*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.

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United States Court of Appeals

Fifth Circuit

FILED

April 5, 2007

Charles R. Fulbruge III

Clerk

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 06-60470

Summary Calendar

PAUL H. LEWIS & SHELIA A. LEWIS, 

Plaintiffs-Appellants,

versus

UNITED STATES DEPARTMENT OF AGRICULTURE/

FARM SERVICE AGENCY, 

Defendant-Appellee.

Appeal from the United States District Court

for the Northern District of Mississippi

Before DeMOSS, STEWART, and PRADO, Circuit Judges.

PER CURIAM:*

This appeal arises from the district court’s grant of summary judgment to the United States

Department of Agriculture-Farm Service Agency (“FSA”) and partial grant ofsummary judgment to

Paul and Shelia Lewis (the “Lewises”). We affirm the district court’s judgment.
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I. FACTUAL AND PROCEDURAL BACKGROUND

On February 11, 1987, the Lewises’ executed two farmloans with FSA, formerlythe Farmers

Home Administration, for their catfish operation. Loan 44-05, due January 1, 1988, had a face value

of $101,000.00 bearing 7.5 % interest. Neither party contests that all applicable statutes of

limitations have run onLoan 44-05. Loan 44-06, due in sixteen annual installments of $6,760.00, had

a face value of $72,591.38 bearing 4.5 % interest. Loan 44-06 contained an optional acceleration

clause, which stated that “the government at its option may declare all or any part of any such

indebtednessimmediately due and payable.” The Lewises missed the first two payments for Loan 44-

06, due on January 1, 1988, and January 1, 1989. In response, on June 14, 1989, the FSA sent an

Attachment 9 notice under 7 C.F.R. § 1951.907(f)(3), entitled “Notification of Intent to Accelerate

or Continue Acceleration of Loans and Notice of Your Rights” (the “Notice”). The Notice advised

them of the amount overdue , $87,267.45, and right to apply for loan service programs. The Notice

also stated that FSA sent the Lewises a copy of an Attachment 1 notice on November 11, 1988,

which notified them of the overdue debt and provided information about farm loan programs. In

1994, FSA received $1,835.00 from the income tax refund of Shelia Lewis pursuant to the

administrative offset allowed in § 1951.121-124. In October 2003, the FSA Mississippi State

Settlement Review Committee reviewed Loan 44-06 and recommended to classify the loan as

“currently not collectible.” The Settlement Review Committee then certified the loans to the

Treasury Department for offset pursuant to 31 U.S.C. §§ 3711 and 3716 because an investigation

revealed no assets available to satisfy a judgment lien. On April 22, 2004, the Treasury Department

transferred the Lewises’ delinquent account to a private collection agency. 
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The Lewises’filed suitseeking to enjoin the FSA fromcollecting on the two farmloans. They

also sought a declaratory judgment that the statutes of limitations had run for regular collection and

administrative offset. FSA conceded that the statutes of limitations had run on Loan 44-05 and both

parties moved for summary judgment on the remaining issues. The district court granted in part and

denied in part the Lewises’ motion for summary judgment and granted FSA’s motion for summary

judgment. The court reasoned that the six year statute of limitations under 28 U.S.C. § 2415(a)

prevented collection on the installments due from January 1, 1988, to January 1, 2000; and the ten

year statute of limitations under 31 U.S.C. § 3716(e) prevented collection on the installments due

from January 1, 1988, to January 1, 1996. FSA could still collect payment, however, on all

installments due after these dates. Accordingly, the district court enjoined FSA from attempting to

collect on the time-barred installments. The Lewises timely appealed the district court’s judgment,

arguing that the statutes of limitationsfor Loan 44-06 began to run against the entire debt at the time

of their default on the first scheduled payment.

II. STANDARD OF REVIEW

We review de novo the district court’s grant of summary judgment, applying the same legal

standards as the district court. Machinchick v. P.B. Power, Inc., 398 F.3d 345, 350 (5th Cir. 2005).

