Umlic Vp LLC v. Matthias, 03-1140.
| Court | United States Courts of Appeals. United States Court of Appeals (3rd Circuit) |
| Citation | 364 F.3d 125 |
| Docket Number | No. 03-1140.,No. 03-1239.,03-1140.,03-1239. |
| Parties | UMLIC VP LLC, Successor in Interest and Assignee of the United States of America (Small Business Administration) v. Aretha MATTHIAS, Individually and as Personal Representative of the Estate of Wesley Matthias; Carlton Parson; Elecia Parson; Oswald C. Venzen; Alice Venzen; Government of the Virgin Islands, Bureau of Internal Revenue; Department of Finance; United States of America Internal Revenue Service; Michael A. Matthias; Rosemarie Webster; Bruce W. Matthias; Elizabeth Olivacce; Laurie Thomas; Carrie Eddy, and all Persons Claiming an Interest in Remainder of Parcel No.7 Sorgenfrim a/k/a Nos. 7B and 7C Estate Sorgenfri; Carlton Parson, Elecia Parson, and Oswald C. Venzen, Appellants UMLIC VP LLC, Successor in Interest and Assignee of the United States of America (Small Business Administration) v. Aretha Matthias, Individually and as Personal Representative of the Estate of Wesley Matthias; Carlton Parson; Elecia Parson; Oswald C. Venzen; Alice Venzen; Government of the Virgin Islands, Bureau of Internal Revenue; Department of Finance; United States of America Internal Revenue Service; Michael A. Matthias; Rosemarie Webster; Bruce W. Matthias; Elizabeth Olivacce; Laurie Thomas; Carrie Eddy, and all Persons Claiming an Interest in Remainder of Parcel No.7 Sorgenfrim a/k/a Nos. 7B and 7C Estate Sorgenfri Aretha Matthias, Michael A. Matthias, Rosemarie Webster, Bruce W. Matthias, Elizabeth Olivacce, Laurie Thomas, and Carrie Eddy, Appellants. |
| Decision Date | 05 April 2004 |
v.
Aretha MATTHIAS, Individually and as Personal Representative of the Estate of Wesley Matthias; Carlton Parson; Elecia Parson; Oswald C. Venzen; Alice Venzen; Government of the Virgin Islands, Bureau of Internal Revenue; Department of Finance; United States of America Internal Revenue Service; Michael A. Matthias; Rosemarie Webster; Bruce W. Matthias; Elizabeth Olivacce; Laurie Thomas; Carrie Eddy, and all Persons Claiming an Interest in Remainder of Parcel No.7 Sorgenfrim a/k/a Nos. 7B and 7C Estate Sorgenfri; Carlton Parson, Elecia Parson, and Oswald C. Venzen, Appellants
UMLIC VP LLC, Successor in Interest and Assignee of the United States of America (Small Business Administration)
v.
Aretha Matthias, Individually and as Personal Representative of the Estate of Wesley Matthias; Carlton Parson; Elecia Parson; Oswald C. Venzen; Alice Venzen; Government of the Virgin Islands, Bureau of Internal Revenue; Department of Finance; United States of America Internal Revenue Service; Michael A. Matthias; Rosemarie Webster; Bruce W. Matthias; Elizabeth Olivacce; Laurie Thomas; Carrie Eddy, and all Persons Claiming an Interest in Remainder of Parcel No.7 Sorgenfrim a/k/a Nos. 7B and 7C Estate Sorgenfri Aretha Matthias, Michael A. Matthias, Rosemarie Webster, Bruce W. Matthias, Elizabeth Olivacce, Laurie Thomas, and Carrie Eddy, Appellants.
Page 126
COPYRIGHT MATERIAL OMITTED
Page 127
Archie Jennings, Jr. (Argued), Archie Jennings, P.C., Charlotte Amalie, St. Thomas, for Appellants.
Robert L. King (Argued), Law Offices of Robert L. King, Windward Passage Hotel, Charlotte Amalie, St. Thomas, for Appellants.
Carol A. Rich (Argued), Campbell, Arellano & Rich, Charlotte Amalie, St. Thomas, for Appellee UMLIC VP LLC.
Before NYGAARD, BECKER, and STAPLETON, Circuit Judges.
BECKER, Circuit Judge.
