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Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

FEDERAL DEPOSIT INSURANCE CORPORATION, ) 

) 

Plaintiff-Appellee, ) 

) 

v. ) 

) 

WILLIAM S. BACHMAN; ANTHONY A. ) 

TRUTANICH; WILLIAM T. BAIRD; ALBERT M. ) 

BIRNIE; JAMES N. DONNERSTAG; STEPHEN G. ) 

HOY; W.A. HULL; JERRY W. NEELY; KING ) 

COOPER, JR.; DONALD M. KOLL; F. MICHAEL ) 

KROTZ; L & E OIL VENTURE, a partnership ) 

consisting of Rudy A. Landry and unknown) 

others; OWEN H. LEWIS; BRUCE LUDWIG; ) 

RAYMOND I. MAHAN; KATHLYN A. MAHAN; ) 

LOWELL W. MORSE; VERA MORSE; BEVERLY J. ) 

OETTING; PETER B. REICH; ROGER C. ) 

SCHULTZ; PRISCILLA SCHULTZ; DOROTHY D. ) 

STANTON; HAROLD JAMES SCHAFER; JESS C. ) 

WILSON, JR., ) 

) 

Defendants, ) 

) 

and ) 

) 

MICHAEL B. BIRNIE; WILLIAM H. BIRNIE; ) 

BARBARA P. BIRNIE; LAURENCE A. BOLTON; ) 

KENNETH T. CAREY; ROBERT M. ELLIS; ) 

RAY ELNER; TERRY D. EVANS; GEORGE H. ) 

FOX, JR.; JOHN M. GILCHRIST, SR.; ) 

MICHAEL J. GREGOIRE; BRENT F. HOWELL; ) 

DAVID D. HURFORD, JR.; CHRISTOPHER M. ) 

JOB; ELDRED J. KUNKEL; EVELYN R. KUNKEL;) 

PAUL J. LUPO; KEY B. LUPO; J. FRANK ) 

MAHONEY, III; JUDITH M. MAHONEY; ) 

RICHARD E. OETTING; ROBERT K. OSTEN- ) 

GAARD; DELMAR D. STANTON; A.P. TIDDENS; ) 

BOYD VAN NESS; DONALD R. WHEELER, ) 

) 

Defendants-Appellants. ) 

F,' 1··· I ;.:,' ;u··,, • .h.r~ .J..J .J! 

::_bnc-::i SL>.tes Cr.>urt of Appeals 

·.renth (~:;·:~-~~;~ 

JAN 8 0 19~0 

'OBERT L HOECF~R rl,a.rlr '-1..... '\. 

No. 88-1827 

Appellate Case: 88-1827 Document: 01019297109 Date Filed: 01/30/1990 Page: 1 
Appeal from the United States District Court 

for the Western District of Oklahoma 

(D.C. No. CIV-85-811-W) 

Brinda K. White (Ronald L. Ripley with her on the briefs) of Linn 

& Helms, Oklahoma City, Oklahoma, for defendants-appellants. 

Mack J. Morgan, III, (Denise Cotter Villani with him on the brief) 

of Crowe & Dunlevy, Oklahoma City, Oklahoma, for plaintiffappellee. 

Before LOGAN, BARRETT, and EBEL, Circuit Judges. 

LOGAN, Circuit Judge. 

The limted partners (defendants) of Brookwood Drilling 

Partnership 1980-I (Brookwood) appeal the district court's summary 

judgment that they are liable to the Federal Deposit Insurance 

Corporation (FDIC) for unpaid capital contributions under Okla. 

Stat. Ann. tit. 54, § 158, Unif. Limited Partnership Act (ULPA) 

§ 17. The issues on appeal are (1) whether the FDIC, as successor 

to a creditor of Brookwood, can bring an action based upon § 158; 

if so, (2) whether the suit is barred by a statute of limitations, 

and (3) whether the limited partners are liable under § 158 in the 

circumstances presented by this case. We hold that the defendant 

limited partners waived the first issue by failing to raise it in 

the district court, and we affirm the district court's ruling that 

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Appellate Case: 88-1827 Document: 01019297109 Date Filed: 01/30/1990 Page: 2 
the FDIC's action is not time barred and that the limited partners 

are liable. 

The original limited partnership certificate of Brookwood 

filed with the Oklahoma Secretary of State, effective April ll, 

1980, stated capitalization at one hundred dollars cash. The 

Brookwood limited partnership agreement was subsequently amended 

to provide that each limited partnership unit could be purchased 

by a capital contribution of $75,000 in cash or, alternatively, 

$20,000 cash and a $55,000 letter of credit to be used to secure a 

capitalization loan. The amended limited partnership certificate 

filed effective May 14, 1980, however~ stated that all capital 

contributions made by limited partners, an aggregate of 

$3,525,000, had been made ''in cash" and that no further capital 

contributions would be required; the certificate did not specify 

that some portion of the stated contributions were in the form of 

letters of credit. 

