LPP Mortgage, Ltd. v. Emmitt H. Boutwell, Sr., et al.

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Rel 10/23/2009 Notice: T h i s o p i n i o n i s s u b j e c t t o formal r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e R e p o r t e r o f D e c i s i o n s , Alabama A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . SUPREME COURT OF ALABAMA OCTOBER TERM, 2009-2010 1080265 LPP Mortgage, L t d . v. Emmitt H. B o u t w e l l , S r . , e t a l . Appeal COBB, C h i e f from P i k e C i r c u i t (CV-05-232) Court Justice. The facts Boutwell Lumber underlying this appeal Company, I n c . , e x e c u t e d of $750,000 t o ITT S m a l l on April Business Finance 1 5 , 1 9 9 1 ; t h e n o t e was s e c u r e d are a note as follows. i n t h e amount Corporation ("ITT") by a mortgage. The 1080265 transaction States was Small executed Business Boutwell, Sr., Boutwell, J r . , and referred to guaranty and the Boutwell guaranties assigned In his wife his agreements the wife ("SBA"). S. the the H. Emmitt H. and (hereinafter defendants") SBA to arising ITT later executed providing f r o m any ITT United Emmitt 1 Boutwell "the liabilities the d e f a u l t on assigned the note Boutwell was remained. Lumber defaulted A p o r t i o n of the paid In by 1996, the the debt, agreed the 1998, SBA SBA sale but SBA had on of the the two 1994, note to facilities forbear the settlement to the the and outstanding pursuit of negotiations. release and $680,000 communications settle and principal debt i n excess of to offered the outstanding began defendants note during the the Lumber, correspondence with the that SBA. equipment of B o u t w e l l October as of t o F a r m e r s E x c h a n g e B a n k , w h i c h , on J u n e 14, 1995, r e m e d i e s on offices Boutwell, Cindy Lumber Company. them t o and J a m i e P. f u n d e d by declared bankruptcy. of the Administration collectively they w o u l d pay n o t e by through from its By personal The n o t e and guaranties d i s p l a y "U.S. Small Business A d m i n i s t r a t i o n " i n t h e i r headings w i t h a t e x t box showing "SBA L o a n number [ o m i t t e d ] . " 1 2 1080265 liability release for Mr. from and personal $15,000. Boutwell, Mrs. Boutwell, liability S r . , f o r $60,000, Mr. and Mrs. On F e b r u a r y 1 9 , 1 9 9 9 , t h e SBA J r . ,a letter that stated, and to Boutwell, J r . , sent Mr. i n pertinent and Mrs. part: "Another f i v e (5) m o n t h s h a v e p a s s e d a n d we s have not received any information from c o n c e r n i n g a payment p l a n t o have your r e s i d e n c e guaranty/liability r e l e a s e d from SBA' s mortgage Note. till you and and " O u r l a s t l e t t e r a d d r e s s e d t o y o u d a t e d O c t o b e r 1, 1998, d i d n o t p r o d u c e any p l a n o r c o r r e s p o n d e n c e from you. " I t h a s b e c o m e m a n d a t o r y t h a t we a c t i o n to recover t h i s debt. take some k i n d of "If we have not received a written plan for repayment of the recommended settlement of $ 1 5 , 0 0 0 . 0 0 b y M a r c h 1, 1 9 9 9 , we m u s t e x e r c i s e o u r options to liquidate the remaining collateral." On that same Boutwell, the date the S r . , t h a t was settlement SBA sent identical amount r e f l e c t e d a letter to Mr. i n a l l respects was $60,000. and Mrs. except that Before the end o f F e b r u a r y 1999, t h e d e f e n d a n t s o f f e r e d payment p l a n s settlement $200 of the debt; monthly monthly. further The and the senior Boutwells the j u n i o r record does action against Boutwells not r e f l e c t the defendants. 