                           UNPUBLISHED

UNITED STATES COURT OF APPEALS
                 FOR THE FOURTH CIRCUIT


AMERICAN INN, L.P., a Virginia           
limited partnership,
                  Plaintiff-Appellant,
                 and
DONALD WOLF; EVELYN WOLF,
                      Plaintiffs,
                                                   No. 01-1888
                  v.
SUNTRUST BANKS, INCORPORATED, a
financial institution chartered under
Trust Company Laws of Georgia;
SUNTRUST BANK,
                 Defendants-Appellees.
                                         
           Appeal from the United States District Court
         for the Eastern District of Virginia, at Richmond.
                 James R. Spencer, District Judge.
                          (CA-01-123-3)

                       Argued: January 23, 2002

                       Decided: February 13, 2002

   Before WIDENER, WILLIAMS, and MOTZ, Circuit Judges.



Reversed and remanded by unpublished per curiam opinion.


                              COUNSEL

ARGUED: Timothy M. Murphy, Williamsburg, Virginia, for Appel-
lant. Paul Kevin Campsen, KAUFMAN & CANOLES, P.C., Norfolk,
2                AMERICAN INN v. SUNTRUST BANKS, INC.
Virginia, for Appellees. ON BRIEF: Kenneth L. Roberts, KEN-
NETH L. ROBERTS, P.C., Newport News, Virginia, for Appellant.
Stephen E. Noona, KAUFMAN & CANOLES, P.C., Norfolk, Vir-
ginia, for Appellees.



Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).


                                OPINION

PER CURIAM:

   American Inn, L.P., filed a breach of contract claim alleging that
SunTrust Bank miscalculated the interest rate on a tax-exempt indus-
trial development revenue note in 1987 and 1993, resulting in
monthly overcharges to American Inn for the duration of the note.1
The district court granted SunTrust’s motion to dismiss for failure to
state a claim upon which relief can be granted, ruling that the statute
of limitations barred American Inn’s claim. Because a new cause of
action accrued, and a separate limitations period commenced, with
each overpayment of interest, American Inn has stated a claim upon
which relief can be granted with respect to all installments due during
the relevant five-year limitations period. We therefore reverse and
remand for further proceedings consistent with this opinion.

                                     I.

   In 1985, the Industrial Development Authority of the City of
Petersburg, Virginia (the "IDA"), issued a twenty-year, tax-exempt
industrial development revenue note, payable to SunTrust, in the
    1
    American Inn is the successor-in-interest to Tudor Inn; SunTrust
Bank is the successor-in-interest to both United Virginia Bank and Cre-
star Bank. For ease of reference, the parties will be referred to throughout
this opinion by their present names, even when referring to their respec-
tive corporate predecessors.
                AMERICAN INN v. SUNTRUST BANKS, INC.                   3
amount of $1,200,000. American Inn immediately assumed payment
obligations pursuant to the note, which was used to finance a hotel
development project.

   The terms of the note required American Inn to pay the principal
of the note in "consecutive equal monthly installments," due on the
first day of each month. American Inn also was obligated to pay
accrued interest on the first day of each month, and, by the terms of
the note, interest was calculated at a "Tax Exempt Rate" equal to 80%
of the Prime Rate. Any prepayments by American Inn were to be
applied "first to the payment of interest accrued to the prepayment
date and then to the reduction of principal," although American Inn
was to provide "not less than 30 days’ notice" of prepayment to Sun-
Trust.

   The note also entitled SunTrust to adjust the interest rate pursuant
to a yield maintenance provision contained in the note if there was a
"decrease in yield," defined as "any change in the tax-equivalent yield
to the Bank on this Note" resulting from a "change in law." Thus,
SunTrust could assess "supplemental interest in an amount sufficient
to compensate the Bank for such ‘change in yield.’"

   In 1987, Congress reduced the corporate tax rate by 12%, resulting
in a decrease in yield to SunTrust on the note. SunTrust therefore
exercised its rights under the yield maintenance provision to increase
the interest rate on the note. Congress changed the corporate tax rate
again in 1993, this time increasing it by 1%. This increase in the cor-
porate tax rate resulted in an increase in yield on the note to SunTrust,
but SunTrust made no corresponding decrease in the interest rate on
the note.

   Also during the term of the note, in 1991, American Inn defaulted
on a related loan held by SunTrust, entitling SunTrust to demand full
payment of the note. Rather than demand full payment, however, on
November 1, 1991, SunTrust entered into a Forbearance Agreement
with American Inn. In the Forbearance Agreement, American Inn rep-
resented and warranted that, as of the date of the agreement, it had
"no claims, actions, causes of action, defenses, counterclaims or set-
offs of any kind or nature which [American Inn], individually or col-
lectively, can assert against [SunTrust] in connection with the
4               AMERICAN INN v. SUNTRUST BANKS, INC.
making, closing, administration, collection and/or enforcement" of the
note. Furthermore, the Forbearance Agreement provided that in the
event that American Inn did have any such claims, actions, causes of
action, defenses, counterclaims or setoffs — again limited to those
existing "ONLY AS OF THE DATE OF THIS AGREEMENT" — it
waived and relinquished them. (Emphasis in original.)

