The promisor executed a promissory note (the “note”) payable to the bank in twelve payments. The promisor secured the note by a security agreement also executed by the promisor and a personal guaranty (the “guaranty”) signed by the president of the promisor’s general partner (the “guarantor”). The bank later closed, and the Federal Deposit Insurance Corporation (FDIC) was named receiver and eventually assigned the note to the assignee. The assignee sued the promisor and the guarantor for defaulting on the note and guaranty. The trial court entered judgment in favor of the assignee against the promisor on the note and dismissed the assignee’s claims against the guarantor based on statute of limitations. On appeal, the promisor argued the trial court erred in (1) entering judgment for the assignee because the assignee failed to demonstrate it was the holder of the note; (2) awarding damages to the assignee because not all of the promisor’s payments already paid on the note had been credited on the debt; and (3) awarding prejudgment interest. The assignee also appealed the trial court’s dismissal of its claims on limitations grounds as to the guarantor.
In 7677 Grp., L.P. v. SMS Fin. JDC, L.P., No. 01-21-00376-CV, 2023 WL 8587649, 2023 Tex. App. LEXIS 9252 (Tex. App.–Houston [1st Dist.] Dec. 12, 2023, no pet. h.) (unpublished opinion), the court reversed and remanded the trial court’s judgment against the promisor as to damages and prejudgment interest and reversed the trial court’s dismissal of assignee’s claims against guarantor based on limitations grounds. The court first held that the assignee was the holder of the note. To recover on a promissory note, a plaintiff must show it is the owner or holder of the note. The court previously held that evidence showing the FDIC had taken over as receiver, along with an indorsement or other evidence of a transfer of the note, was sufficient to establish the assignee as the holder or owner of the note. Here, like those assignees in the previous cases, the assignee provided proof of how it had acquired the note, the assignment agreement, and the allonge to the promissory note indorsed by the receiver as the power of attorney of the assignee. The court then held that the promisor presented overwhelming evidence that the damages awarded by the trial court did not accurately reflect the actual remaining balance. The promisor provided evidence and testimony that it had made several payments on the note that were not included in the assignee’s calculation of the remaining balance. Lastly, in response to the assignee’s appeal as to the guarantor, the court reversed the trial court’s dismissal of the assignee’s claims on limitation grounds. The assignee argued that a six-year statute of limitations applied to a suit on a guaranty rather than the four-year period applied by the trial court. The Supreme Court of Texas has held that “FDIC’s successors in interest are entitled to the benefits of section 1821(d)(14),” which provides a six-year statute of limitation “to actions brought by purchasers of assets from the FDIC to recover on those purchased assets.” Jackson v. Thweatt, 883 S.W.2d 171, 173-74, 178 (Tex. 1994). The court reasoned that it was bound by the Supreme Court of Texas, and it must apply the six-year limitation period. Because the suit had been brought within five years of the date of maturity, the assignee’s claims were not barred.
By Kristin Meurer [email protected]
Edited By Ashley Boyce [email protected]
Edited By Hayden Mariott [email protected]