United States Court of Appeals,
Fifth Circuit.
No. 92-7048.
FEDERAL DEPOSIT INSURANCE CORPORATION, Plaintiff-Appellee,
v.
Evelyn Gretchen BELLI f/k/a Gretchen Riddell and Gretchen Riddel Ritchey, Defendant-
Appellant.
Jan. 26, 1993.
Appeal from the United States District Court for the Southern District of Mississippi.
Before DAVIS, JONES, Circuit Judges, and PARKER1, District Judge.
W. EUGENE DAVIS, Circuit Judge:
I.
The FDIC sued Evelyn Gretchen Belli ("Belli") for the amount due on several personal
guarantees and a promissory note. Belli raised the affirmative defense that the FDIC's claims had
expired under the applicable statute of limitations. The district court rejected this defense, granted
the FDIC's motion for summary judgment and denied Belli's motion for summary judgment. 769
F.Supp. 969 (S.D.Miss.1991). Belli appealed. We REVERSE and REMAND.
II.
From January 1981 through February 1983, Belli executed a series of continuing personal
guarantees. In those documents, she agreed to personally guarantee $916,293.54 of any indebtedness
owed by the Riddell Corporation to the Mississippi Bank of Jackson, Mississippi ("Bank"). In
September of 1982, Belli executed and delivered to the bank a promissory note for $98,500. Payment
under the guarantees and promissory note was due on demand. On August 8, 1983, the Bank made
demand on Belli for payment under the guarantees and the promissory note.
On May 11, 1984, the FDIC was appointed receiver of t he bank. That same day, in its
corporate capacity, the FDIC purchased the notes and continuing guarantees. The FDIC filed suit
1
Chief Judge of the Eastern District of Texas, sitting by designation.
on May 7, 1990, seeking to recover the outstanding balance on the promissory note, as well as the
amount due on the continuing guarantees. The district court granted the FDIC's motion for summary
judgment, and denied Belli's motion for summary judgment, ruling that 28 U.S.C. § 2415(a) did not
bar the FDIC's suit. It then entered judgment in the amount of $945,614.37. Belli timely appealed.
III.
This appeal requires us to interpret two statutes of limitations. The first, 28 U.S.C. § 2415(a),
applies generally to contractual claims asserted by the government. It bars such claims if they are not
"filed within six years after the right of action accrues...." The second statute, 12 U.S.C. §
1821(d)(14), part of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989
("FIRREA"), specifies that the statute of limitations on a contractual claim held by the FDIC runs
from the later of (1) the date on which the FDIC is appointed conservator or receiver; or (2) "the
date on which the cause of action accrues." Section 1821(d)(14) therefore favors the FDIC in a way
that § 2415(a) does not explicitly address.
Because t he events giving rise to this suit occurred before the enactment of FIRREA,
however, both parties disagree, over § 1821(d)(14)'s applicability to this case. Belli argues that the
FDIC's claims had expired under § 2415(a) before the enactment of FIRREA. Therefore, she argues,
the statute of limitations in FIRREA could not revive the FDIC's claims. The FDIC argues that §
2415(a) did not bar its claims because the cause of action on those claims did not "accrue" until the
FDIC acquired them by assignment. In any event, argues the FDIC, § 1821(d)(14) applies
retroactively to revive its claims. We consider these arguments below.
A.
Our first task is to decide when a cause of action "accrues" within the meaning of § 2415(a).
The parties disagree over the meaning of the word "accrues" in that statute, as applied to an FDIC
suit on a note. Belli argues that the word refers to the moment in which the payor on the note came
into breach. The FDIC contends that the word refers to the moment in which the government
acquired the right to sue on the note.
Various circuits have taken conflicting positions on this issue. For example, the Tenth Circuit
applied § 2415(a) to an FDIC suit on a note, and held that the cause of action accrued on the date
the note matured. FDIC v. Galloway, 856 F.2d 112, 116 (10th Cir.1988). However, In FDIC v.
