Evans v. Truist Bank
| Docket Number | Record No. 0631-22-3 |
| Decision Date | 28 March 2023 |
| Citation | 77 Va.App. 140,884 S.E.2d 818 |
| Parties | Edward Brian EVANS v. TRUIST BANK, f/k/a Branch Banking & Trust Company |
| Court | Virginia Court of Appeals |
Robert T. Copeland, Abingdon (Scot S. Farthing, Wytheville, Attorney at Law, P.C., on brief), for appellant.
Brian H. Richardson, Richmond (Peter M. Pearl, Roanoke; Spilman Thomas & Battle, PLLC, on brief), for appellee.
Present: Judges Athey, Lorish and Callins
OPINION BY JUDGE CLIFFORD L. ATHEY, JR.
Edward Brian Evans ("Evans") appeals from a final order entered in the Circuit Court of Wythe County ("trial court") finding him liable to Truist Bank ("the Bank") on a defaulted promissory note for $732,000. On appeal, he contends the trial court applied an incorrect statute of limitations. Evans also contends that the trial court erroneously determined the date the cause of action accrued. Finally, Evans argues that the trial court erroneously calculated the time the statute of limitations was tolled. Finding no error, we affirm the judgment of the trial court.
On March 1, 2011, Branch Banking & Trust Company ("BB & T") loaned Evans $732,000 in exchange for a promissory note ("the note") executed by Evans and made payable to the Bank for the amount of the loan. Truist Bank is BB & T's successor in interest. In separate financial disclosure statements given to the Bank both before and after receiving the loan, Evans provided materially false statements concerning the condition of his finances. The Bank was not aware that the financial disclosures provided by Evans substantially overestimated his ability to repay the promissory note. The note's original maturity date was March 5, 2016.
The terms of the note specified various instances of default such as if the undersigned "fail[ed] to pay any part of the principal or interest when due" and "if any financial statement or other representation made to the Bank by any of the undersigned or any Obligor [was] found to be materially incorrect or incomplete." In any instance of default, the note could "immediately become due and payable without notice, at the option of the Bank." The note also stated that "upon default, the Bank may pursue its full legal remedies at law or equity." Accordingly, when Evans later failed to make the required monthly payments pursuant to the note, the Bank notified him by letter dated October 17, 2013, that he was in default and that the new due date had been accelerated to November 4, 2013.
On May 23, 2014, Evans filed for Chapter 7 Bankruptcy in the United States Bankruptcy Court for the Western District of Virginia seeking discharge of his obligations under the accelerated note. In response, on July 22, 2014, the Bank filed a "Complaint Objecting to Discharge and, Alternatively, Seeking Determination that Certain Debts are Nondischargeable" in the bankruptcy court. Evans’ Chapter 7 Bankruptcy discharge was subsequently denied on September 25, 2015, and the bankruptcy case was thereafter concluded.
Next, on January 25, 2019, the Bank obtained a confession of judgment in the Fairfax County Circuit Court as provided for in the note. The Bank then nonsuited the confession of judgment and refiled its case in the Wythe County Circuit Court on September 25, 2020.1 In response, Evans filed a plea in bar asserting that the statute of limitations had expired and sought dismissal of the complaint. At a hearing held on August 3, 2021, the parties stipulated to most of the facts, including that the statute of limitations had been tolled for 491 days (one year, four months, and three days) while Evans’ bankruptcy proceeding was pending. The trial court subsequently ruled that the promissory note was a negotiable instrument and a six-year statute of limitations applied. The trial court also held that the cause of action for the note accrued on November 4, 2013, which was the accelerated maturity date. The trial court denied Evans’ plea in bar. Evans appealed.
A circuit court's "decision on a plea in bar of the statute of limitations involves a question of law that we review de novo."
Radiance Cap. Receivables Fourteen, LLC v. Foster , 298 Va. 14, 19, 833 S.E.2d 867 (2019) (quoting Van Dam v. Gay , 280 Va. 457, 460, 699 S.E.2d 480 (2010) ).
Evans contends on appeal that the trial court erred in applying a six-year limitation period instead of a five-year statute of limitations. We disagree.
The statute of limitations is five years "[i]n actions on any contract that is not otherwise specified and that is in writing and signed by the party to be charged." Code § 8.01-246. However, "an action to enforce the obligation of a party to pay a note payable at a definite time[2 ] must be commenced within six years after the due date or dates stated in the note or, if a due date is accelerated, within six years after the accelerated due date." Code § 8.3A-118.
Although Evans and the Bank entered a written contract, the five-year statute of limitations would only apply if there was no other statute of limitations "otherwise specified." Here, the note was a negotiable instrument3 that was made payable at a definite time on a specific date—March 5, 2016. Hence, Code § 8.3A-118 "otherwise specifi[es]" a different statute of limitations. Since Code § 8.3A-118 controls, an action to enforce the note was only required to be commenced within six years (absent tolling) of the date of acceleration—November 4, 2013. Thus, the trial court properly applied the six-year statute of limitations found in Code § 8.3A-118 to the facts in this case.
Evans next contends that since he provided materially false statements to the Bank before March 1, 2011, he was in breach and the cause of action accrued on the date the promissory note was executed. As a result, he contends that the trial court erred in its calculation of the limitations period by "fail[ing] to consider the Official Comments" under Code §§ 8.3A-118 and 8.1A-103 which he claims support his contention. We disagree.
"In every action for which a limitation period is prescribed, the right of action shall be deemed to accrue and the prescribed limitation period shall begin to run from the date ... when the breach of contract occurs in actions ex contractu and not when the resulting damage is discovered ...." Code § 8.01-230. Moreover, a breach of contract occurs when: (1) there is a legally enforceable obligation between a defendant and plaintiff, (2) the defendant has violated that obligation, (3) and the defendant's violation of that obligation causes damage or injury to the plaintiff. Navar, Inc. v. Fed. Bus. Council , 291 Va. 338, 344, 784 S.E.2d 296 (2016).
The legally enforceable obligation between Evans and the Bank was timely repayment of the promissory note. And, interestingly here, there...
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