In deciding a motion forsummary judgment, the court must determine whether the submissionsshow

that no genuine issue exists as to any material fact and that the moving party is entitled to judgment

as a matter of law. Fed. R. Civ. P. 56(c); Hart v. Hariston, 343 F.3d 762, 764 (5th Cir. 2003). In

deciding whether a fact issue has been created, the facts and inferences must be reviewed in the light

most favorable to the nonmoving party. Reeves Brokerage Co. v. Sunbelt Fruit & Vegetable Co.,

336 F.3d 410, 412 (5th Cir. 2003).
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III. DISCUSSION

If a borrower defaults on his farm loan, the FSA implements a collection process set forth in

7 C.F.R. § 1951.907(a)-(h). These regulations determine the type of notice sent to the borrower

based on the status of the loan. In this case, the FSA determined that § 1951.907(f) applied because

the Lewises’ payments were more than 180 days delinquent and not yet accelerated by the agency.

The Lewises do not dispute this assertion. Attachments 1 and 2 notices inform borrowers of an

outstanding debt and about loan service programs. To apply for the loan service programs, the

borrower must complete an application within forty-five days after receipt of Attachments 1 and 2

notices. If the borrower fails to respond in a timely manner or submits an incomplete form, and the

FSA has not accelerated the account, then the agency sends an Attachment 9 notice pursuant to §

1951.907(h)(2). An Attachment 9 notice includes the amount of the borrower’s debt and provides

options to avoid loan acceleration. An Attachment 9 notice also states that FSA will accelerate the

borrower’s farm loans but does not indicate acceleration and makes no demands for payment. 

The collection of farm loans are subject to two statutes of limitations: 28 U.S.C. § 2415 and

31 U.S.C. §3716. Section 2415 reads that actions for money damages brought by the United States

“shall be barred unless the complaint is filed within six years after the right of the action accrues . .

. . The provisions of this section shall not prevent the United States or an officer or agency thereof

from collecting any claim of the United States by means of administrative offset, in accordance with

section 3716 ofTitle 31.” 28 U.S.C. § 2415(a) & (i). Section 3716 prevents the administrative offset

of “a claim under this subchapter that has been outstanding for more than 10 years . . . .” 31 U.S.C.

§ 3716(e)(1). The applicable regulations define “outstanding” under this subchapter the same as

“accrue” under § 2415(a). 31 C.F.R. § 901.3. 
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The Lewises argue that their default on the first installment triggered the limitations period

under § 2415(a). We address the issues of whether the statutes run on each installment as payment

becomes due or on the entire debt amount after default on one installment. We also determine

whether FSA’s actions and conduct amount to acceleration of Loan 44-06 even though FSA never

sent notice of acceleration.

The Fifth Circuit has not ruled on these issuesin the context of installment government loans

when the debtor never made any payments. See United States v. Bloom, 112 F.3d 200, 204-05

(1997). The Lewises cite SMS Fin., LLC v. ABCO Homes, Inc., 167 F.3d 235 (5th Cir. 1999), and

FDIC v. Belli, 981 F.2d 838 (5th Cir. 1993), for the proposition that their default on the first

scheduled payment,January 1, 1988, triggered the statute of limitations asto the entire debt amount.

SMS and Belli are distinguishable from the instant case. In SMS, the parties agreed that the statute

of limitations ran against the entire debt on the maturation date. The case primarily dealt with

whether the plaintiff received the benefit of a tolling provision under § 2415(a). 167 F.3d at 242.

