781 F.3d 946
8th Cir.2015Background
- In 2004 Harris obtained a mortgage from Mortgage Professionals, Inc. (MPI). MPI, as required by Missouri law, purchased two Missouri Residential Mortgage Brokers Bonds from Hartford Fire Insurance Company as its surety.
- Harris later sued MPI under the Missouri Merchandising Practices Act and obtained a judgment including compensatory and punitive damages and attorney fees; Hartford had notice of that suit but did not intervene.
- Hartford, as surety, failed to pay the judgment amount due under the bonds.
- In 2012 Harris sued Hartford for breach of contract, vexatious refusal to pay, and equitable garnishment; the district court granted summary judgment to Hartford.
- The dispositive legal question was which Missouri statute of limitations applies to an action to collect on a statutorily required surety bond: the ten-year statute for actions "upon any writing for the payment of money" or the three-year statute for actions "on a statute for a penalty."
- The Eighth Circuit reversed the district court, holding the ten-year statute applies and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which Missouri statute of limitations governs a suit to collect on a statutorily required surety bond? | Harris: suit is an action "upon a writing for the payment of money," so the 10-year statute (§ 516.110(1)) applies. | Hartford: bond imposes a penal remedy; therefore the 3-year statute for penalties (§ 516.130(2)) applies. | The court held the action is on a writing for payment of money and is governed by the 10-year statute; Harris sued within ten years, so her claim is not time-barred. |
Key Cases Cited
- Martin v. Knapp, 45 Mo. 48 (Missouri 1869) (statutorily required bond treated as an action on a writing for payment of money)
- State ex rel. Enter. Milling Co. v. Brown, 106 S.W. 630 (Mo. 1907) (followed Martin in applying 10-year statute to bonds)
- Missouri, K. & T. Ry. Co. v. Am. Sur. Co. of N.Y., 236 S.W. 657 (Mo. 1921) (applied 10-year statute to indemnity/penal bonds)
- State v. Virgilito, 377 S.W.2d 361 (Mo. 1964) (rejected argument that penal character of bond mandates 3-year statute)
- Hughes Dev. Co. v. Omega Realty Co., 951 S.W.2d 615 (Mo. banc 1997) (confirmed 10-year statute governs written-contract claims for payment, including bonds)
- Johnson v. State Mut. Life Assur. Co. of Am., 942 F.2d 1260 (8th Cir. 1991) (noting Missouri’s broad interpretation of the 10-year statute for bonds)