Summary
holding that the § 2415 six year limitations period does not extend to assignees of the FDIC
Summary of this case from F.D.I.C. v. BledsoeOpinion
No. 91CA1904
Decided October 22, 1992. Opinion Modified, and as Modified Rehearing Denied November 27, 1992. Certiorari Granted June 7, 1993 (92SC838).
Certiorari Granted on the following issue: Whether the statute of limitations set forth in 28 U.S.C. § 2415(a) (1988) extends to a private party assignee of the FDIC by virtue of assignment of such assignee of "all right, title and interest" of the FDIC.
Appeal from the District Court of Prowers County Honorable Oyer D. Leary, Judge
Drummond, Dougherty Schwartz, Larry C. Schwartz, for Plaintiff-Appellee.
John Gehlhausen, P.C., John Gehlhausen, for Defendant-Appellant.
Defendant, Douglas Tallman, appeals the summary judgment entered in favor of plaintiff, Tivoli Ventures, Inc. (Tivoli).
The issue before us is one of first impression in Colorado, namely: Whether a private party who is the assignee of a promissory note held by the FDIC as receiver is entitled to the benefits of the statute of limitations set forth in 28 U.S.C. § 2415 (1988). Because we hold that a private party-assignee is not so entitled, we reverse and remand with directions to enter judgment for defendant.
I.
On June 26, 1981, defendant executed a promissory note in favor of First National Bank of Eads (Eads Bank). Defendant signed the note as an accommodation-maker. The note was due on December 28, 1981; however, it was not paid.
On February 14, 1985, the Federal Deposit Insurance Corporation (FDIC) accepted receivership of the Eads Bank.
On January 12, 1987, the FDIC assigned the note to Lease Finance, Inc. Under the terms of the assignment, Lease Finance acquired all right, title, and interest FDIC had in the note.
On August 8, 1989, Lease Finance assigned all its right, title, and interest in the note to plaintiff.
On August 17, 1990, plaintiff filed a complaint against defendant seeking monies due under the note.
Defendant filed a motion for summary judgment contending that the plaintiff's claim was barred by the six-year statute of limitations set forth in § 13-80-103.5(1)(a), C.R.S. (1987 Repl. Vol. 6A).
In opposition to the motion, plaintiff contended that: 1) when the FDIC took over the Eads Bank on February 14, 1985, the Colorado statute of limitations stopped running and the six-year statute of limitations set forth in 28 U.S.C. § 2415 (1988) began to run; 2) Lease Finance, as assignee of the note from FDIC, acquired all of FDIC's rights, title, and interest in the note including the right to bring an action within the federal statute of limitations period; 3) plaintiff, as assignee of Lease Finance, acquired all of Lease Finance's rights, title, and interest in the note including the right to bring an action within the federal statute of limitations period; and 4) the Colorado statute of limitations did not apply to this action. Thus, according to plaintiff, its cause of action was timely.
The court denied defendant's motion, concluding that the Colorado statute of limitations did not apply and that plaintiff's action was not barred. In reaching this conclusion, the court found that plaintiff, as assignee of the note, stepped into the shoes of its assignor and acquired the right to sue within the same statute of limitations as the FDIC.
Plaintiff then filed a motion for summary judgment, contending that since its cause of action was timely and defendant admitted he had not paid the note, summary judgment was proper. The court granted plaintiff's motion.
II.
Defendant contends the trial court erred in concluding that plaintiff's action was governed by the federal six-year statute of limitations. We agree.
A.
In Colorado, all actions for the enforcement of rights set forth in any instrument securing the payment of a debt must be commenced within six years after the cause of action accrues. Section 13-80-103.5(1)(a). A cause of action against the maker of a promissory note accrues on the day after maturity. See Nagy v. Landau, 807 P.2d 1227 (Colo.App. 1990).
Here, defendant's note matured on December 28, 1981. Thus, a cause of action under the note accrued on December 29, 1981, and, under § 13-80-103.5(1)(a), the state statute of limitations expired on December 29, 1987. This is important because the state statute of limitations expired over two years before plaintiff filed its complaint against defendant.
