Federated Capital corp. v Libby; Federated Capital Cop v Chapa

Federated sued Libby and Chapa seeking to collect monies owed under accredit card agreements. The agreements had choice of law and choice of forum clauses adopting Utah law and Utah courts. The district court granted summary judgment to Libby and Chapa ruling Pennsylvania’s statute of limitations applied under Utah’s borrowing statute and the suits were time barred. The Court, with two justices concurring, affirmed. The majority held that the parties’ agreement adopted all of Utah’s substantive law including the borrowing statute, 78B-2-103, and thus the four year limitations period in Pennsylvania law was adopted through 103 as oath’s period as well. The majority noted this gave Federated all that was bargained for with the choice of law provision and avoided awarding it more than was bargained for. The majority also held that the Pennsylvania period applied because Federated did not challenge the district court’s ruling that the cause of action arose in Pennsylvania and it is irrelevant that suit in Pennsylvania would be barred for other reasons if it is bared by the four year period, the lack of forum shopping here does not change that rule and here the case is barred as Libby and Chapa defaulted just short of six years before suit was field. The majority held that Libby and Chapa were entitled to attorney fees both at the district court level and on appeal as they prevailed and the reciprocal fee statute entitled them to fees. The concurrence noted its agreement with the majority opinion and analysis, but noted the appeal hinged on federated conceding the cause of action arose in Pennsylvania and thus the decision here does not control the question of where a case arises.