7/25/2015

KASKETv.CHASEMANHATTANMORTGAGECORP|FindLaw

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KASKETv.CHASEMANHATTANMORTGAGECORP

KASKETv.CHASEMANHATTANMORTGAGECORP
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DistrictCourtofAppealofFlorida,FourthDistrict.
BrentTracyKASKET,Appellant,v.CHASEMANHATTANMORTGAGECORP.,
Appellee.
No.951965.
Decided:May21,1997
JamesA.Bonfiglio,BoyntonBeach,forappellant.AnneS.MasonofMason&Associates,P.A.,Clearwater,for
appellee.
WhentheResolutionTrustCorporation(RTC),asconservatorforCarteretSavings,afailedsavingsandloan
association,filedsuittoforeclosethemortgageonappellant'shome,appellantraisedaffirmativedefensesand

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counterclaimsallegingviolationsoftheTruthinLendingAct(TILA),15U.S.C.1601etseq.,inthe
consummationofthisloantransaction.Forrelief,appellantrequestedbothrescissionofthemortgageand
damages.Thetrialcourtgrantedneither,findingthatappellantwasbarredbytheFinancialInstitutions
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KASKETv.CHASEMANHATTANMORTGAGECORP|FindLaw

Reform,Recovery,andEnforcementAct(FIRREA),12U.S.C.1811etseq.,frombringinghisaffirmative
defensesandcounterclaims.BasedonBeachv.GreatWesternBank,692So.2d146(Fla.1997),weaffirm
insofarasappellantsoughtrescissionbutwereverseastoappellant'saffirmativedefensesrequestingdamages.
AppellantenteredintoamortgageonhishomewithCarteretinAprilof1991.InDecemberof1992,Carteret
wastakenoverbytheRTC,whichtransferredtheappellant'smortgagetothenewthriftcorporationestablished
toreceivetheoldthrift'sassets.AppellantdefaultedonhispaymentsonthemortgageinMarchof1994,and
theRTCfiledsuittoforecloseinJulyof1994.

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Inresponsetothesuit,appellantfiledaffirmativedefensesandacounterclaimallegingvariousviolationsof
TILA.Herequestedrescissionpursuanttosection1635ofTILAanddamagespursuanttosection1640ofTILA.
TheRTCcontendedinitsreplythatthecourtlackedsubjectmatterjurisdictionoftheaffirmativedefensesand
counterclaimbecauseappellanthadnotbroughtaclaimundersection1821ofFIRREA.Initsanswertothe
counterclaim,RTCalsoclaimedthatitwasbarredbythestatuteoflimitations.
Duringthependencyofthesuit,ChaseManhattanMortgageCorporation(Chase)boughtthemortgageand
notefromtheRTCaspartoftheprocessofcleaninguptheCarteretfailure.Atthefinalhearing,appellant
arguedthatChasecouldnotasserttheFIRREAdefensesoftheRTC.InrulinginfavorofChase,thecourtheld
thatChase,asasuccessorininteresttotheRTC,couldraiseFIRREAdefensesandthatunderFIRREA,
appellant'saffirmativedefensesandcounterclaimwereclaimswithinthemeaningofFIRREA.Because
appellanthadfailedtoexhausthisremediesthroughtheadministrativeclaimsprocess,thecourtlackedsubject
matterjurisdictiontohearappellant'saffirmativedefenseandcounterclaim.See12U.S.C.1821(d)(13)(D).
ThecourtalsoheldthatRTChadnotwaivedcompliancewiththeclaimsprocedurebyfailingtogivenoticeto
appellantoftheclaimsprocedure.Thecourtthenenteredajudgmentofforeclosure,andappellantfiledhis
appeal.
Afterthiscasewasorallyargued,westayedtheproceedingsawaitingthesupremecourt'srulinginBeach,as

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thatcasewouldaffecttheoutcomeoftheinstantsuit.InBeach,thesupremecourtheldthattherescission

