Petition for Review of an Order of the Federal Deposit Insurance Corporation.

Before HIGGINBOTHAM and WIENER, Circuit Judges, KAUFMAN, District Judge.*

KAUFMAN, District Judge.

Plaintiffs ("Hartford") are six corporate entities, each affiliated with the ITT Hartford Insurance Group of Companies. In February 1984, Hartford Accident & Indemnity Co., one of those six entities, furnished a performance bond for Morchem Resources, Inc. ("Morchem") to secure a project undertaken by Morchem for Peoples Gas System, Inc. ("Peoples"), the obligee under the bond. Morchem contracted with Peoples to remove and to dispose of sludge from three low pressure gas holding vessels located in North Miami Beach, Florida. As collateral, Morchem gave Hartford a $492,000 CD issued by Texas Investment Bank, N.A. of Houston, Texas ("TIB") in Morchem's name. On November 15, 1985, Morchem's parent company, Finultra, issued a promissory note to TIB, pledging the same $492,000 CD as collateral for payment of the note. During oral argument in this case, when asked by this Court about why that November 1985 act took place, none of counsel for the parties was able to provide any explanation.

On January 7, 1987, Hartford Accident & Indemnity Co. and Morchem agreed to substitute six CDs in place of the single $492,000 CD. Each of the six CDs was for $82,000, thus totaling 492,000, and each was issued separately to a different Hartford subsidiary. Counsel for plaintiffs explained during oral argument before us that Hartford desired the substitution because Hartford became uneasy after Hartford was notified that Morchem was in default on the performance bond. The insurance provided by the Federal Deposit Insurance Company ("FDIC") for a single deposit is limited to the amount of $100,000. Hartford apparently sought to have provided to it total FDIC insurance coverage by causing the substitution of the six CDs for one single CD and by having each $82,000 CD considered separately.

On May 21, 1987, the Comptroller of the Currency declared TIB insolvent and the FDIC on that date took over TIB in the FDIC's capacity as receiver ("FDIC-R"). On or about May 22, 1987, River Oaks Bank notified Plaintiffs that it was in receipt of the insured deposits of TIB and welcomed Plaintiffs as new bank customers. On June 24, 1987, the FDIC, in its corporate capacity ("FDIC-C"),1 informed Hartford of its determination that the six CDs issued in Hartford's name were the property of Morchem and also that those CDs had to be aggregated for deposit insurance purposes. Accordingly, the FDIC concluded that $392,000 of the $492,000 represented by the CDs was uninsured and that only $100,000 was insured. The FDIC-C paid that insured portion of the CDs, ie., $100,000, to River Oaks Bank, the institution which had acquired the deposits of TIB from the FDIC-R. On July 24, 1987, the FDIC-R retrieved the $100,000 from River Oaks Bank, and on July 29, 1987, offset the entire $492,000 represented by the six CDs against the debt Finultra owed TIB.2

On June 24, 1991, Plaintiffs filed suit in the district court against the FDIC as defendant in both its receivership and corporate capacities, seeking to recover $492,000 in deposit insurance for the six CDs or in the amount of the value of the CDs. On May 11, 1993, the district court severed all of plaintiffs' claims against the FDIC in its corporate capacity and transferred them to this Court. The district court reasoned that 12 U.S.C. Sec. 1821(f)(4), one of the sections of Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"), which places claims for deposit insurance within the exclusive jurisdiction of the federal Courts of Appeals, applied retroactively to plaintiffs' claims, ie., claims arising out of a receivership which commenced before August 9, 1989, the effective date of FIRREA. Accordingly, the district court denied the FDIC-C's motion for summary judgment because that court held that it lacked jurisdiction as to the insurance claim, but retained jurisdiction over non-insurance claims alleged against the FDIC-R. During oral argument before this Court, counsel for both sides confirmed that all claims against the FDIC-R had been settled.

In this appeal, the issues arise whether this Court has jurisdiction over Hartford's appeal, whether Hartford's claim against the FDIC was timely filed, whether the FDIC-C acted arbitrarily and capriciously in determining that the CDs belonged to Hartford, and whether, under various equitable principles, the FDIC's offset of the six CDs against the debt owed to TIB by Finultra was wrongful.

