Commercial Services v. Federal Deposit Ins

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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m 99-60076
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COMMERCIAL SERVICES OF PERRY, INC.,
Plaintiff-Appellant,
VERSUS
FEDERAL DEPOSIT INSURANCE CORPORATION,
Defendant-Appellee.
_________________________
Appeal from the United States District Court
for the Northern District of Mississippi
_________________________
January 17, 2000
Before HIGGINBOTHAM and SMITH,
Circuit Judges, and FALLON, District
Judge.*
JERRY E. SMITH, Circuit Judge:
Commercial Services of Perry, Inc.
(“CSP”), sued the Federal Deposit Insurance
Corporation (“FDIC”), claiming the FDIC had
sold, for its own profit, lands held pursuant to
two deeds of trust that the FDIC had
previously sold to CSP. Thus, CSP claims, the
proceeds of that sale inure to it. The FDIC as-
serts that the deeds of trust had been
foreclosed on while the FDIC continued to
hold it, and thus that the sale of assets to CSP
did not include the relevant deeds of trust,
which had been extinguished before the sale.
Because we agree with the district court that
the relevant statute of limitations expired
before suit was filed, we affirm.
I.
CSP purchases bad loans and attempts to
collect the deficiency balance. It bought a
package of loans from the FDIC that included
three loans known as the “Sams Loans,” which
were originally secured by two deeds of trust.
The loan sale agreement between CSP and
FDIC, entered into on November 15, 1993,
defined “loans” to include all rights or security
interests in collateral documents and provided
that “collateral document” included deeds of
trust. The affidavit and assignment of claim
that consummated the transaction was
executed on January 11, 1994.
The FDIC sold the property to Landmark
Enterprises (“Landmark”) on February 4,
1994. The FDIC asserts that it had executed
* District Judge of the Eastern District of
Louisiana, sitting by designation.

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a non-judicial foreclosure on the relevant
deeds of trust on October 13, 1992; thus, at
the time of saleSSand at the time of the loan
sale agreement with CSPSSFDIC owned the
subject property, and the deeds of trust
partially securing the “Sams loans” had been
extinguished. CSP claims that the debtor’s
interest in the property was not affected by the
October 1992 foreclosure sale, which did not
become final until entry of the Amended Final
Judgment dated January 25, 1994. Thus,
according to CSP, the deeds of trust had al-
ready been assigned to it before the
foreclosure became official.
CSP sued on April 24, 1998, to recover the
value of the property sold to Landmark. On
July 9, 1998, CSP served a request for
admissions that the FDIC failed to answer
within the prescribed time; the FDIC did,
however, file an answer to the complaint on
August 5, 1998, which essentially denied the
request for admissions. FDIC asserts that it
never received the request and did not know
that it had been filed until it received the
motion for summary judgment on August 17,
1998, with the request for admissions
attached. On receiving the motion, the FDIC
immediately responded to the request for
admissions.
The district court denied CSP’s motion for
summary judgment and granted FDIC’s on al-
ternate grounds that (1) the statute of
limitations had run on CSP’s claim,
invalidating it; and (2) even had the statute not
run, CSP could not prevail, because it could
not show that it had contracted to purchase
the relevant deeds of trust.
II.
The district court held that CSP’s action is
governed by the three-year statute of limitation
provided in MISS. CODE ANN. § 15-1-49, the
catch-all provision, and CSP does not
challenge this finding. The court also found
that the FDIC’s sale of the properties occurred
on February 4, 1994, more than three years
before CSP sued. The facts facially indicate,
then, that the statute of limitations bars the
action.
CSP attempts to avoid this result by
claiming that the statute of limitations should
not run on an action of this type, in which two
claimants to the same interest exist, until the
latter claimant has received notice of the dis-
position of the interest by the former. This
finding is not supported by the Mississippi
caselaw explicating statutes of limitations
generally. Those cases have established that,
in Mississippi, the statute runs from the time of
the injury, not from its discovery.1 That date
came no later than February 4, 1994, when the
sale was completed.
In Mississippi, moreover, recordation of an
interest in property provides all future would-
be contestants with constructive notice of the
interest. Bedford v. Kravis, 622 So. 2d 291,
295 (Miss. 1993); Metropolitan Nat’l Bank v.
United States, 901 F.2d 1297, 1303-04 (5th
Cir. 1990). Long before the FDIC sold the
properties to Landmark, it asserted an interest
in them. The FDIC recorded, in Lowndes
County, Mississippi, a “Substituted Trustee’s
Deed” on October 15, 1992, and a “Corrected
Substituted Trustee’s Deed” on July 9, 1993,
1 See Wilson v. Retail Credit Co., 325 F. Supp.
460, 465 (S.D. Miss. 1971); Central Trust Co. v.
Meridian Light & Ry., 63 So. 575, 576 (Miss.
1913) (noting that “the time limited is to be
computed from the day upon which the plaintiff
might have commenced an action for the recovery
of his demand”).