Hinkson, 848 F.2d 432, 434 (3rd Cir.1988) ("Hinkson"), in which the FDIC sued on a note, the Third
Circuit held that, for purposes of § 2415(a), the action accrued when the FDIC acquired the failed
bank's assets, including the note. And in an FDIC suit against former officers and directors of a failed
bank for breach of fiduciary and statutory duties, the Ninth Circuit held that the claims accrued under
§ 2415(a) when the FDIC acquired them by assignment. FDIC v. Former Officers & Directors of
Metropolitan Bank, 884 F.2d 1304, 1307-09 (9th Cir.1989) ("Metropolitan Bank ").
The starting point in the Hinkson and Metropolitan Bank analysis is that the term "accrues"
is ambiguous. According to the Hinkson court, when a federal agency comes into possession of
claims by assignment, and where the actionable event occurs before that time, "accrual could begin"
either when "the actionable event occurs" or when "the cause of action is assigned to the federal
government." Hinkson, 848 F.2d at 435. Similarly, the Metropolitan Bank court said that "as an
analytical matter," the claims before it "could be deemed to accrue either when the faulty lending
practices occurred or when the FDIC acquired the claims by assignment." Metropolitan Bank, 884
F.2d at 1307.
In our view, however, the term "accrues" does not admit of such an ambiguous construction.
Neither the FDIC nor the opinions on which it relies point to authority for the proposition that a
transfer from one party to another of a cause of action that has already accrued somehow effects a
new accrual for purposes of § 2415(a). To the contrary, the ordinary usage of the term "accrues" is
that a cause of action "accrues" when "it comes into existence." U.S. v. Lindsay, 346 U.S. 568, 569,
74 S.Ct. 287, 288, 98 L.Ed. 300 (1953). Assignment of a cause of action that has already accrued
does not ordinarily re-commence the limitations period.
Although we will consider at greater length 12 U.S.C. § 1821(d)(14), it is worth noting here
that this provision reinforces our understanding of § 2415(a). In § 1821(d)(14)(A), Congress
adopted a statute of limitations that runs from "the date the claim accrues." In the next subsection,
however, Congress specified that the limitations period
begins to run on the later of: (i) the date of the appoi ntment of the Corporation as
conservator or receiver; or (ii) the date on which the cause of action accrues.
12 U.S.C. § 1821(d)(14)(B). Section 1821(d)(14) supports our reading of the word "accrues" in two
ways. First, it shows that Congress knows how to clearly specify that a statute of limitations runs
from the time that a government entity is appo inted receiver of a bank. The absence of similar
language in § 2415(a) suggests a contrary meaning. Second, in § 1821(d)(14)(B)(ii), Congress uses
the word "accrues" in a manner inconsistent with the government's reading of the word "accrues" in
§ 2415(a); to apply the FDIC's proposed definition of accrues to subsection (ii), above, would render
subsection (i) redundant.
The FDIC argues that Congress, when it enacted § 1821(d)(14), merely intended to clarify
what it had meant all along in § 2415(a). It suggests that the existence of a circuit split over the
meaning of § 2415(a) gives rise to the inference that Congress intended to settle the issue. However,
the case on which the FDIC relies, NCNB Texas Nat'l Bank v. Cowden, 895 F.2d 1488, 1500-1501,
(5th Cir.1990) ("Cowden"), is distinguishable.
In Cowden, we held that pre-FIRREA law authorized the FDIC to transfer the fiduciary
appo intments held by an insolvent bank to a federally created bridge bank. Cowden, 895 F.2d at
1490. After analyzing pre-FIRREA law, we found "additional support for our ho lding" because
FIRREA amendments to the bridge bank statute, codified at 12 U.S.C. § 1821(n), clearly gave the
FDIC the disputed authority. Cowden, 895 F.2d at 1500. We recognized that "reliance on
subsequent legislative actions to determine the meaning of an earlier statute is hazardous." Cowden,
895 F.2d at 1500. Nevertheless, "several considerations" led us to conclude that the FIRREA
amendments in question clarified, rather than changed, pre-FIRREA law. First, the new language in
FIRREA was not inconsistent with our reading of the old, pre-FIRREA, language. Cowden, 895 F.2d
at 1500. Second, the legislative history discussing the FIRREA amendments suggested "Congress
was primarily concerned with clarifying existing law." Cowden, 895 F.2d at 1500. And finally, the
existence of a circuit split on the issue may have suggested that "Congress was provoked to enact an
amendment to clarify rather than change the law." Cowden, 895 F.2d at 1501.
