Federal Deposit Insurance Corp. v. Moore

Citations: 898 P.2d 1329; 66 O.B.A.J. 2354; 1995 OK CIV APP 88; 1995 Okla. Civ. App. LEXIS 74; 1995 WL 408469Docket: 85129

Court: Court of Civil Appeals of Oklahoma; June 6, 1995; Oklahoma; State Appellate Court

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The Federal Deposit Insurance Corporation (FDIC), acting as liquidator for Central Bank and Trust of Tulsa, appealed a trial court's summary judgment favoring James and Kathleen Moore and More Properties, Inc. The FDIC sought to collect on a $100,000 promissory note and foreclose on a mortgage related to two properties owned by the Moores. The Moores had executed the original note in July 1985 and a renewal in July 1986, with the due date of January 2, 1987. Following the bank's failure, the FDIC took over and in October 1989, the Moores communicated their intention to settle the debt for $180,000 but did not resolve the matter. The FDIC initiated legal action on October 14, 1994. The Moores defended the action based on the statute of limitations and moved for summary judgment, arguing that the FDIC's claims were barred. The trial court agreed, ruling that the Moores’ letters from 1989 were inadmissible settlement offers and upheld the statute of limitations defense. The FDIC contended that these letters acknowledged the debt and should negate the limitations claim. Despite acknowledging the trial court's error in excluding the letters, the appellate court affirmed that the FDIC's claims were indeed barred by the statute of limitations.

Section 2408 specifies that evidence related to offers or promises of settlement in compromise negotiations is not admissible to prove the liability, validity, or amount of a disputed claim. However, such evidence may be admissible for other purposes, including demonstrating witness bias, negating claims of undue delay, or obstructing criminal investigations. Section 101 states that if part of a principal or interest is paid, or an acknowledgment of liability is made in writing and signed, an action can be initiated within the prescribed period after such acknowledgment or promise. The Moores contend that their October 1989 letters are settlement offers and thus inadmissible to challenge the FDIC's claim. The FDIC counters that the letters, while settlement offers, are admissible under 2408 for the purpose of acknowledging an obligation and starting a new limitations period under section 101, specifically to counter claims of undue delay. The trial court agreed with the Moores' characterization of the letters as settlement offers but noted that this does not automatically render them inadmissible. The statute allows for exceptions to the exclusionary rule, which are not limited to the examples provided. Relevant case law supports that offers of settlement can be admissible for various purposes beyond proving liability. The conclusion is that the Moores' letters may be admissible under 2408 regarding the acknowledgment of debt and the initiation of a new limitations period under section 101, leading to a need to assess the sufficiency of the letters as an acknowledgment of debt, which presents a division of authority in case law.

The Oklahoma Supreme Court has established that a mere offer to compromise, even if it acknowledges existing debt, does not qualify as an unequivocal acknowledgment or new promise to pay that would activate the 101 savings provision. In Andrew v. Kennedy and subsequent cases, references to debt alone were deemed insufficient for such acknowledgment. Conversely, when a debtor provides a written acknowledgment of debt along with a promise to pay in the future or requests more time to pay, the 101 savings provision is triggered, as it would be unjust for a debtor to invoke the statute of limitations after admitting to the debt. In the current case, the Moores’ letters lacked any promise to pay the debt in full or requests for an extension, thus failing to invoke the 101 savings provision. Consequently, the FDIC's claim, initiated more than five years after the cause of action arose, is barred by the five-year statute of limitations. Although the trial court mistakenly deemed the Moores' settlement offers inadmissible, it correctly ruled in favor of the Moores based on the limitations claim. The summary judgment for the Moores is affirmed.