Assigned on Briefs November 1, 2017
from the Circuit Court for Rhea County No. 2016-CV-308 Thomas
W. Graham, Judge
filed an action against a debtor to collect the outstanding
balance on an installment loan approximately five and
one-half years after the cause of action accrued. After
finding that Florida's five-year statute of limitations
for actions on contracts applied, the trial court denied the
bank's motion for summary judgment and granted the
debtor's motion to dismiss for failure to state a claim.
The bank appeals, and we reverse the trial court's
R. App. P. 3 Appeal as of Right; Judgment of the Circuit
Barnard Cheadle and John R. Cheadle, Jr., Nashville,
Tennessee, for the appellant, SunTrust Bank.
D. Bennett, J., delivered the opinion of the Court, in which
Charles D. Susano, Jr., and Kenny W. Armstrong, JJ., joined.
D. BENNETT, JUDGE
and Procedural Background
case involves a 2007 loan made by SunTrust Bank
("SunTrust") to Matthew Robert Ritter. SunTrust is
a Georgia banking corporation that is qualified to operate in
Tennessee. Mr. Ritter is a resident of Spring City,
February 16, 2007, Mr. Ritter executed an "access
3" equity line account agreement ("the
Agreement") with SunTrust that granted him a line of
credit in the amount of $110, 500.00. The loan was secured by
a mortgage on real property that Mr. Ritter owned in Florida.
Because SunTrust Mortgage, Inc. held a mortgage on Mr.
Ritter's Florida property at the time the Agreement was
executed, SunTrust held a junior mortgage on the property.
Agreement provided that Mr. Ritter could request advances on
the line of credit for a period of ten years and required the
loan to be paid in full no later than twenty years from the
date the Agreement was executed (February 16, 2027). The
Agreement also included the following relevant provisions:
Late Charge. Your payment will be late if it
is not received by us within 7 days after the "Payment
Due Date" shown on your periodic statement. If your
payment is late we may charge you 5.000% of the payment.
Collection Costs. We may hire or pay someone
else to help collect this Agreement if you do not pay. You
will pay us that amount. This includes, subject to any limits
under applicable law, our costs of collection, including
court costs and fifteen percent (15%) of the principal plus
accrued interest as attorneys' fees or reasonable
attorneys' fees as allowed by law . . . .
Governing Law. This Agreement will be
governed by federal law applicable to us and, to the extent
not preempted by federal law, the laws of the State of
Florida without regard to its conflicts of law provisions.
This Agreement has been accepted by us in the State of
2007 and 2011, Mr. Ritter received several advances on the
line of credit. He made payments on the loan through February
15, 2011. SunTrust received no other payments from him after
that date despite a remaining balance of $106, 442.43. On
September 7, 2011, SunTrust formally charged-off the
Mortgage, the senior mortgage holder, initiated foreclosure
proceedings on Mr. Ritter's Florida property and named
SunTrust as a junior interest holder. On July 15, 2013, the
Circuit Court for Charlotte County, Florida granted SunTrust
Mortgage a final summary judgment of mortgage foreclosure in
the amount of $184, 980.25. The record does not indicate how
much the Florida property sold for at the foreclosure sale.
At the time of foreclosure, however, the Florida property was
appraised at $98, 489.00- far less than the combined amount
of $291, 422.68 owed to ...