                   Case: 11-14665           Date Filed: 11/06/2012   Page: 1 of 10

                                                                        [DO NOT PUBLISH]



                      IN THE UNITED STATES COURT OF APPEALS

                                   FOR THE ELEVENTH CIRCUIT
                                     ________________________

                                             No. 11-14665
                                       ________________________

                                D.C. Docket No. 1:11-cv-20638-KMM



POWER FINANCIAL CREDIT UNION,

llllllllllllllllllllllllllllllllllllllll                                    Plaintiff-Appellant,

                                                  versus


NATIONAL CREDIT UNION ADMINISTRATION BOARD,
in its capacity as conservator of Keys Federal Credit Union,

lllllllllllllllllllllllllllllllllllllllll                                 Defendant-Appellee.

                                      ________________________

                            Appeal from the United States District Court
                               for the Southern District of Florida
                                  ________________________
                                       (November 6, 2012)

Before BARKETT and PRYOR, Circuit Judges, and LAWSON, ∗ District Judge.

PER CURIAM:

∗
   Honorable Hugh Lawson, United States District Judge for the Middle District of Georgia,
sitting by designation.
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      The main issue in this appeal is whether an agreement for a Florida credit

union to purchase mortgages of non-members was unenforceable under Florida

law. Power Financial Credit Union agreed to purchase a pool of mortgages from

the National Credit Union Administration. As a Florida credit union, Power

Financial by statute can purchase mortgages only when the mortgage debtors are

members of the credit union, Fla. Stat. § 658.038(15) (2010), but none of the

mortgage debtors in the pool offered by the Administration were members of

Power Financial. The Administration later cited concerns about the legality of

performance and refused to sell the mortgage pool to Power Financial. After

Power Financial sued to enforce the agreement, the district court granted summary

judgment in favor of the Administration on the ground that the agreement was

unenforceable under Florida law. We affirm the summary judgment because the

agreement was unenforceable and affirm the denial of a motion for enlargement of

time for discovery because the denial of that motion was not an abuse of discretion.

                               I. BACKGROUND

      On July 12, 2010, Keys Federal Credit Union agreed to sell Power Financial

Credit Union a pool of 60 mortgage loans. By that time, Keys Federal, a federally-

chartered credit union, had been placed in voluntary conservatorship by the

National Credit Union Administration, a federal agency that supervises credit

unions, and the Administration had taken over the supervision and management of

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Keys Federal. Power Financial is a state-chartered credit union in Florida. Under

Florida law, the membership of a state-chartered credit union is limited to a “field

of membership” composed of a “defined group of persons” who share some trait

such as working in a similar profession, living in the same identifiable community,

working for a common employer, or working for the credit union. Fla. Stat. §

657.002(9). A state-chartered credit union “may purchase the conditional sales

contracts, notes, and similar instruments of its members, provided that the credit

union could have originally made the loan.” Id. § 657.038(15). When the contract

was entered, the debtors on the 60 mortgages in the pool were not part of the field

of membership of Power Financial.

      Before entering the agreement, Power Financial sought guidance from the

Florida Office of Financial Regulation about purchasing the mortgage pool. The

Office informed Power Financial that it could not purchase the mortgage pool

because the mortgage debtors were not members of Power Financial. The Office

also stated that Power Financial could enter a loan participation agreement, but

advised Power Financial to restructure the transaction so that Power Financial

would acquire no more than a 90 percent interest in the outstanding balance of the

loans. After receiving this advice, Power Financial signed the agreement to

purchase the mortgage pool. Although the parties discussed a closing date of July




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15, 2010, the agreement did not contain a closing date or a “time is of the essence”

clause.

      Power Financial then requested that the Office issue an emergency order

permitting Power Financial to purchase the mortgage pool. The Office responded

that the exercise of the emergency power required a showing that a financial

institution was either insolvent or threatened with immediate insolvency, Fla. Stat.

§ 655.4185, and Power Financial had not made that showing. The Office denied

the request for permission to purchase the mortgage pool.

      An attorney for Power Financial, Herbert Haughton, later spoke with a sub-

agent for the Administration, Timothy Hornbrook, and proposed that the

agreement be restructured as a loan participation with Power Financial holding a

90 percent interest in the loans. Hornbrook suggested that this proposal was

acceptable and suggested that Power Financial prepare an amendment to the

agreement for the Administration to review. The amendment was then delivered to

Hornbrook.

      Hornbrook later sent a letter to Power Financial rejecting the amendment.

The letter also stated that Keys Federal had determined that the mortgage pool was

an important asset “both now and in the future.” Power Financial responded that

the original agreement for Keys Federal to sell the mortgage pool remained

binding. Power Financial also stated that it was applying to expand its


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membership so that it could move forward with the initial agreement and that

Power Financial expected Keys Federal to fulfill the obligations of the initial

agreement.

      The Office expanded the field of membership of Power Financial on October

18, 2010. The next day Power Financial sent a letter to the Administration to

inform it of the expansion of the field of membership and that Power Financial was

ready to close the loan purchase. The Administration never responded. Power

Financial later sent a second letter demanding performance of the agreement, but

the Administration did not reply.

      Power Financial filed a complaint in a Florida court alleging that Keys

Federal breached the agreement for the sale of the mortgage pool. The

Administration intervened as conservator for Keys Federal and removed the action

to the district court, 12 U.S.C. § 1789(a)(2). The Administration filed a motion to

be substituted as a party defendant, and the district court granted that motion. Both

parties then filed a joint motion to extend time to complete discovery. The district

court denied the joint motion without comment.

