United States District Court, S.D. Mississippi, Southern Division
VOLVO FINANCIAL SERVICES, a division of VFS U.S. LLC PLAINTIFF
ELVIS WILLIAMSON DEFENDANT
MEMORANDUM OPINION AND ORDER REGARDING MOTIONS FOR
GUIROLA, JR. CHIEF U.S. DISTRICT JUDGE.
THE COURT are the  Motion for Summary Judgment filed by
Plaintiff Volvo Financial Services, and the  Motion for
Partial Summary Judgment filed by Defendant Elvis Williamson
in this breach of contract case. Volvo seeks to recover
deficiency judgments for tractor trailer trucks Williamson
financed through Volvo. Williamson argues that a portion of
Volvo's claim is barred by the statute of limitations.
Both Motions have been fully briefed. The Court finds that
the statute of limitations does not bar any part of
Volvo's claim. Accordingly, Williamson's Motion for
Partial Summary Judgment will be denied. Further, the Court
finds no question of material fact concerning whether Volvo
is entitled to the deficiency judgment it seeks. Volvo's
Motion for Summary Judgment will be granted and a separate
are eight trucks at issue in this case, each purchased
separately with financing by Volvo and secured with a
separate promissory note. Williamson's purchase of the
trucks, and Volvo's financing of the purchases, occurred
between 2014 and 2015. In 2016 and 2017, Volvo repossessed
and sold seven of the trucks (Notes 1-5, 7, 8). Volvo
received insurance proceeds on the truck secured by Note 6
and that disposition is not contested in this case. Each
disposition resulted in a deficiency balance, all of which
are set out in the Attachment to this Order.
parties agree that North Carolina law controls interpretation
of the Promissory Notes, but Mississippi supplies the
controlling procedural law. Volvo moves for summary judgment
asserting undisputed evidence that Williamson failed to fully
pay the eight Promissory Notes and therefore breached the
contracts under North Carolina law. Volvo contends that as a
result, it is entitled to a deficiency judgment, because it
disposed of the trucks in a commercially reasonable manner
after providing reasonable notice to Williamson. Williamson
defends against the Motion on the grounds that 1) Volvo acted
in a commercially unreasonable manner when it sold the trucks
secured by Notes 5, 7 and 8; 2) Volvo did not give
commercially reasonable notice when it sold the trucks
secured by Notes 1-5, 7 and 8; and 3) the sales prices of the
trucks secured by Notes 7 and 8 were grossly inadequate.
Williamson's Motion for Partial Summary Judgment, he
asserts that Volvo's deficiency claims on the first four
promissory notes are barred by the statute of limitations in
Miss. Code Ann. § 15-1-23. Under that statute, a
deficiency claim must be “commenced or brought within
one year from the date of the foreclosure or sale of the
property pledged as security for said note or notes.”
Accordingly, Williamson requests dismissal of Volvo's
deficiency claims as to the first four promissory notes
because the trucks pledged as security were sold more than
one year before the lawsuit was filed. Volvo argues in
opposition that the Notes provided for
cross-collateralization, meaning that each of the Notes
secured all of Williamson's obligations to Volvo. Volvo
argues the Complaint was timely because the first four Notes
remained secured until all of the trucks were sold.
The Statute of Limitations
the Notes at issue contains the following choice of law
provision: “This Note shall be effective only when
accepted by Lender and shall be governed by the substantive
(and not choice of law or conflicts) laws of the State of
North Carolina.” The parties agree that this provision
means that in this diversity case, the Court should apply
Mississippi's procedural law and North Carolina's
substantive law. Mississippi classifies statutes of
limitations as procedural. Zurich Am. Ins. Co. v.
Goodwin, 920 So.2d 427, 433 (Miss. 2006).
argues that the one-year limitation period in Miss. Code
§ 15-1-23 applies to the Notes in this case. The statute
provides that any lawsuit “brought upon any installment
note, or series of notes of three or more” is barred
unless it is “commenced or brought within one year from
the date of the foreclosure or sale of the property pledged
as security for said note or notes.” The first four
truck sales took place during a one month period between
January 27 and February 26, 2016. (Volvo Mot. Summ. J. Ex.
2A-D, ECF No. 12-2). This lawsuit was filed on April 10,
2017, more than one year from the sale of the last of the
group of four trucks. Williamson contends that Volvo may not
obtain a deficiency judgment that includes amounts due under
the Notes secured by those four trucks.
Williamson asserted his statute of limitations defense, it
became Volvo's burden to “show some legal or
equitable basis for avoiding such period of
limitations.” Stroud v. Progressive Gulf Ins.
Co., No. 2016-CA-00750-COA, 2017 WL 4129619, at *3
(Miss. Ct. App. Sept. 19, 2017) (quoting Hall v.
Dillard, 739 So.2d 383, 387-88 (¶ 19) (Miss. Ct.
App. 1999). Volvo argues that the statute of limitations had
not been triggered prior to the sale of all of the trucks
because of the cross-collateralization language in the Notes.
Volvo highlights the following language in the
“Security Interest” provision appearing on the
first page of each Note:
In order to secure (i) payment of the Indebtedness, all other
debts and obligations at any time owed by Borrower to Lender
or its affiliates, and (ii) complete and full performance of
any Loan Party's obligations to Lender under the Loan
Documents, now existing or at any time entered into, Borrower
hereby grants to Lender a security interest in and to the
equipment described above (the “equipment”) . . .
