Thomas v. Branch Banking and Trust Co.
| Citation | 443 F.Supp.2d 806 |
| Decision Date | 04 August 2006 |
| Docket Number | No. CIVA 1:06CV52.,CIVA 1:06CV52. |
| Court | U.S. District Court — Northern District of West Virginia |
| Parties | Laura K. THOMAS Plaintiff, v. BRANCH BANKING AND TRUST COMPANY, Defendant. |
William J. Leon, Morgantown, WV, for Laura K. Thomas, Plaintiff.
Parween S. Mascai, Jackson & Kelly PLLC, Stephen M. LaCagnin, Jackson Kelly, PLLC—Morgantown, Parween S. Mascari, Jackson Kelly, PLLC—Morgantown, Morgantown, WV, for Branch Banking and Trust Company, Defendant.
Pending before the Court is the defendant's Rule 12(b)(6) motion to dismiss. The defendant contends that plaintiff's claims for breach of contract and breach of a secured party's duty to preserve collateral are barred by statutes of limitation. For reasons set forth below, this Court DENIES the defendant's motion.
On March 21, 2006, West Virginia resident Laura Thomas filed suit in this Court against Branch Banking and Trust Company ("BB & T"), a financial institution based in North Carolina. Her complaint describes a series of commercial banking transactions involving herself, her husband, Paul Thomas ("Mr.Thomas"), and One Valley Bank ("One Valley"), a predecessor of BB & T. These transactions began in July, 1992, when Mr. Thomas applied for and received a $870,000 loan from One Valley to fund a real estate venture in Harrison County, West Virginia. He secured this loan by pledging as collateral 12,500 shares of stock that he held in State Bancorp, a West Virginia bank holding company. In March, 1994, Mr. Thomas entered into another loan agreement with One Valley to refinance his first loan and to borrow additional funds for his business endeavors. The value of this second loan totaled $1.95 million, and was partially guaranteed by a pledge from Mr. Thomas of an additional 8926 shares of Bancorp stock. In accordance with provisions in the two loan agreements, Mr. Thomas delivered the certificates of ownership and transferred his stockholder voting rights for a total of 21426 shares to One Valley. One Valley was to retain control of all the shares pledged by Mr. Thomas until all debt from both loans had been fully paid off.
Laura Thomas ("Thomas") became involved in these matters on December 29, 1995, when she signed a "Collateral Transfer Agreement" with her husband and One Valley. That agreement concerned the 8926 shares pledged by her husband to One Valley in 1994. By the transfer agreement's terms, Mr. Thomas's residual ownership interest in 6501 of those 8926 shares would be transferred to his wife. On April 2, 1996, the Thomases and One Valley entered into a similar agreement regarding some of the shares that Mr. Thomas had pledged in 1992.
In her complaint, Thomas asserts that the last of the debt owed to One Valley/BB & T under the two loans was satisfied in February, 2003. At that time, Thomas traveled to the BB & T branch office in Morgantown, West Virginia to collect the certificates of ownership for her shares of Bancorp stock. Thomas alleges that BB & T conveyed certificates for all of the shares due to her under the 1996 transfer agreement, but only 2025 of the 6401 shares that she was entitled to under the 1995 agreemeit. She asserts that BB & T has continually refused to tender the certificates for the remaining 4076 shares or to provide an accounting of their status. Thomas alleges that BB & T's failure to tender those 4076 shares constitutes 1) breach of contract1 and 2) breach of a secured party's duty to preserve collateral under Article 9 of the Uniform Commercial Code ("U.C.C."), W.Va.Code § 46-9-207.
BB & T filed a motion to dismiss this action under Fed. R. Civ. Pro. 12(b)(6) on June 2, 2006, contending that both of Thomas's causes of action are barred by statutes of limitation. The motion has been fully briefed and is ripe for consideration.
The purpose of Rule 12(b)(6) is to test the legal sufficiency of the complaint. Randall v. U.S., 30 F.3d 518, 522 (4th Cir.1994) (citing Schatz v. Rosenberg, 943 F.2d 485, 489 (4th Cir.1991)). The legal conclusions contained in the complaint must be accompanied by factual allegations that are sufficient to support them. Migdal v. Rowe Price-Fleming Int'l Inc., 248 F.3d 321, 326 (4th Cir.2001). This Court must accept as true all well-pleaded factual allegations in the complaint, and must construe those allegations in the light most favorable to the plaintiff. Mylan Lab., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir.1993). A court may grant a motion to dismiss under Rule 12(b)(6) "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the [plaintiffs] allegations." Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984).
BB & T contends that, as a matter of law, Thomas's breach of contract claims are barred by the time limits contained in the West Virginia statute of limitations for contract actions. BB & T further argues that her Uniform Commercial Code cause of action is barred by a general two-year period of limitation for tort claims. This Court finds both of BB & T's major arguments unpersuasive.
In her complaint, Thomas alleges that BB & T's inability or unwillingness to convey 4076 shares of Bancorp stock constitutes a breach of the 1995 collateral transfer agreement that she entered into with her husband and One Valley.2 In general, breach of contract claims in West Virginia are subject to the time limitations contained in W.Va.Code § 55-2-6, which provides, inter alia, that an action to recover on the breach of a written and signed contract must be brought within ten years "after the right to bring the same shall have accrued." Thomas and BB & T concur that the ten-year period in § 55-2-6 applies to Thomas's breach of contract claims. The two sides, however, disagree on when the right to bring those claims accrued.