3 proposed proposed that f o r the t o pay t o pay t h e SBA $250 took any I n August 2000, the 1080265 SBA sold the loan and LPP subsequently concerning their defendants made plans i n 2001 most payments instruments contacted on e a r l y 2002, but in the Ltd. defendants The payments were Mortgage, the obligations. some and t o LPP in record their no ("LPP"), May shows 2001 that respective payment p a y m e n t e x c e e d e d $15 amount of $1. There and is i n d i c a t i o n t h a t the p r o p o s e d s e t t l e m e n t amounts were e v e r in the no paid full. On April 29, 2005, LPP sent letters to the demanding payment, p u r s u a n t to t h e i r original the interest in outstanding $1,000,000. seeking before On debt August enforcement of the evidence was j u d g m e n t on trial court presented June and 12, 5, the 2005, guaranties. without ore 2008. LPP tenus. a jury The an The on guaranties, amount sued the matter May trial defendants 29, of over defendants was 2008, tried and court issued i t s In p e r t i n e n t p a r t , t h a t judgment states: " B o t h C o u n t One a n d C o u n t Two o f t h e Complaint s e e k t o e n f o r c e t h e G u a r a n t y A g r e e m e n t s . No i s s u e , other than t h a t i n v o l v i n g the G u a r a n t i e s , i s b e f o r e the Court. "The C o u r t f u r t h e r f i n d s t h a t t h e g u a r a n t y by t h e D e f e n d a n t s was s p e c i f i c t o ITT S m a l l Business Finance Corporation, i t s successors and assigns. 4 of 1080265 S u c h g u a r a n t y , as r e f l e c t e d i n [ L P P ' s ] E x h i b i t s 6 a n d 7, was i n d e e d a s s i g n e d by ITT S m a l l B u s i n e s s Corporation to Farmers Exchange Bank. The Guaranties, as reflected on the face of said E x h i b i t s 4 a n d 5, w e r e a g a i n a s s i g n e d . The second assignment was accomplished by way of an e n d o r s e m e n t , on t h e f a c e o f t h e i n s t r u m e n t s , f r o m Farmers Exchange Bank to Small Business Administration. However, no further assignment, transfer or endorsement of the Guaranties was offered into evidence. " T h e r e f o r e , on i t s f a c e , i t a p p e a r s t h a t the named P l a i n t i f f , LPP M o r t g a g e , L t d . , l a c k s p r i v i t y t o t h e G u a r a n t i e s as t o t h e named D e f e n d a n t s . "The C o u r t f u r t h e r f i n d s t h a t a t l e a s t a s as F e b r u a r y 19, 1999, i f not e a r l i e r , the B u s i n e s s A d m i n i s t r a t i o n , who then h e l d the communicated to the Defendants regarding o b l i g a t i o n pursuant to the G u a r a n t i e s . early Small note, their " [ L P P ' s ] E x h i b i t s 30 a n d 3 1 e v i d e n c e t h a t t h e Small Business Administration delivered to Defendants a demand and u l t i m a t u m t o p e r f o r m the o b l i g a t i o n s o f t h e G u a r a n t i e s . The S m a l l B u s i n e s s A d m i n i s t r a t i o n ' s u s e o f t h e t e r m s ' m a n d a t o r y t h a t we t a k e some k i n d o f a c t i o n ' a n d 'we m u s t e x e r c i s e o u r o p t i o n s ' make i t c l e a r t h a t s u c h c o m m u n i c a t i o n could h a v e b e e n f o r no o t h e r l o g i c a l p u r p o s e t h a n t o c a l l upon d e f e n d a n t s f o r performance of the Guaranty obligations. "The G u a r a n t i e s a r e s i m p l e c o n t r a c t s , n o t u n d