Before Justices Douglas, Hardesty and Parraguirre. Opinion by Justice Hardesty.
In an appeal from a district court’s grant of summary judgment against a borrower who allegedly defaulted on a commercial loan, the Court considered whether the borrower’s failure to follow the administrative claims process set forth in the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), 12 U.S.C. § 1821, barred the borrower from asserting defenses or affirmative defenses to a complaint filed by an entity (the Successor Bank) that obtained the right to enforce the loan documents after the lender was placed into receivership by the FDIC. After reviewing FIRREA’s purpose and requirements, the Court rejected the borrower’s argument that FIRREA did not apply since the FDIC failed to mail the required notice because the borrower’s due process rights to notice were satisfied by the type of notice he received. The Court also rejected the borrower’s argument that FIRREA did not apply since the district court proceedings involved the Successor Bank rather than the FDIC based on authority from several federal courts stating that a successor to a failed bank is entitled to benefit from FIRREA’s jurisdictional bar with respect to claims related to acts or omissions of the failed bank. Finally, the Court analyzed whether FIRREA’s claims process applied to defenses or affirmative defenses. In answering that question in the negative, the Court examined judicial decisions from other jurisdictions that held, among other things, that (1) FIRREA makes no mention of defenses, affirmative defenses, or potential affirmative defenses, which are not claims, but responses to claims; (2) barring a party from presenting defenses and affirmative defenses in response to a collections complaint would unconstitutionally deprive that party of the opportunity to be heard; and (3) because a party is unable to know what claims, if any, might be brought against it in the future, it would be impossible for that party to submit hypothetical defenses to such claims to FIRREA’s administrative claims procedure. For those reasons, the district court erred by failing to consider the borrower’s affirmative defenses to the Successor Bank’s claims. Reversed and remanded. (Patrick J. Murch, Associate in the Las Vegas office of McDonald Carano Wilson LLP).
