IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 95-50403

CADLE COMPANY,

Plaintiff-Appellant,

versus

1007 JOINT VENTURE; JAMES P. HALBERT;

WILLIAM N. RUSH; LOWELL J. HARO;

GREGORY M. KRONBERG; JAMES P. McMICHAEL;

WILLIAM H. SAYRE; ANTHONY B. SEIDENBERG,

Estate of DAVID H. CHENEY; DAVID G. HOPKINS,

Defendants-Appellees.

Appeal from the United States District Court

for the Western District of Texas

April 22, 1996

Before POLITZ, Chief Judge, and HIGGINBOTHAM and SMITH , Circuit

Judges.

HIGGINBOTHAM, Circuit Judge:

This appeal arises out of a suit on a promissory note executed

by 1007 Joint Venture. The question is whether suit was barred by

limitations. The note changed hands several times before The Cadle

Company acquired it. Cadle Company then sued Joint Venture to

collect a deficiency due on the note. Joint Venture moved for

summary judgment, arguing that Cadle Company's suit was time-barred

under Texas law. Cadle Company responded that as an assignee of

the Federal Deposit Insurance Corporation, it enjoyed the longer

federal statute of limitations applicable to suits by the FDIC.2

The district court granted summary judgment for Joint Venture,

determining that Cadle Company's suit was time-barred under Texas

law and concluding that the federal period of limitations did not

apply. We affirm.

I.

On August 1, 1983, the Round Rock Industrial Development

Corporation a greed to loan $850,000 to 1007 Joint Venture to

finance Joint Venture's purchase of an office building located in

Round Rock, Texas. On August 11, 1983, Joint Venture executed a

promissory note in favor of Round Rock Industrial in the original

princ ipal amount of $850,000. Round Rock Industrial immediately

endorsed the note to Texas American Bank, Fort Worth.

On July 20, 1989, Texas American/Fort Worth was declared

insolvent. The Federal Deposit Insurance Corporation was appointed

receiver for Texas American/Fort Worth. On that same day, the FDIC

as receiver for Texas American/Forth Worth transferred th e Joint

Venture note to Texas American Bridge Bank, N.A. (later known as

T eam Bank). The note was not in default when Texas American was

declared insolvent, nor when the FDIC transferred it to Team Bank.

In August 1991, Team Bank sent Joint Venture a formal notice

of default and a notice of intention to accelerate. In October

1991, Team Bank foreclosed on the property securing the note,

leaving a deficiency. In November 1992, Team Bank merged with Bank

One and formed Bank One, Texas, N.A.1 "If the price at which real property is sold at a foreclosure

sale under section 51.002 is less than the unpaid balance of the

indebtedness secured by the real property, resulting in a deficiency, any action brought to recover the deficiency must be

brought within two years of the foreclosure sale and is governed by

this section." Tex. Prop. Code § 51.003.

3 In November 1993, The Cadle Company acquired the note from

Bank One/Texa s. In September 1994, Cadle Company sued Joint

Venture in federal district court, asserting diversity jurisdiction

and seeking a judgment for the amount due on the note.

Joint Venture moved for summary judgment, arguing that Cadle

Company's claim f or a deficiency was time-barred under Section

51.003 of the Tex as Property Code, which provides that a suit to

collect a deficiency resulting from a real-estate foreclosure must

be brought within two years after the foreclosure. 1 Joint Venture

contended further that, because the note was not in default when

the FDIC transferred it (to Team Bank), Cadle Company was not

entitled to the six-year statute of limitations governing F DIC

actions under the Financial Institu tions Reform, Recovery, and

Enforcement Act. S ee 12 U.S.C. § 1821(d)(14). The district court

agreed and granted summary judgment for Joint Venture.

II.

Cadle Company ably argues that F IRREA's six-year statute of

limitations does not apply to its suit against Joint Venture. We

disagree.

FIRREA provides, in relevant part, that "the app licable

statute of limitations with regard to any action brought by the2 Cadle claims to be an assignee of Bank One/Texas, which is an

assignee of the FDIC.

3 Section 2415(a) provides that "every action for money damages

brought by the United States of an officer or agency thereof which

is founded upon any contract express or implied in law of fact,

shall be barred unless the complaint is filed within six years after the right of action accrues." 28 U.S.C. § 2415(a).

4 [FDIC] as conservator or receiver shall be

— (I) in the case of any

contract claim, the longer of

— (I) the 6-year period beginning on

the date the claim accrues; or (II) the period applicable under

state law

. . . ." 12 U.S.C. § 1821(d)(14)(A). Under FIRREA, "the

date on which the statute of limitation begins to run on any claim

described in [§ 1821(d)(14)(A)] shall be the later of — (I) the

date of the appointment of the [FDIC] as conservator or receiver;

or (ii) the date on which the cause of action accrues." 12 U.S.C.

§ 1821(d)(14)(B). FIRREA thus establishes a six-year limitations

period for a suit by the FDIC to collect on a note, regardless of

the otherwise applicable state statute of limitations.

Cadle Company relies chiefly on Federal Deposit Ins. Corp. v.

