F.D.I.C. v. Belli

• Decision Date: 26 January 1993
• Docket Number: No. 92-7048,92-7048
• Parties: FEDERAL DEPOSIT INSURANCE CORPORATION, Plaintiff-Appellee, v. Evelyn Gretchen BELLI f/k/a Gretchen Riddell and Gretchen Riddel Ritchey, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 838

981 F.2d 838

61 USLW 2485

FEDERAL DEPOSIT INSURANCE CORPORATION, Plaintiff-Appellee, v. Evelyn Gretchen BELLI f/k/a Gretchen Riddell and Gretchen Riddel Ritchey, Defendant-Appellant.

No. 92-7048.

United States Court of Appeals Fifth Circuit.

Jan. 26, 1993.

Ricky G. Luke and Thomas W. Crockett, Watkins, Ludlam & Stennis, Jackson, MS, for defendant-appellant.

Joan E. Smiley, Counsel, F.D.I.C., Washington, DC, R.L. Houston and Patricia A. Hancock, Hancock & Houston, Jackson, MS, for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Mississippi.

Before DAVIS, JONES, Circuit Judges, and PARKER ¹, District Judge.

W. EUGENE DAVIS, Circuit Judge:

I.

The FDIC sued Evelyn Gretchen Belli ("Belli") for the amount due on several personal guarantees and a promissory note. Belli raised the affirmative defense that the FDIC's claims had expired under the applicable statute of limitations. The district court rejected this defense, granted the FDIC's motion for summary judgment and denied Belli's motion for summary judgment. 769 F.Supp. 969 (S.D.Miss.1991). Belli appealed. We REVERSE and REMAND.

II.

From January 1981 through February 1983, Belli executed a series of continuing personal guarantees. In those documents, she agreed to personally guarantee $916,293.54 of any indebtedness owed by the Riddell Corporation to the Mississippi Bank of Jackson, Mississippi ("Bank"). In September of 1982, Belli executed and delivered to the Bank a promissory note for $98,500. Payment under the guarantees and promissory note was due on demand. On August 8, 1983, the Bank made demand on Belli for payment under the guarantees and the promissory note.

On May 11, 1984, the FDIC was appointed receiver of the Bank. That same day, in its corporate capacity, the FDIC purchased the notes and continuing guarantees. The FDIC filed suit on May 7, 1990, seeking to recover the outstanding balance on the promissory note, as well as the amount due on the continuing guarantees. The district court granted the FDIC's motion for summary judgment, and denied Belli's motion for summary judgment, ruling that 28 U.S.C. § 2415(a) did not bar the FDIC's suit. It then entered judgment in the amount of $945,614.37. Belli timely appealed.

III.

This appeal requires us to interpret two statutes of limitations. The first, 28 U.S.C. § 2415(a), applies generally to contractual claims asserted by the government. It bars such claims if they are not "filed within six years after the right of action accrues...." The second statute, 12 U.S.C. § 1821(d)(14), part of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"), specifies that the statute of limitations on a contractual claim held by the FDIC runs from the later of (1) the date on which the FDIC is appointed conservator or receiver; or (2) "the date on which the cause of action accrues." Section 1821(d)(14) therefore favors the FDIC in a way that § 2415(a) does not explicitly address.

Because the events giving rise to this suit occurred before the enactment of FIRREA, however, both parties disagree over § 1821(d)(14)'s applicability to this case. Belli argues that the FDIC's claims had expired under § 2415(a) before the enactment of FIRREA. Therefore, she argues, the statute of limitations in FIRREA could not revive the FDIC's claims. The FDIC argues that § 2415(a) did not bar its claims because the cause of action on those claims did not "accrue" until the FDIC acquired them by assignment. In any event, argues the FDIC, § 1821(d)(14) applies retroactively to revive its claims. We consider these arguments below.

A.

Our first task is to decide when a cause of action "accrues" within the meaning of § 2415(a). The parties disagree over the meaning of the word "accrues" in that statute, as applied to an FDIC suit on a note. Belli argues that the word refers to the moment in which the payor on the note came into breach. The FDIC contends that the word refers to the moment in which the government acquired the right to sue on the note.

Various circuits have taken conflicting positions on this issue. For example, the Tenth Circuit applied § 2415(a) to an FDIC suit on a note, and held that the cause of action accrued on the date the note matured. FDIC v. Galloway, 856 F.2d 112, 116 (10th Cir.1988). However, In FDIC v. Hinkson, 848 F.2d 432, 434 (3rd Cir.1988) ("Hinkson"), in which the FDIC sued on a note, the Third Circuit held that, for purposes of § 2415(a), the action accrued when the FDIC acquired the failed bank's assets, including the note. And in an FDIC suit against former officers and directors of a failed bank for breach of fiduciary and statutory duties, the Ninth Circuit held that the claims accrued under § 2415(a) when the FDIC acquired them by assignment. FDIC v. Former Officers & Directors of Metropolitan Bank, 884 F.2d 1304, 1307-09 (9th Cir.1989) ("Metropolitan Bank ").

