F.D.I.C. v. Bledsoe

Citation989 F.2d 805
Decision Date30 April 1993
Docket NumberNo. 92-1575,92-1575
PartiesFEDERAL DEPOSIT INSURANCE CORPORATION, Plaintiff-Counter Defendant-Appellant, v. Roy William BLEDSOE, Defendant-Counter Claimant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Paul C. Wolf, Richard Early Elsea, F.D.I.C., Dallas, TX, for plaintiff-counter defendant-appellant.

Richard L. Bufkin, Roy Johnson Monk, Jr., Seeligson & Steinberg, Dallas, TX, for defendant-counter claimant-appellee.

Appeal from the United States District Court for the Northern District of Texas.

Before POLITZ, Chief Judge, GOLDBERG, and JONES, Circuit Judges.

GOLDBERG, Circuit Judge:

The Federal Deposit Insurance Corporation ("FDIC") appeals the district court's grant of summary judgment in favor of Roy William Bledsoe ("Bledsoe"). The lower court held that the FDIC's action to recover payment on a promissory note guaranteed by Bledsoe was barred by the statute of limitations. We reverse.

The Nomadic Note

On May 27, 1983, Galleon Builders, Inc. ("Galleon") executed a promissory note in the principal amount of $392,040.00, payable to State Savings & Loan Association of Lubbock ("State Savings"). On the same date, Bledsoe signed an unconditional guaranty, guaranteeing payment of Galleon's indebtedness to State Savings. The note was due and payable on May 27, 1984.

When the promissory note matured, on May 27, 1984, Galleon defaulted on its obligation to pay State Savings. Soon after Galleon's default, the unpaid note (along with Bledsoe's guaranty of the note) embarked on a long transactional voyage through public and private institutions.

The note's journey began on December 19, 1985, when State Savings was declared insolvent and the Federal Savings and Loan Insurance Corporation ("FSLIC") was appointed its receiver. As receiver of State Savings' assets the FSLIC gained possession of the note. However, the note's stay at the FSLIC would last only one night.

The day after FSLIC's appointment as State Savings' receiver, on December 20, 1985, the FSLIC entered into a purchase and assumption agreement with State Federal Savings and Loan Association of Lubbock ("Federal Savings"), a private institution. Under this agreement, the FSLIC transferred substantially all of State Savings' assets, including the promissory note, to Federal Savings.

Having traveled from State Savings to the FSLIC, and from the FSLIC to Federal Savings, the note did not yet complete its institutional tour. The note made its way back to the FSLIC on August 26, 1988, when Federal Savings was declared insolvent and the FSLIC was once again appointed receiver. On August 9, 1989, while the note still rested with the FSLIC, Congress enacted the Financial Institutions Reform, Recovery, and Enforcement Act ("FIRREA"). Under FIRREA, Congress abolished the FSLIC and transferred all of the FSLIC's assets to the FDIC. 1 Pursuant to this statutory transfer, on August 9, 1989, the note reached its current location in the hands of the FDIC.

The FDIC, upon receiving the unpaid note, demanded payment from Bledsoe pursuant to Bledsoe's unconditional guaranty. After Bledsoe refused to comply with the FDIC's demand for payment, the FDIC filed this action in United States District Court for the Northern District of Texas on December 18, 1991, seeking recovery from Bledsoe under the terms of the guaranty.

Bledsoe moved for summary judgment, asserting that the FDIC's claim was time barred under the Texas four year statute of limitations. The FDIC responded by arguing that the FDIC's claim was alive under the federal six year statute of limitations. The district court granted Bledsoe's motion for summary judgment. We review the district court's summary judgment determination de novo. FDIC v. Myers, 955 F.2d 348, 349 (5th Cir.1992). 2

The Juridical Journey

To discover the appropriate period of limitations applicable to the promissory note at issue we must retrace the note's institutional journey, determining along the way the impact of each of the various transfers on the period of limitations governing claims made pursuant to the note.

We begin our analytical journey on a clear and familiar road. On May 27, 1984, when the promissory note at issue matured in the hands of State Savings, and Galleon defaulted on its payment, State Savings' cause of action against Bledsoe accrued and was subject to Texas' four year statute of limitations. Tex.Civ.Prac. & Rem.Code 16.004(a)(3) (Vernon's 1986); see Long Island Trust Co. v. Dicker, 480 F.Supp. 656, 658 (N.D.Tex.1979) reversed on other grounds, 659 F.2d 641 (5th Cir.1981) ("the liability of a guarantor accrues on the date that the principal debt is due, the debtor having failed to pay").

