Title: Long Long & Kellerman v. Wheeler
Citation: N/A
Docket Number: 020033
State: Virginia
Issuer: Virginia Supreme Court
Date: November 1, 2002

Present:  All the Justices 
 
LONG, LONG & KELLERMAN, P.C., et al. 
 
 
 
            OPINION BY JUSTICE LEROY R. HASSELL, SR. 
v.  Record No. 020033 
November 1, 2002 
 
STEVEN L. WHEELER, ET AL. 
 
FROM THE CIRCUIT COURT OF THE CITY OF HAMPTON 
Wilford Taylor, Jr., Judge 
 
I. 
 
In this appeal, we consider whether an assignee of a deed 
of trust is subject to the 20-year statute of limitations 
contained in Code § 8.01-242 even though the assignor of the 
deed of trust is a federal agency which, had it sought to 
enforce the deed of trust, would not have been subject to this 
statute of limitations. 
II. 
 
The relevant facts are not in dispute.  On September 30, 
1980, Steven L. Wheeler and Myrna C. Wheeler conveyed certain 
real estate by deed of trust to secure their personal guaranty 
of payment of a promissory note between Southern Furniture 
Warehouse, Inc., and the Administrator of the Small Business 
Administration.  The deed of trust does not contain a maturity 
date of the debt that it secures, and paragraph 16 of the deed 
of trust states that the "instrument is to be construed and 
enforced in accordance with applicable Federal law."  The deed 
of trust was recorded in the Clerk's Office of the Circuit 
Court for the City of Hampton on that date. 
 
An event of default occurred regarding payment of the 
promissory note.  The Small Business Administration made a 
demand upon the Wheelers to honor their guaranty in 1982.  The 
agency made a second demand and threatened to foreclose on the 
deed of trust in April 2000.  Subsequently, the Small Business 
Administration assigned the deed of trust to LPP Mortgage, 
Ltd., which substituted Long, Long & Kellerman, P.C., as 
trustee of the deed of trust (hereinafter "the trustee").  The 
trustee notified the Wheelers by letter dated July 20, 2001, 
that it intended to initiate foreclosure proceedings.  
Subsequently, the trustee initiated a foreclosure proceeding 
in 2001, more than 20 years after the date of the Wheelers' 
deed of trust. 
 
The Wheelers initiated a proceeding to enjoin the sale of 
the property under the deed of trust.  The circuit court 
entered a decree temporarily enjoining the sale of the 
property, and the court ultimately ruled that the trustee's 
action to enforce the deed of trust was barred by the statute 
of limitations provided in Code § 8.01-242.  The court 
subsequently entered a decree that permanently enjoined the 
trustee from selling the property.  The trustee appeals. 
III. 
 
2
 
Title 28 U.S.C. § 2415 (2002) describes the limitation 
period that governs specified causes of action filed by the 
United States or its agencies.1  Section 2415(a) provides that 
a contract action for money damages filed by the United States 
or its agencies is barred unless the contract action is filed 
within six years after the right of action accrues.  Section 
2415(b) requires, among other things, that the United States 
or its agencies file a tort action for money damages within 
three years after the right of action first accrues.  Section 
2415(c) states that "[n]othing herein shall be deemed to limit 
                     
1 Title 28 U.S.C. § 2415 states in part: 
 
 
"(a) Subject to the provisions of section 2416 
of this title, and except 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 or within one year after final 
decisions have been rendered in applicable 
administrative proceedings required by contract or 
by law, whichever is later . . . . 
 
"(b) Subject to the provisions of section 2416 
of this title, and except 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 a tort shall be barred unless 
the complaint is filed within three years after the 
right of action first accrues . . . . 
 
"(c) Nothing herein shall be deemed to limit 
the time for bringing an action to establish the 
title to, or right of possession of, real or 
personal property." 
 
 
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the time for bringing an action to establish the title to, or 
right of possession of, real or personal property." 
 
In contrast, Code § 8.01-242 enacted by the General 
Assembly states in part: 
 
"No deed of trust or mortgage given to secure 
the payment of money, other than credit line deeds 
of trust described in § 55-58.2, and no lien 
reserved to secure the payment of unpaid purchase 
money, in which no date is fixed for the maturity of 
the debt secured by such deed of trust, mortgage, or 
lien, shall be enforced after twenty years from the 
date of the deed of trust, mortgage, or other lien." 
 
