United States District Court, D. New Jersey
MEMORANDUM OPINION AND ORDER
DOUGLAS E. ARPERT, Magistrate Judge.
This matter comes before the Court on a Motion by Plaintiff to stay this matter for 90 days pursuant to 12 U.S.C. § 1821(d)(12) or, in the alternative, to stay this matter for 180 days pending completion of the claims process mandated in 12 U.S.C. § 1821(d) [Dkt. No. 6]. Defendant opposes Plaintiff's Motion [Dkt. No. 7].
This matter arises out of a Complaint initially filed by the National Republic Bank of Chicago (the "Bank") in the Superior Court of New Jersey, Law Division, Monmouth County against Jitendra Patel ("Defendant"). See Dkt. No. 1, Ex. 4. The Bank's Complaint, filed on August 2, 2012, alleges claims arising from Defendant's default on a $7, 000, 000 loan. On October 4, 2012, Defendant filed an Answer, Counterclaim and Third-Party Complaint. On October 24, 2014, the Federal Deposit Insurance Corporation (the "FDIC" or "Plaintiff") was appointed as Receiver for the Bank, and on November 7, 2014, the FDIC removed the action to this Court pursuant to 12 U.S.C. § 1819(b)(2). See Dkt. No. 1.
Plaintiff filed the present Motion seeking the entry of an Order staying this matter for 90 days pursuant to 12 U.S.C. § 1821(d)(12) or, in the alternative, a stay of this matter for 180 days pending Defendant's completion of the claims process mandated in 12 U.S.C. § 1821(d). Defendant opposes Plaintiff's Motion and argues that Plaintiff is not entitled to a stay of this action under either provision.
A. Stay Pursuant to 12 U.S.C. § 1821(d)(12)
Plaintiff claims that the Court's entry of the requested stay is mandatory under § 1821(d)(12) and contends that the 90 days should commence from the entry of an Order by this Court granting Plaintiff's Motion. Defendant does not contest that Plaintiff is entitled to a stay of the matter pursuant to § 1821(d)(12). However, Defendant disagrees with Plaintiff's asserted duration of the stay.
Under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"), "[a]fter the appointment of a... receiver for an insured depository institution, the... receiver may request a stay for a period not to exceed... 90 days." 12 U.S.C. § 1821(d)(12)(A). While the receiver "is automatically entitled to such a stay under section 1821(d)(12)" and the Court must grant a receiver's request for a 90 day stay as to all parties, "the stay expires no later than 90 days after the [receiver's] appointment." Praxis Properties, Inc. v. Colonial Sav. Bank, S.L.A., 947 F.2d 49, 71 (3d Cir. 1991).
In the present case, the FDIC was appointed as Receiver for the Bank on October 24, 2014. Therefore, because more than 90 days have passed since the FDIC's appointment, the Court finds that the FDIC is not entitled to the 90 day stay under § 1821(d)(12). Accordingly, Plaintiff's Motion to stay this matter for 90 days pursuant to § 1821(d)(12) is DENIED.
B. Stay Pursuant to 12 U.S.C. 1821(d)(3)-(5)
In the alternative to a stay under § 1821(d)(12), Plaintiff claims that this matter should be stayed pursuant to § 1821(d)(3)-(5) until Defendant has completed FIRREA's administrative claims process. Plaintiff asserts that until Defendant has exhausted the administrative claims process, the Court does not have jurisdiction over Defendant's counterclaims. Defendant contends that the stay sought by Plaintiff is improper because Plaintiff initiated the action and Defendant's counterclaims predate the FDIC's appointment.
FIRREA sets forth an "administrative claims process for institutions in receivership and limits judicial review of certain claims." Tellado v. IndyMac Mortgage Servs., 707 F.3d ...