In ...


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