United States v. Oliver

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
January 16, 2009
No. 08-30305 Charles R. Fulbruge III
Clerk
UNITED STATES OF AMERICA, on behalf of United States Department of
Agriculture, also known as Farm Service Agency, formerly known as Farmers
Home Administration
Plaintiff - Appellee
v.
NATHAN EDGAR OLIVER, III
Defendant - Appellant
Appeal from the United States District Court
for the Western District of Louisiana
USDC No. 3:07-CV-0590
Before HIGGINBOTHAM, ELROD, and HAYNES, Circuit Judges.
PER CURIAM:*
Nathan Edgar Oliver, III appeals a summary judgment granted against
him arising out of an in rem action by the United States to foreclose on property
he owned. His sole defense to the action was that the mortgages were
unenforceable because the statute of limitations had run on the underlying
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
No. 08-30305
notes. For the reasons set forth below, we agree with the district court and AFFIRM.
I.
This case was brought by the United States of America, acting through the
Farmers Home Administration (“FmHA”), now known as the Farm Service
Agency. The FmHA seeks to obtain an in rem judgment on the basis of two
promissory notes secured by mortgages on Oliver’s property. Within each
mortgage, Mr. Oliver:
expressly agree[d] that the Government will not be bound by any
present or future States laws . . . (b) prohibiting the maintenance of
an action for a deficiency judgment or limiting the amount thereof
or the time within which such action must be brought [or] (c)
prescribing any other statute of limitations. . . . Borrower expressly
waives the benefit of any such State laws.
There is no dispute that Oliver defaulted on the two notes; he has not
made a payment since 1992. The FmHA accelerated the notes in 1997, but did
not bring this in rem foreclosure action until 2007. On cross-motions for
summary judgment, the district court granted summary judgment for the United
States.
II.
We review de novo the district court’s grant of summary judgment. XL
Specialty Ins. Co. v. Kiewit Offshore Servs., Ltd., 513 F.3d 146, 149 (5th Cir.
2008); see also FED. R. CIV. P. 56(c). Summary judgment is appropriate if the
summary judgment evidence shows “that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment as a matter of
law.” FED. R. CIV. PROC. 56(c). Neither party contends that there are material
fact issues. Instead, they disagree on the applicable law.
III.
“Under a nationwide federal loan program like that of [the] FmHA, it is
settled that federal law ultimately controls the government’s rights and
responsibilities.” Farmers Home Admin. v. Muirhead, 42 F.3d 964, 965 (5th Cir.
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1995) (citing United States v. Kimbell Foods, Inc., 440 U.S. 715, 727 (1979)). In
particular, the United States and its agencies are not subject to a statute of
limitations unless Congress has provided otherwise. Muirhead, 42 F.3d at 967.
Farm loans are subject to two statutes of limitations: 28 U.S.C. § 2415 and
31 U.S.C. § 3716, although only § 2415 is relevant here.1 Section 2415(a) reads
that “every action for money damages brought by the United States or an officer
or agency thereof which is founded upon any contract express or implied in law
or fact, shall be barred unless the complaint is filed within six years after the
right of action accrues . . .” (emphasis added). Section 2415(c) provides:
“Nothing herein shall be deemed to limit the time for bringing an action to
establish the title to, or right of possession of, real or personal property.”
Oliver argues that the six-year statute of limitations under § 2415(a)
applies to the present case, while the FmHA asserts that an in rem foreclosure
action is excluded from the six-year statute of limitations under § 2415(c). This
court, as well as every other United States Court of Appeals to consider the
question, has concluded that § 2415(a) does not set a limitations period on
mortgage foreclosure actions. Muirhead, 42 F.3d at 966-67; Davidson v. FDIC,
44 F.3d 246, 248-49 (5th Cir. 1995); see also UMLIC VP LLC v. Matthias, 364
F.3d 125, 134 (3d Cir. 2004); United States v. Omdahl, 104 F.3d 1143, 1145-46
(9th Cir. 1997); Westnau Land Corp. v. United States Small Bus. Admin., 1 F.3d
112, 114-16 (2d Cir. 1993); United States v. Ward, 985 F.2d 500, 500 (10th Cir.
1993); United States v. Alvarado, 5 F.3d 1425, 1429 (11th Cir. 1993).
In spite of this precedent, Oliver asserts that the FmHA is precluded from
foreclosing on his property under Louisiana property law because the FmHA is
barred under the federal statute of limitations from asserting any claim for
1
Section 3716 concerns administrative offsets. 31 U.S.C. § 3716(e)(1).
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No. 08-30305
damages on the debt itself. This court rejected almost identical arguments in
Muirhead. See 42 F.3d at 966-67.
Oliver argues that Muirhead involved Mississippi law, which he contends
is different from Louisiana law at issue here. He claims, “Louisiana provisions
do not read like a statute of limitations, and indeed, are not a statute of
limitations.” Contrary to Oliver’s arguments, the relevant Louisiana statute
functions almost identically to that of Mississippi. In Muirhead we noted that
“[i]n Mississippi, as in several other states, where a debt is barred, the mortgage
cannot be enforced” and that “[t]he lien is incident to the debt and does not stand
separately.” 42 F.3d at 966 (internal quotations omitted). Louisiana Civil Code
article 3498 provides a prescriptive period for promissory notes of five years
“from the day payment is exigible.” Louisiana Civil Code article 3282 provides
that a “[m]ortgage is accessory to the obligation that it secures. Consequently,
except as provided by law, the mortgagee may enforce the mortgage only to the
extent that he may enforce any obligation it secures.” Thus, Louisiana, like
Mississippi, “forecloses an action or proceedings to enforce a lien not brought
within the time for commencing a suit on the debt involved.” Muirhead, 42 F.3d
at 966. Oliver has failed to identify any difference between Louisiana and
Mississippi law in this respect. Accordingly, Oliver’s attempt to distinguish
Muirhead fails.2
In addition, article 3282 is not absolute. A mortgagee may enforce a
mortgage if “provided by law” even if the obligation secured by the mortgage is
2
On this point, to the extent that a recent Louisiana Court of Appeals decision can be
read as reaching a contrary conclusion, we respectfully disagree. LLP Mortg., Ltd. v. Food
Innovisions, Inc., No. 08-CA-422, 2008 WL 4737059, at *2 (La. Ct. App. Oct. 28, 2008)(not yet
released for publication)(addressing a claim by a private successor to a federal agency).
Because the case before us involves a suit by a federal agency regarding interpretation of
federal law, we are bound to follow Muirhead, rather than a state court decision. We note, too,
that the mortgage at issue in the Food Innovisions case does not appear to have included the
waiver language quoted above.
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No. 08-30305
not enforceable. LA. CIV. CODE art. 3282. 28 U.S.C. § 2415 distinguishes
between actions for recovery on the promissory note and actions to foreclose on
the security, Davidson, 44 F.3d at 249, and thus provides a basis for invoking the
exception provided for in article 3282. Additionally, Oliver expressly waived the
application of state law in signing the mortgages.
Oliver raises other issues, but all are a variation of the same theme: that
Louisiana law somehow renders this mortgage unenforceable. All fail in the face
of Muirhead, by which we are bound.
Accordingly, the judgment of the district court is AFFIRMED.
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