e r s e a l , a n d a r e t h e r e f o r e g o v e r n e d b y § 6-2-34, C o d e o f A l a b a m a , 1975, as t o t h e s t a t u t e o f l i m i t a t i o n s . S u c h s t a t u t e l i m i t s a c t i o n s t o commence w i t h i n s i x years of a c c r u a l . " D e f e n d a n t s ' o b l i g a t i o n s t o p e r f o r m a r o s e when the note went i n t o d e f a u l t . H o w e v e r , t h e a c t i o n on such o b l i g a t i o n would not have a c c r u e d , f o r purposes 5 1080265 o f t h e s t a t u t e o f l i m i t a t i o n s , u n t i l such time as t h e L e n d e r , o b l i g e e o f t h e G u a r a n t i e s , made w r i t t e n d e m a n d . S u c h d e m a n d was made a t l e a s t a s e a r l y a s F e b r u a r y 19, 1999 as r e f l e c t e d i n [LPP's] Exhibits 3 0 a n d 3 1 . ( S u c h d e m a n d , a n d a c t i o n a c c r u a l , may h a v e commenced e v e n e a r l i e r when r e v i e w i n g [LPP's] E x h i b i t s 24, 25, 26, 27, 28 and 2 9 . ) Thus, t h e L e n d e r b e c a m e t i m e - b a r r e d t o commence a n a c t i o n o n t h e G u a r a n t y s u b s e q u e n t t o F e b r u a r y 19, 2 0 0 5 . T h i s a c t i o n was f i l e d a l m o s t s i x m o n t h s l a t e r on A u g u s t 5, 2 0 0 5 . A c c o r d i n g l y , e v e n i f [ L P P ] i s c o n s t r u e d t o h a v e s t a n d i n g t o b r i n g t h e a c t i o n , t h e a c t i o n was time-barred. " T h e r e f o r e , on i t s f a c e , i t a p p e a r s t h a t t h e named P l a i n t i f f , LPP M o r t g a g e , L t d . , l a c k s p r i v i t y and s t a n d i n g t o b r i n g t h e a c t i o n . F u r t h e r m o r e , even i f [LPP] i s c o n s t r u e d t o have s t a n d i n g t o b r i n g t h e a c t i o n , t h e same was t i m e - b a r r e d . The C o u r t r e a c h i n g these c o n c l u s i o n s does n o t f i n d i t n e c e s s a r y to address the other i s s u e s and defenses r a i s e d i n t h i s matter." LPP appealed, determining and that arguing the guaranties (2) i n finding that b a r r e d by the s t a t u t e o f Our standard that the t r i a l LPP's court erred ( 1 ) i n had n o t been a c t i o n on assigned toi t the guaranties limitations. of review i s well settled: "'In reviewing a t r i a l court's f i n d i n g s of fact b a s e d on o r e t e n u s evidence, t h i s Court presumes t h o s e f i n d i n g s t o b e c o r r e c t . ' H e n s l e y v . P o o l e , 910 So. 2 d 9 6 , 100 ( A l a . 2005). 'Nevertheless, this p r i n c i p l e i s n o t a p p l i c a b l e where t h e e v i d e n c e i s undisputed, or where the material facts are e s t a b l i s h e d by t h e u n d i s p u t e d e v i d e n c e . ' S a l t e r v. Hamiter, 887 S o . 2 d 2 3 0 , 234 ( A l a . 2 0 0 4 ) ; s e e a l s o K e r s h a w v . K e r s h a w , 848 S o . 2 d 9 4 2 , 949 ( A l a . 2 0 0 2 ) . 6 was 1080265 Furthermore, 'on a p p e a l , t h e r u l i n g on a q u e s t i o n o f l a w c a r r i e s no p r e s u m p t i o n o f c o r r e c t n e s s , a n d t h i s C o u r t ' s r e v i e w i s de n o v o . ' Ex p a r t e G r a h a m , 702 So. 2 d 1 2 1 5 , 1221 ( A l a . 