Plaintiff corporation sought review of an order of the Superior Court of San Diego County (California), that granted summary judgment in favor of defendant, saving and loan association, in a real estate contract action, on grounds that the Federal Deposit Insurance Corporation as receiver of defendant did not have the power to repudiate the contract.
California Business Lawyer & Corporate Lawyer, Inc. defines WARN Act California
Plaintiff corporation entered into an agreement with defendant savings and loan association to purchase undeveloped land. Plaintiff failed to deposit funds into escrow, and defendant terminated the agreement. Plaintiff sued for specific performance and damages. The bank board determined that defendant was insolvent and placed Federal Savings and Loan Insurance Corporation (FSLIC) as receiver. The board determined that the assets were insufficient to satisfy claims of secured debtors and depositors so that the claims of general creditors were worthless. Bank assumed defendant’s liabilities to depositors and secured creditors and acquired assets of defendant. Federal Deposit Insurance Corporation replaced FSLIC as receiver. Defendant moved for summary judgment, and plaintiff advised the court it was no longer asserting a claim for specific performance. The trial court granted summary judgment. The appellate court affirmed and held that plaintiff voluntarily withdrew its claim for specific performance and because bank board determined that the claims of general creditors were worthless, plaintiff was precluded from obtaining any monetary recovery.
The court affirmed the summary judgment and held that plaintiff corporation voluntarily withdrew claim for specific performance rendering moot the propriety of the repudiation of the contract. The court ruled that plaintiff was precluded from obtaining any monetary recovery against the Federal Deposit Insurance Corporation based on conclusive finding that claims of the general creditors of defendant saving and loan association were worthless.