PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

ELMCO PROPERTIES, INCORPORATED,
Plaintiff-Appellant,

v.

SECOND NATIONAL FEDERAL SAVINGS
ASSOCIATION; RESOLUTION TRUST
CORPORATION, as Receiver of and
Conservator of Second National
                                                                       No. 95-3172
Federal Savings Bank, also known
as Second National Federal Savings
Association; RESOLUTION TRUST
CORPORATION, as Receiver of Second
National Federal Savings
Association,
Defendants-Appellees.

Appeal from the United States District Court
for the District of Maryland, at Baltimore.
M. J. Garbis, District Judge.
(CA-95-1497-MJG)

Argued: July 17, 1996

Decided: September 3, 1996

Before MURNAGHAN, Circuit Judge, and BUTZNER and
PHILLIPS, Senior Circuit Judges.

_________________________________________________________________

Reversed by published opinion. Senior Judge Phillips wrote the opin-
ion, in which Judge Murnaghan and Senior Judge Butzner joined.

_________________________________________________________________
COUNSEL

ARGUED: George Frederick Obrecht, III, OBRECHT &
OBRECHT, Severna Park, Maryland, for Appellant. Kathryn Ryan
Norcross, FEDERAL DEPOSIT INSURANCE CORPORATION,
Washington, D.C., for Appellees. ON BRIEF: Ann S. DuRoss,
Assistant General Counsel, Richard J. Osterman, Jr., Senior Counsel,
FEDERAL DEPOSIT INSURANCE CORPORATION, Washington,
D.C.; Marcell Solomon, SOLOMON & GREEN, P.C., Greenbelt,
Maryland, for Appellees.

_________________________________________________________________

OPINION

PHILLIPS, Senior Circuit Judge:

Appellant Elmco Properties, Inc. sued Appellees Second National
Federal Savings Association (FSA) and the Resolution Trust Corpora-
tion (RTC)--acting in various capacities--seeking declaratory judg-
ment that the RTC had misapplied certain of Elmco's funds to
discharge an outstanding loan. Elmco further sought repayment of
those funds. The RTC and FSA moved to dismiss, claiming that
Elmco's failure to first present its claim to the RTC for resolution, as
is required by the Financial Institutions Reform, Recovery and
Enforcement Act of 1989 (FIRREA) (codified as amended in 12
U.S.C.), divested the district court of jurisdiction. Elmco responded,
claiming that because it never received sufficient notice of the RTC's
administrative claims process, extinguishing its claim without first
allowing it an opportunity to present the claim to the RTC would vio-
late due process. The district court agreed with the RTC and FSA and
dismissed Elmco's claim. Finding that Elmco was denied sufficient
notice of its opportunity to present its claim, hence was denied due
process, we reverse.

I.

In 1986, Elmco executed a guaranty in favor of Second National
Federal Savings Bank (FSB) securing the obligations of Joan and E.
Lee Meadows, Elmco's principal shareholders, under a $500,000 line

                    2
of credit. This guaranty was further secured by an Indemnity Deed of
Trust on real property Elmco owned.

In 1988, FSB made two loans to Elmco totalling $1,625,196. These
loans were guarantied by the Meadows and were secured by Elmco's
real property. Later, Elmco established at FSB an escrow account,
into which Elmco transferred its rights under certain letters of credit;
this account further collateralized Elmco's obligations. In 1990,
Elmco and FSB entered into a "letter agreement" regarding these two
loans, but the terms of that agreement are not in the record.

In 1992, Elmco defaulted on the 1988 loans and the Meadows
defaulted on their line of credit; Elmco and the Meadows also refused
to honor their respective guaranties. Later that year, FSB failed and
the Office of Thrift Supervision (OTS) appointed the RTC as FSB's
receiver. It also chartered a new institution, FSA, which acquired sub-
stantially all of FSB's assets and liabilities, including the 1988 loans
to Elmco and Elmco's escrow account. OTS also appointed the RTC
as FSA's conservator.