This appeal in a diversity-based mortgage foreclosure action stemming from a default on a loan guaranteed by the United States Small Business Administration (the "SBA"), which ultimately transferred to the plaintiffs in foreclosure, UMLIC VP LLC ("UMLIC"), the mortgages which secured the loans, presents three important questions. First, is the right to foreclose on a Virgin Islands mortgage extinguished at the time the right to collect an in personam judgment expires? We conclude that it is not. Second, is an action brought by a successor in interest of the United States (as UMLIC was) governed by federal limitations periods or state/territorial (here, Virgin Islands) limitations periods? We hold that federal law supplies the statute of limitations in cases where the plaintiff is a successor in interest to the United States. Third, is there a federal limitations period applicable to mortgage foreclosure actions? Applying the maxim that "time does not run against the sovereign," and finding no federal statute to the contrary, we conclude that there is not. We therefore affirm the District Court's order for a foreclosure sale and vacate the stay that this Court entered pending appeal.1
Page 128
A. The Loan
The defendants in this case are the fee owners, respectively, of three parcels of land on St. Thomas, and a variety of lienholders on those properties. Only the fee owners are participating in this appeal, and we shall refer to them as the defendants. They are Aretha Matthias and the heirs of Wesley Matthias (Michael A. Matthias, Rosemarie Webster, Bruce W. Matthias, Elizabeth Olivacce, Laurie Thomas, and Carrie Eddy); Carlton and Elecia Parson; and Oswald Venzen. Because the defendants rest their case primarily on statute of limitations grounds, some chronology of the events is important.
Pursuant to a federal loan guarantee program for small businesses, a loan was made on April 12, 1988 by Barclays Bank PLC ("Barclays") to Matthias Enterprises, a corporation run by the various defendants that owned and operated a bakery and convenience store on St. Thomas. The loan carried an interest rate of 2.75% above prime, variable quarterly. The principal amount of the loan was $550,000, of which 85% was guaranteed by the SBA. The loan was secured by the personal guarantees of Aretha and Wesley Matthias, Carlton and Elecia Parson, and Oswald and Alice Venzen.2 The Matthiases, Parsons, and Venzens secured their personal guarantees by granting mortgages in favor of Barclays on their own real property using the following language:3
WITNESSETH, that to secure the guaranty of payment by MATTHIAS ENTERPRISES, INCORPORATED (the "Borrower") of an indebtedness to the Mortgagee to be paid with interest according to a certain promissory note (the "Note"), bearing even date herewith, executed by Borrower pursuant to the terms of a certain Loan Agreement of even date herewith between the Borrower and the Mortgagee [i.e., Barclays] (the "Loan Agreement"), the terms of which are hereby made a part of this instrument, and further to secure the performance by the Borrower of the terms of the Loan Agreement and related loan documents executed of even date herewith, and also to secure any and all sums now or from time to time hereafter owing by Borrower and for which Borrower may be liable, solely or jointly, the Mortgagor [i.e., the Matthiases] hereby grants and gives to the Mortgagee
Page 129
a Second Priority Mortgage in the principal sum of ONE HUNDRED FIFTY THOUSAND DOLLARS $150,000.00 plus interest on [description of property follows].
Judging from an SBA document captioned "Lender's Transcript of Account," Matthias Enterprises defaulted on the loan as early as the fall of 1988. Matthias Enterprises was certainly in default when it filed a Chapter 11 bankruptcy petition in 1992. This petition was later converted to a Chapter 7 liquidation. Effective February 15, 1994 (less than six years from the time of default, under any reading), the SBA made good on its guarantee and repurchased the loan from Barclays, ending Barclays' involvement. Through a series of assignments in 1999 and 2000, the loans came to rest with UMLIC, which, on April 28, 2000 advised the defendants that the loan was in default. This proceeding followed.4
B. Foreclosure Proceedings in the District Court
UMLIC commenced this action in the District Court on June 1, 2001, seeking a declaratory judgment of the amount owed under the Matthias Enterprises note, a judgment of foreclosure on the three properties, and an award of costs and attorneys fees. Originally, UMLIC had also sought an in personam judgment against the Matthiases, Parsons, and Venzens (i.e., a deficiency judgment for the amount owing on the notes but unsatisfied by foreclosure on the mortgages), but later amended its complaint to drop those counts (apparently because the statute of limitations had clearly run on any in personam contract claims).
On June 4, 2002, the District Court held a hearing on what UMLIC's counsel styled as a "motion for summary judgment of foreclosure." The moving papers on both sides were captioned as cross-motions for summary judgment. On December 5, 2002, the District Court filed a memorandum opinion and order granting summary judgment to UMLIC. On December 20, 2002, the District Court entered a declaratory judgment and ordered the U.S. Marshal to conduct a foreclosure sale of the properties. The defendants filed a notice of appeal, and moved the District Court to stay the sale. The District Court refused, but this Court granted the stay pending appeal.
