12 N.E.3d 943
Ind. Ct. App.2014Background
- In July 2004 Imbody purchased a 2004 Chevrolet Trailblazer financed by Fifth Third Bank under a written installment note ($35,906.28; 84 monthly payments of $541.38) that included an optional acceleration clause.
- Imbody made payments until a payment was returned for insufficient funds on March 3, 2006.
- The Bank repossessed the truck and "charged off" the loan on May 31, 2006, later auctioning the vehicle for $16,500 and recording a deficiency; the Bank and Imbody had an informal arrangement for $100 monthly payments on the deficiency.
- Imbody made roughly 14 deficiency payments, with his last payment on February 29, 2008.
- The Bank sued for the remaining deficiency on June 5, 2012; the trial court entered judgment for the Bank, and Imbody appealed claiming the suit was time-barred under the six-year statute of limitations for written contracts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When did the cause of action accrue for statute-of-limitations purposes after default under an installment note with an optional acceleration clause? | The cause of action accrued on Imbody's last payment (Feb. 29, 2008); filing on June 5, 2012 was within six years. | Accrual occurred when the Bank repossessed and charged off the loan (May 31, 2006); suit filed June 5, 2012 is time-barred. | Repossession constituted an affirmative act that effectively accelerated the debt; accrual began May 31, 2006, so the Bank's complaint (filed >6 years later) was time-barred. |
Key Cases Cited
- Cooper Indus., LLC v. City of South Bend, 899 N.E.2d 1274 (Ind. 2009) (policies underlying statutes of limitation)
- Siwinski v. Town of Ogden Dunes, 949 N.E.2d 825 (Ind. 2011) (accrual questions reviewed de novo)
- Smither v. Asset Acceptance, LLC, 919 N.E.2d 1153 (Ind. Ct. App. 2010) (optional acceleration clause: statute runs when creditor exercises acceleration)
- Warrick Cnty. v. Hill, 973 N.E.2d 1138 (Ind. Ct. App. 2012) (accrual of causes of action is generally a question of law)
- Baseline Fin. Servs. v. Madison, 278 P.3d 321 (Ariz. Ct. App. 2012) (repossession can demonstrate exercise of optional acceleration clause)