Opinion ID: 1967796
Heading Depth: 1
Heading Rank: 4

Heading: General Principles for Accrual of Claim

Text: The parties agree that EastBanc's claims are subject to the three-year statute of limitations applicable to breach of contract actions under D.C.Code § 12-301(7) (2001). They disagree, however, as to whether the period of limitations had expired before EastBanc filed its complaint. A cause of action for breach of contract accrues, and the statute of limitations begins to run, at the time of the breach. . . . 1 CALVIN W. CORMAN, LIMITATION OF ACTIONS, § 7.2.1, at 482 (1991); accord, Bembery v. District of Columbia, 758 A.2d 518, 520 (D.C.2000) ([I]n an action for breach of a contract or lease the statute of limitations runs from the time of the breach.). A contract is breached if a party fails to perform when performance is due. 9 ARTHUR L. CORBIN, CORBIN ON CONTRACTS § 943 (interim ed.2002). Under modern contract principles, an aggrieved party also may be entitled to sue prior to breach if the other party has anticipatorily repudiated the contract. See, e.g., Roehm v. Horst, 178 U.S. 1, 13, 20 S.Ct. 780, 44 L.Ed. 953 (1900); 23 SAMUEL WILLISTON & RICHARD A. LORD, A TREATISE ON THE LAW OF CONTRACTS § 63:32 (4th ed.1993). The aggrieved party is entitled to sue either when the anticipatory repudiation occurs or at the later time for performance under the contract. The time of accrual consequently depends on whether the injured party chooses to treat the anticipatory repudiation as a present breach. 1 CORMAN, § 7.2.1, at 488. In essence, this rule gives the plaintiff an optionsue now (if the contract has been repudiated in anticipation of nonperformance) or sue later (at the time of nonperformance). The forcefulness of a repudiation does not transform it into a breach. Rather, the force and clarity of the repudiation affects whether the non-repudiating party is entitled to bring suit before an actual breach occurswhether the repudiating party's words and conduct sufficiently manifest an intention not to perform when it is required to do so. Anticipatory repudiation is not something to be lightly inferred in the rugged give-and-take of the marketplace. Reiman v. International Hospitality Group, Ltd., 614 A.2d 925, 929 (D.C.1992); see 9 CORBIN § 973; 23 WILLISTON & LORD § 63:45 (It is invariably stated in the decisions that in order to give rise to an anticipatory breach of contract, the defendant's refusal to perform must have been positive and unconditional.). For a repudiation of a contract by one party to be sufficient to give the other party the right to recover for breach, the repudiating party must have communicated, by word or conduct, unequivocally and positively its intention not to perform. Order of AHEPA 367 A.2d at 125. Even if the repudiation is clear, forceful, and unequivocal, the time for filing suit does not begin to run on the strength of the anticipatory repudiation alone. See 1 CORMAN, § 7.2.1, at 488. In Franconia Associates v. United States, 536 U.S. 129, 143, 122 S.Ct. 1993, 153 L.Ed.2d 132 (2002), for example, the United States Supreme Court held that the passage of a statute which eliminated borrowers'contractual rights to prepay certain loans constituted a repudiation, not a breach, even though the Act of Congress was a clear and unequivocal communication of the federal government's intent not to perform upon request. It is hard to imagine a more definitive manifestation of an intent not to perform than legislation passed by two Houses of Congress and signed by the President, yet the Court held there was only repudiation, based upon which the plaintiffs could elect to sue; plaintiffs also could choose to wait for nonperformance. Id. at 144, 122 S.Ct. 1993. GPA II argues that the accrual rule that the plaintiff may disregard a repudiation and wait until performance is due applies only to contracts which fix a time for performance. However, it fails to cite any controlling source that confirms its interpretation of the rule. For example, GPA II relies upon a sentence from Franconia in which the Court stated that if the injured party instead opts to await performance, `the cause of action accrues, and the statute of limitations commences to run, from the time fixed for performance rather than from the earlier date of repudiation.' 536 U.S. at 144, 122 S.Ct. 1993 (emphasis added) (citing 1 CORMAN § 7.2.1, at 488). GPA II places too much weight on negative implications drawn from the italicized language, which is merely a reference to the principle that a contract is breached if a party fails to perform when performance is due. More importantly, GPA II disregards the actual holding of Franconia  that the statute of limitations would begin to run when the government wrongly rejected tender of prepayment . . . 536 U.S. at 149, 122 S.Ct. 1993. In other words, a breach would occur when a borrower attempted to prepay, for only at that time would the Government's responsive performance become due. Id. at 143, 122 S.Ct. 1993. The time for performance by the government was hardly fixed. By its very nature, a prepayment occurs before payment is due. Moreover, that day would arrive only if and when, at some point in the future, petitioners attempted to prepay their mortgages. Id. Thus, in Franconia, the Supreme Court applied the accrual rule to a contract that did not fix the time for performance. Similarly, the other cases cited by GPA II do not endorse the rule it espouses. We likewise have failed to uncover any authoritative statement of a principle that would exempt from the accrual rule contracts which do not specify a date for performance. Nor are we persuaded by GPA II's argument that applying the accrual rule to a contract like this one would mean that EastBanc could wait forever to bring a claim for breach of the 1998 Letter Agreement. We have already held that the terms of that agreement are sufficiently clear that the parties can determine how (and therefore when) they are to perform. Moreover, a signatory to a contract who feels plagued by prolonged uncertainty could ask the court to infer from explicit provisions, or from the circumstances surrounding the formation of the agreement that the parties intended their contract to include a reasonable time limit. See In re McCagg, 450 A.2d at 417. [4]