IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

WEBSTER BANK NA, Plaintiff/Appellee,

v.

WILLIAM D. MUTKA, Defendant/Appellant.

No. 1 CA-CV 20-0128

Appeal from the Superior Court in Maricopa County

No. CV2017-002343

The Honorable Teresa A. Sanders, Judge

AFFIRMED

COUNSEL

Tiffany & Bosco, P.A., Phoenix

By Leonard J. McDonald, Jr., Michael F. Bosco

Counsel for Plaintiff/Appellee

Thomas A. Morton, PLLC, Phoenix

By Thomas A. Morton

Counsel for Defendant/Appellant

FILED 2-9-2021
WEBSTER BANK v. MUTKA

Opinion of the Court

2

OPINION

Judge Maria Elena Cruz delivered the opinion of the Court, in which 

Presiding Judge James B. Morse Jr. and Judge Paul J. McMurdie joined.

C R U Z, Judge:

¶1 William D. Mutka appeals the judgment in favor of Webster 

Bank NA on its claim for breach of a home-equity line of credit agreement. 

Mutka argues the suit was untimely because the limitations period began 

to accrue upon his first missed payment. See Mertola, LLC v. Santos, 244 

Ariz. 488, 492, ¶ 21 (2018). We hold that the statute of limitations on a home 

equity line of credit with a defined maturity date “commences on the due 

date of each matured but unpaid installment and, as to unmatured future 

installments, the period commences on the date the creditor exercises the 

optional acceleration clause.” Navy Federal Credit Union v. Jones, 187 Ariz. 

494 (App. 1996). We affirm.

FACTUAL AND PROCEDURAL HISTORY

¶2 In February 2007, Mutka and Webster Bank entered into a 

home equity consumer revolving loan agreement, also known as a home 

equity line of credit (“HELOC”). The agreement allowed Mutka to borrow 

up to $73,000 over roughly the first fifteen years, secured by a deed of trust 

on Mutka’s home. During that period, the agreement required Mutka to 

make monthly interest payments but did not require him to pay anything 

toward the principal. The agreement provided that during the second 

fifteen years, Mutka would have to make monthly principal payments 

equal to 1/180th of the outstanding loan balance, plus interest and any 

unpaid late or other charges. The loan was payable in full in February 2037.

¶3 Mutka failed to pay the monthly interest due in April 2011. 

At the time, he had drawn $72,716.27 in principal. Mutka made no further 

payments on the loan. Six and a half years later, Webster Bank exercised its 

right under the loan agreement to accelerate the debt and sued Mutka to 

collect the balance.

¶4 Mutka moved for summary judgment, arguing the applicable 

six-year statute of limitations barred Webster Bank’s claim. The superior 
WEBSTER BANK v. MUTKA

Opinion of the Court

3

court denied Mutka’s motion, and after a trial, the court entered judgment 

in favor of Webster Bank for $98,063.93.

¶5 Mutka timely appealed. We have jurisdiction pursuant to 

Arizona Revised Statutes (“A.R.S.”) section 12-2101(A)(1).

DISCUSSION

¶6 The interpretation of a statute of limitations is a legal 

question, which we review de novo. Mertola, 244 Ariz. at 490, ¶ 8. Pursuant 

to A.R.S. § 12-548(A),

An action for debt shall be commenced and prosecuted within 

six years after the cause of action accrues, and not afterward, 

if the indebtedness is evidenced by or founded on either of 

the following:

1. A contract in writing that is executed in this state.

. . . .

¶7 Webster Bank filed its complaint in December 2017, more 

than six years after Mutka defaulted by failing to make his monthly interest 

payment in April 2011. When a fixed debt is payable in installments, the 

statute of limitations “commences on the due date of each matured but 

unpaid installment and, as to unmatured future installments, the period 

commences on the date the creditor exercises the optional acceleration 

clause.” Navy Federal, 187 Ariz. at 494. Applying that principle here, the 

superior court entered judgment for Webster Bank for the unpaid principal 

balance and for all interest payments that came due within the six-year

period before the bank filed suit.

¶8 Mutka, however, argues a default on a HELOC is governed 

by Mertola, which held that the Navy Federal rule does not apply to credit 

card debt. Mertola held that “a cause of action to collect the entire 

outstanding [credit card] debt accrues upon default: that is, when the 

debtor first fails to make a full, agreed-to minimum monthly payment.”

Mertola, 244 Ariz. at 492, ¶ 21. Under that rule, Mutka argues, Webster 

Bank’s claim was barred because it filed its complaint eight months too late.

¶9 In Mertola, our supreme court expressly declined to decide 

whether Navy Federal would apply to any debt other than that arising from 

a credit card. Donges v. USAA Federal Savings Bank, 391 F. Supp. 3d 907, 911

(D. Ariz. 2019) held that the Navy Federal rule applied to a HELOC with a 
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Opinion of the Court

4

defined maturity date. We agree with the ruling in Donges and hold that, 

as in Navy Federal, the statute of limitations does not begin to run on future 

installments due under a HELOC until the lender accelerates the debt.

