### T E X A S C O U R T O F A P P E A L S , T H I R D D I S T R I C T , A T A U S T I N

NO. 03-09-00097- CV

Maurice Stephens a/k /a Maurice Wayne Ste phens , Ind ividu ally and as Testam entary Trustee u/w/ o Jess M. Ste phens , Dec eased, and as T rustee of the Jess M. Stephens and Alice Aber nathy S tephens Irre vocable Trust; and Li sa P rice , Appellan ts

v. LPP Mort gage, Ltd., Appellee

F ROM TH E DISTRI CT COURT O F CO NCHO CO UNTY, 119 TH JUDICI AL DISTRICT NO. DAC-07 -03 883, H ONO RAB LE B EN WO ODW ARD, JUDGE P RESIDING

O P I N I O N

This is a case involving judicial fore closure of a l i en o n re al estate. Appellee L PP Mortg ag e, L td., the lienholder under the terms o f a deed of trust secur ing pay ment of

a promissory note, filed this suit to fore close its lien on the rea l proper ty s ec u ri n g the debt. L PP Mortg ag e filed this suit afte r first secur ing a judgme nt on the debt in a separ ate, previously filed suit and unsucce ssfully attempting to collect on that judgme nt. Appellants—Maur ice Stephens a/k/a Maurice Way

ne Stephens, individually and as testamentar y trustee u/w/o J ess M. Stephens, dece ased, a

nd as trustee of the Jess M. S tephens and Alice Aberna thy Stephens I rre vocable Trust, and L isa Price—owne d the prope rty at issue and challeng e L PP Mortg ag e’s ability to f orec lose its lien in this m anner . The district cour t entere d judgme nt in favor of L PP M ortg ag e.Appell an t s asser t that L PP Mortg ag e’s suit is barr ed by res judicata and waiver , based on the prior lawsuit in which L PP Mortg ag e sued on the note, but did not pursue fore closure of its lien either judicially or non-judicially

. The previous lawsuit culminated in a judgme nt in L PP M ortg ag e’s f

avor on the debt. We hold that L PP Mortg ag e’s curre nt suit to fore close it s lien is not barr ed by res judicata or waive r. T h e j u dg ment on the note has not been satisfied, and the

rec overy of a judgme nt on a note secur ed by a lien does not p re cl u d e fo rec losure on the lien in

a subsequent suit i n s t i t u t ed for that purpose. Appellants also asser t that L PP Mortg ag e’s suit is barr ed by limit ations, based on the application of the Texas statute of limit ations applicable to debts. Howe v er , L P P M o rtg ag e obtained the note and deed of trust via transfe r from the U.S. Small Business Administration (the “SBA ”), a fede ral ag ency . The d ee d o f t rust contains express contra ctual provisions establishing the choice of fe dera l law re lating to limitations. W e hold that, based on the plain lang uag e of the deed of trust, and in acc ordanc e with the principle that an assig nee

rec eives the full rig hts of the assig nor, L PP Mortg age rec eived the benef it of the deed of trust provisions calling for the application of fede ral law rela ting to limit ations on debts owed to the SBA. We affir m the judgme nt of the district court.

Factual an d Procedural Background

L PP Mortg ag e is the benef iciary —by assig nme n t—

u n d e r a d e e d o f tr

u s t e n c u mbe ring

rea l proper

ty owned by appellants in Concho County and secur ing repa y ment of a cer

tain promissory
note of which L PP Mortg ag e is the holder—a lso by assig nment. When appellants’ prede cessor s in interest orig inally

executed the note a

nd deed of

trust at issue in this suit on October 21, 1980, the SBA was t h e holder of the note and the benef iciary under the deed of trust. On August 3, 2000,
2befor e the note m ature d, the S BA assig ned the note and deed of trust to L PP Mortg ag e. The note