A claim within the scope of § 55-2-6 accrues "when the breach of the contract occurs or when the act breaching the contract becomes known." McKenzie v. Cherry River Coal & Coke Co., 195 W.Va. 742, 466 S.E.2d 810, 817 (1995). The time of this accrual has been said to coincide with the time when the performance contracted for is to commence or when a payment becomes due. Gateway Communications, Inc. v. John R. Hess, Inc. 208 W.Va. 505, 541 S.E.2d 595, 599 (2000) (quoting 51 Am.Jur.2d, Limitation of Actions, § 160 (2000)).
In the instant case, Thomas asserts that her contract claims accrued in February, 2003, when BB & T failed to transfer certificates for the relevant 4076 shares of stock to her. BB & T, however, contends that Thomas's contract claims accrued on December 29, 1995, when Thomas, her husband, and One Valley entered into their relevant collateral transfer agreement. BB & T argues that Thomas's contract claims could not have accrued any later because BB & T's only duty under the 1995 transfer agreement was to allow Mr. Thomas to transfer his residual ownership interest in the shares of the stock to his wife. Thus, BB & T reasons that the breach of contract claims could have accrued only if and when BB & T refused to allow the ownership transfer in 1995.3
BB & T's argument on this issue, however, contains at least one fatal flaw. In her complaint, Thomas does not aver that One Valley/BB & T breached an obligation to allow the stock transfer from her husband to go forward. Rather, she alleges that One Valley entered into a security contract with her and her husband in which she would receive, upon satisfaction of the two secured loans, some of the shares that Mr. Thomas had originally pledged as collateral to the bank.4 (Complaint ¶ 22). Thomas further alleges that BB & T did not convey 4076 of those shares to her after the loans were fully paid off in February, 2003. (Compl. ¶ 20).
Taking those factual allegations as true, as this Court must at this stage of the litigation, it is clear that BB & T's obligation to convey the share certificates did not become due for performance until February, 2003. Consequently, Thomas's breach of contract claims did not accrue until BB & T allegedly failed to convey the certificates at that time. As Thomas filed her suit in March, 2006, her breach of contract claims are not barred by the ten-year limitation period for actions on written contracts contained in § 55-2-6.
As discussed above, the parties agree that the ten-year period of limitation for actions on written contracts in § 55-2-6 governs Thomas's breach of contract claims, but disagree about when those claims accrued. In contrast, the parties dispute which statute of limitations applies to her claim for breach of duty to preserve collateral. As with her breach of contract claims, Thomas argues that the ten-year period contained in § 55-2-6 controls. BB & T, however, presses for application of the general two-year period of limitation for tort actions at W.Va.Code § 55-2-12.5 Although the issue appears to be one of first impression in West Virginia, a review of the state case law addressing similar issues, and of the background of the U.C.C. section undergirding Thomas's claim, leads this Court to conclude that the ten-year period of limitation at § 55-2-6 should apply.
Article 9 of the U.C.C., found at W.Va. Code § 46-9-101, et seq., governs any "transaction, regardless of its form, that creates a security interest in personal property" .... W.Va.Code § 46-9-109(a)(1)(1995).6 This includes transactions in which stock certificates are pledged as collateral to secure debt. See § 46-9-203(b)(D) (1995) (); § 46-9-102(a)(49) (1995) (); See also Yost v. Haun, 204 W.Va. 306, 512 S.E.2d 228, 230 (1998) (...
To continue reading
Request your trial
-
Patrick v. Teays Valley Trs., LLC
...shall not file surreply memoranda except by leave of court." N.D.W. VA. R. CIV. P. 7.02(b)(4); Thomas v. Branch Banking & Trust Co., 443 F. Supp. 2d 806, 809 n.2 (N.D.W. Va. 2006). A surreply is generally permitted when a party seeks to respond to new material that anopposing party has intr......
-
Crandell v. Hardy Cnty. Dev. Auth.
...contract must be brought within ten years 'after the right to bring the same shall have accrued.'" citing Thomas v. Branch Banking & Trust Co., 443 F.Supp.2d 806, 809 (N.D.W. Va. 2006). Further, Defendant argues that in West Virginia, "the limitation period 'begins to run either when the er......
-
Litten v. Quicken Loans, Inc.
...of which statute of limitations to apply to a statutory claim pursuant to § 55-2-6 or § 55-2-12. See Thomas v. Branch Banking & Trust Co., 443 F. Supp. 2d 806, 813-15 (N.D.W. Va. 2006). The plaintiff in Thomas had sued the defendant bank under Article 9 of the Uniform Commercial Code (the "......
-
Bird ex rel. Similarly Situated W. Va. Citizens v. Chris Turner, Individually & of Kenyon Energy, LLC
...not file a surreply without first obtaining the permission of the court. L. R. Civ. P. 7.02(b)(4); Thomas v. Branch Banking & Trust Co., 443 F. Supp. 2d 806, 809 n.2 (N.D. W. Va. 2006). Generally, a surreply is permitted when a party seeks to respond to new material that an opposing party h......