Cadle Co. v. Matheson

• Decision Date: 03 February 1994
• Docket Number: No. 01-93-00296-CV,01-93-00296-CV
• Citation: 870 S.W.2d 548
• Parties: The CADLE COMPANY, Appellant, v. C.P. MATHESON, Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 548

870 S.W.2d 548

The CADLE COMPANY, Appellant, v. C.P. MATHESON, Appellee.

No. 01-93-00296-CV.

Court of Appeals of Texas,

Houston (1st Dist.).

Feb. 3, 1994.

Joel Muscat, Stafford, for appellant.

Gary L. McConnell, Klement & McConnell, Angleton, for appellee.

Before ANDELL, DUGGAN and HUTSON-DUNN, JJ.

OPINION ON MOTION FOR REHEARING

HUTSON-DUNN, Justice.

The opinion issued by this Court on December 16, 1993, is withdrawn, and the following opinion is filed in lieu of the earlier one.

The Cadle Company, appellant, brought suit on two promissory notes executed by C.P. Matheson, appellee. The trial court rendered summary judgment finding appellant's suit barred by the four-year statute of limitations under TEX.CIV.PRAC. & REM.CODE ANN. § 16.004(a)(3) (Vernon 1986). Appellant challenges the judgment in a single point of error. We reverse.

Appellee executed two promissory notes to the Danbury Bank. The notes matured on October 1 and December 2, 1986. On August 21, 1986, the bank was closed by the Texas Banking Department, and the Federal Deposit Insurance Corporation (FDIC) was named as receiver. The FDIC became holder of both the notes executed by appellee. After making demand for payment in 1986, the FDIC assigned the notes to appellant on August 5, 1991. On August 13, 1992, appellant filed suit against appellee to collect on the notes. Appellee answered and filed a motion for summary judgment based on the four-year statute of limitations, which the trial court granted in his favor.

The standards for reviewing a motion for summary judgment are well established. The movant has the burden of showing that there is no genuine issue of material fact such that it is entitled to judgment as a matter of law. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548 (Tex.1985). If a defendant-movant seeks summary judgment based on an affirmative defense, summary judgment is proper if it conclusively establishes all elements of its affirmative defense as a matter of law. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex.1979). On appeal, evidence favorable to the nonmovant will be taken as true; every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor. Montgomery v. Kennedy, 669 S.W.2d 309, 310-11 (Tex.1984). A summary judgment cannot be affirmed on any grounds not presented in the motion for summary judgment. Hall v. Harris County Water Control & Improvement Dist. No. 50, 683 S.W.2d 863, 867 (Tex.App.-Houston [14th Dist.] 1984, no writ).

Appellant argues that because it is an assignee of the FDIC, this cause of action is governed by one of two statutes applicable to the FDIC that provide for a six-year statute of limitations under federal law. They cite 12 U.S.C. § 1821(d)(14)(A) (1989) and 28 U.S.C. § 2415(a) (1988).

Section 1821(d)(14)(A) provides:

(A) Notwithstanding any provision of any contract, the applicable statute of limitations with regard to any action brought by the [Federal Deposit Insurance] Corporation as conservator or receiver shall be

(i) in the case of any contract claim, the longer of--

(I) the 6-year period beginning on the date the claim accrues;

(II) the period applicable under State law.

Section 2415(a) provides:

(a) Subject to the provisions of section 2416 of this title, and except as otherwise provided by Congress, 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 ...

The FDIC was appointed receiver on August 21, 1986, so the six year statutes under these two sections would have expired on October 1, and December 2, 1992, respectively. Appellant filed suit on August 13, 1992; therefore, if the federal statutes apply, his suit is not barred by limitations.

Section 16.004(a)(3) of the Texas Civil Practice and Remedies Code provides for a four-year statute of limitations for an action on a debt. If this statute applies, appellant's suit is barred, as the limitations periods expired on October 1 and December 2, 1990, respectively.

Three decisions by Texas courts of appeals are directly on point. In Thweatt v. Jackson, 838 S.W.2d 725, 728-29 (Tex.App.-Austin 1992, writ granted), the court held that the assignee of the note acquired the six-year statute of limitations that the FDIC had under section 1821. Under common-law principles, the assignee of a note stands in the shoes of the assignor, obtaining all rights, title, and interest of the assignor. Thweatt, 838 S.W.2d at 727-28. Therefore, the court reasoned, the assignee had rights to the same extent as the FDIC. Id.

Further, the court reasoned that public policy demanded this conclusion because,

if assignees of the FDIC were not allowed to benefit from the six-year statute of limitations in FIRREA, the FDIC would be forced to prosecute all notes for which the state statute of limitations had run, because such claims would be worthless to anyone else. Such a result would be contrary to the policy of ridding the federal system of failed bank assets.

Id. at 728.

In Pineda v. P.M.I. Mortgage Insurance Co., 843 S.W.2d 660, 669 (Tex.App.-Corpus Christi 1992), writ denied per curiam, 851 S.W.2d 191 (Tex.1993), the court held that the six-year federal statute of limitations was a right that passed under TEX.BUS. & COM.CODE ANN. § 3.201 (Vernon 1968) quoted above. In denying writ, the Texas Supreme Court stated that a majority of the court neither approved or disapproved of the court of appeals' discussion of whether the federal statute of limitations applied to the assignees of a federal agency. Pineda, 851 S.W.2d at 191.

In Federal Debt Management v. Weatherly, 842 S.W.2d 774, 779 (Tex.App.-Dallas 1992, writ granted), the court held that the four-year statute of limitations applied to the claim by the assignees of the FDIC. The Dallas court reasoned that although the public policy arguments were sound, section 1821(d)(14) is unambiguous and the clear language of the statute must be followed. Weatherly, 842 S.W.2d at 776, 778. Because the statute applies to actions "brought by [the FDIC]" and does not include assignees of the FDIC, the court held that the assignee of the notes was not entitled to the six-year statute of limitations. Id. at 776.

The Dallas court noted that the statute of limitations is not a right inherited by an assignee but is remedial in nature and limits substantive rights. Id. at 777 (citing Matthews Constr. Co. v. Rosen, 796 S.W.2d 692, 694 (Tex.1990)). Therefore, it reasoned, it is not transferred under the common-law principle stated above in Thweatt nor under TEX.BUS. & COM.CODE ANN. § 3.201(a) (Vernon 1968), which states, "[t]ransfer of an instrument vests in the transferee such rights as a transferor...