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remedyundersection1635ofTILAcouldnotbebroughtasanaffirmativedefenseinthenatureofrecoupment
aftertheexpirationofthreeyearsfromthedateofthemortgagetransaction,asthestatutoryrighttorescission
underthatsectionexpiredafterthatperiod.Becausetheappellantdidnotbringhisactionwithinthattime,
Beachbarshisclaimsforrescission.Wethereforedealonlywiththeclaimsfordamagesundersection1640
ofTILA.
Moreover,wedealonlywiththeissuesraisedinthetrialcourtandonappeal.Wewouldnotethatatnotime
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KASKETv.CHASEMANHATTANMORTGAGECORP|FindLaw

didtheRTCorChaseraisetheissueofwhetheritisexemptfromliabilityundersection1641(a)oftheTruthin
LendingAct.ThatsectionprovidesforliabilityundertheactforassigneesofthecreditorifTILAviolations

claimshandled.Clickformoreinfo:
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appearonthefaceofthedisclosurestatements.Itexcepts,however,involuntaryassignments.Neitherthe
RTCnorChasehasassertedthatbecausetheassignmentfromCarterettotheRTCwasinvoluntary,TILA
damageremediesareunavailable.Thus,itisimportanttonotethatouranalysisoftheseissuesismade
withoutrelianceonthissubsection,theassertionofwhichmayhavemadeasubstantialdifferencebothinour
reasoningandresult.
CongressenactedtheFinancialInstitutionsReform,Recovery,andEnforcementActof1989inresponsetothe
emergingcrisisinthefinancialstabilityofvariousbanksandsavingsandloanassociationsacrossthe
country.ResolutionTrustCorp.v.Love,36F.3d972(10thCir.1994).Whenaninstitutionistakenoverby
theRTC,ithasbroadpowerstogathertheassetsoftheinstitutionandsettleclaimsagainstit.Soasnotto
burdenthecourtswithamultitudeofclaims,andtoassureanorderlyandexpeditiousmethodofdisposingof
claimsagainstfailedinstitutions,12U.S.C.1821(d)(13)(D)provides,inpart,that:
[N]ocourtshallhavejurisdictionover
(i)anyclaimoractionforpaymentfrom,oranyactionseekingadeterminationofrightswithrespectto,the
assetsofanydepositoryinstitutionforwhichtheCorporationhasbeenappointedreceiver,includingassets
whichtheCorporationmayacquirefromitselfassuchreceiveror
(ii)anyclaimrelatingtoanyactoromissionofsuchinstitutionortheCorporationasreceiver.
Instead,RTCmustpublishnoticeofitstakeoverandprovideforatleast90daysduringwhichcreditorsmayfile
claims.12U.S.C.1821(d)(3)(B),(C).Itmustactonanyclaimswithinsixmonths.Ifaclaimis
disallowed,administrativereviewispermitted,ortheclaimantmayfileasuit.If,however,aclaimisnotfiled
withintheapplicabletimeperiod,thenthatclaimisdisallowedandsuchdisallowanceshallbefinal.12
U.S.C.1821(d)(5)(C)(i).
Appellantcontendsthathisaffirmativedefensesandcounterclaimaredefenses,notclaimswithinthe
meaningoftheact.InResolutionTrustCorp.v.Schonacher,844F.Supp.689(D.Kan.1994),thecourt
adoptedatwoparttesttodeterminewhichcounterclaimsanddefensesaresubjecttothemandatory
administrativeclaimsprocessunderFIRREA.First,theaffirmativedefenseorcounterclaimmustbeofthe
typedescribedinthestatute.[T]hebarembodiedinclause(i)reaches(1)claimsforpaymentfromtheassets
of[thefailedinstitution],(2)actionsforpaymentfromthoseassetsand(3)actionsforadeterminationofrights
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withrespecttothoseassets.Id.at694(quotingRosav.ResolutionTrustCorp.,938F.2d383,393(3d
