Barnes v. LPP Mortgage, Ltd.
358 S.W.3d 301
Tex. App.2011Background
- SBA disaster loan of $60,500 to Antonio’s Incorporated after tornado damage; Barnes and Lindsey guaranteed the loan.
- LPP Mortgage, Ltd. purchased one loan and sued the guarantors in 2009 to collect on the guarantees.
- The note dated April 26, 1997 required monthly payments; no payments were made after January 1999.
- Trial court initially denied summary judgments but held a six-year limitations period applied; LPP later sought reduced damages.
- Appellants argued lack of limitations applicability and accrual; issues included assignment for benefit of creditors and demand timing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicable limitations period | LPP entitled to six-year period under 28 U.S.C. §2415(a). | Six-year period limited to United States or agency; assignee not covered. | Six-year limitations apply to LPP |
| Accrual of the guaranties | Limitations began when default occurred; accrual date disputed. | Assignment for benefit of creditors in 2000 triggered immediate due date and accrual. | Accrual not based on assignment; other accrual rules applied; six-year window limited to payments within period |
| Assignment for benefit of creditors | Evidence of assignment existed; triggers tolling. | No valid assignment under statute or common law; insufficient evidence. | No valid assignment shown; statute not triggered by 2000 events |
| Demand as condition precedent | Demand timing compatible with limitations; reasonable delay as standard. | No timely demand; delay barred recovery. | No fact issue; demand timing reasonable and within limitations window |
| Amount due and attorney’s fees | Affidavit foundations adequate; amounts due supported by note. | Affidavit conclusory; fees improperly awarded or not segregated. | Evidence sufficient; fees properly awarded |
Key Cases Cited
- Jackson v. Thweatt, 883 S.W.2d 171 (Tex. 1994) (assignees may benefit from federal six-year limitations)
- Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562 (Tex. 2001) (FDIC successor not entitled where note default post-transfer)
- Stephens v. LPP Mortgage, Ltd., 316 S.W.3d 742 (Tex.App.-Austin 2010) (assignee may obtain federal limitations protection for SBA deeds of trust)
- Wiman v. Tomaszewicz, 877 S.W.2d 1 (Tex.App.-Dallas 1994) (demand as condition precedent; reasonable time ordinarily coincides with statute)
- Findlay v. Cave, 611 S.W.2d 57 (Tex. 1981) (excessive demand requires showing bad faith or unreasonableness)
- Hallco Texas, Inc. v. McMullen County, 221 S.W.3d 50 (Tex. 2006) (cautions against seriatim litigation in certain contexts)