             Case: 11-11195    Date Filed: 11/30/2012   Page: 1 of 19

                                                                        [PUBLISH]


               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT


                                No. 11-11195
                          ________________________

                   D.C. Docket No. 8:10-cv-01656-RAL-TGW



IBERIABANK,
a Louisiana banking corporation and authorized to do business in the State of
Florida,

                                                         Plaintiff - Appellee,

versus

BENEVA 41-I, LLC,
a Florida limited liability company,
BENEVA 41-II, LLC,
a Florida limited liability company,
BENEVA 41-III. LLC, a Florida limited liability company,

                                                        Defendants - Appellants.
                          ________________________

                   Appeal from the United States District Court
                       for the Middle District of Florida
                         ________________________

                              (November 30, 2012)

Before TJOFLAT, MARTIN, and HILL, Circuit Judges.
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TJOFLAT, Circuit Judge:

       In this case, we are called upon to determine whether a sublease transferred

by the Federal Deposit Insurance Corporation (“FDIC”) to Iberiabank after it took

over the assets of a failed bank is enforceable despite a clause purporting to

terminate the sublease on sale or transfer of the failed bank. The District Court

granted summary judgment in favor of Iberiabank, holding that the termination

clause was unenforceable against Iberiabank under 12 U.S.C. § 1821(e)(13)(A)

(2006),1 which grants the receiver authority to enforce contracts entered into by

the failed bank notwithstanding clauses that purport to terminate the contracts on

insolvency or receivership. Beneva appeals that decision, contending that

Iberiabank has no authority to enforce the sublease and that, even if it does, the

termination clause is enforceable because it does not fall within

§ 1821(e)(13)(A)’s prohibition on such clauses. Because we find that the FDIC

acted within its power to enforce contracts under § 1821(e)(13)(A) and that the



       1
          In its complaint, Iberiabank cites 12 U.S.C. § 1821(e)(12)(A) (2006) rather than 12
U.S.C. § 1821(e)(13)(A) (2006). The error appears to be the result of a renumbering of the
statute that occurred in 2005. As part of the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005, Pub. L. No. 109-8, 119 Stat. 23, Congress amended the Federal Deposit
Insurance Act by adding a new section and renumbering paragraphs (11) through (15) as
paragraphs (12) through (16). The District Court also cites § 1821(e)(12)(A) in its order. We
will refer to the statutory provision as it is currently numbered, § 1821(e)(13)(A), throughout this
opinion, except when discussing a case decided before the renumbering. Beneva’s contention
that the mistake is an abuse of discretion by the district court is without merit.

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termination clause is unenforceable against Iberiabank as the FDIC’s transferee,

we affirm.

      In Part I, we recount the facts of the case and the proceedings in the District

Court. In Part II, we explain the statutory framework that governs the FDIC’s

powers when it acts as receiver of a failed bank. We then interpret

§ 1821(e)(13)(A) as it applies to the disputed sublease.

                                         I.

                                         A.

      Beneva and Iberiabank became parties to the sublease at issue through a

series of assignments. The sublease, which covers premises on which Iberiabank

operates a bank branch, was executed on January 3, 1979, by Casto Developers as

sublessor and National Bank Gulf Gate as sublessee. The term of the sublease was

twenty years, with an option to renew for ten successive periods of five years each.

The rent for each renewal period was set at 110% of the rent paid during the

preceding term. The sublease provided that on termination of the agreement, the

sublessee would surrender the premises to the sublessor.

      Sometime between 1979 and 2002, National Bank Gulf Gate was merged

into or acquired by SunTrust Bank. On April 26, 2002, SunTrust assigned its

interests in the sublease to Orion Bank. Orion paid SunTrust $1,051,000 for the

                                          3
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improvements on the property. Casto Investments Company, Ltd., successor-in-

interest to Casto Developers, signed a Memorandum of Lease with Orion. At that

time, the original term of twenty years had run and the current term of the lease

was for five years commencing June 3, 1999. An option to renew for nine

additional five-year periods remained.