In Nimon v. Resolution Trust Corp., 975 F.2d 240, 244 (5th Cir.1992), this Court determined that 12 U.S.C. Sec. 1821(f)(4) places claims involving deposit insurance within the exclusive jurisdiction of the federal Courts of Appeals. That FIRREA provision provides:

Final determination made by the Corporation shall be reviewable in accordance with the chapter 7 of Title 5 by the United States Court of Appeals for the District of Columbia or the court of appeals for the Federal judicial circuit where the principal place of business of the depository institution is located.

In the court below, Hartford argued that Sec. 1821(f)(4), which was enacted on August 9, 1989, did not apply retroactively to receiverships created before that date, and thus, does not apply to the FDIC's 1987 receivership of TIB. Rejecting that argument, the district court transferred all of Hartford's claims against the FDIC-C to this Court pursuant to 28 U.S.C. Sec. 1631.3 Hartford has, in its reply brief in this appeal, dropped its opposition to retroactive application of Sec. 1821(f)(4) to this case. However, in order to clarify the basis for our subject matter jurisdiction, we address the question of whether 12 U.S.C. Sec. 1821(f)(4) applies retroactively to this case and conclude that it does.

We have recently applied 12 U.S.C. Sec. 1821(f)(4) to an insurance coverage dispute, relating to the Federal Savings and Loan Insurance Corporation, based on "deposits made prior to enactment of [FIRREA]," although we did so without elaborating upon the retroactivity issue. Pool v. RTC, 13 F.3d 880, 880-81 (5th Cir.1994). The Supreme Court recently clarified the circumstances in which a new statute which itself does not explicitly state whether it applies to pending cases should be applied retroactively. See Landgraf v. USI Film Products, et al., --- U.S. ----, 114 S. Ct. 1483, --- L.Ed.2d ---- (1994) (deciding whether certain provisions of the Civil Rights Act of 1991, Pub.L. No. 102-166, 105 Stat. 1071 (1991), should be applied retroactively to pending cases).4 In so doing, the Supreme Court endorsed "the traditional presumption against applying statutes affecting substantive rights, liabilities, or duties to conduct arising before their enactment." Id. at ----, 114 S.Ct. at 1504. That presumption is based on "the unfairness of imposing new burdens on persons after the fact." Id. at ----, 114 S.Ct. at 1506. However, the Supreme Court stated that regardless of the general presumption against statutory retroactivity, "in many situations, a court should 'apply the law in effect at the time it renders its decision.' " Id. (citing Bradley, 416 U.S. at 711, 94 S. Ct. at 2016). Such situations generally involve procedural changes to existing law, including statutes which merely alter jurisdiction. "We have regularly applied intervening statutes conferring or ousting jurisdiction, whether or not jurisdiction lay when the underlying conduct occurred or when the suit was filed." Id. --- U.S. at ----, 114 S. Ct. at 1501. In such a circumstance, "[a]pplication of a new jurisdictional rule usually 'takes away no substantive right but simply changes the tribunal that is to hear the case.' " Id. (quoting Hallowell v. Commons, 239 U.S. 506, 508, 36 S. Ct. 202, 202, 60 L. Ed. 409 (1916)).

