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National Credit Union Administration Board v. Jurcevic

United States Court of Appeals, Sixth Circuit

August 11, 2017

National Credit Union Administration Board, acting in its capacity as liquidating agent for St. Paul Croatian Federal Credit Union, Plaintiff-Appellee/Cross-Appellant (14-4297 & 15-3324), Plaintiff-Appellant (17-3162),
v.
Stan Jurcevic, Defendant-Appellant/Cross-Appellee (14-4297 & 15-3324), Defendant-Appellee (17-3162), Bara Jurcevic; Stack Container Service, Inc., Defendants-Appellees (17-3162).

          Argued: August 3, 2017

         Appeal from the United States District Court for the Northern District of Ohio at Cleveland. No. 1:14-cv-00926-Donald C. Nugent, District Judge.

         ARGUED:

          Timothy J. Fitzgerald, KOEHLER FITZGERALD LLC, Cleveland, Ohio, for Stan Jurcevic in 14-4297, 15-3324, and 17-3162 and for Bara Jurcevic and Stack Container Service, Inc. in 17-3162. Gregory G. Rapawy, KELLOGG, HUBER, HANSEN, TODD, EVANS & FIGEL, P.L.L.C., Washington, D.C., for National Credit Union Administration Board in 14-4297, 15-3324, and 17-3162.

         ON BRIEF:

          Timothy J. Fitzgerald, KOEHLER FITZGERALD LLC, Cleveland, Ohio, for Stan Jurcevic in 14-4297, 15-3324, and 17-3162 and for Bara Jurcevic and Stack Container Service, Inc. in 17-3162. Gregory G. Rapawy, David C. Frederick, Daniel V. Dorris, KELLOGG, HUBER, HANSEN, TODD, EVANS & FIGEL, P.L.L.C., Washington, D.C., for National Credit Union Administration Board in 14-4297, 15-3324, and 17-3162.

          Before: SUTTON, McKEAGUE, and THAPAR, Circuit Judges.

          OPINION

          SUTTON, Circuit Judge.

         The National Credit Union Administration Board accused Stan and Bara Jurcevic and their privately owned company, Stack Container Service, of fraudulently obtaining loans from St. Paul Croatian Federal Credit Union. In response, the district court enjoined Stan Jurcevic from disposing of all of his assets, save living expenses, before the trial over these allegations. It also dismissed the Board's tort claims as time barred under the relevant federal statute and dismissed its unjust enrichment claims against Bara Jurcevic and Stack Container as insufficiently pleaded. Both sides appealed.

         Because the district court properly employed the preliminary injunction factors, we affirm the asset freeze. But because the district court did not consider both potential accrual dates under the limitations statute, we remand for further consideration of the timeliness of the tort claims. And a full review of the Board's complaint requires us to reverse the district court's conclusion as to the unjust enrichment claims against Bara Jurcevic and Stack Container. We thus affirm in part and reverse in part.

         I.

         In early 1990, Stan and Bara Jurcevic opened a joint account at the St. Paul Croatian Federal Credit Union. Unlike traditional lending institutions, credit unions operate as "cooperative[s]" where account holders own shares of the company as credit union "members." R. 38 at 3. The National Credit Union Administration Board charters and insures these unions, safeguarding members in the event of collapse. See 12 U.S.C. §§ 1766, 1786(h), 1787. In times of trouble, the Board has authority to place a credit union into conservatorship, a status akin to a Chapter 11 bankruptcy reorganization. If things get worse, it may liquidate the credit union, a process akin to a Chapter 7 liquidation. Though the Board can appoint another entity (such as a state regulator) to serve as conservator for any credit union or liquidating agent for any non- federally insured credit union, only the Board itself may liquidate an insolvent federally insured credit union. See Id. §§ 1786(h), 1787(a)(1)(A), (3).

         From 1996 to 2010, Stan Jurcevic obtained over $1.5 million in share-secured personal loans from St. Paul. At the end of this fourteen-year period, Jurcevic owed about $1.7 million to the credit union. Around this time, federal auditors discovered that St. Paul's Chief Operating Officer, Anthony Raguz, had been accepting bribes in exchange for issuing loans and disguising unpaid loan balances. After revealing this scheme and discovering the credit union's insolvency-the union had over $200 million in unpaid debts-the National Credit Union Administration Board placed St. Paul into conservatorship and eventually liquidated its remaining assets.

         According to the Board, Stan Jurcevic shared in the spoils that led to St. Paul's demise. Jurcevic allegedly misrepresented some facts and omitted others on multiple loan applications and engaged in other misbehavior at St. Paul's expense. The Board claims that Jurcevic failed to disclose a two and a half million dollar business loan from PNC Bank that he guaranteed; an impending decrease in his business income; and the fact that he planned to use the loan funds to prop up Stack Container Service, a business he owned and operated. The Board also accused Jurcevic of failing to keep sufficient funds in his share account and colluding with his wife and others at St. Paul to obtain fraudulent loans, some of which the Jurcevics used to kite prior outstanding loan balances. Consistent with the Board's fears, ...


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