Landreth v. First Nat. Bank of Cleburne County
| Decision Date | 19 January 1995 |
| Docket Number | No. 93-3936,93-3936 |
| Citation | 45 F.3d 267 |
| Parties | 25 UCC Rep.Serv.2d 1167 Billie LANDRETH, as Executrix of the estate of Guy Bailey and Ludie Bailey, deceased, Appellant, v. FIRST NATIONAL BANK OF CLEBURNE COUNTY, Appellee, v. FEDERAL DEPOSIT INSURANCE CORPORATION, Third Party. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Thomas W. Mickel, Little Rock, AR, for appellant.
Kathryn R. Norcross, F.D.I.C., Washington, DC, R. Bryan Tilley, Heber Springs, AR, appeared on the brief, for appellee.
Before McMILLIAN, Circuit Judge, JOHN R. GIBSON, Senior Circuit Judge, and MAGILL, Circuit Judge.
Billie Landreth appeals the district court's order granting First National Bank of Cleburne County BC and Federal Deposit Insurance Corporation (FDIC) summary judgment on Landreth's complaint for refusal to honor a certificate of deposit (CD). Landreth argues the district court erred in determining that the statute of limitations had run. We reverse.
Guy and Ludie Bailey purchased a CD in the amount of $2900 from the Bank of Quitman on March 18, 1970, which paid interest for only six months. The Baileys placed this CD into a safe deposit box in the Bank of Quitman where it remained for twenty-one years, until 1991. On November 11, 1982, the Bank of Quitman was declared insolvent by the Arkansas Bank Department, which appointed the FDIC as receiver of the Bank of Quitman. On November 12, FNBC purchased certain assets and liabilities of the Bank of Quitman, including all time and demand deposits, from the FDIC. FNBC also received an indemnity agreement from the FDIC. FNBC currently uses the building that housed the former Bank of Quitman (where the Baileys' safe deposit box is located) as its main office. On September 3, 1991, Mr. Bailey negotiated the CD to Olmsted Funeral Home to prepay funeral expenses for himself and his wife.
When the funeral home presented the CD for payment to FNBC, they dishonored it, stating they had no record of the CD. The funeral home explained the problem to Landreth, the Baileys' only child, and returned it to her. Landreth also presented the CD for payment to FNBC in late September again without success.
Landreth sued FNBC as attorney-in-fact for the Baileys 1 in the state circuit court alleging damages from FNBC's failure to pay the CD. FNBC brought a third-party complaint against the FDIC under its Indemnity Agreement. FDIC removed the case to federal court. The district court granted FDIC's motion for summary judgment against Landreth on alternative grounds: (1) that the statute of limitations began to run on September 18, 1970, when the six months' payment of interest on the CD expired; and (2) that a demand must be made within a reasonable time and the failure to make a demand for payment for over twenty years was unreasonable as a matter of law. Landreth appeals from this order. On June 22, 1994, pursuant to Eighth Circuit Rule 27B(a), the clerk of this court entered an order substituting Landreth as executrix for the Baileys.
We review the district court's grant of summary judgment de novo. Our task is to determine whether the evidence, viewed in the light most favorable to the nonmoving party, shows there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Commercial Union Ins. Co. v. McKinnon, 10 F.3d 1352, 1354 (8th Cir.1993). The district court's decision was based on Arkansas law. We review the district court's interpretation of state law de novo, giving its decision no deference. Slaughter v. American Casualty Co., 37 F.3d 385, 387 (8th Cir.1994) (citing Salve Regina College v. Russell, 499 U.S. 225, 231, 111 S.Ct. 1217, 1221, 113 L.Ed.2d 190 (1991)).
Landreth argues that a demand was required before the statute of limitations for the CD began to run. Landreth asserts that the district court erred when it determined that the statute of limitations for the CD expired prior to Landreth's filing suit because it began to run when the CD no longer paid interest or that alternatively Landreth did not make a demand for payment within a reasonable time. 2
Arkansas has a six-year statute of limitations for both demand and due date CDs that begins to run only after a demand for payment has been made. The statute provides that:
[a]n action to enforce the obligation of a party to a certificate of deposit to pay the instrument must be commenced within six (6) years after demand for payment is made to the maker, but if the instrument states a due date and the maker is not required to pay before that date, the six-year period begins when a demand for payment is in effect and the due date has passed.
Ark.Code Ann. Sec. 4-3-118(e) (Michie 1991) (emphasis added). Accordingly, whether a CD is a demand or due date CD is immaterial for the purpose of determining when the statute of limitations begins to run. The dispositive fact is whether or not the instrument is a CD, which is undisputed in this case. Assuming that the district court was incorrect and the CD at issue is a demand CD, under the first prong of subsection (e), the statute of limitations does not begin to run until a demand for payment is made. Assuming, without deciding, that the district court was correct that the CD at issue is a due date CD, under the second prong of subsection (e), the statute of limitations does not begin to run until "a demand for payment is in effect and the due date has passed." Id. (emphasis added). Therefore, a demand for payment is required to trigger the statute of limitations regardless of whether the CD is a demand or due date CD.
