City of Lincoln v. Hershberger

Heavican, C.J., Wright, Connolly, Gerrard, Stephan, McCormack, and Miller-Lerman, JJ. The City of Lincoln (the City) loaned money to PMI Franchising, Inc. (PMI), pursuant to a project financing agreement. James E. Hershberger and Sandra M. Hershberger were guarantors on the loan. PMI failed to repay any of the installment payments, and the City, in a letter dated February 28, 1995, exercised its right to accelerate the debt under the agreement. The City filed suit against the Hershbergers on September 20, 1999. The district court granted the Hershbergers' motion for summary judgment, concluding that the statute of limitations had run on the City's claim. The City appealed. Because the statute of limitations began to run when the City exercised its right to accelerate the debt, we conclude that the City's claim is not barred by the 5-year statute of limitations. We reverse, and remand for further proceedings.