       On January 8, 2009, Orion was notified that Casto had sold the subleased

property to Beneva. On August 31, 2009, Beneva and Orion entered into an

amendment to the sublease. The amendment provided that the sublease term

would be extended to June 3, 2049, the expiration date of the final five-year

extension in the original sublease. Orion agreed to pay Beneva $1.75 million as a

“lease extension incentive.”2 The amendment also contained a termination clause,

which is at issue in this case. It provides: “3. Termination. Sublessor shall have

the right to terminate the Sub-lease if (i) Orion is sold and/or transferred to another

banking institution, or (ii) Orion sells and/or transfers all or substantially all of its

assets.”

       On November 13, 2009, the Florida Office of Financial Regulation closed

Orion and appointed the FDIC receiver, with authorization to take charge and



       2
         It is unclear from the record why Beneva and Orion executed the Amendment, since the
expiration date and rent did not change, and why Orion agreed to pay Beneva $1.75 million.

                                              4
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possession of all assets of Orion.3 That same day, the FDIC and Iberiabank

entered into a Purchase and Assumption Agreement under which Iberiabank

agreed to purchase Orion’s assets and assume certain of its liabilities, duties, and

obligations. On June 29, 2010, Beneva notified Iberiabank that, pursuant to the

termination clause contained in the amendment entered into by Iberiabank’s

predecessor, Orion, Beneva was exercising its right to terminate the sublease. The

notice stated, “This provision was specifically negotiated to allow Sublessor the

right to terminate the Sublease in events such as when Orion was closed by the

FDIC and its assets were transferred to Iberiabank.” Beneva gave Iberiabank one

year to vacate the premises, as provided by the sublease.

                                               B.

       Iberiabank brought this declaratory judgment action in the District Court for


       3
          The Florida Office of Financial Regulation took possession of Orion and appointed the
FDIC as receiver pursuant to Fla. Stat. §§ 658.79, 658.80, and 658.81 (2009).
        Under § 658.79, the Office of Financial Regulation may designate a receiver to take
charge of the assets and affairs of a bank “[w]henever the office has reason to conclude, based
upon the reports furnished to it by a state bank or trust company examiner or upon other
satisfactory evidence, that any state bank or trust company: (1) Is insolvent or imminently
insolvent.”
        Under § 658.80(2), “[t]he Federal Deposit Insurance Corporation or any appropriate
federal agency shall be appointed by the office as receiver or liquidator of any state bank, the
deposits of which are to any extent insured by the corporation.”
        Section 658.81 provides for notice and court confirmation of appointment of the receiver
after a hearing. Florida Circuit Judge Hugh Hayes found that the Office had shown that Orion
was imminently insolvent as defined in § 655.005(1)(k) and entered an order confirming
appointment of the FDIC on November 13, 2009.

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the Middle District of Florida on July 26, 2010. It asked the court to rule that the

termination clause was unenforceable under 12 U.S.C. § 1821(e)(13)(A) and thus

the sublease was still in effect without the termination clause.4 Iberiabank also

asked for attorney’s fees and costs as provided in the sublease.

