May 2, 2014
On April 29, 2014, Senior United States District Judge Scott O. Wright entered an Order granting various defendants’ motions to dismiss based on statute of limitations grounds and dismissed the entire lawsuit with prejudice.
The lawsuit was filed originally in 2004 in the Circuit Court of Plate County, Missouri. The lawsuit followed the dismissal of the Adkison class action, an earlier-lawsuit filed in the Circuit Court of Clay County, Missouri that involved the same second mortgage loans. Under controlling Missouri law, the statute of limitations applicable to the claims asserted in the lawsuit is six-years.
In 2011, the Defendants were able to remove the lawsuit to federal court based on the provisions of the Class Action Fairness Act of 2005. In 2012, the United States Court of Appeals for the Eighth Circuit, a federal appellate court, ruled in another federal lawsuit that the six-year statute of limitations did not apply to civil actions such as those for violations of Missouri’s Second Mortgage Loans Act. The Court of Appeals for the Eighth Circuit held that such actions instead are subject to a three-year statute of limitations. In dismissing the lawsuit, Judge Wright followed the decision by the Eighth Circuit “as controlling” and held that the three-year statute applied.
Importantly, this ruling by the Eighth Circuit did not change existing Missouri law, which continues to provide that the six-year statute of limitations applies to civil actions under the Missouri Second Mortgage Loans Act.
There is thus a conflict in Missouri as to whether the six- or three-year statute of limitations applies to civil actions such as those for violations of the Missouri Second Mortgage Loans Act. In Missouri state court, a six year statute of limitations is applied, but a three year statute of limitations is being applied by the federal courts if the case is removed to federal court. We believe that a federal court cannot apply a different statute of limitations than a Missouri state court would apply to the same action.
We disagree with the court’s ruling and plan to appeal. The appellate process could take one to two years.
Click here to find a copy of the district court’s order.
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