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FDIC Prevails Over BofA in Colonial Bank Failure Case, Plus ERISA Appeal

By FindLaw Staff on April 26, 2010 | Last updated on March 21, 2019

Zurich Am. Ins. Co. v. O'Hara, No. 08-16875, concerned an ERISA action seeking reimbursement for medical expenses a benefit plan had paid on defendant's behalf after defendant was injured in an automobile collision.  The court of appeals affirmed summary judgment for plaintiff, on the grounds that 1) the plan's reimbursement and subrogation provision, which stated that "the Plan may collect from [a] covered person[] the proceeds of any full or partial recovery" he obtained from a third-party tortfeasor, "regardless of whether [the] covered person has been fully compensated or made whole," was clearly sufficient to disclaim any "make-whole" limitation on plaintiff's right to reimbursement; and 2) the reimbursement plaintiff sought was not a premium or contribution on the basis of any health status-related factor to be paid out of defendant's general assets, and instead plaintiff sought to recover specific and identifiable funds, advanced to cover defendant's accident-related medical expenses, that were being held in trust by defendant's attorneys.

Bank of Am. N.A. v. Colonial Bank, No. 09-14739, involved an action by Bank of America, N.A. ("Bank of America") against Colonial Bank, alleging that defendant wrongfully refused to return thousands of mortgage loans and their proceeds, valued in excess of $1 billion, to which Bank of America had legal title.  The court of appeals reversed a preliminary injunction in favor of plaintiff, holding that, because the FDIC's proposed actions with respect to the loans and loan proceeds at issue fell squarely within its statutory receivership powers and functions, 12 U.S.C. section 1821(j) stripped the district court of its jurisdiction to enter the preliminary injunction.

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