1997)." Lucky Jacks 1071648, Entm't July 10, from the SBA we to that instruments second no LPP the v. So. consider that w i t h the defendants shows LLC 2009] Initially, determination Ctr., that LPP upon w h i c h ITT assignment to from , of the has no were Farmers Farmers Exchange H o w e v e r , when i t d e l i v e r e d to SBA guaranties the note t o LPP. and the not The make SBA Bank mortgage separate securing The made record separate and to on the The that the SBA was the the loan original instruments assignment d i d , however, s p e c i f i c a l l y d e l i v e r the g u a r a n t i e s t o LPP. in was by Bank appearing a court's contractual privity assigned guaranties. did trial guaranties Exchange endorsement [Ms. 2009). to base i t s c l a i m s . by the Corp., (Ala. the effectuated LPP, an Bldg. whether guaranties from 3d assignment so Jopat the note, and mortgage assignment of assign i t did states, pertinent part: Together w i t h such o t h e r documents, agreements, instruments and other collateral that evidence, secure or otherwise relate to Assignor's right, t i t l e or i n t e r e s t i n and t o t h e Mortgage and/or t h e Note, including without limitation the title 7 the 1080265 insurance p o l i c i e s and h a z a r d i n s u r a n c e t h a t m i g h t p r e s e n t l y be i n e f f e c t . " The d e f e n d a n t s contend, that court correctly assignment of an the t r i a l explicit cannot assert LPP any c l a i m s argues that mortgage assignment the guaranties recognized without c i t a t i o n with the the absence of g u a r a n t i e s means above-quoted the authority, that LPP respect to the guaranties. i s sufficient under to legal determined that their policies language to effect general from the the assignment law of of assignments i n Alabama. " T h e r e a r e no f o r m a l r e q u i r e m e n t s f o r a n a s s i g n m e n t , and 'an a s s i g n m e n t may be written, parol, or otherwise.' B a k e r v . E u f a u l a C o n c r e t e C o . , 557 S o . 2 d 1 2 2 8 , 1 2 3 0 ( A l a . 1 9 9 0 ) . The c o u r t m u s t l o o k t o the substance of the assignment rather than t oi t s form to determine whether there has been an a s s i g n m e n t . S e e i d . T h e r e h a s b e e n a n a s s i g n m e n t (1) if the assignor intended to transfer a present i n t e r e s t i n the subject matter of the contract, i d . , a n d (2) i f t h e a s s i g n o r a n d t h e a s s i g n e e m u t u a l l y assented to the assignment. See 6A C.J.S. A s s i g n m e n t s § 73 ( 2 0 0 4 ) . A n a s s i g n m e n t i s c o n s t r u e d i n a c c o r d a n c e w i t h t h e law o f c o n t r a c t s . D i l l v. B l a k e n e y , 568 S o . 2 d 7 7 4 , 778 ( A l a . 1 9 9 0 ) . " DeVenney v. H i l l , supplied officer the 918 S o . 2 d 1 0 6 , 113 affidavit testimony of ( A l a .2005). William Scott, LPP also a loan f o r B e a l S e r v i c e C o r p o r a t i o n who p a r t i c i p a t e d i n L P P ' s acquisition of the loan instruments 8 from the SBA and who 1080265 testified that "transferred the and (Ala. question and 1990), of fact the mortgage a debt passes thereof, See, and e.g., conclude in that aware of to the 38 Am that those loan vest under 557 So. occurred court's f a c t s of t h i s light by of the the is is the by general assignee any SBA's LPP delivery of loan instruments with instruments. language other of the and SBA's Thus, the trial 9 note." payment a note. Accordingly, guaranties the g e n e r a l t o c o n s t i t u t e an a l l the the assignment assignment of (2009). to court's to we LPP language assignment rights of documents s e c u r i t y f o r the J u r 2 d G u a r a n t y § 33 the delivery r u l e t h a t an the the those i n t e r e s t i n t h e m o r t g a g e and the a finding actual such 2d however, case, general i t "included of a s s i