In Belli, a bank demanded full payment under two guarantees and a promissory note. 981 F.2d at

839. The following year, the FDIC was appointed receiver of the Bank, and in its corporate capacity,

the FDIC purchased the notes and continuing guarantees. Id. The FDIC filed suit more than six years

later, seeking to recover the outstanding balance on the promissory note, as well as the amount due

on the continuing guarantees. Id. The court held that the FDIC’s claims were time barred, reasoning

that 

Neither the FDIC nor the opinions on which it relies point to authority for the

proposition that a transfer from one party to another of a cause of action that has

already accrued somehow effects a new accrual for purposes of § 2415(a). To the

contrary, the ordinary usage of the term “accrues” is that a cause of action “accrues”
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when “it comes into existence.” Assignment of a cause of action that has already

accrued does not ordinarily re-commence the limitations period. 

Id. at 840. In this case, the district court relied upon the Ninth Circuit’s holding in United States v.

Dos Cabezas Corp., 995 F.2d 1486 (9th Cir. 1993). The Dos Cabezas court concluded that a

creditor may not hold a debtor liable on future installments when the contract contains an optional

acceleration clause. Therefore, “unless the creditor exercises the option, the statute of limitations

applies to each installment separately, and does not begin to run on any installment until it is due.”

Dos Cabezas Corp., 995 F.2d at 1490 (citations omitted). 

The Lewises argue that Dos Cabezas runs afoul of Fifth Circuit precedent. We read Dos

Cabezas and Belli as pronouncing consistent statements of law. The FSA did not receive this debt

froma third party after acceleration. Here, the debt arose from a contractual loan agreement between

the Lewises and the FSA, and the FSA never accelerated Loan 44-06 pursuant to the governing

regulations. This reasoning comports with the interpretation of § 2415(a) from other Circuits in the

context of federal installment contracts. See, e.g., Elephant Butte Irr. Dist. of N.M. v. Dep’t of

Interior, 160 F.3d 602 (10th Cir.1998); Bd. of Trs. of Dist. No. 15 Machinists’ Pension Fund v.

Kahle Eng’g Corp., 43 F.3d 852 (3rd Cir.1994); United States v. Feterl, 849 F.2d 354, 356 (8th

Cir.1988); Trs. for Alaska Laborers-Construction Inds. Health and Sec. Fund v. Ferrell, 812 F.2d

512 (9th Cir.1987); United States v. Alessi, 599 F.2d 513, 515 (2d Cir.1979). Accordingly, we hold

that the statutes of limitations in § 2415(a) and § 3716(e)(1) run from the due date of each

installment.

Alternatively, the Lewises argue that the Notice dated June 13, 1989, demonstrates

acceleration of Loan 44-06, and thus, it triggered the statutes of limitations as to the entire debt
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amount on both loans. The Notice informed the Lewises that they were $87,267.45 in arrears on the

two government loans. This calculation includes the entire amount of Loan 44-05 and the two

delinquent installments of Loan 44-06. The Notice sent to the Lewises indicates that FSA will

accelerate the loan unless the borrower pays his outstanding loan amount, lists servicing options,

providesstepsto be taken to avoid acceleration, and gives information about what will happen if the

borrower does not respond to the notice. The form reads that “if you do not respond to this notice

. . . FmHA will accelerate or continue acceleration of any loans . . . .” The requisite acceleration

notice under 1955(d)(2), on the other hand, contains unequivocal language stating “Notice of

Acceleration of Your Debt to the Farmers Home Administration and Demand for Payment of that

Debt.” The plain language of the regulations directing the sequence of collection notices, and the

FSA’s compliance with the regulations, do not indicate that the agency accelerated Loan 44-06 at any

point in time. Therefore, the ten-year statute of limitations for administrative offsets applied to the

installments as they became due.

Conclusion

Loan 44-06 required the Lewises to pay annual installments over a period of sixteen years.

The six-yearstatute oflimitationsfor money damages, pursuant to § 2415(a), hasrun for installments

due between January 1, 1988, and January 1, 2000. The ten-year statute of limitations for

administrative offsets, pursuant to § 3716(e), has run for installments due between January 1, 1988,

and January 1, 1996. For the foregoing reasons, we affirm the district court’s judgment.