The Texas Supreme Court recently considered the difference
between statutes of repose and statutes of limitation in
Federal Deposit Insurance Corp. v. Lenk, 361 S.W.3d 602
(Tex. 2012). After a bank customer died intestate, a probate clerk
presented false letters of administration to two banks and gained
access to the deceased customer's accounts. He was eventually
arrested and convicted of stealing the funds. In the meantime, in
2003 the probate court appointed an administrator of the
decedent's estate. She made no attempt to recover the funds
from the banks until 2005. When the banks refused her demand for
payment, she sued them for breach of the depository agreements. The
banks moved for summary judgment because she failed to timely
notify the banks of the unauthorized transactions. The trial court
granted summary judgment to the banks but the court of appeals
The Supreme Court reversed the court of appeal's judgment
for one bank holding that the statute of repose in Texas Business
and Commerce Code Section 4.406 barred the administrator's
claim. The court did not grant the second bank's motion for
summary judgment because it failed to raise the statute of repose
as an affirmative defense.
The Court reiterated the rule that a statute of repose is a
substantive, rather than a procedural, limitation. This difference
has several consequences:
A statute of limitations extinguishes the right to prosecute an
accrued cause of action after a period of time. It cuts off the
remedy. In contrast, a statute of repose limits the time during
which a cause of action can arise and usually runs from an act of
the defendant. It abolishes the cause of action after the passage
of time even though the cause of action may not have yet
When a statute extinguishes a claim, the statute is
substantive, that ruling has a preclusive effect, and a statute of
limitation dismissal bars suit everywhere. In contrast, when
statutes of limitation are procedural, litigants with untimely
claims cannot refile their claims in the courts of that state, but
they remain free to assert them in a jurisdiction that would apply
a longer statute of limitations. A state court's judgment based
on its own statute of limitations does not preclude a second action
in a different state where the statute of limitations is
Texas has several statutes of repose that are substantive, that
is, they extinguish the claim rather than merely bar the
A person must report an unauthorized transaction to a bank
within one year of account statements being made available. Tex.
Bus. & Com. Code § 4.406(f).
Actions against architects, engineers and design professionals
must be brought within ten years. Tex. Civ. Prac. & Rem. Code
Actions against persons furnishing construction must be brought
within ten years after substantial completion of the improvement.
Tex. Civ. Prac. & Rem. Code § 16.009(a).
Actions against surveyors must be brought within ten years
after the survey was completed. Tex. Civ. Prac. & Rem. Code
Actions involving products liability must be brought within
fifteen years of sale of the product or, if longer, the number of
years the product is warranted by the seller. Tex. Civ. Prac. &
Rem. Code § 16.012(b), (c).
Actions involving a fraudulent conveyance must be brought
within four years after the conveyance of, if later, one year after
the creditor knew or should have known about the conveyance. Tex.
Bus. & Com. Code § 24.010(a)(1).
Actions against agricultural operations must be brought no
later than one year after the start of the circumstance that gave
rise to a nuisance. Tex. Agric. Code § 251.004(a).
A healthcare liability claim must be brought no later than ten
years after the date of the act or omission that gave rise to the
claim. Tex. Civ. Prac. & Rem. Code § 74.251(b).
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In a recent decision characterizing precedent as a seven decade "aberration," the Supreme Court of California permitted plaintiff loan borrowers to introduce against a defendant banking institution parol evidence directly contradicting the very terms of the parties’ written loan agreement.