g n m e n t were s u f f i c i e n t to trial a guaranty passes with along w i t h the other operate the that C o n c r e t e Co., has were e v i d e n c e of a l a c k of i n t e n t to a s s i g n accompanied are recognize assignment which the a s s i g n o r ' s M o r e o v e r , we We agreements w r i t t e n assignment of the g u a r a n t i e s assignment that secure of to particularly guaranties, LPP. an Under the i s not guaranties, guaranty B a k e r v. E u f a u l a as l a c k of a separate t o LPP to whether presumed c o r r e c t . SBA and assigned" DeVenney, s u p r a , 1228 note recover holding and on that 1080265 LPP lacked action to the guaranties on w h i c h trial court limitations period LPP a r g u e s t h a t t h e t r i a l court of Ala. erred because, i t says, i t s assignment came therefore subject to the federal limitations U.S.C. § 2 4 1 5 ( a ) . rationale assignee Code 1975, i n so h o l d i n g t h e SBA period and i s of 28 I n s u p p o r t o f i t s argument, LPP a s s e r t s t h e In that of a loan Islands and o r i g i n a l l y sought to foreclose interposed various by from s e t o u t i n UMLIC VP L L C v . M a t t h i a s , (3d C i r . 2 0 0 4 ) . enacted this a l s o h e l d , h o w e v e r , t h a t L P P ' s a c t i o n was by t h e s i x - y e a r § 6-2-34. the to bring was i n c o r r e c t . The barred privity case, the p l a i n t i f f and mortgage secured the mortgage, U M L I C V P L L C was created b y t h e SBA. the 364 F . 3 d 1 2 5 i n the V i r g i n When U M L I C V P L L C defendant defenses, i n c l u d i n g the l i m i t a t i o n s the T e r r i t o r y of the V i r g i n Islands. debtors period The stated: " H a v i n g s e t t l e d t h a t mortgage f o r e c l o s u r e i s an i n d e p e n d e n t a c t i o n u n d e r V i r g i n I s l a n d s l a w , we m u s t determine the statute of l i m i t a t i o n s a p p l i c a b l e to s u c h an a c t i o n when i t i s b r o u g h t b y an a s s i g n e e o f t h e U n i t e d S t a t e s . UMLIC c l a i m s t h a t an assignee stands i n t h e shoes o f t h e a s s i g n o r - - h e r e t h e U n i t e d States--and thus that the federal limitations periods apply t o i t as they would i f t h e U n i t e d States itself brought a foreclosure action. We agree, and j o i n every other appellate court to 10 court 1080265 consider the issue. Three cases i n particular command o u r a t t e n t i o n : T i v o l i V e n t u r e s , I n c . v. B u m a n n , 870 P . 2 d 1 2 4 4 ( C o l o . 1 9 9 4 ) ; U n i t e d S t a t e s v . T h o r n b u r g , 82 F . 3 d 8 8 6 ( 9 t h C i r . 1 9 9 6 ) ; a n d F D I C v . B l e d s o e , 989 F . 2 d 8 0 5 ( 5 t h C i r . 1 9 9 3 ) . We briefly d i s c u s s e a c h o f them. "In T i v o l i Ventures, the question arose i n the context o f w h e t h e r an a s s i g n e e c o u l d s u e on t h e U n i t e d S t a t e s ' (unexpired) c a u s e o f a c t i o n , o r was l i m i t e d t o an a n t e c e d e n t (and n o w - e x p i r e d ) c a u s e o f a c t i o n . T h e r e , t h e FDIC as r e c e i v e r o f a f a i l e d bank had a s s i g n e d t o a p r i v a t e p a r t y a n o t e h e l d by t h e b a n k . The p a r t i e s d i d n o t d i s p u t e t h a t t h e F D I C ' s c a u s e o f a c t i o n a c c r u e d o n l y w h e n t h e b a n k was p l a c e d i n r e c e i v e r s h i p , n o t w h e n t h e n o t e f i r s t came o v e r d u e , h e n c e t h e F D I C ' s c l a i m e x p i r e d l a t e