 
The trustee contends that the federal government and its 
agencies are immune from statutes of limitations unless 
Congress has explicitly provided a limitations period.  We 
agree. 
 
We recognize that Code § 8.01-242 cannot bar a federal 
agency, such as the Small Business Administration, from 
initiating foreclosure proceedings on real property.  The 
federal government and its agencies are not bound by statutes 
of limitations unless Congress explicitly states otherwise.  
The rationale for this doctrine arises from the common law 
rule – nullum tempus occurrit regi – that the sovereign is 
immune from the operations of statutes of limitations.  This 
rule is necessary because it insures that property rights 
vested in the government are not vitiated due to the 
negligence of the government's agents or employees upon whom 
government must rely.  Government should not lose its 
 
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ownership rights in real and personal property simply because 
a government employee or agent neglects to take legal action 
to protect the government's property interests.  As the 
Supreme Court has observed: 
"The true reason [for the rule nullum tempus 
occurrit regi] is to be found in the great public 
policy of preserving the public rights, revenues, 
and property from injury and loss, by the negligence 
of public officers.  And though this is sometimes 
called a prerogative right, it is in fact nothing 
more than a reservation, or exception, introduced 
for the public benefit, and equally applicable to 
all governments." 
 
Guaranty Trust Co. v. United States, 304 U.S. 126, 132 (1938) 
(quoting United States v. Hoar, 26 F. Cas. 329, 330 (1821)).  
See Brock v. Pierce County, 476 U.S. 253, 260 (1986); Stanley 
v. Schwalby, 147 U.S. 508, 515 (1893); United States v. 
Nashville, Chattanooga & St. Louis Ry. Co., 118 U.S. 120, 125 
(1886); see also United States v. Alvarado, 5 F.3d 1425, 1427-
28 (11th Cir. 1993); United States v. City of Palm Beach 
Gardens, 635 F.2d 337, 339-40 (5th Cir.), cert. denied, 454 
U.S. 1081 (1981). 
 
The trustee argues that Congress has established a 
federal statute of limitations for foreclosures in 28 U.S.C. 
§ 2415(c).  The trustee relies upon the following language in 
this statute:  "Nothing herein shall be deemed to limit the 
time for bringing an action to establish the title to, or 
 
5
right of possession of, real or personal property."  We 
disagree with the trustee. 
 
Contrary to the trustee's contention, this language does 
not create a statute of limitations for foreclosure 
proceedings.  A statute of limitations for a civil case is 
commonly defined as a "statute establishing a time limit for 
suing in a civil case, based on the date when the claim 
accrued."  Black's Law Dictionary 1422 (7th ed. 1999).  
Generally, a statute of limitations prescribes a period of 
time in which the person with a cause of action must file 
pleadings to enforce that cause of action or the right of 
action may be defeated if the party against whom the cause of 
action has been filed asserts the statute of limitations as a 
bar. 
 
We hold that Title 28 U.S.C. § 2415(c) is not a statute 
of limitations for the United States and its agencies.  
Rather, the statute makes clear that the United States' and 
its agencies' rights to file proceedings to establish title 
to, or right of possession of, real or personal property are 
not affected by the six- and three-year statutes of 
limitations provided in § 2415(a) and (b).  Furthermore, 
§ 2415(c) does not establish a time limit within which the 
federal government or its agencies must assert any rights 
against another entity.  Indeed, federal courts have concluded 
 
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that Congress has not enacted in § 2415 a statute of 
limitations that bars the United States or its agencies from 
instituting foreclosure proceedings.  Alvarado, 5 F.3d at 
1429-30; United States v. Thornburg, 82 F.3d 886, 894 (9th 
Cir. 1996); Farmers Home Admin. v. Muirhead, 42 F.3d 964, 966 
(5th Cir. 1995); Westnau Land Corp. v. U.S. Small Bus. Admin., 
1 F.3d 112, 115-17 (2d Cir. 1993); United States v. Ward, 985 
F.2d 500, 501 (10th Cir. 1993). 
 
