Opinion ID: 3014377
Heading Depth: 2
Heading Rank: 3

Heading: The Applicable Federal Limitations

Text: such title is subject to Period defeasance on payment of Having settled that federal law the debt . . . . should govern the limitations period in this The Virgin Islands, however, is a “lien case, the question now becomes what that theory” jurisdiction. See BA Props. v. limitations period is. We start with 28 Gov’t of V.I., 299 F.3d 207, 218-20 (3d U.S.C. § 2415(c), which concerns Cir. 2002) (citing Royal Bank of Canada v. “action[s] to establish . . . title to . . . real . Clarke, 373 F. Supp. 599, 601 (D.V.I. . . property.” That section provides: 1974)); see also 28 V.I. Code § 290 (“A “Nothing herein shall be deemed to limit mortgage of real property shall not be the time for bringing an action to establish deemed a conveyance so as to enable the the title to, or right of possession of, real owner of the mortgage to recover or personal property.” At the threshold, possession of the real property without a we note that the literal language of § foreclosure and sale according to law, and 2415(c) does not affirmatively establish a a judgment thereon.”). As Black’s Law 10 Dictionary explains, “in many . . . states, a upon any contract express or mortgage is regarded as a mere lien, and implied in law or fact, shall not as creating a title or estate. It is a be barred unles s the pledge or security of particular property complaint is filed within six for the payment of a debt . . . but is not years after the right of now regarded as a conveyance in effect.” action accrues or within one Black’s Law Dictionary at 1010 (citations year after final decisions omitted). have been rendered in applicable administrative The implication of all this is that an proceedings required by action to foreclose on a mortgage in the c o n tr a c t o r b y l a w , Virgin Islands would not be “an action to whichever is later. . . . establish the title to . . . real . . . property” under § 2415(c), because Virgin Islands Every Court of Appeals to consider the law would recognize no interest in real question whether § 2415(a) sets a property from the mortgage.9 Since § limitations period on mortgage foreclosure 2415(c) does not apply to this action, we actions has concluded that it does not. next consider whether the six-year This has been the consistent result in both limitations period provided in § 2415(a) lien theory and title theory jurisdictions, applies. Our inquiry is guided by the rule and has held irrespective of how the court of construction that “[s]tatutes of has interpreted § 2415(c). See Westnau limitations sought to be applied to bar Land Corp. v. SBA, 1 F.3d 112, 114-16 (2d rights of the Government, must receive a Cir. 1993) (§ 2415(a) does not apply) strict construction in favor of the (citing cases); FmHA v. Muirhead, 42 F.3d G o v er nm ent.” Badaracco v. 964 (5th Cir. 1995) (neither § 2415(a) nor Commissioner, 464 U.S. 386, 391 (1984) (c) applies); United States v. Omdahl, 104 (quoting E.I. Dupont de Nemours & Co. v. F.3d 1143, 1145-46 (9th Cir. 1997) (“§ Davis, 264 U.S. 456, 462 (1924)). 2415(c) applies to a mortgage foreclosure action”); United States v. Ward, 985 F.2d Section 2415(a) provides: 500 (10th Cir. 1993) (Oklahoma is a lien (a) [Subject to exceptions theory state; § 2415(a) does not apply); not pertinent here,] every United States v. Alvarado, 5 F.3d 1425, action for money damages 1429 (11th Cir. 1993) (§ 2415(a) does not brought by the United States apply). or an officer or agency We join these courts in holding that thereof which is founded § 2415(a) does not apply to mortgage foreclosure actions. Two related rationales—one or both of which is present 9 We express no view on the in each of the cases cited above—convince applicability of § 2415(c) in a title theory us of this. First, foreclosure was a jurisdiction. 11 historically equitable remedy. Since § UMLIC’s action, and the District Court 2415(a) speaks in terms of “damages,” a was correct to rule again st the traditionally legal remedy, foreclosure defendants.10 actions are not encompassed by § 2415(a). The order of foreclosure will be Second, foreclosure is an in rem affirmed, and the stay will be vacated. proceeding, and money damages are not acquired through in rem proceedings. Since no party contends that any of the other limitations periods in other 10 We note that the use of a federal subsections of § 2415 apply, we are left limitations period in federal lending with the result that there is no federally transactions has been subject to forceful provided statute of limitations for criticism. In Muirhead, Judge Edith mortgage foreclosure actions. Like the Jones wrote: Muirhead, Alvarado, Westnau, and Ward [W]e are troubled by Courts, we turn to federal common law to the federal government’s fill the gap. insistence that it may The gap is filled by what the Court enforce ancient mortgages of Appeals for the Tenth Circuit outstanding in numerous, characterized as: long-lived and often default-prone federal [t]he maxim, time does not lending programs run against the sovereign, essentially forever. The combined with the principle continued existence of that the United States is not these mortgages may cloud bound by a statute of titles to property all over limitations unless Congress the country, and in so has explicitly expressed one, doing will engender United States v. John confusion, higher real Hancock Mut. Life Ins. Co., property transaction costs, 364 U.S. 301 (1960) and commercial instability. Ward, 985 F.2d at 502; see also United If federal agencies simply States v. Kimbell Foods, Inc., 440 U.S. conformed their lending 715, 725 (1979) (federal law governs practices to the dictates of issues involving the rights of the United state law, as every private States arising under nationwide federal lender must, they would act programs, though absent Congressional more promptly upon directives to the contrary, state law can defaulted mortgages and provide the federal rule of decision). Thus would not prejudice the there is no statute of limitations on alienability of reality [sic]. Muirhead, 42 F.3d at 967. 12 13