
USCA1 Opinion

	




          January 19, 1994      [NOT FOR PUBLICATION]                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                  __________________          No. 93-1648                                       ST. HILAIRE & ASSOCIATES, INC.,                          D/B/A CORSO ELECTRIC CO., ET AL.,                               Plaintiffs, Appellants,                                          v.                 FEDERAL DEPOSIT INSURANCE CORPORATION, ETC., ET AL.,                                Defendants Appellees.                                  __________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF NEW HAMPSHIRE                       [Hon. Shane Devine, U.S. District Judge]                                           ___________________                                 ___________________                                        Before                                Cyr, Boudin and Stahl,                                   Circuit Judges.                                   ______________                                 ___________________               Gray   H.  Reiner,    Reiner  and   Bouffard  on  brief  for               _________________     ______________________          appellants.               Ricky L. Brunette, Law Office of Susan J. Szwed on brief for               _________________                ______________          appellees.                                  __________________                                  __________________                 Per  Curiam.  Appellant, St. Hilaire & Associates, Inc.,                 ___________            D/B/A Corso Electric Co., and  Albert St. Hilaire, appeal the            dismissal  of  their  action  against  the   Federal  Deposit            Insurance Corporation [FDIC], as receiver for Numerica  Bank,            Federal Savings  Bank [Numerica],  and  the Resolution  Trust            Corporation  [RTC],  as  conservator   for  Homebank  Federal            Savings  Association [Homebank FSA].  We vacate the dismissal            and remand to the district court for further proceedings.                 We take the  following facts from the  record, accepting            the facts pleaded in the complaint as true.  In 1987 or 1988,            Albert St. Hilaire  [St. Hilaire], president of  St. Hilaire,            Inc. [the corporation],  sought financing from  Numerica Bank            of  Manchester, New  Hampshire.   Subsequently,  officers and            agents of  Numerica indicated to  St. Hilaire  that they  had            transferred to Homebank, Federal Savings Bank [Homebank FSB],            a  fully owned subsidiary  of Numerica.   They also requested            that he allow them to transfer the financing arrangements for            the corporation to Homebank FSB as well.  St. Hilaire agreed,            and in 1988,  financing totalling approximately  $450,000 was            provided by Homebank  FSB.  In 1991, Homebank  FSB refused to            extend further  credit to the corporation, and,  as a result,            the corporation was forced to cease business operations.                 Effective  October  10,  1991,  Numerica  was   declared            insolvent and the  FDIC was appointed receiver.  Homebank FSB            was closed on the same date.  The  RTC was appointed receiver                                         -2-            of  Homebank FSB.    In  its capacity  as  receiver, the  RTC            entered  into  a  Purchase  and   Assumption  Agreement  with            Homebank FSA, whereby essentially all of the assets and  some            of  the liabilities  of  Homebank  FSB  were  transferred  to            Homebank  FSA.   Among  the assets  transferred were  the St.            Hilaire  notes. The RTC was appointed conservator of Homebank            FSA.                   In 1992,  the RTC as conservator of Homebank FSA brought            suit against the corporation  and against St. Hilaire  in the            United  States District  Court  for  the  District  of  Maine            seeking  collection of  the notes.   In  their answer  to the            complaint, St.  Hilaire and  the  corporation raised  various            affirmative  defenses.    St. Hilaire  asked,  in particular,            that, if he were found  personally liable on the note, he  be            allowed to set off any claims which he would have against the            Numerica  and Homebank as  a result of  administrative claims            which  he  had  already initiated  pursuant  to  12  U.S.C.              1821(d).    On October  23, 1992,  the court  granted summary            judgment to the RTC and found St. Hilaire personally liable.                 On  October 5,  1992, St.  Hilaire  and the  corporation            initiated  the instant  suit in  the  United States  District            Court for the District of New Hampshire.  The complaint seeks            damages from the FDIC as receiver of Numerica and against the            RTC as conservator  of Homebank FSA for breach  of an implied            covenant of good  faith and fair dealing; for  violation of a                                         -3-            joint  venture agreement; and for breach of an oral contract.            The RTC  as conservator  filed a  motion to  dismiss alleging            that  appellants  had  failed  to  file  a  claim  under  the            administrative claims  process prior to  commencing suit  and            that, therefore, the  federal court was  without jurisdiction            to hear  the claim  pursuant to  12 U.S.C.    1821(d)(13)(D).            The RTC also sought dismissal on the grounds of res judicata.                                                            ___ ________            The district court dismissed the entire case on the ground of            lack of jurisdiction.   It did  not address the issue  of res                                                                      ___            judicata.            ________                 As the FDIC notes in  its brief, "[t]his appeal comes to            this Court in  a state of procedural confusion."   First, the            FDIC advises  this court  that it  never moved  for dismissal            below.      Not  only  should the  district  court  not  have            dismissed  the  complaint  against the  FDIC  without  such a            motion,  see Greene v. Union Mut. Life Ins. Co., 764 F.2d 19,                     ___ ______    _______________________            21-22 (1st  Cir. 1985), but  the FDIC also admits  that it is            not  entitled  to such  relief since  appellants did  file an            administrative claim with the FDIC.  The claim was denied and            hence is  properly before  the district court.   12  U.S.C.              1821(d)(6)(A).                 Second, the  RTC as  conservator now  concedes that  the            ground  on  which  its  motion  to  dismiss  was granted  was            improper.  12 U.S.C.   1821(d)(13)(D) limits the jurisdiction            of federal courts to those  parties who have exhausted  their                                         -4-            administrative  remedies as regards claims against the RTC as                                                                   ___ __            receiver.  Since  appellants in the instant  case have sought            ________            relief only  against the RTC in its  capacity as conservator,                                                          __ ___________            the court erred in granting  dismissal for failure to exhaust            administrative remedies.1                   The RTC now  asks this court to affirm  the dismissal on            the alternate ground of res judicata.  The essential elements                                    ___ ________            of res  judicata are  a final  judgment on  the merits  in an               ___  ________            earlier action between identical parties or their privies and            an  identity of  causes of  action in  the earlier  and later            suits.  See, e.g., Kale v. Combined  Ins. Co., 924 F.2d 1161,                    ___  ___   ____    _________________            1165  (1st Cir),  cert. denied,  112  S.Ct. 69  (1991).   The                              ____  ______            decision by the United States  District Court of the District            of  Maine is  clearly a  final  judgment between  the RTC  as            conservator and the appellants.                   However, we think it is  unwise to attempt to  determine            the res  judicata issue in  the first instance.   It  was not                ___  ________            addressed by the district court and  has not been extensively            briefed  in this court.  Accordingly, we vacate the dismissal            as to the  RTC without prejudice  to its right to  assert the            res judicata defense on remand in the district court.            ___ ________                 The order  dismissing the  action against  the FDIC  and            against  the RTC  is vacated  and  the case  is remanded  for                                 _______                    ________                                            ____________________            1.  Appellants  do not appear to accept this concession since            they continue  to argue that  they in fact did  exhaust their            administrative remedies.                                         -5-            further proceedings.  No costs.                                         -6-
