OPINION & ORDER
[Resolving Doc. Nos. 1, 28, 29]
JAMES S. GWIN, District Judge.
Petitioners Steve and Marija Skertic ask this Court to review the National Credit Union Administration Board's decision regarding the amount of insurance coverage on their accounts at the St. Paul Croatian Federal Credit Union The NCUA liquidated the Credit Union after it became insolvent The NCUA then determined that the Skertic's were entitled to $553, 000 of insurance coverage The Skertics appealed that decision because they say that they are entitled to $717, 000 of coverage The Board denied their appeal Now, the Skertic's ask this Court to review the Board's decision For the reasons below, the Court GRANTS summary judgment to the Board.
In 2010, Steve and Marija Skertic held approximately $718, 000 in three joint accounts at the St. Paul Croatian Federal Credit Union in Eastlake, Ohio They invested their money as follows: (1) $391, 558.17 in account 69600; (2) $154, 748.09 in account 69601; and (3) $172, 023.84 in account 69602 Because the Skertics' had limited mobility, Josip Gosevic, a Credit Union employee and friend of the Skertics, delivered them $800 from their accounts each month
In early 2010, NCUA regulators discovered fraud and embezzlement at the Credit Union. In response to those losses, the NCUA placed the Credit Union under conservatorship. Anticipating liquidation, Credit Union employees and NCUA agents scrambled to audit and restructure accounts to maximize the account holders' insurance coverage.
Josip Gosevic was part of that effort. He calculated that the Skertic's accounts totaled roughly $717, 000. But, Gosevic knew that the National Credit Union Act limited insurance coverage for co-owners in joint accounts. Thus, he spoke with Andy Baumann, the NCUA site manager, about structuring the Skertic's accounts to maximize their insurance coverage. Baumann told Gosevic that "an account with four owners would be insured up to $1, 000, 000." Gosevic then helped the Skertics add their relatives Martin and Ljubica Prcela as co-owners on their accounts.
On April 30, 2010, the NCUA closed the Credit Union and began to liquidate its holdings. The NCUA determined that the Skertics accounts were insured up to approximately $553, 000. It limited the insurance coverage because the Prcelas had their own accounts at the Credit Union, and thus, the insurance cap also applied to the Prcelas total holdings as co-owners on joint accounts. As a result, the Prcelas' co-ownership of the Skertic's accounts did not result in full insurance coverage.
Instead, the NCUA found that Gosevic's restructuring had the following mixed effects: (1) the Prcelas could claim insurance money on behalf of the Skertics because they were co-owners on the Skertic's accounts; (2) after claiming approximately $305, 000 in coverage on their own accounts, the Prcelas could claim only approximately $195, 000 for the Skertics; and (3) the Skertics could personally claim approximately $358, 000. Adding the $358, 000 and $195, 000 figures, the NCUA calculated a total insurance recovery of approximately $553, 000 on the Skertic's accounts valued at $717, 000. Thus, the Credit Union's liquidation caused the Skertics to lose approximately $164, 000.
The NCUA made insurance payments on the Skertic's accounts totaling approximately $553, 000. In addition, the NCUA gave the Skertics a certificate acknowledging their $164, 000 loss. On August 6, 2010, the Skertics appealed the NCUA's insurance coverage determination to the Board. The Board denied their appeal. On May 13, 2011, the Skertics filed a petition asking this Court to review the Board's decision.
II. Legal Standard
Courts review NCUA Board final determinations of insurance coverage using the standards of the Administrative Procedures Act ("APA"). Under the APA, courts may set a ruling aside only if it finds that the Board's action is unsupported by substantial evidence or if it is arbitrary, capricious, an abuse of discretion, or contrary to law.
The § 706 standard is the least demanding form of judicial review. An outcome is not arbitrary or capricious "when it is possible to offer a reasoned explanation [for it], based on the evidence." To satisfy the substantial evidence standard, the Board's decisions must be supported by "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion."
In an appeal from final agency action, summary judgment is appropriate based on the administrative record when the nonmoving party cannot show a genuine dispute of material fact and the standards of § 706 are met. If, on the other hand, factual uncertainty precludes such judgment, the proper course is to ...