The trustee argues at length in its brief that "[t]he 
federal law of limitations, not state law, controls" the 
resolution of this appeal.  However, as we have already 
concluded, there is no federal statute of limitations that 
prescribes a time period in which the federal government or 
its agencies must file a proceeding to foreclose on a deed of 
trust.2  We note that the trustee correctly admitted in his 
memorandum filed in the circuit court that "Congress has not 
explicitly declared any federal statute of limitations for 
cases of this nature." 
                     
 
2 The Supreme Court held in United States v. Kimbell 
Foods, Inc., 440 U.S. 715, 726-27 (1979), that federal law, 
not state law, governs disputes concerning the federal 
government's rights arising out of its participation in 
nationwide loan programs.  In this case, however, the rights 
of the federal government are not implicated.  Rather, the 
issue we consider is whether a private entity that is an 
assignee of a deed of trust that was formerly owned by an 
agency of the federal government, may be subjected to a state 
statute of limitations. 
 
 
7
 
The trustee, relying upon our decision in Union Recovery 
Ltd. P'ship v. Horton, 252 Va. 418, 477 S.E.2d 521 (1996), 
cert. denied, 520 U.S. 1167 (1997), argues that as an assignee 
of a federal agency, the trustee "stands in the shoes of the 
federal assignor and is not barred from foreclosing by virtue 
of any Virginia statute of limitations."  Therefore, the 
trustee argues that the circuit court erred by applying Code 
§ 8.01-242, a state statute of limitations, to bar the claim 
of an assignee of a federal agency.  We disagree. 
 
In Union Recovery, we considered whether an assignee of a 
promissory note from the Resolution Trust Corporation was 
entitled to the benefit of the statute of limitations 
available under federal law to the Resolution Trust 
Corporation.  The Resolution Trust Corporation was a receiver 
of an insured depository institution that originally held the 
note, and the assignee argued that it was not required to 
comply with the state statute of limitations that was shorter 
than the federal statute of limitations.  We held that the 
assignee was entitled to rely upon the federal statute of 
limitations.  We explained that 
 
"[t]he extended statute of limitations is 
merely a mechanism for providing the receiver with 
an adequate time to pursue those claims which the 
financial institution could not successfully pursue 
prior to its failure.  As such, the receiver's right 
to sue within the statute of limitations period is 
inherent in its possession of the instruments at 
issue and would thus be among the 'rights, remedies 
 
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and benefits which are incidental to the thing 
assigned,' and not merely a right 'personal to the 
assignor and for [its] benefit only.' " 
 
252 Va. at 424, 477 S.E.2d at 524 (quoting WAMCO, III, Ltd. v. 
First Piedmont Mortgage Corp., 856 F. Supp. 1076, 1086 (E.D. 
Va. 1994)). 
 
Unlike the circumstances in Union Recovery, in which 
Congress specifically created a federal statute of 
limitations, in the case presently before this Court, Congress 
has not created an applicable federal statute of limitations 
that governs a foreclosure proceeding initiated by the federal 
government or its agencies.  Additionally, in this case, the 
rationale underlying the rule that the federal government is 
immune to the operation of statutes of limitations would not 
be served by permitting a private assignee to enjoy perpetual 
immunity from a statute of limitations for a purely private 
benefit.  Thus, we hold that the trustee is not entitled to 
the immunity afforded to the federal government and its 
agencies from statutes of limitations. 
 
We further hold that the 20-year statute of limitations 
contained in Code § 8.01-242 is controlling in this case.  The 
deed of trust at issue in this case did not contain a maturity 
date and was executed by the Wheelers on September 30, 1980.  
The trustee initiated foreclosure proceedings more than 20 
 
9
years from the date of the deed of trust and, therefore, the 
trustee's action is barred. 
IV. 
 
In view of the foregoing, and finding no merit in the 
trustee's remaining contentions, we will affirm the decree of 
the circuit court. 
Affirmed. 
 
CHIEF JUSTICE CARRICO, with whom JUSTICE KINSER and JUSTICE 
LEMONS join, dissenting. 
 
 
I would reverse the judgment of the trial court.  The 
deed of trust in this case states that it "is to be construed 
and enforced in accordance with applicable Federal law."  
(Emphasis added.)  The majority opinion notes that the 
substituted trustee under the deed of trust correctly stated 
the applicable federal law when it said in its memorandum 
filed in the circuit court that "'Congress has not explicitly 
declared any federal statute of limitations for cases of this 
nature, and thus, time does not run against the sovereign, or 
its assignees.' "  Slip op. at 7.   (Emphasis added.)  LPP 
Mortgage, Ltd., an appellant here, is the assignee of the 
Administrator of the Small Business Administration, the 
beneficiary under the deed of trust. 
 