r . The p r i v a t e p a r t y s u e d t o c o l l e c t on t h e n o t e , a n d was met w i t h t h e a r g u m e n t t h a t t h e a c t i o n was b a r r e d b y Colorado's six-year limitations period, which s t a r t e d t o r u n f r o m t h e d a t e t h e n o t e was o v e r d u e . The private party p l a i n t i f f argued that as t h e assignee o f t h e FDIC, i t was entitled to the s i x - y e a r l i m i t a t i o n s p e r i o d i n 28 U.S.C. § 2 4 1 5 t h a t s t a r t e d t o r u n f r o m t h e t i m e t h e b a n k was p u t i n t o receivership. The C o l o r a d o Supreme C o u r t agreed, h o l d i n g t h a t t h e p r i v a t e - p a r t y a s s i g n e e o f t h e FDIC stood i n t h e shoes o f t h e U n i t e d S t a t e s . "Like the case before us, Thornburg i n v o l v e d the g u a r a n t o r - m o r t g a g o r ' s l i a b i l i t y when a c o r p o r a t i o n d e f a u l t e d on an S B A - b a c k e d l o a n . The g u a r a n t e e a n d mortgage were f i r s t a s s i g n e d t o a p r i v a t e p a r t y , and then assigned b a c k t o t h e SBA w h i c h b r o u g h t t h e c a s e . The m o r t g a g o r a r g u e d t h a t t h e s t a t e s t a t u t e o f l i m i t a t i o n s r a n o u t o n t h e n o t e w h i l e i t was i n t h e hands o f t h e p r i v a t e p a r t y , and thus t h a t t h e a c t i o n by t h e SBA was t i m e barred as w e l l because a t r a n s f e r (back) t o t h e U n i t e d S t a t e s c a n n o t r e v i v e a t i m e - b a r r e d c a u s e o f a c t i o n . See FDIC v. H i n k s o n , 848 F . 2 d 4 3 2 , 434 ( 3 d C i r . 1 9 8 8 ) ( ' I f t h e s t a t e statute of limitations has e x p i r e d before the 11 1080265 government a c q u i r e s a c l a i m , i t i s n o t r e v i v e d by transfer to a f e d e r a l agency.'). The C o u r t o f Appeals f o r the Ninth C i r c u i t held that the federal s t a t u t e a p p l i e d . A f t e r d i s c u s s i n g (and approving) cases that hold t h a t an a s s i g n e e of the United S t a t e s stands i n t h e shoes of the U n i t e d S t a t e s , the T h o r n b u r g C o u r t u l t i m a t e l y r e s t e d i t s h o l d i n g on t h e f a c t t h a t t h e a s s i g n m e n t t o t h e p r i v a t e p a r t y was o n l y f o r c o l l e c t i o n p u r p o s e s ( r e f e r r e d t o b y some c o u r t s as a ' c o n s i g n m e n t ' ) , and t h e U n i t e d States n e v e r d i v e s t e d i t s e l f o f t h e n o t e . S e e T h o r n b u r g , 82 F.3d a t 8 9 1 - 9 2 . T h i s may make T h o r n b u r g a m o r e compelling case for application of federal l i m i t a t i o n s law than t h i s case, because i n the case b e f o r e u s now, t i t l e t o t h e m o r t g a g e h a s p a s s e d t o UMLIC. "Bledsoe's f a c t s a r e between T i v o l i Ventures and Thornburg. L i k e T i v o l i Ventures, Bledsoe i n v o l v e d a note that first came to the United States as receiver ( t h e FSLIC) i n an S & L i n s o l v e n c y . The note was assigned to a private party (unlike T h o r n b u r g , t h i s seems t o h a v e b e e n a t r u e s a l e , a n d not a consignment) and then ( v i a another i n s o l v e n c y ) back to the United States as receiver. Like Thornburg, the defendant asserted that the four-year s t a t e s t a t u t e o f l i m i t a t i o n s r a n on t h e n o t e w h i l e i t was i n p r i v a t e h a n d s , a n d c o u l d n o t t h e r e a f t e r b e r e s u s c i t a t e d b y t r a n s