The National Credit Union Act’s Extender Statute is a statute of limitations, not a statute of repose; therefore, its time limits establish only an affirmative defense that may be waived.
National Credit Union Administration Board vs. Barclays Capital, Inc., No. 13-3183 (10th Cir., 3/3/15).
The Failed Settlement and Its Consequence
The NCUAB was appointed as conservator and liquidating agent for two credit unions that failed. It determined that the credit unions failed because they had invested in residential mortgage-backed securities (“RMBS”) sold with offering documents that misrepresented the quality of the underlying mortgage loans. The NCUAB began settlement negotiations with Barclays, which “dragged on.” The NCUAB and Barclays therefore entered into a series of tolling agreements that purported to exclude all time that had passed during the settlement negotiations. Barclays also expressly made a separate promise in the tolling agreements that it would not “argue or assert” in any future litigation a statute of limitations defense that included the time passed in the settlement negotiations. After negotiations broke down, the NCUAB filed this action more than five years after the RMBS were sold and more than three years after the NCUAB was appointed conservator of the credit unions. Barclays moved to dismiss on several grounds, including untimeliness. The District Court granted the Motion to Dismiss, holding that the three-year period under the Extender Statute may not be extended by a tolling agreement because the three-year period has set an outer limit that may not be extended by agreement or equitable tolling.
The Appellate Ruling
On appeal, while conceding that the litigation was commenced outside the three-year period, the NCUAB argues that the claims are still timely under either of two legal theories, because the Extender Statute itself was lawfully tolled by the tolling agreements, or because Barclays is estopped from pleading a statute-of-limitations defense because of its separate promise not to do so. Regarding the former, the Court of Appeals holds that the Extender Statute’s limitations periods cannot be tolled by contract, so tolling agreements purporting to toll the statute of limitations are not effective. The Extender Statute’s opening clause, which states that “[n]otwithstanding any provision of any contract” amounts to an express statement that the limitations period cannot be tolled by agreement.
Regarding NCUAB’s latter theory, the Court holds that Barclays is estopped from asserting a statute-of-limitations defense by its own separate promise. The Court reasons that the Extender Statute is a statute of limitations, not a statute of repose. The statute refers to itself as a “statute of limitations” and uses that term several times while not ever mentioning the term “repose.” It also refers to the date a claim accrues, language consistent with a statute of limitations. Because the Extender Statute is a statute of limitations, its time limits establish only an affirmative defense that can be waived. Here, Barclays expressly promised not to raise the statute-of-limitations defense if doing so would require inclusion of time periods that the parties agreed to exclude and the Court holds Barclays to that promise.
(SLC Ref. No. 2015-15-10)
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