This Court has previously recognized that principle, holding that amendments to statutes which affect procedural or remedial rights generally apply to pending cases, where such change does not deprive a party of its " 'day in court.' " NCNB Texas Nat'l Bank v. P & R Invs. No. 6, 962 F.2d 518, 519 (5th Cir.1992) (quoting FDIC v. 232, Inc., 920 F.2d 815, 818-19 (11th Cir.1991)). "When Congress adopts statutory changes while a suit is pending, the effect of which is not to eliminate a substantive right but rather to 'change the tribunal which will hear the case,' those changes--barring specifically expressed intent to the contrary--will have immediate effect." Turboff v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 867 F.2d 1518, 1521 (5th Cir.1989) (quoting Hallowell, 239 U.S. at 508, 36 S.Ct. at 202). Thus, we have retroactively applied 12 U.S.C. Sec. 1819(b)(2),5 permitting the FDIC to remove cases in which it is a party to federal court, to pending cases. See, e.g., NCNB Texas Nat'l Bank, 962 F.2d at 519; In re Meyerland Co., 960 F.2d 512, 514 n. 2 (5th Cir.1992), cert. denied, --- U.S. ----, 113 S. Ct. 967, 122 L. Ed. 2d 123 (1993); Walker v. FDIC, 970 F.2d 114, 120 (5th Cir.1992); FSLIC v. Griffin, 935 F.2d 691, 695-96 (5th Cir.1991), cert. denied, --- U.S. ----, 112 S. Ct. 1163, 117 L. Ed. 2d 410 (1992); Triland Holdings & Co. v. Sunbelt Service Corp., 884 F.2d 205 (5th Cir.1989); see also FDIC v. Belli, 981 F.2d 838, 842-43 (5th Cir.1993) (applying 12 U.S.C. Sec. 1821(d)(14),6 extending the statute of limitations for contractual claims held by the FDIC, retroactively to pending cases, except where so to do would revive an expired claim). Section 1821(f)(4) changes the forum which hears deposit insurance disputes; it does not alter any substantive rights of the parties nor does it deprive any party of its day in court. Thus, we hold that 28 U.S.C. Sec. 1821(f)(4) applies retroactively to govern this case and that this Court has jurisdiction in this appeal.

The FDIC argues that Hartford did not timely petition for review of the FDIC's deposit insurance determination. In so doing, the FDIC relies on 12 U.S.C. Sec. 1821(f)(5), which states: "Any request for review of a final determination by the Corporation shall be filed with the appropriate circuit court of appeals not later than 60 days after such determination is ordered." The FDIC argues that the 60-day time limit began to run in this case on the effective date of FIRREA, August 9, 1989. Because Hartford did not file this suit until June 24, 1991, the FDIC contends that such filing is untimely. Further, the FDIC asserts that applying Sec. 1821(f)(5) to Hartford retroactively is mandated under the aforementioned Fifth Circuit caselaw which generally permits procedural statutory amendments to be applied to pending cases. We do not agree with either of those two positions.7

The FDIC's assertion that retroactive application of Sec. 1821(f)(5) is in accord with this Court's prior caselaw fails to recognize that in the cases cited above, we approved retroactive application of procedural statutory changes where those changes did not deprive a litigant of its day in court, but rather changed the forum in which the claim was to be heard or extended a statute of limitations. In such instances, the substantive rights of the parties were not affected.8 In contrast, retroactive application of Sec. 1821(f)(5) in this case would extinguish claims which were valid before the statute's effective date and deprive Hartford of a forum, even though it acted properly under law existing at the time its claims arose. "[T]he mere fact that a new rule is procedural does not mean that it applies to every pending case." Landgraf, --- U.S. at ----, 114 S. Ct. at 1502 n. 29.

