Rush, C.J.
A closed installment contract, such as a mortgage or promissory note, is one in which a borrower agrees to make a series of payments to a lender on specific dates. Suits to enforce obligations under these contracts are subject to multiple statutes of limitations.
Here, borrowers ask us to impose an additional rule of reasonableness, insisting that their lender waited too long to sue them for amounts owed under a mortgage and promissory note. The lender urges us to affirm the trial court’s order, which granted it partial relief.
We find that imposing additional, judicially created time constraints upon a lender’s ability to bring a claim on a closed installment contract is neither necessary nor wise. Applicable statutes of limitations already keep a lender from waiting indefinitely to sue for a borrower’s default. And these statutes are triggered at multiple points in time, leaving the lender empty-handed if it delays too long. Imposing a further rule of reasonableness could spur lenders to sue borrowers prematurely, depriving them of the opportunity to first negotiate repayment.
Finding that the lender filed suit within the applicable statutes of limitations, we affirm.
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A promissory note is a negotiable instrument that accompanies a mortgage. It is an installment contract that contains a maturity date— usually fifteen or thirty years past its date of execution—when the full balance owed becomes due. Such a note may also include a provision, known as an acceleration clause, that gives the lender the option to immediately demand payment on the full loan amount if the borrower fails to pay one or more installments.
The Blairs argue that the applicable statute of limitations requires an acceleration option to be exercised within six years following a borrower’s first default. And because EMC failed to do so, the Blairs contend that it waited an unreasonable amount of time to sue for payment under the note and thus its suit is time-barred.
EMC counters that there are three possible points in time when the statute of limitations could have been triggered: (1) as each installment payment became due; (2) upon an exercise of the optional acceleration clause, had it chosen to accelerate; or (3) upon loan maturity. And EMC argues that its claim was timely because it was asserted within six years of many of the Blairs’ missed installment payments and within six years of the note’s maturity date. Yet, EMC refrains from asking for full relief, rather urging us to affirm the trial court’s order that it is entitled to recover only some of the amount due.
We grant EMC’s request for two reasons.
First, there is no need to impose a rule of reasonableness when a lender sues to enforce installment obligations on a closed installment contract, such as a mortgage or a promissory note. Unlike credit cards or other open accounts, a closed installment contract contemplates payment of a certain sum over a fixed period of time, which means a lender cannot wait indefinitely to sue for missed installments.
Second, under either of the applicable statutes of limitations, a cause of action for payment upon a promissory note with an optional acceleration clause can accrue on multiple dates—including when the note matures. See Ind. Code § 34-11-2-9 (2019); Ind. Code § 26-1-3.1-118(a) (2019). Thus, EMC would be entitled to full relief under either statute.
However, EMC not only expressly disclaimed any argument for full relief; but it also urged us to affirm the trial court’s order that it was entitled to partial relief. Under these particular circumstances, we affirm the trial court’s order.
I. There is no need to judicially create additional time constraints on a lender’s ability to bring an action upon a closed installment contract.
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II. Two statutes of limitations apply to a cause of action upon a promissory note.
Two statutes of limitations apply when a lender sues for payment upon a promissory note. These statutes “provide security against stale claims, which in turn promotes judicial efficiency and advances the peace and welfare of society.” Cooper Indus., LLC v. City of South Bend, 899 N.E.2d 1274, 1279 (Ind. 2009).
First, Indiana Code section 34-11-2-9 is the general statute of limitations for “action[s] upon promissory notes.” This statute states that such an action, when pertaining to a note executed after August 31, 1982, “must be commenced within six (6) years after the cause of action accrues.” I.C. § 34-11-2-9.
Second, Indiana has adopted the relevant Uniform Commercial Code (UCC) statute of limitations as Indiana Code section 26-1-3.1-118. This statute specifically governs “an action to enforce the obligation of a party to pay a note payable at a definite time.” I.C. § 26-1-3.1-118(a). It gives two alternative deadlines for asserting a cause of action upon such a note: either “within six (6) years after the due date or dates stated in the note or, if a due date is accelerated, within six (6) years after the accelerated due date.” Id.
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Finding these opinions persuasive, we conclude that Indiana’s two applicable statutes of limitations recognize three events triggering the accrual of a cause of action for payment upon a promissory note containing an optional acceleration clause. First, a lender can sue for a missed payment within six years of a borrower’s default. Second, a lender can exercise its option to accelerate and fast-forward to the note’s maturity date, rendering the full balance immediately due. The lender must then bring a cause of action within six years of that acceleration date. Or, third, a lender can opt not to accelerate and sue for the entire amount owed within six years of the note’s date of maturity.
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Conclusion
Important legal differences between closed installment contracts and open accounts counsel against treating them identically for purposes of statutes of limitations. Because we find no need to impose a rule of reasonableness when a lender sues for payment on a closed installment contract, we conclude that EMC could, under the two applicable statutes of limitations, have recovered the full amount owed. But since EMC expressly disclaimed any argument for full relief, we affirm the trial court and decline to grant relief beyond what EMC sought.
David, Massa, Slaughter, and Goff, JJ., concur.