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June 25, 1993

RESOLUTION TRUST CORPORATION, as Receiver for First Atlantic Savings and Loan Association, et al., DEFENDANTS.

The opinion of the court was delivered by: JOHN C. LIFLAND

 LIFLAND, District Judge

 Presently before the Court are American Casualty Company of Reading, Pennsylvania's ("ACC") motion for summary judgment and the Resolution Trust Corporation's ("RTC") cross-motion for partial summary judgment. Having considered the briefs, the oral arguments, and the applicable law, the Court is of the opinion that ACC's motion should be granted and the RTC's motion should be denied.


 This is a declaratory judgment action brought by ACC against the RTC and the former directors and officers of a failed mutual savings and loan association, seeking a declaration that the directors' and officers' liability insurance written by ACC does not cover suits brought by the RTC against the former directors and officers.

 First Atlantic Savings and Loan Association ("First Atlantic") was a mutual savings and loan association chartered under New Jersey law. ACC issued to First Atlantic Insurance Policy No. ZED 400711290 ("the Policy"). The Policy provided insurance coverage to the directors and officers of First Atlantic for losses incurred during the Policy period of April 5, 1989 to April 5, 1990. The Policy contained the following endorsement, known as the regulatory exclusion:

It is understood and agreed that the Insurer shall not be liable to make any payment for Loss in connection with any claim made against the Directors or Officers based upon or attributable to:
any action or proceeding brought by or on behalf of the Federal Deposit Insurance Corporation, the Federal Savings & Loan Insurance Corporation, any other depository insurance organization, the Comptroller of the Currency, the Federal Home Loan Bank Board, or any other national or state regulatory agency (all of said organizations and agencies hereinafter referred to as "Agencies"), including any type of legal action which such Agencies have the legal right to bring as receiver, conservator, liquidator or otherwise; whether such action or proceeding is brought in the name of such Agencies or by or on behalf of such Agencies in the name of any other entity or solely in the name of any Third Party.

 Pursuant to the terms of a Purchase and Assumption Agreement between the RTC, as Receiver for First Atlantic, and First Atlantic Federal, substantially all the assets of First Atlantic, including potential claims against First Atlantic's former directors and officers, were transferred to First Atlantic Federal. OTS immediately placed First Atlantic Federal into conservatorship and appointed the RTC as Conservator.

 On September 13, 1991, the OTS closed First Atlantic Federal and replaced the RTC as conservator with the RTC as Receiver for First Atlantic Federal. Also, on that same date, the RTC as Receiver for First Atlantic Federal assigned all claims against First Atlantic's former directors and officers to the RTC in its separate corporate capacity. Thus, all claims previously held by First Atlantic and its depositors are now owned by the RTC in its corporate capacity.

 ACC filed a Complaint seeking declaratory relief. In its Complaint, ACC requests a ruling that the Policy provides no coverage for any action which may be brought against the directors and/or officers of First Atlantic by the RTC or any other regulatory agency. In its Complaint, ACC relies on several provisions of the Policy. However, for the purposes of this summary judgment motion, ACC relies solely on the regulatory exclusion. *fn1"


 Fed. R. Civ. P. 56(c) provides that summary judgment shall be granted:

if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

 The burden of showing that no genuine issue of material fact exists rests initially on the moving party. Once the moving party has shown that there is an absence of evidence to support the non-moving party's case, the burden shifts to the non-moving party to "set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). There is no issue for trial unless the non-moving party can demonstrate that there is sufficient evidence favoring the non-moving party to enable a reasonable fact finder to return a verdict in that party's favor. Anderson, 477 U.S. at 249. The court must view the facts and inferences therefrom in the light most favorable to the non-moving party. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 50 L. Ed. 2d 748, 97 S. Ct. 732 (1977).

 The issue before the Court is whether the regulatory exclusion is enforceable, and if so, whether the exclusion bars coverage for claims that the RTC intends to bring against First Atlantic's former directors and officers. The RTC argues that the regulatory exclusion is unenforceable because its application would contravene both federal and New Jersey law. ACC argues that the majority of courts addressing the enforceability of regulatory exclusions have held that these clauses are enforceable and therefore preclude coverage for any action a regulatory agency may bring against directors or officers.

 Federal Law

 RTC argues that the regulatory exclusion deprives the RTC of its statutory rights under the Financial Institutions Reform, Recovery and Enforcement Act of 1989, Pub. L. No. 101-73, § 220(b)(b), 103 Stat. 183, 265-66 (FIRREA). The RTC was established pursuant to 12 U.S.C. § 1441a. Pursuant to 12 U.S.C. § 1441a(b)(4), the RTC is granted the same powers and rights to carry out its duties as the FDIC has under Sections 11, 12, and 13 of the Federal Deposit Insurance Act (12 U.S.C. §§ 1821, 1822, and 1823). Pursuant to 12 U.S.C. § 1821(d)(2)(A)(i), the FDIC as receiver or conservator succeeds by operation of law to:

all rights, titles, powers, and privileges of the insured depository institution, and of any stockholder, member, accountholder, depositor, officer, or director of such institution with respect to the institution and assets of the institution.

 Also, pursuant to 12 U.S.C. § 1823(d)(3), the FDIC in its corporate capacity has the same rights and powers as enumerated in § 1821(d)(2)(A)(i). Thus, the RTC correctly concludes that pursuant to §§ 1441a(b)(4), 1821(d)(2)(A)(i), and 1823(d)(3), it succeeds to "all rights, titles, powers, and privileges" of First Atlantic's depositors.

 The RTC argues that under the Policy, First Atlantic's depositors were entitled to receive proceeds from the Policy to satisfy derivative claims brought against the directors and officers. Endorsement 11 to the Policy, an "Insured v. Insured" exclusion, provides:

It is understood and agreed that the Insurer shall not be liable to make any payment for Loss . . . which is based upon or attributable to any claim made against any Director by any other Director or Officer or by the Institution . . ., except for a shareholder derivative ...

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