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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 92-1335

FEDERAL DEPOSIT INSURANCE CORPORATION,
Plaintiff-Appellee
Cross-Appellant,
versus
REX P. FULLER, Individually and as
Independent Executor of the Estate
of R.P. Fuller, deceased,
Defendant-Appellant
Cross-Appellee,
and
ANN FULLER CLAYTON, f/k/a Ann Fuller
Lydick, and JANE FULLER JACKSON, d/b/a
Lydick-Jackson Joint Venture,
Defendants
C
r
o
s
s
-
Appellees.

Appeals from the United States District Court
for the Northern District of Texas

(June 21, 1993)
Before WISDOM*, GARWOOD, and HIGGINBOTHAM, Circuit Judges.
HIGGINBOTHAM, Circuit Judge:
I.
The FDIC sued on a promissory note executed by Rex P. Fuller
on behalf of himself, his sisters, Ann Fuller Lydick Clayton and
*Because of illness, Judge John Minor Wisdom was not present
at the oral argument of this case; however, having had available
the tape of oral argument, he participated in this decision.

Jane Fuller Jackson, and his father, R.P. Fuller in favor of
Continental Illinois National Bank and Trust Company of Chicago in
December 1984. The makers defaulted in May 1986 and Continental
accelerated the note and sued in September 1986. Fuller1
counterclaimed for fraud, racketeering, and civil conspiracy.
In April 1987, Continental assigned Fuller's note to the FDIC
in its corporate capacity. The FDIC and the Fullers then began
settlement negotiations agreeing to temporarily dismiss the suit
during their effort. When no settlement was reached, the FDIC sued
on the note in September 1990.
Fuller answered the FDIC's claim in part by a plea of laches.
At trial, the court rejected the defense of laches holding that
laches cannot be asserted against the FDIC in its corporate
capacity. The jury returned a verdict in favor of the FDIC for the
principal amount of $4,500,096.50. The court awarded the FDIC
costs, post-judgment interest, and counsel fees, but denied
prejudgment interest.
II.
Fuller urges that the court erred in rejecting laches as a
defense and asks for a trial of the issue. The FDIC cross-appeals
the denial of prejudgment interest. We do not reach the broad
contention that laches is never a defense to a claim by the FDIC in
its corporate capacity. We conclude that laches is, in any event,
not a defense to the legal claim against Fuller and that the
district court did not err in not awarding prejudgment interest.
1We throughout refer to the makers as "Fuller."
2

The FDIC argues that laches is not a defense to its legal
claim, a suit on the note for debt. The FDIC points out that it
filed suit within the limitations period and that it is equally
clear that the FDIC asserted a legal and not an equitable claim.
The FDIC relies on Clark v. Amoco Production Co., 794 F.2d 967
(5th Cir. 1986), in which we held that under Texas law, laches is
usually not a defense unless the claim is "of an essentially
equitable character." Judge Rubin articulated the consistent
principle behind laches as "equitable remedies are not available if
granting the remedy would be inequitable to the defendant because
of the plaintiff's long delay." Environmental Defense Fund, Inc.
v. Alexander, 614 F.2d 474, 478 (5th Cir.), cert. denied, 449 U.S.
919 (1980). This principle illustrates the equitable nature of the
laches defense, implying its inapplicability to claims for legal
remedies. In Franks v. Bowman Transp. Co., 495 F.2d 398, 406 (5th
Cir. 1974), rev'd on other grounds, 424 U.S. 747 (1976), we stated
that "[i]n an equitable action, equitable defenses may be raised,
and these include the doctrine of laches." The converse would be
that in legal actions, laches is not available. See Morgan v.
Koch, 419 F.2d 993, 996 (7th Cir. 1969).
This would end the matter but, we are told, there is an
exception to this general rule. In "extraordinary circumstances,"
laches may be asserted before limitations has run. Of course, this
sidesteps the issue of whether laches can bar a legal claim filed
within the statute of limitations and the only relevant Fifth
Circuit precedent we are pointed to involved claims that the Court
3

