PNC Bank v. Sterba (In re Sterba)
United States Court of Appeals for the Ninth Circuit
852 F.3d 1175 (2017)
- Written by Abby Roughton, JD
Facts
In 2007, Richard and Olga Sterba (debtors) bought a condo in California. The Sterbas took out two loans to fund the condo purchase. Both loans were secured by liens against the condo. The Sterbas’ promissory note to National City Bank (National City), the junior lienholder, included a general choice-of-law provision stating that the promissory note was governed by Ohio law because National City was an Ohio bank. A few months later, the Sterbas defaulted on their loans. The senior lender foreclosed on the condo, leaving an outstanding debt to National City of $42,000. In 2013, the Sterbas filed for bankruptcy in California. National City’s successor in interest, PNC Bank (creditor), filed a claim in the Sterbas’ bankruptcy proceeding based on the 2007 promissory note. The Sterbas asserted that PNC’s claim was barred by California’s four-year statute of limitations. However, PNC argued that the claim was not time-barred because Ohio had a six-year statute of limitations, and Ohio law governed the promissory note. The bankruptcy judge agreed with PNC and allowed the claim, but the Bankruptcy Appellate Panel (BAP) reversed. PNC appealed to the Ninth Circuit.
Rule of Law
Issue
Holding and Reasoning (Korman, J.)
Concurrence (Tashima, J.)
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