matured pur suant to its terms on October 15, 2000. I t was not fully paid. L PP Mortg ag e filed suit to co l l ec t o n the note on November 1, 2001, in Tom Gre en County (the county of residenc e of the individuals obligated to pay under the note). The 2001 lawsuit i n v o l v ed cl ai ms only with respe ct to the note. L PP Mortg ag e did not pursue fore closure of its lien under the deed of trust, or o therwise place the deed of trust at issue. On October 20, 2003, the district court enter ed judgme nt on the promissory note in favor of L PP Mortg ag e. Under the judgme nt, L PP Mortg ag e was entitled to rec over the sums due and owing under the terms of the note. A writ of execution was issued on the judgme nt. Howeve r, the writ was returne d “Nulla B ona,” a

nd the judg ment rema ins unsatisfied. P u rs u an t t o the terms of the deed of trust, the benef iciary had the rig ht to tak e possession of or sell the secur ed proper ty upon the borrowe r’s failure to pa y the indebtedness. On Fe bruar y 15, 2007, L PP Mortg ag e filed this suit for judicial fore closure of its lien ag ainst appellants in Co ncho County district court, seeking to enfor ce the deed of trust with respe ct to the proper ty

secur ing the debt. Following a bench trial, on J anuar y 28, 2009, the district court enter ed judgme nt 1 in favor of L PP Mortg ag e, order ing fore closure of L PP Mortg ag e’s lien. Appellants appea l, alleg ing

err or in the district court’s denial of their aff irmative defe nses of res judicata, waiver , an d limit ations.

Appellant Maurice Stephens filed a counter claim ag ainst Har old L

. Stephens, a third party , 1 for indemnity

. That counter claim was not subject to final dispositi on by the district court’s judgme nt and is not at issue in this appeal. 3Stan dard of Revie w Appellants challeng e the district court’s c o n c lu s io n s o f la w th a t L PP Mortg ag e’s rig ht to forec lose the dee d of trust is not barre d by res judica ta, waive r, or limit ations. The fa cts of this

case are not disputed. W e conduc t a de novo revie w of the di strict court’s leg al conclusions. See Reliance Nat’l Indem

. Co. v. Advance’ d Temps., Inc. , 227 S.W

. 3 d 4 6 , 5 0 (Tex. 2007); Hack enjos v. Hac kenjos , 204 S.W .3d 906, 908 (Tex. App.—Dallas 2006, no pe t.).

Res Judicata Appellants contend that afte r suing on the promissory note and reduc ing that claim to judgme nt, L PP Mortg ag e was barr ed by res judicata from pursuing the reme dy of fore closure of the deed of trust lien secur ing repa y ment of the note. For res judicata to apply , there must be (1) a prior final judgme nt on the merits by a court of competent jurisdiction, ( 2) identity of parties or those in privity with them, and (3) a second action based on the same claims that wer e raised or could have been raised in the first action. Citi zens Ins. Co. v. Dacc ach , 217 S.W .3d 430, 449 (Tex. 2007). The doctrine of res judicata s ee k s t o b ring an end to litigation, preve nt vexatious litigation, maintain stability of court decisions, promote judicial economy , and preve nt double rec overy . Id. Under the doctrine, if a plaintiff preva ils in a lawsuit, his cause of action merg es into the judgme nt and the

cause of ac tion dissolves. Jeane s v. Hende rson , 688 S.W .2d 100, 103 (Tex. 1985). The que stion, here , is whether L PP Mortg ag e was require d to liti g ate its claim for judicial fore closure of its lien as par t of its prior suit on the promissory note.

4I t has long been the rule in Texas that “suit may be maintained on a note secur ed by

lien without enfor ceme nt of the l i en , an d af t er judgme nt another suit can be broug ht to fore close the lien.” Kempner v . Comer , 11 S.W . 194, 196 (Tex. 1889).

I t is so well settled as not to be controve rted that the rig ht to rec over a persona l judgme nt for a debt secur ed by a lien on land a nd the rig ht to have a f

orec losure of lien are sever able, and a plaintiff may elec t to seek a p er s o n al judgme nt without fore closing the lien, and e ven without a wa iver of the lien.

Carter v. Gray , 81 S.W .2d 647, 648 (Tex. 1935). “[A] cre ditor can establish liability and there afte r bring a subsequent suit to fore close his lien.” Lodal & Bain Eng’rs, Inc. v. Bayfield Pub. Util. Dist. , 583 S.W .2d 653, 654-55 (Tex. Civ. App.—Houston [1st Dist.] 1979), rev’ d o n other grounds , 602 S.W .2d 262 (Tex. 1980).