Plaintiff contends, however, that when the FDIC assumed receivership on February 14, 1985, the federal statute, 28 U.S.C. § 2415, preempted the Colorado statute of limitations and a new six year period began to run. We agree with that portion of plaintiff's argument.
28 U.S.C. § 2415 provides:
"Every action for money damages brought by the United States or an officer or agency thereof which is founded upon any contract, express or implied in law or fact, shall be barred unless the complaint is filed within six years after the right of action accrues."
When a federal agency acquires a cause of action from a private party that is not already barred by the applicable state statute of limitations period, the federal statute of limitations thereafter preempts the state limitations period and controls the litigation. FDIC v. Thayer Insurance Agency, Inc., 780 F. Supp. 745 (D. Kan. 1991).
Here, the FDIC was appointed receiver of Eads Bank on February 14, 1985 and at that time, the Colorado statute of limitations had not yet run. Thus, on February 14, 1985, the state statute of limitations ceased to be applicable and a new six-year statute of limitations, as provided for in 28 U.S.C. § 2415, became controlling. See FDIC v. Thayer Insurance Agency, Inc., supra. See also FDIC v. Farris, 738 F. Supp. 444 (W.D. Okla. 1989) (period of statute of limitations began to run on the date the FDIC became receiver); FDIC v. Hinkson, 848 F.2d 432 (3rd Cir. 1988) (period of statute of limitations began to run on the date the FDIC received assignment of the note rather than the date promissor defaulted on note).
B.
Plaintiff also contends that when the FDIC assigned all its rights and interest in the note to Lease Finance, Lease Finance acquired the FDIC's right to sue within six years of February 14, 1985, the date it was appointed receiver. And, according to plaintiff, it acquired this same right when Lease Finance assigned all its rights to plaintiff. We disagree.
A statute of limitations pertains to remedies only. See Industrial Commission v. Weaver, 81 Colo. 191, 254 P. 444 (1927). It does not confer any right of action but is enacted to limit the time within which the right might be asserted. 54 C.J.S. Limitations of Action § 3 (1987).
A statute of limitations is generally considered to be procedural rather than substantive in nature. 54 C.J.S. Limitations of Action § 3 (1987). Its purpose is to promote justice by discouraging delay and prohibiting the prosecution of stale claims. Colorado Springs v. Timberlane Associates, 824 P.2d 776 (Colo. 1992).
Plaintiff has cited only one case addressing the issue before us. Mountain States Financial Resources Corp. v. Agrawal, 777 F. Supp. 1550 (W.D. Okla. 1991). The discussion by the Oklahoma court is brief. It basically concludes that general principles governing the rights of assignees and the public policy set forth in D'Oench, Duhme Co., Inc. v. FDIC, 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed.2d 956 (1942) support the private party's contention that it was entitled to the benefit of the federal statute. However, the ruling in D'Oench protects federal banking authorities from all claims and defenses based upon unwritten agreements and, accordingly, plaintiff's reliance on it is misplaced. See Reisig v. Resolution Trust Corp., 806 P.2d 397 (Colo.App. 1991).
Likewise, we are not persuaded that general principles of assignee law override the language of the federal statute. If statutory language is plain and its meaning clear, the statute must be applied as written. See Great Western Exchange, Inc v. Walters, 819 P.2d 1093 (Colo.App. 1991). Section 28 U.S.C. § 2415 applies only to actions "brought by the United States or an officer or agency thereof." Hence, since the action here was brought by plaintiff, a private party, we conclude that 28 U.S.C. § 2415 does not apply.
In the absence of any persuasive authority to the contrary, we hold that when the FDIC assigns a note to a private party, the private party does not acquire the right to sue within the time provided for in the federal statute of limitations. Instead, the private party's action is governed by the state statute of limitations.
Thus, we conclude that plaintiff's cause of action was governed by § 13-80-103.5(1)(a) and that the statute of limitations expired on December 29, 1987. Plaintiff's action was barred when Lease Finance assigned the note to plaintiff on August 8, 1989, and when plaintiff filed its complaint against defendant. Accordingly, the trial court erred in granting plaintiff's motion for summary judgment.
The judgment is reversed, and the cause is remanded with directions to enter judgment in favor of defendants.
JUDGE CRISWELL concurs.
JUDGE SMITH specially concurs.