The starting point in the Hinkson and Metropolitan Bank analysis is that the term "accrues" is ambiguous. According to the Hinkson court, when a federal agency comes into possession of claims by assignment, and where the actionable event occurs before that time, "accrual could begin" either when "the actionable event occurs" or when "the cause of action is assigned to the federal government." Hinkson, 848 F.2d at 435. Similarly, the Metropolitan Bank court said that "as an analytical matter," the claims before it "could be deemed to accrue either when the faulty lending practices occurred or when the FDIC acquired the claims by assignment." Metropolitan Bank, 884 F.2d at 1307.

In our view, however, the term "accrues" does not admit of such an ambiguous construction. Neither the FDIC nor the opinions on which it relies point to authority for the proposition that a transfer from one party to another of a cause of action that has already accrued somehow effects a new accrual for purposes of § 2415(a). To the contrary, the ordinary usage of the term "accrues" is that a cause of action "accrues" when "it comes into existence." U.S. v. Lindsay, 346 U.S. 568, 569, 74 S.Ct. 287, 288, 98 L.Ed. 300 (1953). Assignment of a cause of action that has already accrued does not ordinarily re-commence the limitations period.

Although we will consider at greater length 12 U.S.C. § 1821(d)(14), it is worth noting here that this provision reinforces our understanding of § 2415(a). In § 1821(d)(14)(A), Congress adopted a statute of limitations that runs from "the date the claim accrues." In the next subsection, however, Congress specified that the limitations period

begins to run on the later of: (i) the date of the appointment of the Corporation as conservator or receiver; or (ii) the date on which the cause of action accrues.

12 U.S.C. § 1821(d)(14)(B). Section 1821(d)(14) supports our reading of the word "accrues" in two ways. First, it shows that Congress knows how to clearly specify that a statute of limitations runs from the time that a government entity is appointed receiver of a bank. The absence of similar language in § 2415(a) suggests a contrary meaning. Second, in § 1821(d)(14)(B)(ii), Congress uses the word "accrues" in a manner inconsistent with the government's reading of the word "accrues" in § 2415(a); to apply the FDIC's proposed definition of "accrues" to subsection (ii), above, would render subsection (i) redundant.

The FDIC argues that Congress, when it enacted § 1821(d)(14), merely intended to clarify what it had meant all along in § 2415(a). It suggests that the existence of a circuit split over the meaning of § 2415(a) gives rise to the inference that Congress intended to settle the issue. However, the case on which the FDIC relies, NCNB Texas Nat'l Bank v. Cowden, 895 F.2d 1488, 1500-1501 (5th Cir.1990) ("Cowden"), is distinguishable.

In Cowden, we held that pre-FIRREA law authorized the FDIC to transfer the fiduciary appointments held by an insolvent bank to a federally created bridge bank. Cowden, 895 F.2d at 1490. After analyzing pre-FIRREA law, we found "additional support for our holding" because FIRREA amendments to the bridge bank statute, codified at 12 U.S.C. § 1821(n), clearly gave the FDIC the disputed authority. Cowden, 895 F.2d at 1500. We recognized that "reliance on subsequent legislative actions to determine the meaning of an earlier statute is hazardous." Id. Nevertheless, "several considerations" led us to conclude that the FIRREA amendments in question clarified, rather than changed, pre-FIRREA law. First, the new language in FIRREA was not inconsistent with our reading of the old, pre-FIRREA, language. Id. Second, the legislative history discussing the FIRREA amendments suggested "Congress was primarily concerned with clarifying existing law." Id. And finally, the existence of a circuit split on the issue may have suggested that "Congress was provoked to enact an amendment to clarify rather than change the law." Id.

However, the text and legislative history of § 1821(d)(14) do not support the conclusion that it clarifies, rather than changes, § 2415(a). First, the new language in FIRREA is inconsistent with the reading that the FDIC asks us to attach to § 2415(a); Congress's use of the term "accrues" in FIRREA suggests that the term does not refer to the moment in which a private party assigns a cause of action to the FDIC. See 12 U.S.C. § 1821(d)(14)(B)(ii). Second, the scant legislative history of this section indicates that it was meant to modify existing law by lengthening the limitations period applicable to the FDIC. For example, in a passage to which the FDIC refers, Senator Riegle said:

Section 212 of the conference bill [codified at 12 U.S.C. § 1821] provides for extended statute of limitations periods for claims brought by the FDIC in its capacity as conservator or receiver of a failed institution.... Extending these limitations periods will significantly increase the amount of money that can be recovered...