Appellants argue, howeve r, that this longsta nding rule was overr

uled by the Texas Supreme Court’s dec ision in Barr v. Resolution Trust Corp. , 837 S.W .2d 627 (Tex. 1992). I n Barr , the supreme court “reaf fi rm ed” the transac tional approa ch to res judicata, which rela tes to what claims could have been litigated in a prior lawsuit. See 837 S

. W

. 2 d at 6 3 1

. Under the
transac tional a

pproac h, res judicata may apply if the subsequent suit a rises out of the same subject
matter as a p revious suit and, throug h the exercise of diligenc e, could have been litigated in the previous sui t. See id. A determination of wha t constitutes the s ubject matter of a suit require s an examination of the fac tual basis of the c laims w ithout re g ard to the form of a ction. See id. at 630.

Appellants rely on the principle that “in order to asce rtain t h e entire ag ree ment betwee n contra cting parties, separate documents executed at the sa me time, for the sa

me purpose, and in the course of the same transac tion are to be construed toge ther.” See Jim W alter Homes, Inc.
5v. Schuene mann , 668 S.W .2d 324, 327 (Tex. 1984). Acc ording to appellants, if the note and deed of

t ru s t s h ould be construed toge ther based on this principle, it follows that under the transac tion al approa ch to res judicata—a s set out in Barr —a final judgme nt on the note will bar a subsequent suit to forec lose the lien.

We disag ree . The fa ct that two documents should be viewed toge ther for pur poses

o f co n s t ru i n g those documents’ terms is not, by itself, sufficie nt to require all claims under eithe r document to be broug ht toge ther, p a r tic ularly g iven that, here , the two documents cre ate two separ ate and sever able rig hts held by L PP Mortg ag e. When a debt is memorialized by a note that is secur ed by a lien, the note and lien constitute separ ate obligations. See Aguero v. Ramirez , 70 S.W .3d 372, 374 (Tex. App.—Corpus Christi 2002, p et. denied) ; W hittingt on v. W

hittingt on , 853 S.W .2d 193, 195 (Tex. App.—B eaumont 1993, no writ). Such separ ate obligations may be litigated in separ ate lawsuits. See Carter , 81 S.W .2d at 648. Therefor e, the holder of a note and secur ity interest may bring suit and obtain judgme nt on the not e, and—if , as is the case here, the holder did not reque st fore closure in that suit, the judgme nt on the note i n t h e h o l d er ’s favor is not satisfied, and no provisions of the note or deed of trust contra ctually alter the parties’ reme dies—the lien-cr editor may later br ing suit for

judicial fore closure of

the lien. Our conclusion is consistent with the supreme court’s application of the transac tional approa ch to res judicata actua l ly applied in Barr

. Geor g e Ba rr was one of two partne rs in a partne rship that executed a promissory note, and both p ar t n ers executed a persona l g uara nty of the note. See 837 S.W .2d at 628. The holder of the note, Sunbelt Fe dera l Savings, filed suit ag ainst both the partne rship as maker of the note and Ba rr’ s partne r as g uara

ntor. I n a separ ate suit, Sunbelt

6sued Ba

rr under the g uara

nty ag ree m en t , but the trial court enter ed a take- nothing judgme nt in favor of Ba

rr. See id. I n response , Sunbelt amende d its pleading s in its first lawsuit to asser t a claim ag ainst Ba

rr in his capa city as partne r in the partne rship. See id. The s u p re me court held that

res judicata barr ed Sunbelt’s attempt to add Ba rr as a party

. See id. at 631. The court observe d that the note and Ba

rr’ s g uara nty ag ree ment we re ex ecute d as part of a single transac tion. See id. Howeve r, the court also observe d that in both suits Sunbelt soug ht to hold Ba rr “primar ily liable for pay ment of the note” and soug ht “the same amount of damag es.” See id. This is signific ant. I n this

case , there is a longsta

nding rule in Texas that the note and lien constitute separ ate obligations, and
t h ey i nvolve di ffe rent remedies. Thus, while i n its first suit L PP Mortg ag e sought and obtained a