However, the text and legislative history of § 1821(d)(14) do not support the conclusion that
it clarifies, rather than changes, § 2415(a). First, the new language in FIRREA is inconsistent with
the reading that the FDIC asks us to attach to § 2415(a); Congress's use of the term "accrues" in
FIRREA suggests that the term does not refer to the moment in which a private party assigns a cause
of action to the FDIC. See 12 U.S.C. § 1821(d)(14)(B)(ii). Second, the scant legislative history of
this section indicates that it was meant to modify existing law by lengthening the limitations period
applicable to the FDIC. For example, in a passage to which the FDIC refers, Senator Riegle said:
Section 212 of the conference bill [codified at 12 U.S.C. § 1821] provides for extended
statute of limitations periods for claims brought by the FDIC in its capacity as conservator or
receiver of a failed institution.... Extending these limitations periods will significantly increase
the amount of money that can be recovered by the Federal Government through litigation...."
135 Cong.Rec. 10,205 (1989) (emphasis added). Thus, instead of clarifying the reach of § 2415(a),
this passage reflects a congressional intent in § 1821(d)(14)(B) to lengthen the limitations periods
applicable to the FDIC. More generally, Representative Ortiz said: "I understand that this bill would
redefine and augment the powers of the [FDIC].... The powers set forth in this bill are, in many
respects, new...." 135 Cong.Rec. H 5003 (August 3, 1989). Third, while the existence of a circuit
split militates in favor of the FDIC's position, we are reminded that "individually" this consideration
"might not justify any conclusion as to Congress's intent." Cowden, 895 F.2d at 1501.
The FDIC argues that two recent decisions of this Circuit compel us to adopt the position
taken by the Third and Ninth Circuits. We disagree. In the first case, FDIC v. Mmahat, 907 F.2d
546 (5th Cir.1990) ("Mmahat"), we held that an FDIC claim against former general counsel for a
then-defunct savings and loan had not prescribed. We held that the Louisiana limitations period was
tolled until the attorney-client relationship ended. Coincidentally, this relationship ended when the
FDIC took over the filed institution as receiver. Mmahat, 907 F.2d at 551. Footnote 5 of that
opinion cited § 2415(a) for the proposition that "[t]he FDIC gets the benefit of an extended period
which begins to run from the time it took over as receiver." Mmahat, 907 F.2d at 551. However,
given our holding, the footnote is dicta and we decline to rely on it.
The second case, FDIC v. Wheat, 970 F.2d 124 (5th Cir.1992), is also inapplicable. Wheat
involved an FDIC suit against a bank's former director for negligence, breach of fiduciary duty, and
breach of contract. We held that the FDIC filed suit within the § 2415(a) limitations period because
the period "began to run when the FDIC was appointed receiver." Wheat, 970 F.2d at 128.
However, in Wheat, we did not need to analyze the term "accrues" in § 2415(a). Rather, we relied
on 28 U.S.C. § 2416(c), which excludes from the computation of the § 2415(a) limitations period
times during which "facts material to the right of action are not known and reasonably could not be
known by an official of the United States charged with responsibility to act in the circumstances...."
Wheat, 970 F.2d at 128. Because the loan that gave rise to Wheat had been made after an FDIC
inspection and before receivership, the FDIC co uld not reasonably have known about the loan.
Wheat, 970 F.2d at 128.
In Wheat, we clearly stopped short of interpreting the term "accrues" in the manner here
suggested by the FDIC. Instead, we based our conclusion on § 2416's discovery rule, as applied to
a breach of fiduciary duty case. The FDIC has not argued that, and we do not see how, § 2416 could
apply in this case, where the causes of action are clear on the faces of the guarantees and promissory
note at issue. So our holding in Wheat does not apply here.