On May 14, 1980, the effective date of the amended 

certificate, Penn Square Bank made the capitalization loan to 

Brookwood in the amount of $2,585,000, secured by the letters of 

credit provided by Brookwood's limited partners. When the 

capitalization loan came due, the bank renewed it as a production 

loan, released the letters of credit, took a security interest in 

certain oil and gas wells, and required each limited partner to 

guarantee a prorated share of the loan. Eventually, after an 

extension and recollateralization, Brookwood defaulted on this 

loan. The FDIC (as successor through a series of bank failures) 

sued the limited partners, seeking the difference between the 

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Appellate Case: 88-1827 Document: 01019297109 Date Filed: 01/30/1990 Page: 3 
limited partners' capital contributions as stated in the amended 

certificate and their actual cash contributions, relying upon 

Okla. Stat. Ann. tit. 54, § 158, ULPA § 17. The district court 

granted summary judgment for the FDIC. 

We will affirm the grant of summary judgment if it is clear 

from the record that there are no genuine issues of material fact 

and the FDIC is entitled to judgment as a matter of law. See 

Willner v. Budig, 848 F.2d 1032, 1033-34 (lOth Cir. 1988), cert. 

denied, 109 s. Ct. 840 (1989). 

I 

The defendant limited partners argue that even if they owe 

the partnership the sums sought, the FDIC, not having first 

proceeded against the partnership, may not sue for amounts due to 

the partnership. Although they did not present this argument to 

the district court, defendants contend that determining whether 

the FDIC can properly pursue this cause of action is a question of 

''standing," which is a nonwaivable jurisdictional issue. We 

disagree. 

Even if the proper construction of Okla. Stat. Ann. tit. 54, 

§ 158, ULPA § 17, is that only a judgment creditor of a limited 

partnership can sue the limited partners under that provision, the 

requirement can be, and was, waived by defendants' failure to 

raise it in the district court. Defendants confuse the doctrine 

of standing with that of real party in interest. 

"The law of standing is almost exclusively concerned with 

such public law questions as determinations of constitutionality 

and review of administrative or other governmental action." 

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Appellate Case: 88-1827 Document: 01019297109 Date Filed: 01/30/1990 Page: 4 
c. Wright, The Law of Federal Courts § 13, at 60 (4th ed. 1983) 

[hereinafter Law of Federal Courts]. The term "standing," 

however, is used loosely in many contexts to denote the party with 

a right to bring a particular cause of action. This practice 

leads to much confusion when it is necessary to distinguish 

between "standing" in its most technical sense and the concept·of 

real party in interest under Fed. R. Civ. P. l7(a). See generally 

6 C. Wright & A. Miller, Federal Practice and Procedure § 1542 

(1971) [hereinafter 6 Federal Practice and Procedure]; 13 

C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure 

. § 3531, at 338-45 & nn.6-8 (2d ed. 1984 & Supp. 1989) [hereinafter 

13 Federal Practice and Procedure]; Law of Federal Courts§ 13, at 

59-60 & § 70, at 452-53 & n.2. "[S]tanding pertains to suits 

brought by individuals or groups challenging governmental action 

which has allegedly prejudiced their interests. On the other 

hand, the real party in interest question is raised in those much 

rarer instances between private parties where a plaintiff's 

interest is not easily discernible." Malamud v. Sinclair Oil 

Corp., 521 F.2d 1142, 1147 (6th Cir. 1975); see also K-B Trucking 

Co. v. Riss Int'l Corp., 763 F.2d 1148, 1154 n.7 (lOth Cir. 1985) 

(whether incorporator could join corporation as plaintiff on a 

claim of fraudulent misrepresentation was a real-party-in-interest 

issue, not standing; "standing challenge is not properly raised in 

connection with real party in interest analysis under Rule 

l7(a)"). 