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thus establishing notice to the world, including
CSP, that the FDIC asserted ownership over
the propertiesSSthat other ownership of them
or mortgages on them had been extinguished.
CSP therefore was chargeable with
constructive notice of the FDIC’s interest and
ownership claim as of at least the latter of
those dates.2
CSP thus faces the challenge of showing
that, despite the basic rules in Mississippi de-
termining when statutes of limitations run, this
case is one in which the statute should not be-
gin to run until a party in its position has re-
ceived actual notice of the other claimant’s ac-
tions. To achieve this end, CSP cites two pre-
cedents; neither helps.
In Jordan v. Warren, 602 So. 2d 809
(Miss. 1992), the court required actual notice
to be provided to co-tenants before ouster and
adverse possession by one of the tenants could
occur. Because co-tenancy creates a
relationship tantamount in some ways to
partnership, and because CSP does not here
claim either to have been co-tenant with the
FDIC or to have been “ousted” by it (in the
real, co-tenancy-related meaning of the term,
rather than in the irrelevant manner in which
CSP employs it), the precedent does not
pertain.
In Estate of Petrick, 635 So. 2d 1389
(Miss. 1994), meanwhile, the executrix was re-
quired to provide actual notice to the
reasonably identifiable creditors of the estate
pursuant to a statutory requirement that such
actual notice be provided by executors to
creditors. CSP provides no similar statutory
requirement in cases such as the instant one.
The only relevance of Petrick, then, is to
suggest that actual notice requirements have
arisen in Mississippi only when required by
statute, and so do not arise here.
Furthermore, even were actual notice re-
quired here (and we do not conclude that it is),
it would have been provided more than three
years before suit was filed. As the FDIC
notes, CSP has admitted to having access to
the FDIC’s files concerning this property,
which included a January 4, 1993, bankruptcy
court order abandoning the relevant property
to the FDIC as creditor. CSP also was privy
to a March 1995 order that confirmed the
FDIC’s ownership. Surely this constituted
actual notice of the FDIC’s use of the property
as its own.
AFFIRMED.
2 CSP contends that this conveyance to the
FDIC, and thus the extinguishment of the deed of
trust, were invalid and were rendered valid only by
later judicial order. To make this argument, CSP
asserts that “a deed of trust in Mississippi
containing a defective or faulty description is
void.”
This is inaccurate. The very cases cited for this
proposition distinctly enunciate that “a deed will
not be held void for uncertainty of description if,
by any reasonable construction, it can be upheld.”
Neil v. Jones, 497 So. 2d 797, 800 (Miss. 1986);
see also Stevenson v. Stevenson, 579 So. 2d 550,
553 (Miss. 1991); Seal v. Anderson, 108 So. 2d
864, 865-66 (Miss. 1959). Thus, CSP needed to
plead and prove not only that the initial property
description in the recordation was faulty, but also
that it was so flawed as to defeat constructive
notice. CSP did not attempt this feat.

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