. “Loan Documents” means this Note, all other
loans made by, or obligations of, Borrower to Lender . . . .
(See, e.g., Volvo Mot. Summ. J. Ex. 1 A, at p. 2,
ECF No. 12-1).
argues that this language “effectively created a global
indebtedness secured by all of the Equipment.” (Volvo
Resp. 4, ECF No. 20). Therefore, according to Volvo, the sale
of trucks in January and February 2016 was not sufficient to
trigger the statute of limitations as to any Note because all
of the Notes were secured by all of the trucks. Only after
all of the trucks had been sold, and there was no more
property securing the Notes, were the Notes
“foreclosed” upon as contemplated by the statute.
As the remaining four trucks were sold within the limitation
period, it is irrelevant that the first four were sold
outside of the limitations period.
are no Mississippi cases applying the statute of limitations
in Miss. Code Ann. § 15-1-23 to a note containing the
cross-collateral clause at issue here. Williamson urges the
Court to consider each Note and each truck separately.
However, in the Court's view, the Notes never concerned
only one piece of equipment. Each Note contemplated
additional security, and each successive purchase added a
piece of equipment as security for each Note then existing.
Unlike the cases cited by Williamson, the Notes here had
additional equipment securing them even after the equipment
initially securing the Note was sold. For example, in the
Commercial Agency v. Loe case cited by Williamson, a
plane securing a note was repossessed and sold, creating a
deficiency. There was no question that all of the property
securing the note was sold on a particular day.
Commercial Agency v. Loe, 667 F.Supp. 359, 365 &
n. 5 (S.D.Miss. 1987). The same is true of Guthrie v. The
Merchants National Bank of Mobile, 180 So.2d 309, 311,
315 (Miss. 1965) (all property securing single note sold
outside limitation period) and Rankin County Bank v.
McKinion, 531 So.2d 822, 823 (Miss. 1988) (same). These
cases do not answer the question presented in this case,
which is whether a partial sale of security triggers the one
year statute of limitations. Thus, the Court must make an
Erie guess and predict how the Mississippi Supreme
Court would resolve the issue if presented with the same
case. BancPass, Inc. v. Highway Toll Admin.,
L.L.C., 863 F.3d 391, 401 (5th Cir. 2017).
the Court concludes that although nominally eight promissory
notes are involved here, they are, in effect, one note
secured by eight trucks by operation of the
cross-collateralization clause in each Note. The next
question is whether the first or last truck sale triggered
§ 15-1-23. In this regard, the statute is ambiguous,
since “the foreclosure or sale of the property pledged
as security for said note or notes” could refer to one
or all items of property pledged as security.
ambiguity in a statute exists, a court must “turn to
the principles of statutory construction.”
Oktibbeha Cty. Hosp. v. Miss. State Dep't of
Health, 956 So.2d 207, 212 (Miss. 2007). In doing so,
“it is the Court's duty to ‘carefully review
statutory language and apply its most reasonable
interpretation and meaning to the facts of a particular
case.'” Miss. Methodist Hosp. & Rehab.
Ctr., Inc. v. Miss. Div. of Medicaid, 21 So.3d 600, 608
(Miss. 2009) (quoting Caldwell v. N. Miss. Med.
Ctr., 956 So.2d 888, 891 (Miss. 2007)). To this end,
“[w]hen reasonable, th[e] Court is obliged to reach an
interpretation that gives effect to all of the statutory
Mississippi Supreme Court has considered the meaning of this
statute, albeit in a different context. In the early case of
Lewis v. Simpson, 167 So. 780, 781 (1936), the court
found the statute to be ambiguous as to whether a junior
mortgage holder who had not foreclosed was subject to the
same limitation period as the senior mortgage holder who had
foreclosed. The court held that Miss. Code Ann. §
15-1-23 applied only to the foreclosing party, stating that
“[t]he outstanding purpose of this legislation, . . .
was to discourage the foreclosure of mortgages during the
depression period. The title to the act clears up the
uncertainty in the body thereof; in unmistakable language it
plainly names the notes secured by the foreclosed
mortgage.” Although the holding does not directly apply
to this case, the court's mention of the purpose of the
statute is helpful.
most reasonable interpretation of the statute when applied to
the facts of this case is that the sale or foreclosure must
be complete to trigger the limitation period. It can be
expected that sales of multiple items pledged as security for
a single note will occur over some period of time, and it
would serve no purpose to require the foreclosing party to
file more than one lawsuit if sales spanned the limitation
period. This interpretation has no effect on the purpose of
the statute - to discourage the foreclosure of mortgages
during the depression period. As noted above, the usual
mortgage foreclosure situation involves one piece of property
secured by a single note, generating no uncertainty about
when the limitation period has commenced and no potential for
multiple lawsuits. Those hazards exist only where, as in this
case, multiple items of property are pledged as security for
one promise to pay. Allowing the foreclosure/sales process to
be completed before starting the one-year clock for an action
on the note avoids these hazards.
Court therefore concludes that the statute of limitations in
Miss. Code Ann. § 15-1-23 does not bar Volvo's claim
to a deficiency judgment that includes the disposition of the
first four trucks. The ...