        On January 25, 2011, before discovery had been completed, Iberiabank

moved for summary judgment. The District Court entered judgment in favor of

Iberiabank on February 11, 2011. It concluded that the FDIC had “the absolute

right to assume the sublease and transfer it to the Plaintiff,” and that the

termination clause operated as an ipso facto clause5 and was therefore


        4
          This court has jurisdiction over this case under 28 U.S.C. § 1331. In a declaratory
judgment action, the court normally looks to whether “the cause of action anticipated by the
declaratory judgment plaintiff arises under federal law.” Hudson Ins. Co. v. Am. Elec. Corp.,
957 F.2d 826, 828 (11th Cir. 1992). Although the anticipated cause of action here is a state
contract claim, resolution of the dispute requires interpretation of a substantial federal issue. See
id. at 829 (11th Cir. 1992) (quoting Franchise Tax Bd. V. Construction Laborers Vacation Trust,
463 U.S. 1, 28, 103 S. Ct. 2841, 2856, 77 L. Ed. 2d 420 (1983)) (“[S]tate-created causes of action
can sometimes arise under federal law when the potential state court plaintiff’s right to relief
necessarily depends on resolution of a substantial question of federal law.” (internal quotation
marks omitted)). Even if the federal issue would not appear on the face of a well-pleaded
complaint by Beneva, but rather as a defense by Iberiabank, Iberiabank likely could bring its own
state contract claim, which would necessarily raise a federal question. See Grable & Sons Metal
Prods., Inc v. Darue Eng. & Mfg, 545 U.S. 308, 315, 125 S. Ct. 2363, 2368, 162 L. Ed. 2d 257
(2005) (finding jurisdiction under § 1331 when plaintiff brought quiet title action that turned on a
federal tax provision: “[the meaning of the federal tax provision] appears to be the only legal and
factual issue contested in the case. [It] is an important issue of federal law that sensibly belongs
in a federal court. . . . [B]ecause it will be the rare state title case that raises a contested matter of
federal law, federal jurisdiction to resolve genuine disagreement over federal tax title provisions
will portend only a miscroscopic effect on the federal-state division of labor.”).
        5
         An ipso facto clause is a clause that provides the consequences if a certain event occurs.
Section 1821(e)(13)(A)’s prohibition on ipso facto clauses is analogous to the unenforceability of

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unenforceable against the successor-in-interest to the FDIC under 12 U.S.C.

§ 1821(e)(13)(A). The court opined that the termination clause would render

Orion’s assets “worthless,” thus destroying the FDIC’s ability to sell the failed

bank’s assets.

       This appeal followed. Beneva argues, inter alia,6 that summary judgment in

favor of Iberiabank should be reversed because Iberiabank has no right to enforce

the sublease and, even if it does, the termination clause is not an ipso facto clause

and is thus enforceable against Iberiabank.7

ipso facto clauses in the bankruptcy context. In bankruptcy, an ipso facto clause provides the
consequences, such as termination of a contract, upon insolvency or filing of a bankruptcy
petition. Under 11 U.S.C. § 365(b)(2), ipso facto clauses are not enforceable against the trustee.
       6
        Beneva also argues that the district court abused its discretion in granting summary
judgment without requiring the parties to narrow the factual issues as required by the court’s case
management order. The argument is without merit.
       7
          Beneva also argues that the District Court abused its discretion in granting attorney’s
fees to Iberiabank because there is no statutory authority for a grant of fees under the Declaratory
Judgment Act. Iberiabank’s request for fees was based on a clause in the sublease, however.
Section 16.04 of the sublease provides:
                In case suit shall be brought by Sub-lessor for the recovery of
                possession of the Demised Premises or for the recovery of rent or
                because of the breach of any covenant by the Sub-lessee and if the
                Sub-lessor is successful in such litigation, then the Sub-lessee shall
                pay all costs of said litigation including a reasonable attorney’s fee;
                if unsuccessful, the Sub-lessor shall pay to the Sub-lessee all costs of
                said litigation including a reasonable attorney’s fee incurred by sub-
                lessee in the defense thereof. In case suit shall be brought by the Sub-
                lessee because of the breach of any covenant by Sub-lessor and if the
                Sub-lessor is successful in such litigation, then the Sub-lessee shall
                pay all costs of said litigation, including a reasonable attorney’s fee.
        The District Court, in granting summary judgment, reserved jurisdiction on the matter of
attorney’s fees and directed the parties to engage in good faith negotiations to resolve the amount

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                                                 II.