In June of 1993, Elmco and the Meadows entered into a settlement
agreement with FSA and with the RTC in its capacity as FSA's con-
servator. Under this agreement, Elmco and the Meadows confirmed
their defaults on the two loans and the line of credit, agreed to a work-
out of the amounts owed under those loans, and agreed to allow FSA
to foreclose on some of Elmco's real property. The agreement also set
up certain conditions that, if fulfilled by Elmco and the Meadows,
would release those parties from their liabilities under the loans and
guaranties. One of those conditions was that "No event of Bankruptcy
or Avoidance Action shall have occurred." JA 21.

In November of 1993, Lee Meadows filed for bankruptcy. Three
months later, FSA notified Elmco that the escrow account had been
closed and the $132,762.29 in the account had been"applied to prin-
cipal on [Elmco's] non-performing loan[s]." JA 28. Elmco later wrote
to request a refund of that money.

By September of 1994, FSA had failed and the RTC was changed
from its conservator to its receiver. In October, November, and
December, the RTC published notices in the Baltimore Sun and

                     3
Washington Post announcing the receivership and explaining that all
creditors should submit proof of their claims against FSA to the RTC
by January 28, 1995.

Shortly after becoming FSA's receiver, the RTC also wrote to
Elmco and denied its request to return the funds. It explained that it
considered Meadows's filing for bankruptcy a default under the set-
tlement agreement, and that, it believed, this default allowed the RTC
to seize the escrow funds. This letter erroneously identified the RTC
as receiver for FSB, instead of receiver for FSA. The letter also did
not mention the administrative claims process or the January 28 dead-
line. Elmco did not submit a claim to the RTC before this date.

In May of 1995, Elmco filed this suit in the United States District
Court for the District of Maryland, naming as defendants FSA, the
RTC as Conservator for FSA, and the RTC as Receiver for FSB. This
complaint sought declaratory judgment that (1) the settlement agree-
ment was still in effect between FSA and Elmco, (2) the previous let-
ter agreement regarding the escrow account was superseded by the
settlement agreement, (3) the RTC was not entitled to apply the
escrow funds to Elmco's debt, and (4) the RTC owed Elmco the
amount it had seized. Elmco also sought an order requiring the RTC
to refund the money.

But the Defendants responded with Rule 12 motions, claiming that
the district court lacked jurisdiction and that Elmco had failed to state
a claim. The motions claimed that, under FIRREA's administrative
exhaustion requirement, Elmco's failure to first file its claim with the
RTC divested the district court of jurisdiction. Elmco then amended
its complaint to add the RTC as Receiver for FSA as a defendant, and
also to seek declaratory judgment that the time for it to file its com-
plaint with the RTC had not yet expired.

On the defendants' motions, the district court dismissed the claims
for lack of subject matter jurisdiction, holding that, because Elmco
had not first presented its claims to the RTC, FIRREA barred any
court from taking jurisdiction over those claims. It also rejected
Elmco's argument that the RTC's failure to mail it notice of the
administrative claims process had deprived it of any opportunity to
present its claim, thus had violated its due process rights.

                     4
Elmco now appeals, claiming primarily that lack of mailed notice
did violate its due process rights.

II.

Elmco contends that the RTC's failure to mail it notice of FSA's
receivership and the accompanying administrative claims process ren-
dered the ensuing extinguishment of its claim unconstitutional under
the Fifth Amendment's Due Process Clause. We conclude that failure
to mail notice, when coupled with Elmco's lack of sufficient knowl-
edge to charge it with a duty to inquire further into the claims process,
did make discharge of Elmco's claim unconstitutional.

A.

A brief outline of FIRREA's relevant provisions is in order. FIR-
REA establishes an administrative process that allows the RTC, act-
ing as receiver for a failed institution, to settle claims against that
institution and liquidate its assets. See 12 U.S.C. § 1821(d); Tillman
v. Resolution Trust Corporation, 

, 1035 (4th Cir. 1994);
Brady Dev. Co. v. Resolution Trust Corporation, 

, 1003
(4th Cir. 1994). Upon becoming receiver, the RTC must promptly
publish notice to the institution's creditors that they must present their
claims before a certain date--the "bar date"--which is to be at least
ninety days after publication of the notice. § 1821(d)(3)(B)(i). Fur-
thermore, the RTC must mail a similar notice to (1) creditors appear-
ing on the institution's books, and (2) claimants 1 not appearing on the
_________________________________________________________________
1 As the Third Circuit has pointed out, FIRREA unfortunately does not
define "claim," hence contains no definition of "creditor" or "claimant."
National Union Fire Ins. Co. v. City Sav., F.S.B. , 

, 386 (3d
Cir. 1994). But that court, relying on analogous provisions of the Bank-
ruptcy Code, defined "claim" as "an action asserting a right to payment,"
in contrast to a mere request for declaratory judgment. 