characterized as "essentially equitable" in nature. See, e.g.,
Franks, 495 F.2d at 406. The appellants do gain some support from
S.E.R., Jobs For Progress, Inc. v. United States, 759 F.2d 1, 8
(Fed. Cir. 1985), where the Court stated that laches is not
inapplicable in contract cases per se. Instead, the Federal
Circuit stated that laches cannot be asserted against legal claims
where a statute of limitations is available to preclude recovery on
stale claims "unless the offended party has been unmistakably
prejudiced by the delay." Id. at 9. We question this "exception"
because it does not admit principled limits but we need not cross
this bridge because even if we assume laches is available in
"extraordinary" circumstances or where the defendant is
"unmistakably prejudiced," nothing supports its application here.
Fuller argues that the FDIC's delay of two years caused the
loss of witnesses and access to evidence that would have supported
third party claims of fraud, racketeering, and civil conspiracy
against Continental. In the dismissal agreement, Fuller agreed not
to refile claims against Continental until or unless the FDIC
refiled suit. The decision not to pursue discovery regarding these
claims was unilateral.
Fuller alleges that a key witness died during negotiations,
another witness could no longer recollect the relevant events and
involved employees of Continental left the company's employment and
cannot be located. Yet Fuller admits that the death was one month
after the original case was dismissed, a loss hardly the result of
the delay. In addition, he does not allege that he had been aware
4

of the whereabouts of the missing witnesses when the case was
dismissed and later lost track of them. There is no contention
that the witness with the failed memory had any recollection of the
events when the case was originally dismissed. Two years does not
account for the witness's inability to recall events from ten years
ago. Those events were eight years old when Fuller first filed his
counterclaims.
The FDIC denies that any delay caused the loss of any claims.
In Matter of Bohart, 743 F.2d 313 (5th Cir. 1984), we held that
loss of a claim during a delay is not enough. Rather, the delay
must cause the loss. Id. at 326-27. Fuller was free to pursue
discovery during negotiations. In addition, there is no suggestion
that he would have had access to the "lost" evidence before the
delay.
III.
At trial, FDIC employee Winget, the only witness to testify
regarding the amount due on the note, testified that the principal
amount due was $4,500,096.50. He also testified that the accrued
interest as of January 3, 1992, was $2,239,273.62. Winget did not
personally calculate the interest due.
The promissory note provided for payment of interest by Fuller
as follows:
. . plus interest (on the basis of a year consisting of 365,
or when appropriate 366, days) from the date hereof until
maturity at a fluctuating rate per annum equal to the sum of
the prime interest rate of the Bank [Continental] (being at
any time the rate per annum then most recently announced by
the Bank at Chicago, Illinois as its prime rate) in effect
from time to time, plus one percent (1%), such rate to change
concurrently with each change in said prime rate as publicly
5

announced by the Bank, on the principal balance hereof
remaining from time to time unpaid, payable monthly on the
first day of each month hereafter, commencing January 1, 1985,
and at maturity, and with interest after maturity (whether by
acceleration or otherwise) on said principal balance until
paid at a rate per annum which is in effect from time to time
(but not less than the prime rate in effect at maturity), plus
two percent (2%), all such payments of principal and interest
to be made in lawful money of the United States in immediately
available funds.
There was no evidence regarding Continental's prime rate or dates
on which it changed.
In closing argument, the FDIC requested a total award,
including principal and interest, in excess of $6.7 million. The
jury awarded $4,500,096.50. The district court denied the FDIC's
motion to amend the judgment to include an award for the alleged
prejudgment interest. We review the district court's denial of
this motion for abuse of discretion. Midland West Corp. v. FDIC,
911 F.2d 1141, 1145 (5th Cir. 1990).
Fuller vigorously contested the FDIC's proof of the amount
due. In particular, he argued to the jury that Winget had no
personal knowledge regarding the facts and calculations leading to
his interest amount testimony. Fuller asked the jury to award no
money where the FDIC failed to proof the amount due with a
preponderance of the evidence. The most likely inference from the
jury's award is that it rejected the interest testimony. We are
not persuaded that the district court abused its discretion by
declining to amend the judgment.
AFFIRMED.
6