Lpp Mortg. Ltd. v. Hotaling, Civil No. 06-cv-00602-REB-MEH.

• Court: United States District Courts. 10th Circuit. United States District Court of Colorado
• Writing for the Court: Blackburn
• Citation: 497 F.Supp.2d 1217
• Parties: LPP MORTGAGE LTD, f/k/a Loan Participant Partners, Ltd, a Texas limited partnership, Plaintiff, v. William H. HOTALING and Ada E. Hotaling, Defendants.
• Docket Number: Civil No. 06-cv-00602-REB-MEH.
• Decision Date: 19 July 2007

497 F.Supp.2d 1217 LPP MORTGAGE LTD, f/k/a Loan Participant Partners, Ltd, a Texas limited partnership, Plaintiff,
v.
William H. HOTALING and Ada E. Hotaling, Defendants. Civil No. 06-cv-00602-REB-MEH. United States District Court, D. Colorado. July 19, 2007.

Audris G. Hampton, Britney Diane Beall — Eder, Castle, Meinhold & Stawiarski, LLC, Denver, CO, for Plaintiff.

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Arthur Lindquist-Kleissler, Lindquist-Kleissler & Company, LLC, Denver, CO, for Defendants.

ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

BLACKBURN, District Judge.

This matter is before me on Plaintiff LPP Mortgage Ltd. f/k/a Loan Participant Partners, LTD., A Texas Limited Partnership's Motion for Summary Judgment [# 50], filed May 15, 2007. The defendants filed a response [# 77], and the plaintiff filed a reply [# 78]. I grant the motion.¹

I. JURISDICTION

I have subject matter jurisdiction over this case under 28 U.S.C. § 1332(a)(1) (diversity).

The plaintiff is the assignee of a promissory note and deed of trust initially owned by the United States Small Business Administration (SBA). The note and deed of trust were executed by the defendants and are based on money loaned to the defendants' corporation by the SBA. As an assignee of the SBA, the plaintiff asserts that this court also may have jurisdiction under 15 U.S.C. § 634(b), which provides that any United States District Court has jurisdiction over a suit filed by the SBA administrator. As the plaintiff notes, the SBA Administrator's rights to sue under § 634, including the jurisdictional provision of § 634(b), may not be assignable. Amended Complaint, ¶ 4. Because I have jurisdiction under 28 U.S.C. § 1332, I need not address the applicability of § 634(b) to this case.

II. SUMMARY JUDGMENT — STANDARD OF REVIEW & ANALYSIS

Under FED.R.Civ.P. 56(c), summary judgment is proper only if the evidence, viewed in a light most favorable to the nonmoving party, demonstrates that there is no genuine issue as to any material fact, and the moving party is entitled to summary judgment as a matter of law. Farthing v. City of Shawnee, Kan. 39 F.3d 1131, 1134 (10th Cir.1994). A "material" fact is one "that might affect the outcome of the suit under the governing law," Id. at 1135 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)), and a "genuine" issue is one where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. (citing Anderson, 477 U.S. at 248, 106 S.Ct. 2505).

III. BACKGROUND

On September 14, 1993, Contract Furniture Installers, Inc., (CFI) obtained a loan of $152,000 from the SBA. The defendants, William and Ada Hotaling, executed a deed of trust to secure the note. The deed of trust encumbered the house owned by William and Ada Hotaling, located at 10444 W. 83rd Ave, Arvada, Jefferson County, Colorado (the Property). The house was and is owned by William and Ada Hotaling personally, and was not owned by the corporation, CFI. On April 26, 1994, the SBA, CFI, and the Hotalings executed a modification of the deed of trust. The modification reflected an increase in the principal balance of the note from $152,000 to $216,700.

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On April 11, 1995, the SBA sent letters to William H. Hotaling and to William H. Hotaling, as President of CFI. The letters declared the note, as modified, to be in default and declared that the entire balance of the note was due and payable immediately. CFI made no payments on the SBA note after February, 1995.

On April 24, 2001, the SBA assigned the note and deed of trust to the plaintiff, LPP Mortgage Limited (LPP). The Hotalings are the record owners of the property that is subject to the deed of trust. LLP attempted to complete a public trustee foreclosure on the deed of trust, but a Colorado state court concluded that foreclosure of the deed of trust was barred, apparently applying state law. LLP now seeks to judicially foreclose the deed of trust in this action, which was filed in this court on March 31, 2006.

The facts outlined above are undisputed. The sole issue in this case presents a question of law: what period of limitations is applicable to the plaintiffs claim. LPP argues that it is entitled to the benefit of the federal statute of limitations applicable to foreclosures under 28 U.S.C. § 2415(c). Section 2415(c) was applicable to the claim when it was held by the SBA, and LPP claims that the benefit of § 2415(c) was included in the SBA's assignment of the claim to LPP.

The Hotalings argue that the period of limitations applicable to the SBA under § 2415(c), is not assignable, and that the law of the State of Colorado defines the applicable limitations periods. The Colorado period of limitations applicable to the enforcement of the deed of trust has expired. Thus, the Hotalings argue that LPP is time barred from enforcing the deed of trust. In addition, the Hotalings argue that LPP is time barred from enforcing the promissory note, and, therefore, also is barred from enforcing the deed of trust.

IV. ANALYSIS A. Assignment of the Benefit of § 2415's Limitations Period

28 U.S.C. § 2415 is titled "Time for commencing actions brought by the United...