Cir.1991)).Second,thecourtmustdeterminewhethertheclaimcouldhavebeenbroughtindependentlybythe
defendantagainsttheinstitutionorthereceiver.Ifitcan,thenitisaclaimforwhichexhaustionofthe
administrativeremediesundertheactismandatory.Schonacher,844F.Supp.at694.InSchonacher,the
courtheldthatanaffirmativedefenseforrecoupmentforviolationsoftheEqualCreditOpportunityAct,15
U.S.C.1691(a)(1),bytheinstitutionextendingcredit,includingactualandpunitivedamagesandattorney's
fees,wasaclaimbecausethestatutepermittedindependentrecoveryforviolations.
OthercourtshavefollowedSchonacherandhaveobservedthatwhereanaffirmativedefensecanbebroughtas
anindependentclaim,administrativeexhaustionofremediesmustoccur.SeeLove,36F.3dat977National
UnionFireIns.Co.v.CitySav.,28F.3d376,39394(3dCir.1994).
Intheinstantcase,appellant'sclaimisbaseduponsection1640ofTILA.Thatstatuteprovidesthatacreditor
whofailstocomplywiththestatutorydisclosurerequirementsisliabletoitsdebtorforactualdamagesaswell
aspenaltydamages.Section1640(e)providesforaoneyearstatuteoflimitationsforsuchactionsbutpermits
borrowerstoclaimrecoupmentforsection1640damagesasanaffirmativedefensetoacreditor'sactionto
collectthedebt.Floridalawpermitsrecoverybywayofrecoupmenteventhoughthestatuteoflimitationshas
expiredwhenthepartypleadsitindefenseofanactionbroughtbytheopposingpartyinconnectionwiththe
sametransaction.SeeAlliev.Ionata,503So.2d1237(Fla.1987).
AtthetimethattheRTCtookoverCarteret,theoneyearstatuteoflimitationshadexpiredonappellant'sTILA
damageclaim.However,thereremainedhisstatutoryrighttoasserttheclaiminrecoupment.Thus,atno
timeaftertheRTCtookovertheinstitutioncouldappellanthavesuccessfullybroughtanindependentclaimfor
section1640damagesagainsttheRTC.Theissuecouldonlyberaisedasadefensetoasuitforcollectionbythe
RTCoritssuccessor.Therefore,underthetwoparttestdevelopedinSchonacher,theappellant'saffirmative
defenseofrecoupmentfordamagespursuanttosection1640wasnotaclaimwhichhadtobefiledthroughthe
administrativeclaimsprocess.Asaconsequence,thetrialcourthadjurisdictiontodeterminetheissueonthe
affirmativedefense.Whiletheappellantalsofiledacounterclaimforsection1640damages,thatwasbarred
bytheoneyearstatuteoflimitations,anissueraisedbytheRTCinitsanswer.Thecounterclaimwas
thereforemerelyanactionforrecoupment,whichisalloweddefensivelywhenfacedwithanactionfor
collectionofthedebt.SeeAllie.Thus,itcannotbemaintainedasanindependentclaimrequiring
administrativeexhaustion. 1
Section1640damages,however,constituteacivilpenalty.SeeBeachv.GreatWesternBank,670So.2d986
(Fla.4thDCA1996),app'd,692So.2d146(Fla.1997)FederalDepositIns.Corp.v.HughesDev.Co.,684
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F.Supp.616,62122(D.Minn.1988).Therefore,undersection1612(b),whichexemptsgovernmentalagencies
fromanycivilorcriminalpenaltyunderTILA,liabilityforsection1640damagescouldnotbeimposedonthe
RTC.
ThequestionraisediswhetherthatexemptioncanalsobeassertedbyChase,asanassigneeoftheRTC.
AppellantcitesInrePinder,83B.R.905(Bankr.E.D.Pa.1988),whichholdsthatanongovernmentalassignee
ofamortgagegiventoadebtorbyafederalagency(inPinder,HUD)wasliabletothedebtorforarecoupment
penaltyunderTILA,eventhoughHUDwouldnotbeliableundersection1612(b).Thecourtnotedthatsection
1641ofTILAdefinestheliabilityofassignees,andnoexceptionfromliabilityisprovidedforvoluntary