Equally clear is that when the FSLIC was appointed receiver of State Savings on December 19, 1985, and the note transferred to the FSLIC, the FSLIC received the benefit of the federal six year statute of limitations under 28 U.S.C. § 2415(a). 3 The FSLIC's six year limitation period began to run when the cause of action accrued on May 27, 1984. 4

When the promissory note is transferred from the FSLIC to Federal Savings on December 20, 1985, our journey reaches a critical juncture; and being unable to find a ready map in our judicial atlases we must come to a temporary halt. The issue we must resolve is whether the FSLIC's six year period of limitations under § 2415(a) was transferred to Federal Savings when the FSLIC assigned its note to Federal Savings; or whether upon transfer to a private party the statute of limitations applicable to the note reverted to Texas' four year period. The necessity of engaging in judicial cartography and resolving this question is illustrated by briefly comparing the opposite destinations reached depending on the road we decide to travel.

If we decide that upon the transfer of the promissory note from the FSLIC to Federal Savings the note was subject to Texas' four year period of limitations, then our analytical trip would be short and simple. Texas' four year statute of limitations began running on May 27, 1984 (when Galleon defaulted) and expired on May 27, 1988. On May 27, 1988, under the Texas statute of limitations, any claim made pursuant to the promissory note at issue became stale in the hands of Federal Savings, and no subsequent transfer of the note could give the stale claim a second life.

It is well established that the subsequent transfer of a note to the government cannot revive a claim that is already stale. As the court in FDIC v. Hinkson, 848 F.2d 432, 434 (3rd Cir.1988), stated: "[i]f the state statute of limitations has expired before the government acquires a claim, it is not revived by transfer to a federal agency." The Supreme Court, in Guaranty Trust Co. v. United States, 304 U.S. 126, 142, 58 S.Ct. 785, 793, 82 L.Ed. 1224 (1938), explained that the federal government is not unjustly deprived in such a circumstance because "the United States never acquired a right free from a pre-existing infirmity, the running of limitations against its assignor, which public policy does not forbid." See also United States v. Nashville C. & S.L. Ry., 118 U.S. 120, 125, 6 S.Ct. 1006, 1008, 30 L.Ed. 81 (1886) (the United States cannot "maintain an action upon [a contract] if at that time all right of action of [the assignor] was extinguished, or was barred by the Statute of Limitations"); FDIC v. Wheat, 970 F.2d 124, 128 n. 7 (5th Cir.1992) ("Had the [state] limitations period expired [when the FDIC took over the bank], then the FDIC would have no rights"). Under this doctrine, the subsequent transfer of the promissory note from Federal Savings back to the FSLIC, on August 26, 1988, could not revive the already stale cause of action, and any suit filed by the FSLIC pursuant to the note would be time barred.

The same doctrine applies with equal force to bar the retroactive application of FIRREA to revive claims which have already become stale under state law. See FDIC v. Belli, 981 F.2d 838, 842 (5th Cir.1993) (section 1821(d)(14) "does not revive claims that had expired before August 9, 1989 ... In the absence of evidence of a contrary legislative purpose, subsequent extensions of a statutory limitation period will not revive a claim previously barred"); FDIC v. McSweeney, 976 F.2d 532, 534 (9th Cir.1992) ("The FDIC may not ... revive claims for which the state limitations period has expired before the date of federal receivership"). Thus, if we conclude that upon the note's transfer from the FSLIC to Federal Savings the Texas four year period of limitation became applicable to the note, we would be compelled to hold that the note became stale on May 27, 1988, and that the FDIC's subsequent action was time barred.

The opposite result is reached, however, if we decide that the federal six year period of limitations was transferred from the FSLIC to Federal Savings on December 20, 1985, the date FSLIC assigned the note to Federal Savings. Under § 2415(a)'s six year period of limitations, claims made pursuant to the unpaid note would be viable up through May 27, 1990. Hence, on August 26, 1988, when the note returned from Federal Savings to the FSLIC, and on August 9, 1989, the effective date of FIRREA, claims made pursuant to the note would be alive under § 2415(a). As we have held that FIRREA retroactively "applies to claims held by the FDIC that were alive on August 9, 1989," Belli, 981 F.2d at 842, FIRREA would retroactively apply to the note at issue.

As relevant to the analysis at hand, FIRREA maintained § 2415(a)'s six year period of limitations for claims brought by the FDIC, 5 but changed the date at which the period of limitations begins to run. While under the general statute of limitations set forth in § 2415(a) the six year period of limitations began to run upon the maturity of the note, under FIRREA's § 1821(d)(14)(B) "the date on which the statute of limitations begins to run ......

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