       We review a district court’s grant of summary judgment de novo. Holloman

v. Mail-Well Corporation, 443 F.3d 832, 836 (11th Cir. 2006). We consider the

evidence in the light most favorable to the nonmoving party. Id. Summary

judgment is appropriate when there is no genuine issue of material fact and the

evidence compels judgment as a matter of law in favor of the moving party. Id. at

836–37.

       There appear to be no genuine issues of material fact in this case. Beneva



of fees and costs. In its order granting attorney’s fees, the court noted that the parties had
stipulated to fees of $19,438.50, but that Beneva contended that the court lacked jurisdiction to
award the fees because it was divested of jurisdiction when Beneva filed its notice of appeal.
         Although the language of Section 16.04 does not provide for fees in the event that the
sublessee brings a declaratory judgment action, Beneva has waived any claim about the language
of the contract clause by stipulating to the amount of fees owed. See Charter Co. v. United
States, 971 F.2d 1576, 1582 (11th Cir. 1992) (“Having induced the court to rely on a particular
erroneous proposition of law or fact, a party in the normal case may not at a later state of the case
use the error to set aside the immediate consequence of the error.”).
         We also note that Beneva’s jurisdiction argument fails. Filing an appeal does not divest a
district court of jurisdiction to decide the issue of attorney’s fees. Rather, Beneva’s appeal was
premature when filed because the court had not yet entered judgment on attorney’s fees. In this
circuit, “a request for attorney’s fees pursuant to a contractual clause is considered a substantive
issue; and an order that leaves a substantive fees issue pending cannot be ‘final.’” Brandon,
Jones, Sandall, Zeide, Kohn, Chalal & Musso, P.A. v. MedPartners, Inc., 312 F.3 d 1349, 1355
(11th Cir. 2002). A premature appeal may be cured, however, by a subsequent order terminating
the litigation. Norman v. Hous. Auth. of Montgomery, 836. F.2d 1292, 1295–96 (11th Cir. 1988)
(citing Bank South Leasing, Inc. v. Williams, 778 F.2d 704, 705 (11th Cir. 1985)) (“[A] notice of
appeal filed after judgment was rendered but before the attorney’s fee issue was decided was
premature, but . . . a subsequent order deciding the attorney’s fees issue cured the premature
notice.”). Because the district court entered an order on attorney’s fees one week after the notice
of appeal was filed, Beneva’s notice of appeal is timely.


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and Iberiabank’s dispute involves construction of § 1821(e)(13)(A) and

application of the statute to the sublease and amendment at issue, which are

matters of law appropriate for summary judgment. We first describe the statutory

background on which the issues play out before turning to the merits of the case.

                                              A.

       The Financial Institutions Reform, Recovery, and Enforcement Act of 1989

(“FIRREA”), Pub. L. No. 101-73, 103 Stat. 183 (codified as amended in scattered

sections of 12 U.S.C.), was enacted to strengthen regulation of the nation’s

financial system in the wake of the savings and loan crisis of the 1980s.8 The Act

provides a mechanism for dealing with financially distressed banks in a way that

preserves their going-concern value. McAndrews v. Fleet Bank of Massachusetts,

N.A., 989 F.2d 13, 15 (1st Cir. 1993). It grants the FDIC broad powers under 12

U.S.C. § 1821 to manage the affairs of insolvent banks as receiver or conservator.

       When the FDIC is appointed conservator or receiver, it succeeds to “all

rights, titles, powers, and privileges of the insured depository institution.”

§ 1821(d)(2)(A)(i). It may operate the institution, § 1821(d)(2)(B), or it may

“transfer any asset or liability of the institution in default . . . without any


       8
          FIRREA amended the Federal Deposit Insurance Act, Pub. L. No. 81-797, 64 Stat. 873
(codified as amended in scattered sections of 12 U.S.C.), which was enacted in 1950 and governs
the FDIC.

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approval, assignment, or consent with respect to such transfer,”

§ 1821(d)(2)(G)(i)(II). The FDIC may also “exercise all powers and authorities

specifically granted to conservators or receivers, respectively, under this chapter

and such incidental powers as shall be necessary to carry out such powers.”