Belli and the FDIC have also raised nontextual arguments to support their respective readings
of § 2415(a). Belli contends that we must construe any ambiguities in § 2415(a) in her favor, because
Congress enacted that statute to protect citizens against whom the government brings stale claims.
See Guarantee Trust Co. v. United States, 304 U.S. 126, 136, 58 S.Ct. 785, 790, 82 L.Ed. 1224
(1938) (A statute of limitations "is a statute of repose, designed to protect the citizens from stale and
vexatious claims, and to make an end to the possibility of litigation after the lapse of a reasonable
time."); United States v. Cardinal, 452 F.Supp. 542, 544 (D.Vt.1978) (The purpose of § 2415(a)
"is to increase fairness to private litigants dealing with the Government."). The FDIC responds that
the Third and Ninth Circuits rejected the reasoning of Cardinal, opting instead for a rule of
construction that courts should presume that a statute of limitations does not bar a suit brought by
the government. The FDIC also raises the policy argument that Belli's reading of § 2415(a) would
disadvantage the FDIC by giving it a sho rt period in which to file suit. Because § 2415(a) is
unambiguous, we need not resort to interpretive rules or policy inquiries. So we decline to address
these arguments.
B.
Because we have decided that § 2415(a) barred the FDIC's suit, we must decide the extent
to which § 1821(d)(14) applies retroactively. We agree with the FDIC that § 1821(d)(14) applies
to claims held by the FDIC that were alive on August 9, 1989, FIRREA's effective date. Statutory
changes that relate only to procedure or remedy usually apply immediately to pending cases. United
States v. Vanella, 619 F.2d 384, 386 (5th Cir.1980). And statutes of limitations are considered to
be procedural rather than substantive. Fust v. Arnar-Stone Labs, Inc., 736 F.2d 1098, 1100 (5th
Cir.1984) ("Fust"). In Fust, we said: "Statutes of limitation, being procedural and remedial in nature,
are generally accorded retroactive effect, unless they are unconstitutionally cast." Fust, 736 F.2d at
1100.
However, § 1821(d)(14) does not revive claims that had expired before August 9, 1989. In
an analogous case, we held that a Louisiana statutory suspension of prescription did not revive a
cause of action that had prescribed before the statute's effective date. Trizec Properties, Inc. v.
United States Mineral Products Company, 974 F.2d 602, 606-08 (5th Cir.1992) ("Trizec") (applying
Louisiana law). We based our conclusion on the fact that the statute "contains no language of revival
of an expired (i.e. prescribed) cause of action." Trizec, 974 F.2d at 606. The Seventh Circuit
followed the same approach when it construed 42 U.S.C. § 3613(a)(1)(A). It said: "In the absence
of evidence of a contrary legislative purpose, "subsequent extensions of a statutory limitation period
will not revive a claim previously barred.' " Village of Bellwood v. Dwivedi, 895 F.2d 1521, 1527
(7th Cir.1990) (citations omitted). Because § 1821(d)(14) also lacks a clearly expressed intent to the
contrary, we hold that it does not revive claims that expired before its effective date. We note that
at least one other court has expressed an unwillingness to allow § 1821(d)(14) to revive stale claims.
See Resolution Trust Corp. v. Krantz, 757 F.Supp. 915, 922 (N.D.Ill.1991).
The FDIC's causes of action under the guarantees and promissory note accrued on or before
August 8, 1983, the date the Bank demanded payment. Therefore the six year limitations period
under § 2415 expired before August 9, 1989, FIRREA's effective date. So FIRREA's extended
statute of limitations did not revive any of the FDIC's claims against Belli.
IV.
For the foregoing reasons, we REVERSE the dist rict court's denial of Belli's motion for
summary judgment; we also REVERSE the order granting the FDIC's motion for summary judgment
and render judgment in favor of Belli.
REVERSED and RENDERED.