m o n ey judgme nt ag ainst those parties obliga ted on the note, in this suit L PP Mortg ag e seeks t o enforce t h e d ee d of trust and obtain the rig ht to judicially fore close its lien ag ainst the proper ty encumbe red by the lien. The claims in the two lawsuits in Ba r r were eac h attempts to reduc e a 2 debt to judgme nt. Her e, the claims in the two suits are differ ent, the reme dies soug ht are differ ent, and the parties are differ ent. L PP Mortg ag e’s curr ent suit for judicial fore closure of a lien ca nnot 3 be bar red by res judicata base d solely

on a pre vious suit reducing the debt to a money judgme nt. Moreove r, we are persua ded by the fac ts that (1) a state statute can modify the g ener al rule that a party who sues a maker on a note is not prec luded under the doctrine of res judicata from pursuing the secur ity by way of fore closure, see Restatement (Third) of Property : Mortg ag es § 8.2

This distinction is highlig hted by the fact that the first lawsuit was filed in the county of 2 residenc e of the maker s of the note, T o m Gr ee n C o unty , and the curr ent lawsuit was filed in the county in which the re al prope rty encumbe red by

the lien is located, Concho County

. The prope rty

at issue had be en tra

nsfer red by the orig inal obligor s on the debt. 3 7cmt. a, repor ters’ note (1997) (identify ing six states with “one- action” leg islation); an d (2) no Texas statute establishes such a one-a ction rule, see, e.g. , Tex. Bus. & Com. Code Ann. § 9.601(a) (West S u p p . 2009) (af

ter defa ult, secur ed party may reduc e claim to judgme nt, fore close, or otherwise enfor ce claim or secur ity interest by any available judicial proce dure)

. T o hold as appellants argue would be to acc omplish by g ener al res judicata principles what would otherwise
seem to re quire spec ific leg islative action. We decline to do so. 4 We are also persua ded by the policy conce rns ident ified by the United States Ba nkruptcy Court for the Southern District of Texas in its co n s i d er at ion of this issue. See In re Gayle , 189 B.R. 914, 919 (B ankr. S.D. Tex. 1995). I f a judgme nt on the note p re v en ted a suit for fore closure of a lien secur ing the debt, debtors would have incentive not to satisfy any judgme nt in favor of the holder of the note. As a re s u l t , cr ed i t o rs would be forc ed, as a prac tical matter, to seek forec losure (whether judicial or n o n -j u d i ci al ) prior to or i n conjunction wit h any suit on a promissory note, even when fore closure is the less desirable reme dy for either or both pa rties. See i d

. I n contra st, by permitting the cre ditor to sue on a note without forf eiting the reme dy of fore closure, our holding prese rves the cre ditor’s ability to rec over the amounts owed without having to pursue the r emedy

of for eclosure when suc h reme dy may not be pra ctical or

nece ssary . W e conclude that until the underly ing debt is actua lly satisfied, the rec ov er y o f a judgme nt on the note secur ed by a deed of trust lien, wher e fore closure of the li en h as not been soug ht in that suit, does not merg e the deed of trust in the judgme nt and does not prec lude

We note that the Restatement of J udg ments applies both the transact i o n al ap p roach to 4 res judicata, see Restatement (Second) of J udg ments § 24 (1982), and the g ener al rule that a judgme nt on a note does not pre clude a subsequent suit for for eclosure , see id. § 18 cmt. g

. 8fore closure on the lien in a su b sequent suit instit uted for that purpose. The district court did not

err in concluding that L PP M ortg ag e’s r ight to for eclose was not bar red by res judica ta. 5

Waiver Appellants contend that th e d istrict court err ed in concluding that the aff irmative defe nse of waiver did not bar L PP Mortg ag e’s claim for judicia l forec losure. Waiver involves the intentional relinquishment of a known rig h t or intentional conduct inconsistent with claiming
t h at rig ht. See Tenneco Inc. v. Enterprise Prods. Co. , 925 S.W .2d 640, 643 (Tex. 1996). Th e elements of waiver include (1) an exis ting rig ht, benef it, or advanta g e held by a party , (2) the party ’s
actua l knowledg e of its exis tence , and (3) the party ’s actua l intent to relinquish the ri g ht, or intentional conduct inconsistent with the rig ht. Ulico C as. Co. v. All ied Pi lots Ass’n , 262 S.W .3d 773, 778 (Tex. 2008).