§ 1821(d)(2)(J)(i)

       The FDIC’s powers with respect to contracts entered into before its

appointment as conservator or receiver are provided in § 1821(e). The receiver

has the authority to repudiate or disaffirm any contract or lease to which the

depository institution is a party if the receiver determines that it would be

burdensome and that repudiation would “promote the orderly administration of the

institution’s affairs.” § 1821(e)(1).9 Conversely, § 1821(e)(13)(A) provides that

the FDIC may enforce contracts entered into by the depository institution:

               The conservator or receiver may enforce any contract,
               other than a director’s or officer’s liability insurance
               contract or a depository institution bond, entered into by
               the depository institution notwithstanding any provision of
               the contract providing for termination, default,
               acceleration, or exercise of rights upon, or solely by reason
               of, insolvency or appointment of or the exercise of rights
               or powers by a conservator or receiver.



       9
        A party who has been harmed by repudiation may receive actual compensatory
damages, § 1821(e)(3), but the Act specifically provides that a lessor may not receive damages if
the FDIC repudiates a lease under which the institution is the lessee.

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       It is § 1821(e)(13)(A) that is at issue in this case. Beneva argues that

Iberiabank has no power to enforce the sublease under § 1821(e)(13)(A) because

the statute grants that power only to a conservator or receiver.10 Beneva further

argues that, even if Iberiabank does have the power to enforce the sublease, the

termination clause bars enforcement of the sublease because the termination clause

does not fall within the language of § 1821(e)(13)(A).

       Although the District Court determined that Iberiabank, as the FDIC’s

successor-in-interest, could enforce the contract, we do not agree that Iberiabank is

attempting to enforce the contract. If the contract remains in effect, it is because

the FDIC enforced it when it transferred Orion’s assets to Iberiabank. We thus

look to the record to determine whether the FDIC enforced the contract.

                                              B.

       When the Florida Office of Financial Regulation appointed the FDIC

receiver of Orion, it authorized the FDIC to “take charge and possession of all

assets and affairs of Orion Bank.” Section 658.82(1) of the Florida statutes

provides that when the FDIC is appointed receiver, “it may proceed independently


       10
          Beneva also argues that § 1821(e)(13)(A) does not authorize a private cause of action
by Iberiabank against Beneva. This argument is irrelevant. Iberiabank has brought a declaratory
judgment action in anticipation of a state ejectment action by Beneva. Interpretation of
§ 1821(e)(13)(A) is necessary to determine Iberiabank’s and Beneva’s rights under the sublease,
construction of which is governed by state law.

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with the receivership pursuant to its rules and regulations.”11 Under 12 U.S.C.

§ 1821(d)(2)(A)(i), the FDIC as receiver succeeded by operation of law to “all

rights, titles, powers, and privileges of the insured depository institution.” The

FDIC thus took possession of the sublease as an asset and right of Orion pursuant

to the FDIC’s powers as receiver under state and federal law.

       The same day the FDIC took possession of Orion, it transferred Orion’s

assets, liabilities, and obligations to Iberiabank pursuant to its power under

§ 1821(d)(2)(G)(i)(II) to “transfer any asset or liability of the institution in

default.” The sublease was not listed as an asset in the agreement that governed

the transfer.12 Instead, the FDIC granted Iberiabank an option to have the lease of