Here,
the district court concluded that, although Elmco's complaint technically
requested declaratory judgment that it owned the funds and an order
requiring RTC to refund them, it was in essence a claim for monetary
relief. See JA 79. The Third Circuit itself has treated such actions, though
"dressed in injunctive garb," as requests for monetary damages. See Rosa
v. RTC, 

, 393 (3d Cir. 1991). Accordingly, we have no trou-
ble treating Elmco's facially declaratory and injunctive action as what it
genuinely is, i.e., a "claim" against the assets of FSA.

                     5
books but whose names and addresses the RTC later discovers.
§ 1821(d)(3)(C).

The RTC may allow any claim filed before the bar date that is
"proved to [its] satisfaction." § 1821(d)(5)(B). But, with one limited
exception, the RTC has no such discretion as to claims filed after the
bar date: "[C]laims filed after the [bar date] shall be disallowed and
such disallowance shall be final." § 1821(d)(5)(C)(i). The one excep-
tion is that the RTC may, in its discretion, hear late-filed claims when
the claimant "did not receive notice of the appointment of the receiver
in time to file such claim before [the bar date]." § 1821(d)(5)(C)(ii);
see F.D.I.C. v. diStefano, 

, 117 (D.R.I. 1993) (as
written, FIRREA makes receiver "sole gatekeeper" of such late-filed
claims).

One whose claim the RTC denies on its merits or fails to rule on
within 180 days may seek judicial or administrative review of that
claim. § 1821(d)(6)(A). But, unless a claim is first presented to the
RTC for resolution, no court has jurisdiction over it. § 1821(d)(13)(D).2
These provisions combine to create an exhaustion requirement that,
we have concluded, is "absolute and unwaivable." 

(quoting Glenborough New Mexico Assoc. v. Resolution Trust
Corporation, 

, 392-93 (D.N.M. 1992)). Importantly,
FIRREA does not allow waiver of the exhaustion requirement even
for claimants to whom the RTC failed to mail the required notice of
the claims process and bar date. Freeman v. F.D.I.C., 

,
1402 (D.C. Cir. 1995); Intercontinental Travel Mktg., Inc. v. F.D.I.C.,
_________________________________________________________________
2 Section 1821(d)(13)(D) provides:

          Except as otherwise provided in this subsection, no court shall
          have jurisdiction over--

          (i) any claim or action for payment from, or any action
          seeking a determination of rights with respect to, the assets
          of any depository institution for which the [RTC] has been
          appointed receiver, including assets which the [RTC] may
          acquire from itself as such receiver; or

          (ii) any claim relating to any act or omission of such insti-
          tution or [RTC] as receiver.

                    6


, 1285 (9th Cir. 1994); Meliezer v. Resolution Trust
Corporation, 

, 882-83 (5th Cir. 1992).3

B.

To prove its due process claim, Elmco must of course show that it
was deprived of a protected interest without due process of law.
Board of Regents v. Roth, 

, 571 (1972). Here, Elmco
points to a property interest, namely its claim against the RTC for
refund of its seized escrow account. See Logan v. Zimmerman Brush
Co., 

, 428 (1982) (cause of action is a constitutionally
protected property interest). Elmco has been deprived of that interest.
Specifically, the statute's administrative claims process and jurisdic-
tional bar apply directly to Elmco's claim; Elmco is a claimant who
failed to file any claim before the bar date, and, under FIRREA, its
failure to timely file requires the denial of its claim4 --unless the RTC
allows the late filing, which it admits it would not--and withdraws
jurisdiction over that claim from all courts.5 Accordingly, Elmco has
been deprived of the property interest it had in its claim.
_________________________________________________________________
3 Of course, FIRREA does, as discussed above, make a partial excep-
tion for late claims filed by claimants who lacked timely notice of the
receivership. § 1821(d)(5)(C)(ii). But the fact that the receiver has discre-
tion to allow even these claims--and that review of those claims will be
jurisdictionally barred if the receiver denies them as untimely--strongly
suggests that Congress did not intend a full waiver of the exhaustion
requirement as to claimants who did not receive the required mailed
notice, regardless of whether they had independent knowledge of the
receivership. E.g., 