Using the term "standing'' to designate real-party-in-interest 

issues tempts courts to apply standing principles outside the 

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Appellate Case: 88-1827 Document: 01019297109 Date Filed: 01/30/1990 Page: 5 
context in which they were developed. The instant case 

illustrates the problems that can result. Defendants are correct 

that standing may implicate the Article III requirement of a "case 

or controversy," an issue of subject matter jurisdicition which 

cannot be waived. However, failure to timely raise a real-partyin-interest defense operates as a waiver. K-B Trucking, 763 F.2d 

at 1153 n.2; Harris v. Illinois-California Express, Inc., 687 F.2d 

1361, 1373-74 (lOth Cir. 1982); 6 Federal Practice and Procedure 

§ 1542, at 640 & 642-43. Even if standing jurisprudence is 

helpful by analogy in resolving real-party-in-interest issues, 

this does not convert real party in interest into a nonwaivable 

issue of subject matter jurisdiction. 1 

Although the cases may refer to the question of whether a 

creditor can sue to enforce limited partners' obligations to make 

their stated capital contributions as a question of "standing," 

1 There is a sound reason to distinguish real party in interest 

from standing for purposes of waiver. A plaintiff's challenge to 

far-reaching governmental action is somewhat akin to a class 

action; the plaintiff acts on behalf of all others similarly 

situated. While subsequent challenges cannot be barred by res 

judicata, but cf. 18 C. Wright, A. Miller & E. Cooper, Federal 

Practice and Procedure § 4458, at 521-22 (1981) (advocating 

preclusive effect in some situations), if others contest the same 

action on the same legal grounds, the outcomes will be controlled 

by stare decisis. Consequently, standing jurisprudence requires 

the plaintiff to have a sufficient stake in the outcome of the 

proceedings to make the plaintiff an effective litigant. See Law 

of Federal Courts § 13, at 70; 13 Federal Practice and Procedure 

§ 3531, at 345-47 & § 3531.3, at 409-10. The government should 

not be able to obtain its adversary of choice by waiving the 

standing issue. In contrast, the consequences of waiver of real 

party in interest in private disputes are largely confined to the 

parties themselves. There is almost no risk of suit by one 

without a genuine stake in the issue, and defendants can be 

counted upon to raise the real-party-in-interest defense or 

interplead if they fear liability to another party on the same 

claim. See Law of Federal Courts § 13, at 60. 

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Appellate Case: 88-1827 Document: 01019297109 Date Filed: 01/30/1990 Page: 6 
properly considered, these cases implicate the principle of the 

real party in interest under Fed. R. Civ. P. 17(a). Because the 

real-party-in-interest defense is for the benefit of defendants, 

they can waive it. Audio-Visual Marketing Corp. v. Omni Corp., 

545 F.2d 715, 719 (lOth Cir. 1976). Since this defense was not 

asserted in the district court, the limited partners should not be 

allowed to raise it for the first time on appeal. 

II 

The district court held that the six-year statute of 

limitations contained in 28 u.s.c. § 2415(a) applies to this 

action and that the FDIC commenced suit well within that limit. 2 

The limited partners contend that the district court should have 

applied the three-year statute of limitations contained in Okla. 

Stat. Ann. tit. 12, § 95 2d. We disagree. 

The general rule is that "[w]here the government acquires a 

derivative claim and that claim is not then barred by the 

state statute of limitations, the state statute ceases to run 

against the government at the time of such acquisition." United 

States v. Sellers, 487 F.2d 1268, 1269 (5th Cir. 1973)~ see also 

United States v. Essley, 284 F.2d 518, 521 (lOth Cir. 1960) ("[I]t 

is a well established rule that, without a clear manifestation of 

Congressional intent, the United States is not bound by state 

2 28 U.S.C. § 2415(a), in relevant part, reads: 

"[E]xcept as otherwise provided by Congress, 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 ••.• " 

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Appellate Case: 88-1827 Document: 01019297109 Date Filed: 01/30/1990 Page: 7 
: 

statutes of limitations •.. in enforcing its rights."); 14 

c. Wright, A. Miller & E. Cooper, Federal Practice and Procedure 

§ 3652, at 166-71 & n.5 (2d ed. 1985 & Supp. 1989). Defendants 

make no contention that this cause of action was time-barred when 

·the FDIC acquired it. 

In bank failure cases in which the FDIC succeeds to claims to 

enforce notes, guaranties, or other contracts, we have applied the 

six-year statute of limitations of§ 2415(a). See,~' Federal 

Deposit Ins. Corp. v. Petersen, 770 F.2d 141, 142-43 (lOth Cir. 

1985). A suit to enforce the statutory liability of a limited 

partner for stated capital contributions seems to be a quasicontractual action within the reach of § 2415(a). Cf. United 

States v. Neidorf, 522 F.2d 916, 918-20 (9th Cir. 1975) (action by 

United States as judgment creditor of corporation for recovery of 

distributions to shareholders which rendered corporation insolvent 

is quasi-contractual action subject to § 2415(a) six-year 

limitations period), cert. denied, 423 u.s. 1087 (1976). Thus, 

the FDIC's suit was timely filed. 

III 

The defendant limited partners also contend that the letters 

of credit satisfied their obligations to make their stated capital 

contributions under Okla. Stat. Ann. tit. 54, § 158, ULPA § 17. 