assigneesofgovernmentalagencies.ThiswasavoluntaryassignmentbetweentheRTCandChase.
Therefore,Pinder'srationalewouldcontrol.Weagainnote,however,thattheappelleehasnotassertedan
exemptionundersection1641becausetheassignmenttotheRTCfromCarteretSavingswasinvoluntary.
ChaseclaimsthatitisentitledtoassertallofRTC'sdefensesbasedonthedoctrineofD'Oench,Duhme&Co.
v.FederalDepositIns.Corp.,315U.S.447,62S.Ct.676,86L.Ed.956(1942),codifiedas12U.S.C.1823(e).
ThedoctrinecanbeassertedbyassigneesoftheFDIC.SeePorrasv.PetroplexSav.Ass'n,903F.2d379(5th
Cir.1990).TheD'Oench,Duhmedoctrinepreventstheassertionofsideagreementstodefeattheinterestofthe
FDIC(orRTC)wherethoseagreementsarenotintherecordsorbooksofthefailedinstitution.Thedoctrine
protectstheFDICwhichontakeovermustevaluatethefinancialpredicamentofthefailedinstitution.The
mistakesintheTruthinLendingstatementsinthiscasedonotqualifyunderthetermsofD'Oench,Duhmeor
section1823(e),becausetheycomefromthefaceofthedocumentsoftheinstitutionitself.Thereisnosecret
agreementbetweenthefailedthriftandtheborrowerwhichwouldreducethevalueofanassetoftheinstitution,
astherewasinD'Oench,Duhme.TheRTCoritsassigneesneededonlytoreviewthetruthinlending
documentsintherecordsofCarterettodeterminewhethertheycompliedwithTILA.
Initsargument,ChasemakesapolicyargumentthatRTCmustbeabletotrusttheaccuracyofthedocuments
ownedbythefailedinstitutionandliquidatetheassetswithoutexaminingthelegalityofthedocuments.No
citationtoanyauthorityismadeforthisstatement.WhatisreallyadvocatedisthatRTCanditssuccessors
shouldnotberequiredtoevaluateanydocumentsinthefailedthrift'sloanportfolioforanyerrors,suchasTILA
violationsorusuryorthelike.Whilethatmaybeveryconvenient,itisnotthelaw.IfCongressintendedfor
boththeRTCanditsassignstobeexemptfromliabilityforanyerrorormisstepinthefinancialdocumentsof
aninstitution,itcouldhaveprovidedthatinFIRREA.Itdidnot,anditexemptedtheRTConlyfrom
agreementsnotfoundintherecordsoftheinstitution.12U.S.C.1823(e).Wedonotaddressthe
applicationofsection1641becauseitwasnotarguedinthebriefs.
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Therefore,inthiscaseastheissueswerepresentedandaddressed,weholdthatChasecanbeliableforsection
1640damagesifappellantprovesTILAviolationsapparentonthefaceoftheloandocuments.Becauseofits
determinationsregardingjurisdiction,thetrialcourtdidnotreachthemeritsofthevariousTILAviolations
allegedbytheappellant.Whiletheappellanthasaddressedthematterindetail,thereareseveralissues
whichwillrequirefindingsoffactbasedupontheevidencepresented,whichshouldbemoreappropriately
accomplishedbythetrialcourt.WethereforereverseandremandtothetrialcourttodeterminewhetherTILA
violationsoccurredintheoriginaltransaction.Ifthetrialcourtfindsthatthereareviolations,itshouldalso
determinewhethertheseviolationsareapparentfromthefaceofthedocumentswithinthemeaningof15
U.S.C.1641soastorenderChase,asthesubsequentassigneeoftheloan,liable.
Reversedandremandedwithinstructions.
FOOTNOTES
1.BecauseweholdthattheaffirmativedefenseallegingTILAviolationsanddamagesundersection1640
werenotclaimswhichrequiredadministrativeexhaustion,wedonotneedtoaddressthenoticeissueraisedby
appellant.
WARNER,Judge.
GLICKSTEINandPOLEN,JJ.,concur.

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