- 93 -
since it was a counterclaim, it could not be raised as a defense
was denied). Reiter v. Cooper, 507 U.S. at 263; cf. FDIC v.
Hulsey, 22 F.3d 1472, 1487 (10th Cir. 1994) (claims in recoupment
are compulsory counterclaims under Fed. R. Civ. P. 13(a)). This
suggests that it is a mistake to insist too much on recoupment's
defensive nature in the case at hand.39
Faced with the issue of whether recoupment is subject to the
limitations on setoff in the Bankruptcy Code, a later bankruptcy
court decided, on the basis of Reiter v. Cooper, that recoupment
was not so limited. It said further, by way of distinguishing
the two: "recoupment speaks not simply to the net amount due from
one party to the other computed by subtracting one claim from the
other, but rather to the amount of the plaintiff's claim alone on
a particular contract, transaction or event." In re Izaguirre,
39In deciding in Reiter v. Cooper, supra, that it made no
difference whether the recoupment was considered a counterclaim
or defense, the Supreme Court cited 5 Wright & Miller, Federal
Practice & Procedure, sec. 1275 (2d ed. 1990), according to which
it is not clear whether setoffs and recoupments should be viewed
as defenses or counterclaims. Reiter v. Cooper, 507 U.S. at 263.
In In re Izaguirre, 166 Bankr. 484, 493 (Bankr. N.D. Ga.
1994), a bankruptcy court cited the reference in Reiter v. Cooper
to Wright & Miller to conclude: "Although recoupment may be
viewed as an offset to the extent it is viewed as a counterclaim,
recoupment has a chameleon-like quality that also permits it to
be viewed simply as a defense."
In agreement that Reiter v. Cooper minimizes the importance
of the distinction between defenses and counterclaims with
respect to recoupment is Consolidated Rail Corp. v. Primary
Indus. Corp., 868 F. Supp. 566 (S.D.N.Y. 1994).
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