It is undisputed that a demand for payment was not made on FNBC until September 1991. Accordingly, the district court erred when it determined that the statute of limitations automatically began to run on September 18, 1970, the date on which the CD ceased to pay interest, because it ignored the plain language of Sec. 4-3-118(e) which requires a demand to be in effect before the statute of limitations begins to run. Thus, the six-year statute of limitations did not begin to run until September 1991, when demand for payment was made on FNBC.
The district court held in the alternative that Arkansas requires a demand for payment to be made within a reasonable time. Neither the district court nor the parties have cited any authority for the proposition that Arkansas requires a demand to be made within a reasonable time. We believe the district court erred by construing Sec. 4-3-118(e) to require a demand for payment to be made within a reasonable amount of time.
As is evident throughout the Uniform Commercial Code, when the Arkansas legislature intends to require an action to be taken within a reasonable time, this intention is expressed within the terms of the particular statute. The Arkansas Uniform Commercial Code is replete with explicit requirements that actions be taken within a reasonable time. 3 Accordingly, under the maxim expressio unius est exclusio alterius, we will not imply a reasonableness requirement into a statute that is silent on the subject. Furthermore, Ark.Code Ann. Sec. 4-1-204 states:
(1) Whenever this subtitle [U.C.C.] requires any action to be taken within a reasonable time....
(2) What is a reasonable time for taking any action depends on the nature, purpose, and circumstances of such action.
The plain meaning of subsection (1) shows that if the Arkansas legislature wants an action to be taken in a reasonable time, they express it within the text of the statute as they have done repeatedly throughout the Uniform Commercial Code. Since Sec. 4-3-118(e) is silent, we will not imply a requirement that demand for payment be made within a reasonable time.
Subsection (b) of Sec. 4-3-118 also supports our decision that to trigger the statute of limitations for a CD, a demand need not be made within a reasonable time. Subsection (b) 4 bars an action on a demand note, but specifically excludes CDs, if interest or principal on the note is not paid for a period of ten continuous years. The exclusion of CDs from the bar of subsection (b) shows that the Arkansas legislature considered whether or not the statute of limitations for CDs should begin without a demand. Subsection (e) contains no similar events that will trigger the statute of limitations when a demand has not been made. Because the Arkansas legislature clearly knew how to specify events that trigger the statute of limitations in lieu of a demand, as illustrated in Sec. 4-3-118(b), the failure to enunciate any similar events triggering the statute of limitations in lieu of a demand with respect to a CD indicates that the legislature did not intend the statute to begin running until a demand for payment was made. Accordingly, we will not imply a reasonableness requirement into Sec. 4-3-118(e), and we hold that the district court erred when it did so.
Our holding that a demand need not be made within a reasonable time is also supported by the comments to the Uniform Commercial Code. Comment 1 to U.C.C. Sec. 3-122 (1990) 5 states that CDs are issued with the understanding that they will be held for long periods of time, which often exceed the period of the statute of limitations, and that the expectation and custom of the banking industry requires a demand for payment to be made before any liability is incurred by the bank.
The district court cites Whitlock v. Bank of Maryville as support that it is adopting the majority position which requires a demand to be within a reasonable time. 612 S.W.2d 481, 484 (Tenn.App.1980). However, the jurisdictions that require a demand for payment to be made to trigger the statute of limitations for a CD do not agree whether the demand must be made in a reasonable time. 10 Am.Jur.2d Banks Sec. 466 (1964). Some jurisdictions require the demand to be...
To continue reading
Request your trial
-
Madewell v. Downs
...(8th Cir.1995); ELCA Enter., Inc. v. Sisco Equip. Rental & Sales, Inc., 53 F.3d 186, 189 (8th Cir.1995); Landreth v. First Nat'l Bank of Cleburne County, 45 F.3d 267, 268 (8th Cir.1995); Carnes v. United Parcel Serv., Inc., 51 F.3d 112, 115 (8th Cir.1995); McLaughlin v. Esselte Pendaflex Co......
-
H.T.E., Inc. v. Tyler Technologies, Inc.
...372 (1960); Cohn v. Town of Cazenovia, 42 Misc.2d 218, 247 N.Y.S.2d 919, 920 (N.Y.App.1964). But see Landreth v. First Nat'l Bank of Cleburne County, 45 F.3d 267, 269 (8th Cir.1995) (six-year statute of limitations for seeking payment of certificate of deposit did not require demand for pay......
-
Stephenson v. Davenport Community School Dist.
...judgment motion, however, any disputed facts are considered in the light most favorable to Stephenson. Landreth v. First Nat. Bank of Cleburne County, 45 F.3d 267, 268 (8th Cir.1995). In February of 1990, Brianna Stephenson tattooed a small cross between her thumb and index finger. She was ......
-
Stanton v. Larry Fowler Trucking, Inc.
...retroactively to bar Stanton's claim. We review the district court's grant of summary judgment de novo. Landreth v. First Nat'l Bank of Cleburne County, 45 F.3d 267, 268 (8th Cir.1995). The district court based its decision on Arkansas law. We review the district court's interpretation of A......