      The Administration then filed a motion for summary judgment arguing that

Power Financial could not enforce the contract because the purchase of the loans

was barred by Florida law. The district court concluded that “performance of the

Contract, at all times since its formation has been prohibited by Section


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657.038(15)’s requirement that the borrowers who have mortgages in the portfolio

be members of Power Financial.” The district court also concluded that the

expansion of the field of membership of Power Financial did not alter this

conclusion because the mortgage debtors had not become members after the

expansion. Because performance of the contract would have violated Florida law,

the district court granted summary judgment in favor of the Administration.

                         II. STANDARDS OF REVIEW

      Two standards of review govern this appeal. We review a grant of summary

judgment de novo. Cruz v. Publix Super Mkts, Inc., 428 F.3d 1379, 1382 (11th

Cir. 2005). We apply the same legal standards that bound the district court, and

view all facts and reasonable inferences in the light most favorable to the

nonmoving party. Id. Summary judgment is appropriate when “there is no

genuine dispute as to any material fact and the movant is entitled to judgment as a

matter of law.” Fed. R. Civ. P. 56(a). We review the denial of motions for

discovery for abuse of discretion. Am. Key Corp. v. Cole Nat’l Corp., 762 F.2d

1569, 1572 (11th Cir. 1985).

                                III. DISCUSSION

      We divide our discussion of this appeal in two parts. First, we explain that

the Administration was entitled to a summary judgment because the agreement




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with Power Financial was unenforceable. Second, we explain that the denial of the

joint motion to extend the time for discovery was not an abuse of discretion.

                        A. The Agreement Was Unenforceable.

      A Florida state-charted credit union “may purchase the conditional sales

contracts, notes, and similar instruments of its members, provided that the credit

union could have originally made the loan.” Fla. Stat. § 657.038(15). When

Power Financial and the Administration entered the initial agreement on July 12,

2010, the mortgage debtors could not be members of Power Financial because they

were outside the “limited field of membership” of Power Financial. Fla. Stat. §

657.002(9). The field of membership of Power Financial was not expanded to

include the mortgage debtors until October 18, 2010. Even after the expansion the

field of membership of Power Financial, Power Financial did not enroll the

mortgage debtors as members.

      The district court correctly ruled that the agreement was unenforceable.

Performance of the agreement would have required Power Financial to violate

section 657.038(15) by purchasing loans on which the debtor was not a member of

Power Financial. “[A] contract which violates a provision of . . . a statute is void

and illegal and, will not be enforced in [Florida] courts.” De Lage Landen Fin.

Servs., Inc. v. Cricket’s Termite Control Inc., 942 So. 2d 1001, 1003 (Fla. Dist. Ct.




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App. 5th Dist. 2006) (quoting Harris v. Gonzalez, 789 So. 2d 405, 409 (Fla. Dist.

Ct. App. 4th Dist. 2001)).

      Power Financial argues that the agreement should be enforced against the

Administration because section 657.038(15) applies only to the state credit union

making the purchase, but this argument fails. The bar on the enforcement of

contracts resulting in statutory violations applies even when the party seeking

enforcement would be the only party violating the law. The Florida Supreme

Court has explained that contracts that produce statutory violations are

unenforceable because “courts have no right to ignore or set aside a public policy

established by the legislature or the people. Indeed, there rests upon the courts the

affirmative duty of refusing to sustain that which by the valid statutes of the

jurisdiction . . . has been declared repugnant to public policy.” Local No. 234 of

United Ass’n of Journeyman & Apprentices of Plumbing & Pipefitting Indus. of

U.S. & Canada v. Henley & Beckwith, Inc., 66 So. 2d 818, 821 (1953). This

principle applies regardless of which party would violate the law when the contract

is performed. The agreement was unenforceable under Florida law even though

Power Financial would have been the only party violating section 657.038(15).

      Power Financial argues that there remains a disputed issue of material fact

about whether the Administration repudiated the agreement before Power Financial

had a reasonable opportunity to enroll the mortgage debtors, but we disagree.


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Under Florida law, “[a] prospective breach of a contract occurs when there is

absolute repudiation by one of the parties prior to the time when his performance is

due under the terms of the contract. Such a repudiation may be evidenced by

words or voluntary acts but the refusal must be distinct, unequivocal, and

absolute.” Mori v. Matsushita Elec. Corp. of Am., 380 So. 2d 461, 463 (Fla. Dist.

Ct. App. 3d Dist. 1980). The Administration never repudiated the agreement. Its

letter from Hornbrook to Power Financial noted “the impossibility of executing the

outright loan pool sale” and informed Power Financial that a new staff had

determined that “the real estate portfolio is an important asset to Keys both now

and in the future.” But this language falls short of a “distinct, unequivocal, and

absolute” refusal to fulfill the agreement, id., and did not create a genuine issue of

material fact.

        B. Denial of the Joint Motion for an Enlargement of Time to Complete
                       Discovery Was Not an Abuse of Discretion.

      Power Financial argues that the denial of the joint motion to extend the time

for discovery was an abuse of discretion because the parties had only four months

to complete discovery, but we disagree. “The abuse of discretion standard . . .

allow[s] a range of choice for the district court, so long as that choice does not

constitute a clear error of judgment.” United States v. Kelly, 888 F.2d 732, 745

(11th Cir. 1989). The determination that four months was an adequate time in

which to perform discovery was within the “broad discretion” of the district court

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to control discovery. See Am. Key, 762 F.2d at 1578. Moreover, Power Financial

fails to explain how additional discovery would have enabled it to avoid a

summary judgment against its complaint.

                               IV. CONCLUSION

      We AFFIRM the grant of summary judgment in favor of the Administration

and against Power Financial.




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