Submitted April 11, 2013
Appeal from United States District Court for the Eastern District of Missouri - St. Louis.
For Simon Mahanna, Debra Ann Mahanna, Plaintiffs - Appellants: H. Clay Billingsley, Jeffrey Nicholas Dunphy, John Kilo, Kilo & Flynn, Saint Louis, MO.
For U.S. Bank National Association, Defendant - Appellee: Michele (Mike) W. Bartolacci, Brian A. Lamping, Felicia R. Williams, Thompson & Coburn, Saint Louis, MO.
Before COLLOTON, MELLOY, and SHEPHERD, Circuit Judges.
MELLOY, Circuit Judge.
In the late 1980's Plaintiffs Simon Mahanna and Debra Ann Mahanna, husband and wife, gave physical possession of gold coins and proof sets to a predecessor of Defendant U.S. Bank, N.A. (" U.S. Bank" ), as collateral to secure a line of credit. In 1997, in the midst of bank mergers and branch closings, Mr. Mahanna personally inquired as to the location of the gold coins. A bank representative informed him that the bank could not locate the coins but was investigating the matter. Mr. Mahanna continued to inquire about the collateral for twelve years and was repeatedly told bank personnel were looking into the matter. In 2009, U.S. Bank stated conclusively that it no longer possessed the coins. In January 2011, the Mahannas filed the present action alleging breach of contract, negligence, and conversion.
The district court granted summary judgment in favor of U.S. Bank, holding that the claims were time barred. The court determined that, at some point after Mr. Mahanna's initial inquiry but prior to 2001, a reasonable person would have known that an injury and substantial damages may have occurred. The district court found this notice sufficient to trigger commencement of a ten-year statutory limitations period which ended prior to the filing of this action. We affirm.
Simon Mahanna is a registered professional engineer who worked a variety of jobs including work as a city engineer, a planning engineer on power plant projects, and eventually the owner of his own development company. He later became a director of Boatman's Bank. Through Boatman's Bank, he met a banker who later went to work for Mark Twain Bank, Dennis Geohegan. Mr. Geohegan successfully solicited some of the Mahannas' business for Mark Twain Bank.
In September 1986, the Mahannas opened a six-month, $8,000 line of credit with Mark Twain bank and provided the gold coins and proof sets to the bank as physical collateral. Then, on May 1, 1987, the Mahannas executed an account agreement and a security and pledge agreement with Mark Twain Bank to set up an open-ended $8,000 secured line of credit. The note associated with the 1986 line of credit
is stamped " Paid by Execuline XXXXXX4599 5-1-87." It appears that the 1987 line of credit replaced the 1986 line of credit because " Execuline XXXXXX4599" is the account number listed on the note for the 1987 line of credit. The security and pledge agreement executed in 1987 listed as collateral the gold coins and proof sets. Mr. Mahanna now states that he was told Mark Twain Bank would hold the collateral in a safe deposit box at a specific branch of Mark Twain Bank, the Progress branch. The 1987 security and pledge agreement provided that Mark Twain Bank was to exercise reasonable care in the " custody and preservation" of the collateral and provided that Mark Twain Bank could demand additional collateral if at any time it believed itself to be undersecured.
According to the Mahannas, an original purpose for the line of credit was to provide overdraft protection for a related checking account and to provide a convenient means for safekeeping the coins. In 1990, the Mahannas expanded their line of credit to $80,000 and provided as security three certificates of deposit. The certificates of deposit had face values totaling $72,000 and maturity dates of December 12, 1998. The Mahannas assert that the expanded line of credit was secured not only by the certificates of deposit, but also by the previously listed gold coins and proof sets. The documentation for the 1990 line of credit, however, contains only Mrs. Mahanna's signature and lists as security only the certificates of deposit. The 1990 documents do not list the gold coins, nor is Mr. Mahanna's name on the documents. Further, the documentation provided to this court is not sufficiently legible to ascertain from the face of the documents whether the security interest in the gold coins survived the 1990 execution of the line of credit. Plaintiffs assert and claim in deposition testimony that the security interest continued after that date, and Defendants admit in their court filings that they possess no evidence to refute that assertion. The account number on the documents executed in 1990 is different than the account number on the documents executed in 1986 and 1987. In addition, the record contains a 1990 assignment of the $72,000 certificates of deposit signed by Mrs. Mahanna in favor of Mark Twain Bank.
The 1987 account agreement signed by Mr. and Mrs. Mahanna, and the 1990 account agreement signed only by Mrs. Mahanna, state, " I hereby grant you a continuing security interest in and right to set off at any time against any account I have with you, any collateral (except residential real estate) securing other loans with you and any other of my property (except residential real estate) now or hereafter in your possession, all as security for sums I owe you hereunder or otherwise, including . . . ." The 1987 account agreement then lists: " Various Gold Medals and Proof Sets[.]" The 1990 account agreement does not list these items. Rather it lists: " Security and Pledge Agreement dated January 18, 1990; Continuing Contract of Guaranty dated January 18, 1990[.]"
In 1997 a series of bank mergers and branch closings began through which Mark Twain Bank merged with or became owned first by Mercantile Bank, then by Firstar Bank, and, eventually, by U.S. Bank. In 1997, the ...