Bledsoe , 989 F.2d 805 (5th Cir. 1993), in arguing that because it

is an assignee of the FDIC, 2 it is entitled to the longer period of

limitations that FIRREA extends to actions brought by the FDIC. In

Bledsoe

, we held that an assignee of the FSLIC enjoys the six-year

limitations period that 28 U.S.C. § 2415(a) extends gener ally to

suits brought by federal agencies. 3 We explained: "As [FIRREA] is

silent as to the rights of assignees [of the FDIC or the FSLIC], we

turn to the common law to fill the gap. Fortunately, while the

statute i s quiet, the common law speaks in a loud and consistent4 Cadle Company points to two Texas cases that held that an

assignee received FDIC's six years even though the notes at issue

were not in default when the FDIC took over as receiver. E KA

Liquidators v. Phillips

, 883 S.W.2d 178 (Tex. 1994); The Cadle

Company v. Weaver

, 883 S.W.2d 179 (Tex. 1994). But in those cases,

the notes went into default while the FDIC still had them. Joint

Venture argues not that the note must have already been in default

when the FDIC acquired it, but that default must have occurred some time before the FDIC transferred it away.

5 voice: An assignee stands in the shoes of his assignor ." Id. at

810. We concluded that the assignee in B ledsoe "stood in the shoes

of the FSLIC, the assignor, and thus received the FSLIC's six year

period of limitations." I d. ; see also Davidson v. Federal Deposit

Ins. Corp. , 44 F.3d 246 (5th Cir. 1995) (holding that transfer of

note in default to FDIC triggered six-year statute of limitations

under 28 U.S.C. § 2415(a)).

Joint Venture contends that this case differs from Bledsoe and

Davidson in that these notes were in default when transferred to

the FSLIC and the FDIC, respectively. According to Joint Venture,

FIRREA's longer period of limitations attached to the defa ulted

notes in Bledsoe and in Davidson only because the fact of default

meant that a claim had accrued be fore the FSLIC and the FDIC

transferred the notes; the existence of a claim, in turn, activated

FIRREA's limitations period while the notes were in the hands of

the FSLIC and the FDIC. On this view, FIRREA's six-year period

comes into play only if a claim accrues on a note either before the

FDIC acquires it, or while th e FDIC has it. 4 Joint Venture thus

argues that because the note in this case was not in default until

after the FDIC transferred it to Bank One/Texas, Bledsoe is not

controlling.6

Cadle Company responds that in Bledsoe , "[n]o distinction or

limitation was made depending upon whether the note in question was

in default when transferred by the FDIC." Cadle Company points out

that FIRREA itself "makes no distinction between a note that is in

default and a note that is not in default when the FDIC obtains

possession of the note." It is true that neither B ledsoe nor

FIRREA draws an express distinction based on the timing of default.

Since the note in Bledsoe was in default when the FDIC acquired it,

it is silent on the issue befo re us, and our task today is to

address that silence.

Bledsoe

, to be sure, teaches that "[a]n assignee stands in the

shoes of his assignor," 989 F.2d at 810. Cadle Company concedes

here, as it must, that it did not acquire a ll of the rights and

powers of the FDIC. Thus, our decision today requires that we ask

an additional question: did the transfer of the note carry with it

the longer limitations period.

We agree with Joint Venture that an assignee of the FDIC can

invoke FIRREA's six-year period of limitations only if the note at

i ssue was in default either before the FDIC acquired it or while

the FDIC owned it. FIRREA's six-year period of limitations has no

significance independent of a claim to which it applies; it

attaches only to an accrued claim, not to a performing note.

Indeed, the text of FIRREA favors this view ; it refers to "the

applicable statute of limitations with regard to any action brought

by the [FDIC]." 12 U.S.C. § 1821(d)(14)(A). This limitations

period begins to run on the later of "the date of the appointment7

of the [FDIC] as conservator or receiver" or "the date on which the

cause of action accrues." 12 U.S.C. § 1821(d)(14)(B). The sixyear period is not triggered by the FDIC's appointment as receiver;

rather, it becomes relevant only upon the accrual o f a cause of

action, at which time it identifies the starting date for the sixyear period. Until a note is in default, there is no claim and

hence no need to ask whether FIRREA's federal limitations rule

supplants an otherwise applicable state statute of limitations.

We expanded the reach of federal law in B ledsoe in part on

federal policy concerns that are here less salient. In B ledsoe

, we

emphasized the need to facilitate "Congress' policy of protecting

failed institutions' assets." 989 F.2d at 811. We quoted F all v.

Keasle r , 1991 WL 340182, at *4 (N.D. Cal. Dec. 18, 1991), which

explained as follows:

To hold that assignees are relegated to the state statutes of

limitations would serve only to shrink the private market for

the assets of failed banks. It would require the FDIC to hold

onto and prosecute all notes for which the state statute of

limitations has expired because such obligatio ns would be

worthless to anyone else. This runs contrary to the policy of

allowing the FDIC to rid the federal system of failed bank

assets.

Bledsoe , 989 F.2d at 811. These market concerns, to be sure, are

sharpest when a note held by the FDIC is in default, since such a

note has no value to a prospective tr ansferee whose claim on it

would be time-barred under state law. This reasoning loses force

with a note performing when the FDIC transfers it; because such a

note is not in default, it has value to a prospective transferee

and no limitation period is running. A market thus exists for such

a note without an extension of FIRREA's limitations period to an8

assignee of the FDIC. Though Cadle Company may be correct that a

performing note will tend to have a slig htly higher value if it

c arries with it FIRREA's longer limitations period, such a "more

money" argument does not by itself mandate that we read FIRREA as

displacin g an otherwise applicable state statute of limitations.

See Davidson , 44 F.3d at 252 (finding that FDIC could not prevail

on the ground that there was a federal interest in "sim ply not

depleting the deposit insurance fund").

AFFIRMED.