.
4 Although Elmco never has actually filed a claim with the RTC, the
statute itself requires the RTC to deny the claim as untimely, unless it
concludes that Elmco lacked timely notice of FSA's receivership. The
RTC has argued in its brief that Elmco did have such notice, Appellee's
Br. at 21, and stated at argument that, if Elmco did now file a claim, it
would treat the claim as time-barred. Accordingly, there is no question
that Elmco's claim has been extinguished under FIRREA.
5 Elmco briefly argues that, because FSA never had a right to seize its
account, those funds never became FSA's "assets"; from this it concludes
that its claim seeking repayment of those funds really does not affect
FSA's assets, hence is not subject to FIRREA's jurisdictional bar. See

                   7
Elmco claims this deprivation of its property occurred without due
process. As mentioned above, the claim is extinguished under FIR-
REA even though the RTC failed to give the statutorily required
notice. See 

. Although the statute
attaches no consequences to the RTC's failure to mail Elmco notice,
several courts have recognized that depriving a claimant of its prop-
erty interest under such circumstances may raise serious constitutional
problems. See 

n.2 (where requisite notice
lacking, FIRREA claims process raises "serious due process con-
cerns"); Greater Slidell Auto Auction, Inc. v. American Bank & Trust
of Baton Rouge, 

, 942 (5th Cir. 1994) (due process
requires mailing of notice to known claimants); National 

(probable due process violation if insufficient notice
given); 

(as applied, FIRREA may raise
"grave constitutional concerns").

We agree. If the RTC denies as untimely the claim of one who
never--via formal mailed notice or otherwise--is given constitution-
ally sufficient notice of the requirement that he file his claim before
the bar date, such a denial, which is final and unreviewable, deprives
that claimant of his claim without ever affording him notice of the
deprivation or an opportunity to defend against it. Such a deprivation
without appropriate notice or any opportunity to protest--either pre-
or post-deprivation6 --violates due process. E.g., Boley v. Brown, 

, 222 (4th Cir. 1993) (citing Mullane v. Central Hanover
Bank & Trust Co., 

, 314 (1950)).
_________________________________________________________________

§ 1821(d)(13)(D)(i) (withdrawing from all courts jurisdiction over claims
seeking "payment from . . . or a determination of rights with respect to"
a failed institution's assets). This claim is meritless because, even if
Elmco's claim to the funds succeeds on the merits, satisfaction of the
claim must necessarily be paid out of FSA's assets. Accordingly,
Elmco's claim seeks "payment from" FSA's assets and is subject to the
jurisdictional bar.

6 The failure to give notice of the bar date, of course, denies the claim-
ant an opportunity for pre-deprivation procedures, while FIRREA's elim-
ination of any judicial review of denied, late-filed claims prevents post-
deprivation remedy.

                    8
The question then becomes whether Elmco was given constitution-
ally adequate notice that its claim would be extinguished if not timely
filed. That notice is that which is "reasonably calculated, under all the
circumstances, to apprise interested parties of the pendency of the
action and afford them an opportunity to present their objections."

; accord Mennonite Board of Missions v.
Adams, 

, 795 (1983). Under Mullane, a party with an
identified, present property interest whose address is known or rea-
sonably ascertainable is entitled to mailed notice of proceedings
affecting his property right. 

; see Greater

("Mailing of notice to claimants known to the
receiver is constitutionally required"). As to such parties, mere con-
structive notice by publication is insufficient. 

. As Mullane plainly put it, "The means [of notice] employed must
be such as one desirous of actually informing the absentee might rea-
sonably adopt to accomplish 

.