any occupied property assigned to Iberiabank.13 The agreement provided that, if

       11
          12 U.S.C. § 1821 likewise provides that the FDIC may accept appointment as receiver
by an appropriate State supervisor of an insured State depository institution and that the FDIC
will enjoy the powers of both state law and § 1821. § 1821(c)(3)(A)–(B).
       12
           In fact, the Agreement specifically excluded the sublease. Section 3.5(f), which listed
assets not purchased by the assuming bank, provides, “The Assuming Bank does not purchase,
acquire or assume . . . leased or owned Bank Premises . . . provided that the Assuming Bank does
obtain an option under Section 4.6, Section 4.7 or Section 4.8, as the case may be, with respect
thereto.” The sublease was likewise not listed on Schedule 3.2, though it is listed as an asset
subject to an option to purchase.
       13
          The option was contained in Section 4.6 of the Agreement, “Agreement with Respect
to Bank Premises.” It provides in relevant part:
       (b) Option to Lease. The Receiver hereby grants to the Assuming Bank an
       exclusive option for the period of ninety (90) days commencing the day after Bank
       Closing to cause the Receiver to assign to the Assuming Bank any or all leases for
       leased Bank Premises, if any, which have been continuously occupied by the
       Assuming Bank from Bank Closing to the date it elects to accept an assignment of

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the lease could not be assigned, the FDIC would enter into a sublease with the

assuming bank containing the same terms and conditions as the existing lease.14

The agreement further provided that, should Iberiabank fail to notify the FDIC that

it wished to exercise the option but continue to occupy the premises for a certain

amount of time, it would be deemed to have assumed the lease.15

       In assuming the sublease and subsequently transferring it to Iberiabank, the

FDIC was acting within its power to take charge of Orion’s assets, to transfer


       the leases with respect thereto to the extent such leases can be assigned; provided,
       that the exercise of this option with respect to any lease must be as to all premises
       or other property subject to the lease.
       14
           Section 4.6(b) continues:
        If an assignment cannot be made of any such leases, the Receiver may, in its
        discretion, enter into subleases with the Assuming Bank containing the same
        terms and conditions provided under such existing leases for such leased Bank
        Premises or other property. The Assuming Bank shall give notice to the Receiver
        within the option period of its election to accept or not to accept an assignment of
        any or all leases (or enter into subleases or new leases in lieu thereof). The
        Assuming Bank agrees to assume all leases assigned (or enter into subleases or
        new leases in lieu thereof) pursuant to this Section 4.6.
        An anti-assignment provision in the sublease does not affect the FDIC’s rights. When the
FDIC was appointed receiver, it succeeded by operation of law to all the assets and rights of
Orion, including the sublease, notwithstanding any anti-assignment provision.
       15
           The automatic assumption provision was contained in Section 4.6 of the Agreement. It
provides in relevant part:
       (g) Vacating Premises.
       (ii) By failing to provide notice of its intention to vacate such premises prior to the
       expiration of the option period specified in Section 4.6(b), or by occupying such
       premises after the one hundred eighty (180)-day period specified above in this
       paragraph (ii), the Assuming Bank shall, at the Receiver’s option, (x) be deemed
       to have assumed all leases, obligations and liabilities with respect to such
       premises (including any ground lease with respect to the land on which premises
       are located).

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those assets, and to enforce contracts entered into by Orion. The termination

clause in the sublease purporting to allow termination on transfer of Orion’s assets

would have been triggered by the FDIC’s takeover of Orion’s assets. The FDIC,

however, had the power to enforce the lease notwithstanding clauses to the

contrary. It must have enforced the sublease when it transferred Orion’s assets to

Iberiabank; otherwise, the option to lease the occupied premises would have been

meaningless. Without the leased premises, the value of Orion’s assets would have

decreased. The FDIC was thus carrying out its duty under FIRREA to maximize

the value of failed banks when it entered into the Purchase and Assumption

Agreement and enforced the sublease.

                                         C.

      Notwithstanding the FDIC’s power to transfer assets and enforce contracts,

Beneva contends that the termination clause is enforceable against the FDIC

because it does not expressly condition termination on insolvency or appointment

of a conservator or receiver. Iberiabank argues that the termination clause is

unenforceable under § 1821(e)(13)(A) because, regardless of whether it contains

exact language from the statute, it was triggered by the FDIC’s receivership of

Orion.