f e r t o t h e U n i t e d S t a t e s . The Court of Appeals f o r the F i f t h C i r c u i t held that the s i x - y e a r f e d e r a l s t a t u t e a p p l i e d to the note while i t was i n t h e h a n d s o f t h e a s s i g n e e o f t h e U n i t e d S t a t e s , and thus concluded t h a t the cause of a c t i o n had n o t e x p i ^ d . re J "Thornburg l i s t s as a d h e r i n g to this rule a number o f s t a t e c o u r t s a n d f e d e r a l d i s t r i c t c o u r t s , in addition to the Courts of Appeal f o r the F i f t h and Ninth Circuits; i t notes only one contrary decision, Wamco, I I I , L t d . v. First Piedmont M o r t g a g e C o r p . , 856 F. S u p p . 1 0 7 6 ( E . D . V a . 1 9 9 4 ) . See T h o r n b u r g 82 F. 3 d a t 8 9 0 - 9 1 . S i n c e 1 9 9 6 , w h e n 12 1080265 T h o r n b u r g was d e c i d e d , t h e C o u r t o f A p p e a l s f o r t h e T e n t h C i r c u i t h a s j o i n e d t h i s g r o u p . See UMLIC-Nine C o r p . v . L i p a n S p r i n g s D e v . C o r p . , 168 F . 3 d 1 1 7 3 ( 1 0 t h C i r . 1 9 9 9 ) . We t o o now j o i n t h e m a j o r i t y v i e w . "In v i e w o f t h e t h o r o u g h d i s c u s s i o n s i n T i v o l i Ventures, Bledsoe, and Thornburg, we simply s u m m a r i z e w h a t we r e g a r d a s t h e b e s t d o c t r i n a l a n d p u b l i c p o l i c y reasons f o r the r u l e that the assignee of the United States stands i n the shoes o f the United States and i s e n t i t l e d to rely on t h e limitations periods p r e s c r i b e d by f e d e r a l law. D o c t r i n a l l y , an a s s i g n e e s t o o d i n t h e s h o e s o f t h e a s s i g n o r a t common l a w , a n d t h e U n i f o r m C o m m e r c i a l C o d e p r o v i d e s t h a t ' [ t ] r a n s f e r o f a n i n s t r u m e n t ... v e s t s i n t h e t r a n s f e r e e any r i g h t o f t h e t r a n s f e r o r to enforce the instrument.' UCC § 3-203(b). M o r e o v e r , t h e R e s t a t e m e n t (Second) o f C o n t r a c t s § 336 c m t . b , e x . 3 e x p l a i n s t h a t 'A l e n d s m o n e y t o B a n d a s s i g n s h i s r i g h t t o C. C's r i g h t i s b a r r e d b y t h e S t a t u t e o f L i m i t a t i o n s when A ' s r i g h t w o u l d h a v e b e e n . ' We s e e n o r e a s o n t h a t t h e i n v e r s e s h o u l d n o t h o l d as w e l l . In p u b l i c p o l i c y terms, a f f o r d i n g a s s i g n e e s o f t h e U n i t e d S t a t e s t h e same r i g h t s a s the U n i t e d S t a t e s i s d e s i r a b l e because i t improves the m a r k e t a b i l i t y o f instruments h e l d by the U n i t e d States, thereby g i v i n g the United States greater f l e x i b i l i t y i n monetizing i t s claims." 364 F.3d a t 131-33 In this case (footnote omitted; i t i s emphasis uncontroverted added). that this loan t r a n s a c t i o n o r i g i n a t e d u n d e r t h e a u s p i c e s o f t h e SBA; t h a t t h e guaranties a r e SBA documents; specifically assigned acquires derivative a subrogation, to or by other and t h a t t h e SBA. claim, the guaranties "Where whether means, a n d t h a t 13 the by claim were government assignment, i s not then 1080265 barred by ceases the to state run against acquisition." i n the LLC Washington, v. shoes 233 light that of Ala. that shoes the the guaranties limitations 825 654, LPP, SBA v. and the at Sellers, state time 487 F.2d such 1268, 1269 s e t t l e d t h a t an Ocwen L o a n 6 (Ala. 2006); 2d 90 (Ala. assignee Servicing, Green Tree 2002); and v. Accordingly, in So. 907 and the r a t i o n a l e o f U M L I C VP the that of purposes those period in the 2415(a) states, the SBA, stands of asserting claims are subject statute, 28 federal LLC, in i t s claim to U.S.C. 2415(a). Section in pertinent part: "[E]very a c t i o n f o r money damages b r o u g h t by the U n i t e d S t a t e s o r an o f f i c e r o r a g e n c y t h e r e o f w h i c h i s f o u n d e d upon any c o n t r a c t e x p r e s s o r i m p l i e d i n l a w o r f a c t , s h a l l be b a r r e d u n l e s s t h e c o m p l a i n t i s f i l e d w i t h i n s i x years a f t e r the r i g h t of action a c c r u e s o r w i t h i n one year a f t e r f i n a l decisions have been rendered in applicable administrative proceedings required by contract or by law, whichever i s l a t e r : Provided, t h a t i n the event of l a t e r p a r t i a l payment or w r i t t e n acknowledgment of d e b t , t h e r i g h t o f a c t i o n s h a l l be d e e m e d t o a c c r u e 14 Fin. May 172 assignee (1937). statute of i s long 2d So. the for the assignor. the So. authority conclude of 939 Channell, Mathers, States of limitations, government Alabama law stands Corp. of the United (5th C i r . 1973). v. statute we the on the § 1080265 again at the acknowledgment The defendants action argue of that each even i s t i m e - b a r r e d because, guaranties 1995. time such under payment this they say, or statute, the c l a i m s LPP's on their a c c r u e d a t t h e t i m e t h e y d e f a u l t e d on t h e n o t e , i n In this incorrect. The assertion, however, the defendants are guaranties state: "In c a s e t h e D e b t o r s h a l l f a i l t o pay a l l o r any part of the Liabilities when due, whether by a c c e l e r a t i o n or o t h e r w i s e , a c c o r d i n g to the terms of s a i d n o t e , the U n d e r s i g n e d , i m m e d i a t e l y upon the w r i t t e n demand o f L e n d e r , w i l l p a y t o L e n d e r the amount due a n d u n p a i d b y t h e D e b t o r as a f o r e s a i d , i n l i k e manner as i f s u c h amount c o n s t i t u t e d t h e d i r e c t and p r i m a r y o b l i g a t i o n of the U n d e r s i g n e d . " As the plain trial court correctly language guaranties determined, of the g u a r a n t i e s , the d i d not Even i f the t r i a l accrue until a and cause written in light of the of action on the d e m a n d was c o u r t i s c o r r e c t i n d e t e r m i n i n g that the made w r i t t e n d e m a n d on t h e g u a r a n t i e s i n F e b r u a r y 1 9 9 9 was attempting to s e t t l e w i t h the defendants obligations under the not t i m e - b a r r e d under that the defendants guaranties made. note 28 and U.S.C. § 2 4 1 5 ( a ) . made p a y m e n t s o n 15 The the debt i n v a r i o u s months between March when i t concerning g u a r a n t i e s , LPP's their claims record and are shows s e c u r e d by 2001 SBA the January 1080265 2002. T h u s , u n d e r 28 U.S.C. accrued filed as l a t e as those judgment this LPP's cause o f a c t i o n and the i n s t a n t the six-year of the t r i a l and t h e cause i s remanded with months, i n A u g u s t 2005, w i t h i n The § 2415(a), court action limitations i s therefore f o r further proceedings opinion. R E V E R S E D AND Woodall, REMANDED. Smith, Parker, a n d Shaw, J J . , c o n c u r . 16 was period. reversed, consistent

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