Here, the RTC was aware of Elmco's claim against FSA's assets
and knew Elmco's address. RTC's awareness is clear on the record;
after becoming FSA's receiver, the RTC responded in writing to
Elmco's request for refund of the escrow account and, after discuss-
ing its reasoning, concluded, "In view of the foregoing, we cannot
accept your claim for refund." JA 29 (emphasis added). Given that the
RTC, soon after becoming receiver, was aware of Elmco's identity,
address, and asserted interest in FSA's assets, the RTC was constitu-
tionally required to mail Elmco notice that, unless it asserted its claim
in an administrative complaint filed before the bar date, its claim
would be finally, unappealably denied. See Greater 

. Under Mullane, then, mere publication of the bar date in local
newspapers was insufficient as to Elmco.

The district court read our opinion in Tillman as, in effect, making
constructive notice by publication sufficient in all cases. But such a
holding would fly in the face of Mullane, and an analysis of the facts
of Tillman shows that it is consistent with Mullane's teachings.
Unlike Elmco, the claimant in Tillman was not one that the RTC dis-
covered before its bar date. In fact, Tillman did not assert his claim
against the failed bank until 30 months after that bank entered receiv-

. Also, his claim was not based on a standard
creditor-debtor arrangement, but on an alleged contract under which

                     9
the bank had promised to reimburse him for expenses he incurred in
the course of unrelated litigation. As a result, Tillman's interest
appears not to have been known to RTC or to have been of a type that
RTC should be required to discover on its own, and thus he fell within
a class of claimants for whom notification by publication is sufficient.
See 

(under those facts, notice by publication
sufficient for those whose interests are contingent, future, or not likely
to come to trustee's attention in normal course of business). Accord-
ingly, Tillman's approval of notice to that claimant solely by publica-
tion is consistent with Mullane and may not be read as suggesting that
notice by publication is constitutionally sufficient as to all claimants.

Nevertheless, Elmco may not complain of its lack of formal notice
if it actually knew enough about the situation to place it on "inquiry
notice" as to the details of the administrative process. Some courts
have held that a claimant's knowledge that a bank has entered receiv-
ership triggers such inquiry notice. See Intercontinental Travel 

(citing Greater 

(Aldisert, J.,
dissenting)); Flagler Fed. Sav. & Loan Ass'n v. Greenview Apart-
ments, Ltd., 

, 1436 (S.D. Fla. 1995) (actual knowl-
edge that bank was in receivership put claimant on inquiry notice). In
a similar context, our sister circuits have rejected bankruptcy credi-
tors' arguments that, absent formal notice of the deadline for contest-
ing the dischargeability of their debtors' obligations, their interest in
those obligations could not constitutionally be discharged. See In re
Medaglia, 

(2d Cir. 1995); In re Alton, 

(11th
Cir. 1988). Those courts have held that, once creditors actually learn
that their debtors have filed for bankruptcy, they have a duty to
inquire as to what they might be required to do to protect their inter-
ests, and, failing such inquiry, cannot claim lack of due process when
those debts are discharged. See id.7

Accordingly, if Elmco had timely, actual knowledge that FSA had
entered receivership, its due process argument might be defeated by
its own failure to act on that knowledge to protect its rights. But noth-
ing in the record suggests that Elmco had such knowledge. The par-
_________________________________________________________________
7 Significantly, the Altoncourt acknowledged that, if a creditor had no
notice of the bankruptcy proceeding--formal or otherwise--Mullane
would prohibit discharge of its 

n.4.

                     10
ties' brief correspondence contains nothing alerting Elmco that the
RTC had become FSA's receiver. FSA's letter of February 7, 1994,
in which it informed Elmco that the account had been seized, does not
mention the RTC at all, although earlier negotiations informed Elmco
that the RTC was then acting as FSA's conservator. The RTC's Octo-
ber 6, 1994--thus, post-receivership--letter denying Elmco's request
for return of its funds was mistakenly sent on letterhead identifying
the RTC as receiver for FSB, not FSA. But, given what Elmco
already knew, the nature of this mistake was not obvious on the face
of the letter. Although Elmco perhaps should have known that the
RTC erred in writing as FSB's receiver, it might well have thought
the appropriate letterhead would have identified the RTC as FSA's
conservator, not its receiver.