¶10 In distinguishing Navy Federal, the supreme court in Mertola 

emphasized the difference between a “closed-end” debt and a credit-card 

debt. In a closed-end debt such as a promissory note or the installment debt 

at issue in Navy Federal, “the principal amount of the debt is fixed and there 

is a ‘defined schedule of repayment’ specifying precisely the size of each 

payment . . . and when the payment falls due, ‘until the debt is fully 

repaid.’” 244 Ariz. at 291, ¶ 16. The court said that, by contrast, although a 

credit card may have a credit limit, the amount the borrower owes each 

month and the date the principal balance will be due may fluctuate 

depending on the amount charged and changes in the interest rate. Id. The 

court expressed concern that if the Navy Federal rule were applied to credit 

card debt, a creditor could unilaterally extend the statute of limitations by 

refraining from exercising its right to accelerate, allowing interest to accrue

at higher default rates. Id. at ¶ 19. Additionally, the court pointed out, 

credit card debt is often unsecured, so creditors do not have the incentive 

to accelerate the debt immediately by exercising a right to repossess or 

foreclose. Id.

¶11 Mutka argues his HELOC resembled a credit card account

because it had an established billing cycle, annual fee, over-limit fees, and 

terms on which Webster Bank could limit or suspend his right to borrow. 

The differences between a credit card account and a HELOC are more 

significant, however, than the similarities as they pertain to the statute of 

limitations. Like the HELOC in Donges, Mutka’s line of credit agreement 

specified a maturity date on which the entire debt would become due.

1 

Although the ultimate amount Mutka would borrow was not known until 

the end of the initial fifteen-year draw period, after that date, the amount of 

the principal indebtedness would be fixed, and the loan agreement set out 

a repayment schedule. Mutka’s HELOC also was secured by real property, 

giving Webster Bank an additional incentive to collect on its debt through 

foreclosure. See Mertola, 244 Ariz. at 492, ¶ 19.

1 Mutka contends his HELOC did not have a defined maturity date, 

but the loan agreement he executed expressly stated: “If not sooner paid, I 

promise to pay all amount I owe under this Agreement on the Maturity 

Date stated in subsection 1.d. above.”
WEBSTER BANK v. MUTKA

Opinion of the Court

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¶12 Mutka cites cases from other jurisdictions that he asserts 

“treat a home equity line of credit as a revolving credit agreement.” 

However, as Webster Bank notes, the cases are not compelling because they 

do not analyze how the statute of limitations applies to a HELOC. 

Although Mutka contends Donges is not controlling authority on Arizona 

law, we may consider it for its persuasive value. Arizonans for Second 

Chances, Rehab., & Pub. Safety v. Hobbs, 249 Ariz. 396, 412, ¶ 60 n.6 (2020) 

(citing district court orders “as persuasive authority”). And, contrary to his 

contention, the court in Donges did not mistakenly conclude that Mertola 

applied only to credit-card debt; it recognized that in Mertola “the Arizona 

Supreme Court expressly declined to decide which rule applies for other 

types of debt.” Donges, 391 F. Supp. 3d at 912 (internal quotations omitted).

¶13 As explained above, the maturity date in Mutka’s agreement 

prevents Webster Bank from unilaterally extending the statute of 

limitations period. Additionally, Webster Bank was deterred from failing 

to act because it can only collect monthly payments within the six-year 

statute of limitations. Webster Bank was essentially penalized for its delay 

in filing and unable to collect on payments outside the statute of limitations 

between April 2011 and December 2011.

¶14 Finally, there is no meaningful distinction between a creditor 

foreclosing on the secured property, as was the case in Donges, and this case,

where Webster Bank was only trying to collect a money judgment.2

CONCLUSION

¶15 For the foregoing reasons, we affirm. Both parties request 

their attorneys’ fees incurred on appeal pursuant to A.R.S. 

§ 12-341.01, and Webster Bank additionally requests its attorneys’ fees 

pursuant to the parties’ loan agreement. As the prevailing party and 

pursuant to the parties’ agreement, Webster Bank may recover its 

2 Although we agree with the ruling in Donges in that the Navy Federal 

rule applies to a HELOC with a defined maturity date, and now hold that 

limitations does not begin to run on future installments due under a 

HELOC until the lender accelerates the debt, we note that in Bridges v. 

Nationstar Mtg., 1 CA-CV 19-0556, 2021 WL 126562 (Ariz. App. Jan. 14, 2021) 

we recently held that “absent an express statement of acceleration in the 

notice of trustee’s sale, or other evidence of an intent to accelerate, recording 

a notice of trustee’s sale, by itself, does not accelerate a debt.”
WEBSTER BANK v. MUTKA

Opinion of the Court

6

reasonable attorneys’ fees and taxable costs upon compliance with Arizona 

Rule of Civil Appellate Procedure 21.