I n their attempt to show waiver , appellants rely solely on the fac t that L PP Mortg ag e, in its 2001 lawsuit, sued only on the promissory note and did not pursue the reme dy of fore closure under the deed o f t ru s t

— an available reme dy that L PP Mortg ag e presumably knew exis ted. Howeve r, we have alre ady held that the filing of suit and rec overy of a judgme nt on a note secur ed by a lien does not prec lude fore closure on the lien in a subsequent suit institut ed for that purpose. See, e.g. , Carter , 81 S.W .2d at 648. There fore , L PP Mortg ag e’s filing s u i t o n t h e n o te in the

Appellant L isa Price cites Kermacy v. First Unitarian Church of Austin , 361 S.W .2d 734, 5 736 (Tex. Civ. App.—Austin 1962, writ ref ’d n.r.e .), to argue that the or igina l debt cre ated by the note m erg ed int o the judg ment and became a new debt and, there fore , the di strict court’s findings of fac t ref err ing to the “note” rathe r than the “note judgme nt” wer e err or. Howeve r, Price does not explain how such ref

ere nces, if err or, cause d any of the court’s conclusions of law to be err or, other than by mere ly restating arguments that we have alr eady addre ssed. 92001 lawsuit was not the relinquish m en t of its rig ht to fore close the lien and was not conduct

inconsistent with such rig ht. The district court did not err in concluding that L PP Mortg ag e’s claim 6 for judicial f

orec losure wa s not barre d by waiver

.
Statu te of Limi tation s

Appellants contend that L PP Mortg ag e’s s uit is barr ed by limit ations and that the district court err ed as a matter of law in c oncluding otherwise. L PP M ortg ag e conc edes tha t if the Texas statute of limit ations applicable to the fore closure of a rea l proper ty lien applies, this suit is untim ely

. See Tex. Ci v. Prac. & Re m. Code Ann. § 16.035(a) (West 2002). Howe ver, the note and dee d of trust in this case wer e orig inally executed in f avor of the SBA. See 13 C.F.R. § 123.5 (2010) (identifying disaster loans o ffe red by SBA). Fe dera l law prohibits a person who rec eives any benef it or assistance from the SBA to claim or asser t any state law to defeat the obligation incurre d in obtaining such benef it or assistance

. See id. § 101.106(d) (2010). Moreove r, fede ral law provides that there is no limit on t h e t i m e for the United States, or an office r or ag ency there of,
to bring an action to establish the t i t l e t o, or rig ht of possession of, rea l proper ty

. See 28 U.S.C. § 2415(c) (2006).

As a g ener al rule, when a fede ral ag ency assig ns a note and deed of trust to a subsequent holder, the assig nee reta ins the applicable fede ral law protec tion ag ainst any state statute of limit ations. See Feder a l Deposit Ins. Corp. v. Bledsoe , 989 F.2d 805, 810 (5th Cir. 1993); Jack son v. T hweatt , 883 S.W .2d 171, 174-75 (Tex

. 1994); see also Tex. Bus. & Com. Code Ann.

I n fac t , u n d er t he principles of res judicata, L PP Mortg ag e’s decision not to pursue the 6 reme dy of fore closure in the 2001 lawsuit preserv ed its rig ht to pursue that reme dy in this lawsuit. 10§ 3.203(b) (West 2002) (providing , as g ener al rule, that transfe r of instrument “vests in the transfe ree

any rig ht of th e t ra n s fe ror to enfor ce the instrument”). Apply ing this rule, the SBA’s assig nment to L PP Mortg ag e of the deed of trust included a transfe r of the benef its of both (1) the United States’ exemption from st at e l aw s ett ing periods of limit ation and (2) the absenc e of a period of limit ations for fore closure actions. See LPP Mortgage Ltd. v. Hotaling , 497 F. Supp. 2d 1217, 1220 (D. Colo. 2007).

