Duck

MEMORANDUM OF OPINION AND ORDER

Prime Ventures, Ltd.’s trustee in bankruptcy, Charles Duck (Trustee), brought *687 this action to determine the validity of two promissory notes with an outstanding balance of approximately $8.6 million held by defendant Manhattan Savings Bank (Manhattan). The notes are secured by a first deed of trust encumbering an apartment complex (Apartments) located in Houston, Texas and owned by Prime Ventures. The Trustee argues that the notes and trust deed are void because Manhattan failed to sue to foreclose the lien within the four-year period provided by the Texas statute of limitations. Manhattan argues that the notes and trust deed are still enforceable. The United States Bankruptcy Court for the Northern District of California, Wolfe, J., granted Manhattan’s motion for summary judgment and denied the Trustee’s cross-motion for summary judgment. The Trustee appeals.

FACTS AND ISSUES

The facts are not in dispute. Manhattan’s lien upon the Apartments was created by two deeds of trust granted in 1968 and 1969 to Manhattan’s predecessor in interest by the then owner of the real property, Prime Ventures’ predecessor in interest. The deeds of trust…