Evans v. Truist Bank f/k/a Branch Banking & Trust Co., Record No. 0631-22-3 (Va. Ct. App. Mar. 28, 2023)

Facts. On March 1, 2011, Truist Bank, formerly BB&T, loaned Edward Brian Evans $732,000 in exchange for a promissory note. Evans made several materially false statements concerning his financial situation both before and after receiving the loan. Unsurprisingly, Evans failed to make his payments, and on October 17, 2013, Truist notified him that he was in default and accelerated the new due date to November 4, 2013.

Evans’ attempt to discharge the loan in bankruptcy was unsuccessful, however the proceedings tolled the statute of limitations for 491 days. On January 25, 2019, the Bank obtained a confession of judgment. It nonsuited the confession, then refiled on September 25, 2020, more than six months later. Evans then filed a plea in bar, seeking dismissal because the statute of limitations had run. He asserted that the limitations period on a written contract is five years and that the cause of action accrued on the date that he made the loan on March 1, 2011. The trial court disagreed. It found that the applicable statute of limitations was six years and the accrual date was the accelerated maturity date of November 4, 2013. Evans appealed.

Issues. Whether the statute of limitations was five or six years, and on what date the cause of action accrued.

Holding. The statute of limitations on a negotiable instrument payable at a definite time is six years from the date(s) stated in the note, or if a due date is accelerated, from the accelerated due date.

Notes. Although the note was a written contract, the five-year statute of limitations listed in Code § 8.01‑246 applies unless “otherwise specified.” Here, Code § 8.3A‑118 specified a different limitations period of six years. An action on a breach of contract accrues on the date when the breach occurs, not when the resulting damage is discovered. A breach occurs when (a) there is a legally enforceable obligation, (b) the defendant has violated this obligation, and (c) the violation causes damage or injury to the plaintiff. Here, the obligation was timely repayment, and Evans committed several breaches. By the terms of the contract, he was in default at the time he provided materially false information and each time he missed a payment, including when he did not pay the full amount on the accelerated due date. Again, by the terms of the contract, Truist was not required to pursue its “full legal remedies at law or equity.” Here, it chose to only pursue its legal remedies related to Evans last default on the accelerated payment date on November 4, 2013.

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