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Keefe Co. v. Americable International

July 13, 2000

THE KEEFE COMPANY, APPELLANT,
v.
AMERICABLE INTERNATIONAL,. INC., APPELLEE.



Before Terry and Steadman, Associate Judges, and Pryor, Senior Judge.

The opinion of the court was delivered by: Steadman, Associate Judge

On Certification from the United States Court of Appeals for the District of Columbia Circuit

Argued October 13, 1999

Pursuant to D.C. Code § 11-723 (1995), the United States Court of Appeals for the District of Columbia Circuit ("Circuit Court") has certified the following question to this court:

Under District of Columbia law, and upon the facts described in this opinion, when parties have entered into a contract in which payment is due on the first of each month, calculated as a percentage of the promisor's revenues from a specific service already rendered by the promissee, does the limitation period begin to run separately on each missed payment, as is generally the case with installment contracts, or, does repudiation or breach of the contract as a whole trigger a single limitations period? Keefe Co. v. Americable Int'l, Inc., 335 U.S. App. D.C. 118, 124, 169 F.3d 34, 40 (1999)(emphasis in original). We conclude that, on the facts presented to us, the limitation period on each missed monthly payment under the contract in question began to run separately, and we answer the certified question accordingly.

I.

The facts may be summarized as follows. *fn1 In the mid-1980's, Keefe Co. ("Keefe") and Americable International, Inc. ("Americable") entered into a letter agreement by which Keefe agreed to assist Americable in obtaining cable television ("CATV") contracts with U.S. military bases. Paragraph 4 of the agreement set forth in three separate subparagraphs the compensation Keefe was to receive for each contract so acquired: (A) a one-time fee of $10.00 per "home passed," (B) 3% of gross monthly subscriber revenues received from 90 days after service initiation until sale of the system, payable once a month on the first day of each month, and (C) 2% of the gross sale price of the system when sold.

As to the monthly payments, paragraph 4(B) of the contract provided, "Termination of this agreement as hereinafter provided shall not affect the Keefe Company [sic] right to said fee or [Americable's] obligation to pay the same on bases where a service agreement has been executed and a CATV system has been constructed by the Company." Paragraph 4(C), pertaining to the 2% due on sale, contained a similar provision. The termination provision of the contract also stated more generally: "It is mutually understood and agreed that termination of this agreement shall not in any way affect The Keefe Company [sic] right to receive compensation for services performed pursuant to the terms and conditions of this agreement prior to the effective date of said termination where a Service Request Agreement has been executed and a cable T.V. system has been constructed by the Company."

The contract terminated sometime between 1987 and 1989. *fn2 In 1994, Keefe filed the instant suit in federal district court, alleging that Americable had failed to make $395,000 worth of "one-time" payments due in 1988, as well as missing $870,000 in monthly payments due between 1988 and 1994. Americable moved for summary judgment on multiple grounds, including that the statute of limitations had run in 1991, three years after the contract was first breached. See D.C. Code § 12- 301(7) (1995)(creating three-year statute of limitations for actions on contract). As to the one-time payments, the district court ruled that the statute of limitations barred recovery since the payments were due in 1988. However, as to the monthly payments, it concluded that those were installment payments with individual statutes of limitation, such that only payments due more than three years prior to Keefe bringing suit were barred. *fn3 Americable's appeal of the latter ruling led to certification of the question now before us. *fn4

II.

It may be useful to begin with an examination of the operation of the general rule relating to the statute of limitations as applied to installment obligations. This rule was relied upon by the district court in this case and has been established in the jurisprudence of the District of Columbia, as in most of the nation, for at least a century. "[I]t is well settled that where a debt is payable in independent instalments the right of action accrues upon each as it matures, and if the obligee shall fail to commence his action until the statutory bar has intervened in the case of one or more instalments, he can only recover those not barred when his action was commenced." Washington Loan & Trust Co. v. Darling, 21 App. D.C. 132, 140 (1903); see also Le John Mfg. Co. v. Webb, 91 A.2d 332, 335 (D.C. 1952)("It is not open to doubt that under an ordinary installment contract a suit may be brought on each installment as it falls due"). *fn5

The theory is that each installment due is a separate obligation as to which the statute runs separately. There is nonetheless some recognition of a "single action" principle in the requirement that if and when an obligee elects to file an action, the complaint must include all installments "then due and owing" or the obligee will otherwise be barred as to such overdue obligations not sued upon. See Le John, supra, 91 A.2d at 335. However, unlike the normal situation in which a suit is brought on a contract, where a suit is brought to recover installment obligations then due and owing, complete relief need not be sought in that action as to future payments. To the contrary, successive suits may be brought as new installments come due. See Goodwin v. Cabot Amusement Co., 149 A. 574, 578-79 (Me. 1930); Phelps v. Shawprint, Inc., 103 N.E.2d 687, 690 (Mass. 1952); Townewest v. Warner Communications, 826 S.W.2d 638, 640 (Tex. App. 1992) ("in regard to future payments that become due and payable, the appellants will again have the right to sue if the appellees continue to dishonor their obligation"); 4 Corbin On Contracts § 948 (1951 ed. & Supp.1999)("If a contract provides for the payment of money in instalments, an action will lie for each instalment as it falls due. A judgment rendered in any one of those actions will not operate as a bar to the maintenance of the others.") and § 950 (but "only one action is maintainable for all instalments of money under a single contract that are overdue when suit is commenced").

Indeed, so embedded is this concept of distinct installment obligations that there is doubt whether an obligee even has the option, absent an acceleration clause, to bring a single suit, seeking both past-due and future payments, based solely on the obligor having missed installments. There is some authority for the proposition that an obligee may bring such suit. See, e.g., Goodwin, supra, 149 A. at 578- 79 (Me. 1930)(allowing plaintiff to either sue once for total breach or sue for partial breach as installments came due); Hoyt v. Horst, 201 A.2d 118, 124 (N.H. 1964) (allowing plaintiff to recover present and future damages for "total breach"); see also Le John, supra, 91 A.2d at 335 (citing Goodwin, supra, favorably). However, there is also authority to the contrary. See, e.g., New York Life Ins. Co. v. Viglas, 297 U.S. 672 (1936) ("a party to a contract who has no longer any obligation of performance on his side but is in the position of an annuitant or a creditor exacting payment from a debtor, may be compelled to wait for the instalments as they severally mature"); Phelps, supra, 103 N.E.2d at 690; Federal Recovery of Wash., Inc. v. Wingfield, 986 P.2d 67, 70-71 (Or. App. 1999).

Further, even where the obligor expressly informs the obligee that no further payments will be made, most courts have declined to apply the doctrine of anticipatory repudiation. See, e.g., Parker v. Moitzfield, 733 F. Supp. 1023, 1025 (E.D. Va. 1990)("Nearly as well established, but not so free of controversy, is the proposition that the doctrine does not apply to unilateral contracts or to contracts the complaining party has fully performed."); Greguhn v. Mutual of Omaha Ins. Co., 461 P.2d 285, 287 (Utah 1969)(stating that doctrine does not apply where all that remains is for one party to pay installments of money); see also Long Island R.R. Co. v. Northville Corp., 362 N.E.2d 558, 563-64 (N.Y. 1977)(summarizing debate about when doctrine should apply); Restatement (Second) Of Contracts, ยง 243(3)(1981)(indicating that, where all that remains is for the breaching party to make installment payments of money, failure to do so, whether ...


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