"[A]n assignee obtains his rights from the assignor, and, 
thus, he is said to 'stand in the shoes' of the assignor when 
 
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pursuing an action on the contract or instrument assigned."  
Union Recovery Ltd. P'ship v. Horton, 252 Va. 418, 423, 477 
S.E.2d 521, 523 (1996).  The right to enforce the contract or 
instrument is one of the "'rights, remedies and benefits which 
are incidental to the thing assigned' . . . and not merely a 
right 'personal to the assignor and for [its] benefit only.'"  
Id. at 424, 477 S.E.2d at 524 (quoting WAMCO, III, Ltd. v. 
First Piedmont Mortgage Corp., 856 F.Supp. 1076, 1086 (E.D. 
Va. 1994)). 
 
In Horton, the assignee of a promissory note in favor of 
the Resolution Trust Corporation sought a money judgment 
against the makers.  This Court considered whether the 
assignee was entitled to the benefit of the longer federal 
statute of limitations available to Resolution Trust or was 
subject to the shorter state statute of limitations.  This 
Court held that the assignee was entitled to the "longer 
limitations period."  252 Va. at 424, 477 S.E.2d at 524. 
 
The majority seeks to distinguish Horton on two grounds.  
First, the majority says that in the circumstances reviewed in 
Horton, Congress specifically created a federal statute of 
limitations in 12 U.S.C. § 1821(d)(14)(A) and (B) on a 
contract claim while, here, Congress has not created an 
applicable federal statute of limitations that governs a 
foreclosure proceeding initiated by the federal government or 
 
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its agencies.  However, Congress has specifically declared 
that "[n]othing [in 28 U.S.C. § 2415] shall be deemed to limit 
the time for bringing an action to establish the title to, or 
right of possession of, real or personal property," § 2415(c), 
and the parties to this litigation agree that § 2415(c) 
applies to foreclosure proceedings brought by the federal 
government or its agencies. 
 
It cannot make any possible difference legally or 
logically that § 2415(c) may not qualify as a statute of 
limitations.  The fact that Congress has prescribed no 
limitation on the right of a federal agency to foreclose on a 
deed of trust but has imposed a limitation upon such an 
agency's right to recover a money judgment on a contract claim 
should not affect the right of an assignee to step into the 
shoes of the assignor in either case.  Just as the assignee in 
Horton was entitled to benefit from the longer period 
prescribed in 12 U.S.C. § 1821, so too is the assignee in this 
case entitled to the benefit of the non-limitation provision 
of 28 U.S.C. § 2415(c). 
 
The majority also seeks to distinguish Horton on the 
ground that permitting a private assignee to enjoy perpetual 
immunity from a statute of limitations for a purely private 
benefit would not serve the rationale underlying the rule that 
the federal government is immune to the operation of statutes 
 
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of limitations.  However, this involves a public policy matter 
that is solely within the province of Congress, and it has 
seen fit to enact § 2415(c) without any restriction upon those 
who may benefit from the absence of a limitation period 
applicable to federal foreclosures. 
 
Moreover, we crossed the public policy bridge in Horton.  
We said there that, even without reference to the public 
policy that might be promoted, application of the common law 
permitting an assignee to stand in the shoes of the assignor 
"mandates the application of the longer [federal] limitations 
period," 252 Va. at 424, 477 S.E.2d at 524, which certainly 
benefited the private assignee involved in that case.  While 
the benefits to the private parties involved in Horton and 
this case might differ, the difference is in degree only, not 
in principle, and public policy is not implicated.  And, at 
this point, I repeat that this Court said in Horton that the 
right to enforce an instrument assigned by a federal agency to 
a private party is "among the rights, remedies, and benefits 
which are incidental to the thing assigned and not merely a 
right personal to the assignor and for [its] benefit only."  
Id. (Emphasis added) (internal quotation marks and citation 
omitted). 
 
I find no principled distinction between Horton and the 
case at hand.  Accordingly, I would reverse the judgment of 
 
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the trial court and let the assignee stand in the shoes of the 
assignor to foreclose the deed of trust in question. 
 
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