Franconia Associates v. United States, 536 U.S. 129, 11 (2002)

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Cite as: 536 U. S. 129 (2002)

Opinion of the Court

Court of Appeals agreed with the Court of Federal Claims on the respective benefits and burdens generated by the promissory notes: Petitioners enjoyed "an unfettered right to prepay their loans at any time," id., at 1363, while the Government had an obligation "to continue to allow borrowers" that option, ibid. If the Government's "continuing duty was breached," the court concluded, "the breach occurred immediately upon enactment of ELIHPA because, by its terms, ELIHPA took away the borrowers' unfettered right of prepayment." Ibid. Thus, the court ruled, the statute of limitations began to run on February 5, 1988, the date of ELIHPA's passage, see id., at 1364; 5 given that limitations-triggering date, the court held, petitioners' claims, filed over nine years post-ELIHPA, were time barred.

In holding petitioners' claims untimely, the Federal Circuit rejected the argument pressed by petitioners that the passage of ELIHPA qualified as a repudiation. Were ELIHPA so regarded, petitioners' suit would be timely if filed within six years of either the date performance fell due (the date petitioners tendered prepayment) or the date on which petitioners elected to treat the repudiation as a present breach. "An anticipatory repudiation occurs," the Court of Appeals recognized, "when an obligor communicates to an obligee that he will commit a breach in the future." Id., at 1363 (internal quotation marks omitted). "The doctrine of anticipatory repudiation does not apply in this case," the court reasoned, because after ELIHPA revoked the promise to allow unrestricted prepayment, the Government owed no future performance under the contracts. Id., at 1364.

5 The Federal Circuit thus disagreed with the Court of Federal Claims in one respect: The former concluded that petitioners' claims had accrued on the date of ELIHPA's enactment, while the latter held that those claims had accrued on the effective date of regulations implementing the Act. 240 F. 3d, at 1365, n. 3. This disagreement is irrelevant to, and rendered academic by, our resolution of the petitions.


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