The FDIC recognizes that applying the 60-day limitations period from the date of the final determination is patently unfair because there is simply no way Hartford could have foreseen, on June 24, 1987, that a 60-day limitation would someday come into effect. Thus, the FDIC proposes that we begin running the limitations period from the date of FIRREA's enactment. While such an approach may not be unconstitutional, see Fust v. Arnar-Stone Laboratories, Inc., 736 F.2d 1098 (5th Cir.1984),9 it would be manifestly unjust, and therefore in contravention of Bradley v. School Board, 416 U.S. 696, 94 S. Ct. 2006, 40 L. Ed. 2d 476 (1974), because it would "infringe upon or deprive a person of a right that had matured," and would impose "unanticipated obligations ... upon a party without notice or an opportunity to be heard." Id. at 720, 94 S.Ct. at 2021. See also Landgraf, --- U.S. at ----, 114 S. Ct. at 1497 ("Elementary considerations of fairness dictate that individuals should have an opportunity to know what the law is and to conform their conduct accordingly; settled expectations should not be lightly disrupted."). In this case, the FDIC's proposed limitations period would deprive Hartford of a forum without giving Hartford adequate notice to protect its otherwise valid rights. In hindsight, it may appear that Hartford should have moved quickly upon enactment of FIRREA and the inclusion in it of the 60-day limitations period. However, such hindsight fails to take into account the situation which reigned in retroactivity law prior to the Supreme Court's ruling in Landgraf. Further, given this Court's approval of retroactively applying procedural, as opposed to substantive, statutory changes, and the substantive aspect of the statutory change in this case, Hartford could reasonably have believed that the 60-day limitations period did not apply to it. Finally, we note that the date of the "final determination" in this case is in dispute. The FDIC states that its final determination was made in the June 24, 1987, letter to Hartford.10 However, Hartford correctly notes that final determinations may occur after the FDIC's initial determination and after several written exchanges between the FDIC and the alleged depositor concerning ownership of the deposit. See Kershaw, 987 F.2d at 1208; Nimon, 975 F.2d at 244. In this case, the FDIC never responded to Hartford's inquiries and requests for further information, despite the FDIC's direction to Hartford to submit any questions to the FDIC. The FDIC seemingly desires to convert a determination into a "final" determination simply by ignoring the inquiries of alleged depositors. Hartford concedes that prior to its institution of the within case, there has been a "de facto" final determination by the FDIC, and we agree. Nonetheless, even if the 60-day limitation period had been in effect in 1987, it is not clear, under the facts of this case, whether the limitations period would have begun running on June 24, 1987, the date of the letter from the FDIC to Hartford or on a later date. In any event, for the reasons set forth supra, we decline to apply the 60-day limitations period retroactively to govern Hartford's claims.

At the time of the alleged final determination in this case, there was no federal statute or regulation specifically governing the limitations period for insurance coverage disputes. As to general limitations provisions, Hartford's within filing was timely under either the general federal six year statute of limitations contained in 28 U.S.C. Sec. 2401,11 or Texas' four year statute of limitations contained in Tex.Civ.Prac. & Rem.Code Secs. 16.004(c), 16.051.12 The FDIC does not dispute the applicability of one or both of those limitations periods. Because Hartford filed timely under each and all of those provisions, and because we conclude that Sec. 1821(f)(5) does not bar Hartford's claims, we need not determine which of the federal or state limitations periods applies in pre-FIRREA insurance coverage dispute cases such as this one. Rather, we simply hold that Hartford's challenge to the FDIC's insurance determination is not time-barred.

We review insurance coverage determinations by the FDIC-C under the Administrative Procedure Act ("APA") and must affirm them unless they are " 'found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.' " Kershaw v. RTC, 987 F.2d 1206, 1208 (5th Cir.1993) (quoting Nimon, 975 F.2d at 244). Hartford, as the appellant, bears the burden of proving that the FDIC's determination was arbitrary and capricious. Mississippi Hospital Ass'n v. Heckler, 701 F.2d 511, 516 (5th Cir.1983). In performing our duties of review under the APA, we accord deference to an administrative agency's interpretation of its own regulations. Kershaw, 987 F.2d 1206.

At the time the FDIC-C made the determination at issue in this case, the relevant pre-FIRREA statute defined "insured deposit" as "the net amount due to any depositor ... for deposits in an insured bank" up to $100,000. 12 U.S.C. Sec. 1813(m)(1) (1982). That statute further provides: "[I]n determining the amount due to any depositor there shall be added together all deposits in the bank maintained in the same capacity and the same right for his benefit either in his own name or in the names of others."13 Id.

Under the regulations issued by the FDIC "[f]or the purpose of clarifying and defining the insurance coverage under" the statute, id., the FDIC determines the actual owner of a deposit account by examining the deposit account records.

The deposit account records of the insured bank shall be conclusive as to the existence of any relationship pursuant to which the funds in the account are deposited and on which a claim for insurance coverage is founded. Examples would be trustee, agent, custodian or executor. No claim for insurance based on such a relationship will be recognized in the absence of such disclosure.