The District Court of the Virgin Islands had 28 U.S.C. § 1332 diversity jurisdiction under 48 U.S.C. § 1612(a). The plaintiff, UMLIC, is a citizen of North Carolina, and none of the defendants are citizens of North Carolina. The order of the District Court was entered on December 20, 2002. The defendants filed timely notices of appeal. This Court has jurisdiction under 28 U.S.C. § 1291.
Our review of a grant of summary judgment is plenary. See Anderson v. Conrail, 297 F.3d 242, 246-47 (3d Cir.2002). Summary judgment must be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law."
Page 130
Fed.R.Civ.P. 56(c). In considering the motion, "we must grant all reasonable inferences from the evidence to the non-moving party." Knabe v. Boury Corp., 114 F.3d 407, 410 n. 4 (3d Cir.1997). The chronology recounted above is not in dispute. The only questions before us are legal.
A. The Mortgage and the Personal Guarantee
The defendants contend that the mortgages are no more than security for their personal guarantees, and that, absent an ability to sue in contract for enforcement of those guarantees, UMLIC cannot recover on the mortgages. Because the Virgin Islands statute of limitations for contract claims, 5 V.I.Code § 31(3)(A), and the federal statute of limitations for contract claims, 28 U.S.C. § 2415(a), both provide for a six-year limitations period, and the lawsuit was filed outside that period, the defendants assert that irrespective of which statute applies, a suit on the security for the guarantees (i.e., the mortgages) is barred along with an in personam suit on the guarantees.5
The strongest authority that the defendants cite for this proposition is an Alaska case which held as they would have us hold.6 Dworkin v. First National Bank of Fairbanks, 444 P.2d 777, 781-82 (Alaska 1968), acknowledged that opinion was divided over whether a suit to recover security could be maintained even after the statute had run on collection of the underlying debt. Authority is still divided today. See 55 Am.Jur.2d Mortgages §§ 680, 683 (2003). The D...
To continue reading
Request your trial
-
Delp v. Rolling Fields, Inc., Civil Action No. 10-285 Erie
...for medical reasons ... in a manner that accommodates the legitimate interests of employers.'" Conoshenti v. Pub. Serv. Elec. & Gas Co., 364 F3d 125, 140-41 (3d Cir. 2004) (quoting 29 U.S.C. § 2601(b)(1), (b)(3)). An "eligible employee" under the FMLA is entitled to "a total of twelve workw......
-
U.S. v. Sunoco, Inc.
...§ 2415(a) speaks in terms of `damages,' a traditionally legal remedy, foreclosure actions are not encompassed." UMLIC VP LLC v. Matthias, 364 F.3d 125, 134 (3d Cir.2004). Read too quickly, that statement appears to define "money damages" as "historically legal." But the UMLIC court did not ......
-
Nat'l Credit Union Admin. Bd. v. Deutsche Bank Nat'l Trust Co., 14-cv-8919 (SHS)
...the FDIC's), the benefit of the extender statutes passes to an assignee of the federal agency. See, e.g. , UMLIC VP LLC v. Matthias , 364 F.3d 125, 133 (3d Cir. 2004) ; Beckley Capital L.P. v. DiGeronimo , 184 F.3d 52, 57 (1st Cir. 1999) ; UMLIC-Nine Corp. v. Lipan Springs Dev. Corp. , 168 ......
-
First State Bank of Nw. Ark. v. Mcclelland Qualified Pers. Residence Trust, CIVIL ACTION NO. 5:14-CV-130 (MTT)
...of the FDIC receives the benefit of the federal limitations period as a matter of federal law. See, e.g., UMLIC VP LLC v. Matthias, 364 F.3d 125, 131-33 (3d Cir. 2004); FDIC v. Bledsoe, 989 F.2d 805, 810-12Page 11(5th Cir. 1993); Mountain States Fin. Res. Corp. v. Agrawal, 777 F. Supp. 1550......
-
TAKING FROM STATES: SOVEREIGN IMMUNITY'S PRECLUSIVE EFFECT ON PRIVATE TAKINGS OF STATE LAND.
...work may be to individuals, no redress can be had for damages resulting from their acts."). (273.) See, e.g., UMLIC VP LLC v. Matthias, 364 F.3d 125, 133 (3d Cir. 2004). It is also briefly worth noting that the federal government can never stand in a private party's shoes. Young v. United S......