Again, we disagree. 

Although Brookwood's amended limited partnership agreement 

contemplated that some limited partners would use letters of 

credit to purchase their units, Brookwood's amended limited 

partnership certificate on file with the Oklahoma Secretary of 

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Appellate Case: 88-1827 Document: 01019297109 Date Filed: 01/30/1990 Page: 8 
State specified, without qualification, that all stated capital 

contributions by the limited partners had been made in cash. 

Okla. Stat. Ann. tit. 54, § 158(a)(l), ULPA § 17(l)(a), provides 

that "[a] limited partner is liable ••• [f]or the difference 

between his contribution as actually made and that stated in the 

certificate [on file with the secretary of state] as having been 

made II Under the circumstances of this case, this 

provision makes the limited partners liable for the portion of 

their stated capital contributions which were made by letters of 

credit in lieu of cash. 

The plain terms of the amended certificate, stating falsely 

that all capital had been contributed in cash, warrant this 

outcome. But taking the analysis even further, we reach the same 

result. While Okla. Stat. Ann. tit. 54, § 145, ULPA § 4, declares 

that a limited partner's contributions may be cash or "other 

property," it is obvious that a limited partner's mere promise to 

pay his contribution is not sufficient to discharge his obligation 

to actually pay that contribution. A limited partner can promise 

to make future contributions, Okla. Stat. Ann. tit. 54, 

§ 143(a) (1) (G), ULPA § 2 ( 1) (a) (VI I ) , but he nonetheless "is liable 

. . [f]or any unpaid contribution which he agreed in the 

certificate to make in the future at the time and on the 

conditions stated in the certificate," id. § 158(a)(2), ULPA 

§ 17(1) (b). A letter of credit, in essence, is nothing more than 

a promise to pay that is secured by the credit of the issuing 

bank. See generally J. White & R. Summers, Handbook of the Law 

Under the Uniform Commercial Code § 18-1, at 709 & § 18-2, at 713 

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Appellate Case: 88-1827 Document: 01019297109 Date Filed: 01/30/1990 Page: 9 
. 

' 

(2d ed. 1980). Neither Penn Square Bank nor Brookwood ever drew 

on the letters of credit issued on behalf of the limited partners. 

Thus, in no real sense did the partnership receive the capital 

represented by the letters of credit. While the bank did release 

the letters of credit as security for their loan to Brookwood, 

"generally only conditions stated in the filed certificate of 

limited partnership will excuse payment of capital contributions 

" Partnership Equities, Inc. v. Marten, 15 Mass. App. Ct. 

42, 443 N.E.2d 134, 136-37 (1982). That the limited partners may 

have complied with the amended limited partnership agreement does 

not alter this result, since "a waiver or compromise [of a limited 

partner's liability for contributions stated in the certificate] 

shall not affect the right of a creditor of a partnership, who 

extended credit . after the filing and before a cancellation 

or amendment of the certificate, to enforce such liabilities." 

Okla. Stat. Ann. tit. 54, S 158(c), ULPA S 17(3). 3 

The limited partners contend that the FDIC cannot recover 

based upon the capital contributions stated in the amended 

certificate because the bank did not rely on the certificate in 

extending credit to Brookwood, or at the least, that there is a 

factual question regarding the bank's reliance, precluding summary 

judgment. If the FDIC were suing under Okla. Stat. Ann. tit. 54, 

S 147, ULPA S 6, no doubt this would be true. 4 But there is no 

3 The defendant limited partners admit that Penn Square Bank 

extended credit to Brookwood after the filing of the amended 

limited partnership certificate. Brief of Appellants at 8. 

4 Okla. Stat. Ann. tit. 54, S 147, ULPA S 6, in relevant part, 

provides: "If the certificate contains a false stateme11t, one who 

Continued to next page 

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Appellate Case: 88-1827 Document: 01019297109 Date Filed: 01/30/1990 Page: 10 
,' 

reliance element to recovery under id. § 158, ULPA § 17. Indiana 

Mortgage & Realty Investors v. Spira-Mart, 115 Mich. App. 141, 320 

5 N.W.2d 320, 322 (Ct. App. 1982). 

AFFIRMED. 

Continued from previous page 

suffers loss by reliance on such statement may hold liable any 

party to the certificate who knew the statement to be false." 

5 Significantly, recovery under Okla. Stat. Ann. tit. 54, § 158, 

ULPA § 17, which has no reliance requirement, is limited to the 

amount of the stated capital contribution, whereas, on proof of 

reliance a plaintiff can recover the full amount of any loss under 

id. § 147, ULPA § 6. 

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