      Interpretation of § 1821(e)(13)(A)’s provision barring enforcement of ipso

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facto clauses against receivers and conservators is a matter of first impression in

this circuit. In fact, few courts have addressed § 1821(e)(13)(A).16 To resolve this

dispute, we thus turn to settled principles of statutory interpretation. We look first

to the text of the statute. United States v. DBB, Inc., 180 F.3d 1277, 1281 (11th

Cir. 1999) (“The starting point for all statutory interpretation is the language of the

statute itself.”). If the text of the statute is unambiguous, we need look no further.

We will look beyond the plain language of the statute to evidence of congressional

intent only if the statute’s language is ambiguous; applying the plain meaning of


       16
           Three Courts of Appeals have decided cases in which § 1821(e)(13)(A) (or its
predecessor, § 1821(e)(12)(A)) is referenced. None of the cases is applicable here.
        The District Court in this case relied on McAndrews v. New Bank of New England,
N.A., 796 F.Supp. 613 (D. Mass. 1992), aff’d sub nom. McAndrews v. Fleet Bank of
Massachusetts, N.A., 989 F.2d 13 (1st Cir. 1993), in holding that the Termination Clause is
unenforceable against the FDIC or its successor-in-interest. But in that case, the FDIC was a
party to the action, and the court did not engage in interpretation of § 1821(e)(12)(A). Instead,
the First Circuit held that applying the statute to a contract entered into before FIRREA was
enacted did not constitute an impermissible retroactive application, nor did it constitute an
unconstitutional taking.
        In Resolution Trust Corp. v. District of Columbia, 78 F.3d 606 (D.C. Cir. 1996), the RTC
challenged the District of Columbia’s invocation of a “bankruptcy clause” providing for
termination of a lease of office space if the lessor “failed in business.” The District Court for the
District of Columbia had determined that if the bankruptcy clause applied, it would be overridden
by § 1821(e)(12)(A). The Court of Appeals for the D.C. Circuit did not reach the issue, however,
because it determined that an estoppel certificate signed by the District of Columbia prevented it
from invoking the bankruptcy clause when the lessor went into receivership.
        The Sixth Circuit has decided two cases in which § 1821(e)(13)(A)’s predecessor is
mentioned. FDIC v. Aetna Cas. and Sur. Co., 903 F.2d 1073 (6th Cir. 1990), involved a
provision in bankers blanket bonds that provided for termination of coverage on takeover by the
FDIC. The court noted that § 1821(e)(12)(A) specifically excludes fidelity insurance from its
prohibitions, so the provision in the bonds could not be against public policy. RTC v. Cheshire
Mgmt Co., 18 F.3d 330 (6th Cir. 1994), involved a qualified financial contract, which is
governed by a separate provision, § 1821(e)(8)(A).

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the statute would lead to an absurd result; or there is clear evidence of contrary

legislative intent. Id.

      Under § 1821(e)(13)(A), the FDIC may enforce contracts entered into by the

depository institution “notwithstanding any provision of the contract providing for

termination, default, acceleration, or exercise of rights upon, or solely by reason

of, insolvency or the appointment of or the exercise of rights or powers by a

conservator or receiver.” The termination clause at issue provides for termination

if “Orion is sold and/or transferred to another banking institution.” The clause

does not mention insolvency or appointment of a receiver or conservator, and it

applies in contexts outside insolvency. There is nothing in § 1821(e)(13)(A),

however, that premises unenforceability on explicit reference to insolvency or

conservatorship or receivership. Although the termination clause does not

incorporate the statutory language “exercise of the rights of the receiver,” the

termination clause’s trigger is the exercise of one of the rights of the receiver—the

right to succeed to all rights and title of Orion pursuant to § 1821(d)(2)(A)(1) or to

transfer or sell Orion’s assets pursuant to § 1821(d)(2)(G)(i)(II).

