On November 21, 2011, the Pennsylvania Superior Court filed an opinion in Osprey Portfolio, LLC v. Izett, 2011 Pa. Super. 248, holding that a suit to enforce a guaranty is subject to the 20 year statute of limitations applicable to “instruments under seal,” rather than the four year statute of limitations applicable to “actions upon a contract.” The decision was subsequently appealed to the Pennsylvania Supreme Court, which granted allocatur on August 13, 2012. At the present, the appeal has been fully briefed for the Supreme Court, and oral argument is scheduled for November 28, 2012.
This action arises from a 1999 commercial loan transaction between First Union National Bank (“First Union”) and Izett Manufacturing, Inc. (“the Business”), whereby First Union agreed to lend the Business up to $50,000 in return for a promissory note, which George Izett (“Izett”) signed in his capacity as vice-president of the Business. Izett also signed a guaranty under seal (“the Guaranty”), in which he agreed to unconditionally guarantee timely payment of all sums due under the loan to First Union and its successors or assigns. In 2001, First Union sold the loan and assigned the Guaranty to Osprey Portfolio, LLC (“Osprey”), and, in 2005, Osprey notified Izett that he was in default. In 2010, Osprey confessed judgment against Izett, who argued that the judgment should be stricken because Osprey failed to file its complaint within Pennsylvania’s four year statute of limitations applicable to contract actions. See 42 Pa.C.S.A. § 5525. The trial court disagreed with Izett, however, instead holding that the applicable statute of limitations was the 20 year statute governing “instruments under seal,” as set forth at 42 Pa.C.S.A. § 5529(b)(1). Izett appealed to the Pennsylvania Superior Court, arguing that, although the Guaranty was indeed signed under seal, it did not constitute an “instrument.”
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