Appellants, howeve r, rely on Holy Cross Church of God in Christ v. W olf , 44 S.W .3d 562 (Tex. 2001), for the proposition that the SBA’s protec tion ag ainst state limit ations periods does
not inure to a subsequent noteholder’ s benef it when the SBA transfe rs the note befor e it matures and, thus, befor e a cause of action under the note has acc rued. I n Holy Cross , upon the failure of a bank, the Fe dera l Deposit I nsuranc e Corporation (FDI C) beca me the bank’ s rec eiver

and the holder

of a promissory note executed by the appellant churc h and s ec u re d by a deed of trust. See 44 S.W .3d
at 565. The FDI C sold the note to a subsequent holder, who acc eler ated the note, at which time the holder’s cause of action on the note acc rued. See id. at 565, 570. Eventually , the holder of the note fore closed on the churc h’s proper ty , but not until over four y ear s afte r the note’s acc eler ation. See id. at 570. The four- y ear Texas statute of limit ations, if applicable , would have barred the suit. Rely ing on Jack

son v. Thweatt , the holder argued that he was entitled to the six -y ea r limit ations period under the applicable fe d eral law, the Financ ial Institut ions Reform, Recove ry , and Enforc ement Act of 1989 (F I RREA). See id. Conversely , the churc h argued that the holder should
not g et the benef

it of the longe r fede ral limit ations period when no cause of action acc rued until the FDI C was no long er the noteholder. See id. at 570-71.

11T h e s u p reme court considere d the “two justifications” for extending FI RREA’s

limit ations period to FDI C’s succ essors, eac h of which wer e relied on in Jack son . See id. at 573 (citing Jack

son , 883 S.W .2d at 174). The first justification is that without such extension, the FDI C would be forc ed to prosec ute all notes wher e limit ations has ru n , b ec ause there would be no purcha sers of an unenfor cea ble note. See id. The court conclude d that this justification did not apply when no c ause of

action has a ccr

ued at the time of

transfe r, bec ause the transfe ree would have the full four- y ear period to enfor ce the note. A signific ant impact on the note’s marke tability would not b e ex p ec t ed. See id. at 574. The second justification identified by the court in Holy Cross is t h e

common law principle that an assig nee stands in the shoes of his assi gnor, and thus, an extended limit ations period is part of the “b u n d l e o f ri gh ts” transfe rre d with the note. See id. at 573. The
court conclude d that t h i s justification also did not apply , beca use FI RREA’s six -y ear limit ations period did not attach until a claim acc rued

. T h u s , wh en the FDI C transfe rs the note befor e a claim acc rues, the FDI C’s rig ht to a six -y ear limit ations period under FI RREA “is never trig g ere d.” See id. at 574. Wit hout the statute ever apply ing, the common law rule is never neede d to fill in the statutory g ap of w hether

the statute applies to an a ssigne e. I n this case , L PP Mortg ag e’s rig ht to pursue reme dies under the deed of trust did not mature or acc rue until afte r L PP Mortg ag e obtained the note and deed of trust from the SBA. Appellants argue that, as a result, we should construe the fede ral law g overning the SBA’s limit at i ons period in the same manner that the supreme court construed FI RREA’s limit ations provision in Holy Cross

. Acc ording to appellants, as in Holy Cross , neither justification

12for extending the benef it of the fede ral limit ations period (or lack there o f) s h o u ld apply in this ty pe of situation.

We ag ree t h at t h e first justification identified in Holy Cross may be inapplicable. Dec lining to extend the SBA’s protec tions from state limit ations periods to the transfe ree of a note held by the S BA would not seem to result i n signific ant m arke t conce rns when no cause of action has y et acc rued. Once a cause of action acc rued, the transfe ree would have the full four- y ear period provided for

by state law. 7 Howeve r, unlike i n Holy Cross , the second justification—an assig nee stands in the shoes of the assig nor—does apply here