      Even presuming ambiguity as to whether § 1821(e)(13)(A) applies only to

ipso facto clauses that include specific statutory language, our reading of the

statute comports with Congress’s stated intent in enacting FIRREA and its grant of

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             Case: 11-11195     Date Filed: 11/30/2012   Page: 17 of 19

broad powers to the FDIC to manage the affairs of failing banks under § 1821.

Congress amended § 1821(e)(13)(A) in 2005 to add “or the exercise of rights or

powers by” after “the appointment of.” Bankruptcy Abuse Prevention and

Consumer Protection Act of 2005, Pub. L. No. 109-8, 119 Stat. 23 (2006). By

broadening the scope of clauses that are unenforceable against the FDIC as

receiver, Congress evidenced an intent to strengthen the FDIC’s ability to enforce

contracts. Were we to hold that the termination clause is enforceable against the

FDIC, we would eviscerate § 1821(e)(13)(A). If termination clauses that do not

contain the explicit language “on exercise of the rights of the receiver” but are

triggered by exercise of those rights are valid, the language added by Congress in

2005 would be rendered toothless. For example, receivership necessarily involves

a transfer of assets when the FDIC takes over the failing bank. Contracting parties

could thus get around § 1821(e)(13)(A) simply by drafting clauses that provide for

termination on sale or transfer of assets. The notice of termination in this case

provides evidence that Beneva intended just such a result: “This provision was

specifically negotiated to allow Sublessor the right to terminate the sublease in

events such as when Orion was closed by the FDIC and its assets were transferred




                                         17
               Case: 11-11195       Date Filed: 11/30/2012      Page: 18 of 19

to Iberiabank.”17

       Beneva also argues that the termination clause does not fall within the

language of the statute because there are situations outside the insolvency context

in which the clause would be enforceable. If Orion’s shareholders had simply sold

the bank, Beneva would have been able to terminate the sublease under the terms

of the amendment. The fact that the termination clause is enforceable in some

contexts, however, does not mean that it is enforceable in all contexts. As applied

when a bank is in receivership, the Clause operates to terminate upon “exercise of

rights or powers by a conservator or receiver,” and thus is unenforceable under

§ 1821(e)(13)(A). The broad scope of the clause does not save it.

       Beneva’s narrow reading of § 1821(e)(13)(A) is unsupported by the

language of the statute and would allow contracting parties to defeat the FDIC’s

power to enforce contracts simply by drafting termination clauses that do not

explicitly mention insolvency or receivership. Given FIRREA’s grant of broad

powers to the FDIC to manage the affairs and preserve the value of insolvent

banks, Congress could not have intended the statute to be construed to allow such

a result. We hold that the Termination Clause falls within the language of


       17
          The notice does not affect our interpretation of the Termination Clause. We point out
the language simply to show the effect a narrow reading of the statute would have on contracting
parties, who would know full well how to avoid § 1821(e)(13)(A).

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               Case: 11-11195       Date Filed: 11/30/2012       Page: 19 of 19

§ 1821(e)(13)(A) and is therefore unenforceable against the FDIC as receiver of

Orion. The FDIC was acting within its powers when it enforced the sublease

notwithstanding the termination clause. The District Court properly granted

summary judgment to Iberiabank, and the sublease between Beneva and

Iberiabank remains in effect.18

       We note that our decision does no injustice to Beneva. The original

sublease was drafted in 1979, before FIRREA was enacted but well after the FDIC

was created and imbued with broad powers to manage the affairs of failing banks.

Any entity that enters into a lease with a bank, or accepts assignment of such a

lease, is on notice that, should the bank fail, the FDIC will have the power to

enforce the lease. Congress granted the FDIC such powers for the health of the

banking industry and the benefit of depositors, and Beneva may not skirt

§ 1821(e)(13)(A) with a narrow reading of the statute.

       AFFIRMED




       18
          The sublease contains a severability provision, Section 19.01, which provides that if
any term or provision of the sublease is found to be invalid or unenforceable, the remainder of
the sublease will remain in effect.

                                               19