The pleadings further suggest that, at the relevant times, Elmco did
not know that the RTC was FSA's receiver. In its complaint, Elmco
admits it knew that, in 1992, the RTC had been appointed receiver for
FSB and conservator of FSA; but the complaint mentions nothing of
the RTC's receivership of FSA. Indeed, Elmco did not originally sue
the RTC as receiver for FSA, but only as receiver for FSB and conser-
vator of FSA. It did not add the RTC as receiver for FSA to its list
of defendants until it filed its amended complaint, by which time the
RTC had put its receivership of FSA on record.

Nor could Elmco's knowledge that the RTC was FSA's conserva-
tor be held to put it on inquiry notice. Unlike its role as receiver, the
RTC as conservator cannot initiate the administrative claims process
or liquidate a failed bank. Instead, the conservator's function is to
restore the bank's solvency and preserve its assets. Compare
§ 1821(d)(2)(D) (setting forth conservator's powers) with § 1821(d)
(2)(E) (authorizing receiver to liquidate bank's assets) and § 1821(d)
(3)(A) (authorizing RTC or FDIC "as receiver" to determine claims
against failed bank).

Because nothing in the record suggests that Elmco had actual
knowledge that FSA had entered receivership, nor that it had actual
knowledge of the administrative claims process or bar date, Elmco
was never placed on inquiry notice of the claims process. The RTC's
failure to mail the required notice to Elmco thus is not excused by any
actual knowledge Elmco had, and, under such circumstances, it would

                     11
violate the Due Process Clause of the Fifth Amendment to allow the
RTC to treat Elmco's claim as untimely, hence permanently denied.

Put another way, Congress has established FIRREA's administra-
tive claims process as the sole door through which a claimant against
a failed bank may enter. The RTC may not constitutionally close that
door and shut off the exclusive opportunities for review to which it
leads without giving the claimant appropriate notice of its closing.
Here, no such notice was given and the district court erred in rejecting
Elmco's due process objection to dismissal of its action.

III.

There remains the question of the appropriate remedy for the dis-
trict court's error. We approach it by asking what the district court
should have done had it recognized the due process violation we have
found. Had it done so, it should have rejected the RTC's jurisdictional
defense, declined to dismiss the action, and entered a decree entitling
Elmco to process its claim with the RTC free of the bar of
§ 1821(d)(5)(C)(i). That is the remedy most suited to correcting the
specific constitutional violation, see 

n.2 (so
suggesting), and to preserving the statutory scheme's requirement of
first resort to the administrative claim process. We may order it in
exercise of our appellate jurisdiction. 28 U.S.C.§ 2106.

The RTC points out that the necessary effect of such a remedy is
to enjoin action by the RTC, and it contends that this is forbidden by
FIRREA's anti-injunction provision, § 1821(j). We disagree.

That subsection does generally bar courts from enjoining the
RTC's exercise of its statutory "powers or functions . . . as a conser-
vator or receiver." § 1821(j); see In re Landmark Land Co., 

, 290 (4th Cir. 1992) (Congress gave RTC "full rein to exercise
its statutory authority without injunctive restraints"). But § 1821(j)
does not immunize the RTC from all injunctions:

          By its terms, § 1821(j) shields only "the exercise of powers
          or functions" Congress gave to the FDIC; the provision does
          not bar injunctive relief when the FDIC has acted or pro-

                    12
          poses to act beyond, or contrary to, its statutorily prescribed,
          constitutionally permitted, powers or functions.

National Trust for Historic Preservation v. FDIC , 

, 240
(D.C. Cir.), vacated, 

(D.C. Cir. 1993), and restored in rel-
evant part, 

(D.C. Cir. 1994) (en banc). Because Congress
could not authorize the RTC to act unconstitutionally, enjoining the
RTC from doing so cannot infringe on its statutorily granted powers.
Accordingly, FIRREA's anti-injunction provision does not prohibit
the remedy identified.

IV.

For the reasons above stated, we vacate the district court's grant of
summary judgment dismissing the action for lack of jurisdiction and
remand to that court for entry of a decree in accordance with this
opinion. In doing so, the court may in its discretion require Elmco to
process its claim in accordance with applicable RTC procedures and
may impose a reasonable time limit for filing of the claim.

SO ORDERED

                    13