Funds owned by a principal and deposited in one or more deposit accounts in the name or names of agents or nominees shall be added to any individual deposit accounts of the principal and insured up to $100,000 in the aggregate.

12 C.F.R. Sec. 330.1(b); 330.2(b) (1987).

In this case, the FDIC-C determined that Morchem was the actual owner of the funds despite the fact that each of the six CDs bears the name of a different Hartford company. The FDIC considered those Hartford companies as holding the funds represented by the CDs in some form of custodial or agency capacity.14 The FDIC relied primarily on the original Collateral Agreement, in which the single CD was pledged to secure the performance bond provided by Hartford. That agreement states that Morchem is the "Depositor," that Hartford, the "Surety," is only entitled to the collateral to the extent there is a loss on the bond, and that Hartford may foreclose on the bond to realize the value of the security. The FDIC determined further that no change in Morchem's status as the actual depositor occurred when the single CD was replaced with six CDs. That substitution agreement confirmed that the CDs were to be "held by the named Companies as security for the performance of the undertakings in the ... Collateral Agreement" and "shall be deemed the collateral substituted for the" single $492,000 CD.15 Under a standard surety agreement such as this one, a surety such as Hartford gains rights to foreclose upon pledged collateral only if the obligor defaults on the bond and the surety correspondingly suffers a loss. In such a situation, the surety could have a claim to the FDIC's insurance coverage of the CDs through its rights with respect to those CDs as collateral. However, while the record does indicate that Hartford has paid claims under the bond, Hartford, in this appeal, has not relied on such loss.16 Rather, in this appeal, Hartford has emphasized that it owns the CDs because its name is on them.17

The FDIC-C, before making the determination of ownership, apparently did not discover that there were in fact defaults by Morchem; however, such failure by the FDIC-C does not add up to arbitrary or capricious conduct on its part, given that nothing in the bank records indicates that such loss had occurred. At the time of the agency's determination of ownership, there was no regulation defining "deposit account records." In Abdulla Fouad & Sons v. FDIC, 898 F.2d 482, 486 (5th Cir.1990), we rejected appellant's claim that the FDIC should have examined records other than those contained in the deposit account records to determine depositor status. We explained that the FDIC was not required to undertake such examinations because the FDIC was empowered and expected by Congress " 'to make available to the public its insured savings as speedily as possible.' " Id. at 485 (quoting Scott, Some Answers to Account Insurance Problems, The Business Lawyer 493, 504 (Jan.1968)). Because the FDIC "must literally make determinations of deposit insurance coverage overnight," the FDIC is not called upon to use its limited resources to investigate possible ownership rights outside of those indicated in the deposit account records themselves. Id. Thus, the FDIC did not need to go beyond the bank file concerning the CDs to determine who had ownership interests in the CDs.

Nor in this case did the FDIC look at too many records before making its determination as to ownership. Hartford claims that the only records relating to the "deposit account" are the CDs themselves and TIB's computer listing of open customer accounts. But, even if some of those documents related to matters other than "deposit accounts," they clearly related to ownership of the CDs since they pertain to the question of who had a right with respect to those CDs and under what circumstances.18 Thus, the FDIC did not act arbitrarily or capriciously in determining that Morchem owned the CDs and that the CDs should be aggregated.

Hartford argues that the FDIC's offset of the six CDs against the debt owed TIB by Finultra was wrongful and asks this Court to impose a constructive trust or to grant some similar type of equitable relief. However, Hartford's equitable claims are based on actions taken by the FDIC-R, not the FDIC-C.19 Since the FDIC-R has been dismissed in this case pursuant to a settlement agreement in the district court, and because this appeal relates only to Hartford's insurance claims, the offset claims are not open. Under the dual capacities doctrine, the FDIC-C may not be held liable for acts committed by the FDIC-R, ie., the FDIC acting in one capacity is not subject to defenses or claims based on its acts in other capacities. See Texas American Bancshares, Inc. v. Clarke, 954 F.2d 329, 335 (5th Cir.1992).

For the reasons set forth in this opinion, Hartford's petition for review is DENIED.