Federal Debt Management, Inc. v. Mark D. Gilliland, M.D.--Appeal from 269th District Court of Harris County

IN THE

TENTH COURT OF APPEALS

No. 10-93-174-CV

FEDERAL DEBT MANAGEMENT, INC.,

Appellant

v.

MARK D. GILLILAND, M.D.,

Appellee

From the 269th District Court

Harris County, Texas

Trial Court # 92-52347

O P I N I O N

This is an appeal by plaintiff-appellant Federal Debt Management, Inc. (FDM) from a summary judgment that it take nothing in its suit on a promissory note against defendant-appellee Mark D. Gilliland, M.D.

Mark D. Gilliland, M.D., executed a promissory note for $50,000.00 to Southwestern Bank-Northbelt, N.A. (SWB) on April 16, 1986. Gilliland defaulted in paying the note by failing to make the final payment of interest and principal due on January 16, 1987.

In April 1987 the Bank was declared insolvent, and the Federal Deposit Insurance Corporation (FDIC) was appointed receiver and became the owner of the note. On May 8, 1992, the FDIC sold and assigned the note to FDM. On November 1, 1992, FDM filed this suit against Gilliland. This was more than four years after the maturity date of the note, but less than six years after Gilliland's default and the appointment of FDIC as receiver.

Gilliland defended on the ground that the Texas four-year statute of limitations barred recovery on the note.

Both FDM and Gilliland filed motions for summary judgment. The trial court granted Gilliland's motion and denied FDM's motion.

The effect of the trial court's summary judgment is that the Texas four-year statute of limitations barred recovery on the note, and that the Federal six-year statute of limitations is inapplicable.

FDM appeals on one point of error.

"The trial court erred in rendering summary judgment on the basis of limitations against Plaintiff-Appellant, Federal Debt Management, Inc. ("FDM"), as assignee of the Federal Deposit Insurance Corporation ("FDIC") as Receiver for Southwestern Bank-Northbelt NA (SWB), and in denying FDM's own motion for summary judgment for the reason that assignees of the FDIC are entitled to the protections of the six-year statute of limitations enjoyed by FDIC as a matter of law."

The sole question in this case is whether an assignee of a promissory note in default from the FDIC receives the benefit of the six-year statute of limitations applicable to the FDIC.

In the consolidated case of Cordus Jackson, Jr. v. Gary Thweatt, D-3057 , and Federal Debt Management, Inc. v. Lee Weatherly, D-3437, S.W.2d (Tex. 1994)(Opinion delivered March 9, 1994), our Supreme Court held that under 12 U.S. Code, Section 1821(d)(14), the FDIC has six years to bring suit on delinquent notes acquired from a failed bank, and that purchasers of such notes from the FDIC obtain the benefit of this federal limitations period.

The Cadle Company v. Estate of Forrest Weaver, D-3866, S.W.2d (Tex. 1994) (Opinion delivered March 9, 1994), is to the same effect, holding that an assignee of a promissory note from FDIC does receive the benefit of the six-year statute of limitations provision applicable to the FDIC, and that the Texas four-year statute of limitations does not apply.

We sustain FDM's point, and reverse the judgment of the trial court granting Gilliland's motion for summary judgment, and denying FDM's motion.

This case is remanded to the trial court with instructions to compute the amount Gilliland owes on his note and render judgment for FDM against him for such amount.

FRANK G. McDONALD

Chief Justice (Retired)

Before Justice Cummings,

Justice Vance, and

Chief Justice McDonald (Retired)

Reversed and remanded with instructions

Opinion delivered and filed April 13, 1994

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