. Un d er t h e FI RREA, which the supreme court was construing in Holy Cross , the statute of limit ations does not beg in to run until the date on which the

cause of action acc rues. See id. at 571 (quoting 12 U.S.C. § 1821(d)( 14) (2006)). I n contra st, for the S BA , there is neither a f eder al nor state limi tations period applicable to the enforce ment of an instrument from the outset. See 28 U.S.C. § 2415(c) ; 13 C.F.R. § 101.106(d). This protec tion is part of the SBA ’s “bundle of

rig hts” immediately

upon the instrument’s execution. Moreove r, the plain lang uag e of the deed of trust g o v er n s t h e parties’ rig hts and reme dies with respe ct to limit ations. The deed of trust in this case contains the fol l owing provision: “I n compliance with section 101.1(d) of the Rules and Reg ulations of the Small Business Administration (13 C.F.R. 101.1(d)) , this instrument is to be construed and enfor ced in acc ordanc e

Neither party has identified any fede ral policy that instruments held by the SBA rema i n 7 marke table. Wherea s the SBA makes its own loans, the FDI C obtains notes from failed banks. One of FI RREA’s purposes was to provide funds from public and private source s to de al expeditious ly with the failed bank’s assets obtained by the FDI C. See Jack son v. Thweatt , 883 S.W .2d 171, 174 (Tex. 1994) (citing FI RREA, Pub. L . No. 101-73, § 101(8) , 103 Stat. 183, 187 (1989)). 13with applicable Fe dera l law.” This provision does not require that the SBA be the party attempting

to enfor ce the instrument for fede ral law to apply

. See Coker v. C o ke r , 6 50 S.W .2d 391, 393 8 (Tex. 1983) (“I f t he written instrument is so worde d that it can be given a cer tain or definite legal meaning or interpret ati on, then it is not ambig uous and the court will construe the contra ct as a matter of la

w.”) . The fe dera l reg ulation refe renc ed by the provision included the f ollowing: Any person, corpor ation or org anization that applies for and rec eives any benef it or assistance from SBA, or that offe rs any assura nce or secur ity upon which SBA relies for the g ranting of such benef it or assistance , shall not be entitled to c laim or asser t an y l o cal immunit y to defe at the obligation such party incurre d in obtaining or assuring such F eder al bene fit or assistance

.
31 Fe d. Reg

. 10,466 (Aug

. 4, 1966) (codifie d at former 13 C.F.R. § 101.1(d)( 4)). This prohibition 9 ag ains t a p erson relying on a state statute of limit ations to defe at any obligation incurre d in obtaining the SBA’s assistance is not made conting ent on the SBA rema ining the holder o f t h e applicable instrument. Under the plain lang uag e of the regulat i o n , s t at e l i mitations law is to be disreg arde d with respe ct to enfor ceme nt of this particula r deed of trust. Thus, appellants cannot rely

on a Texas statute of limit ations to defe at the rig ht of the holder of the lien—whether the SBA or an assig nee—to judicially

fore close. Ba sed on the plain lang uag e of the deed of trust and the cited fede ral reg ulation, and in acc ordanc e with the principle that an assig nee rec eives the full rig hts of the assig nor, we hold that

I n contra st, the promissory note states that “this instrument is to be construed a nd (whe n 8 SBA is the Holder

or a pa rty in interest) e nforc ed in ac corda nce w ith applicable F eder al law.” I n 1996, the provisi o n s o f 13 C.F.R. section 101.1(d) wer e modi fied and moved t o their 9 cu rr en t l o cation at 13 C.F.R. section 101.106. See 60 Fe d. Reg

. 57,965, 57,966 (Nov. 24, 1995), adopted 61 Fe d. Reg . 2394, 2395-96 (Jan. 26, 1996). 14L PP Mortg ag e rec eived the benef it o f t h e S BA ’s protec tion from state statutes of limit ations. There fore , the district c ourt did not err in c oncluding that L PP Mortg ag e’s rig ht to fore close is not barr ed by limit ations.

Conclu sion Appellants have failed to establish that L PP Mortg ag e’s rig ht to judicially fore close its lien is barr ed by res judicata, waiver , or limit ations. Having overr uled eac h of appellants’ points on appea l, we af

firm the judg ment of the district cour t.

__________________________________________ G. Alan Waldrop, Just ice Be fore J ustices Pury ear , Waldrop and He nson Affir med Filed: Jul y

1, 2010

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