   American Inn continued to make monthly payments on the note to
SunTrust through Spring 1998, when it obtained a payoff calculation
from SunTrust in order to sell the property. American Inn objected to
SunTrust’s payoff calculation, alleging that SunTrust had been mis-
calculating the supplemental interest. On May 5, 1998, SunTrust
agreed to "research its files to determine the applicable interest rate"
and permitted American Inn to reserve "its rights, to the extent they
exist, to object to the payoff amount[.]" Subject to this reservation,
American Inn paid off the note in full and sold the property. On July
1, 1998, however, SunTrust notified American Inn that the bank
"d[id] not believe it [wa]s required to refund or adjust any of the inter-
est payments made to date" because "any payments made by [Ameri-
can Inn] without protest or objection at the time they were made was
sufficient to waive any right to object to the change in interest rate."

   On March 2, 2001, American Inn filed this action against SunTrust
for, inter alia, breach of contract.2 Consistent with its objection to
SunTrust’s payoff calculation, American Inn alleged that SunTrust
miscalculated the increased interest rate, beginning in 1987, resulting
in overpayment by American Inn of the monthly supplemental inter-
est charges assessed by SunTrust. American Inn further alleged that
SunTrust’s failure to reduce the interest rate beginning in 1993, when
the corporate tax rates increased, resulted in additional overpayment
by American Inn of the monthly supplemental interest charges. Sun-
Trust filed a motion to dismiss for failure to state a claim upon which
relief can be granted.
  2
    The district court dismissed American Inn’s remaining claims for
breach of fiduciary duty, breach of a duty of good faith and fair dealing,
negligence, fraud, unjust enrichment, and constructive trust. The district
court also dismissed plaintiffs Donald and Evelyn Wolf, American Inn’s
principals and guarantors of the note, and dismissed defendant SunTrust
Banks, Inc., SunTrust’s parent corporation. On appeal, American Inn
does not challenge the dismissal of these claims or parties.
                 AMERICAN INN v. SUNTRUST BANKS, INC.                     5
   The district court granted SunTrust’s motion to dismiss for failure
to state a claim on the ground that the applicable five-year statute of
limitations barred all of American Inn’s contract claims. The court
rejected American Inn’s assertion that the statute of limitations began
to run at the time of the final payoff of the note and instead held that
the "statute of limitations began to run[ ] in 1987 and 1993 when the
interest rate was improperly adjusted" because the note was an install-
ment contract. In a footnote, the district court further concluded that
American Inn, by entering the Forbearance Agreement, had "contrac-
tually waived any right they had to sue [SunTrust] in connection with
the [note]." American Inn appeals.

   In reviewing a district court’s dismissal for failure to state a claim,
we must assume the factual allegations contained in the complaint to
be true, and we review de novo the legal sufficiency of those allega-
tions. See, e.g., Migdal v. Rowe Price-Fleming Int’l, Inc., 248 F.3d
321, 325-26 (4th Cir. 2001). The longstanding rule in this circuit is
"that a motion to dismiss for failure to state a claim should not be
granted unless it appears to a certainty that the plaintiff would be enti-
tled to no relief under any state of facts which could be proved in sup-
port of his claim." Rogers v. Jefferson-Pilot Life Ins. Co., 883 F.2d
324, 325 (4th Cir. 1989) (internal quotation marks and citation omit-
ted).

                                    II.

   Under Virginia law, the statute of limitations applicable to a breach
of contract action is five years and runs from the date "when the
breach of contract occurs." Va. Code Ann. § 8.01-246(2) (Michie
2000); id. § 8.01-230. An exception to strict application of the statute
of limitations is made in the case of an "indivisible" contract,3 where
a non-breaching party can "elect between pursuing his remedy when
an action which would constitute a breach occurs or awaiting the time
fixed by the contract for full and final performance. If he elects the
  3
   An indivisible, or entire, contract is distinguishable from a divisible
contract, such as an installment contract, in that it requires "a continuous
or recurring course of professional services related to a particular under-
taking." Harris v. K & K Ins. Agency, Inc., 453 S.E.2d 284, 286 (Va.
1995).
6               AMERICAN INN v. SUNTRUST BANKS, INC.
latter course, the statute of limitations does not begin to run against
his right of action until the time for final performance fixed by the
contract has passed." Suffolk City Sch. Bd. v. Conrad Bros., Inc., 495
S.E.2d 470, 472-73 (Va. 1998).

   According to American Inn, the district court erred in ruling that
its contract claim was time-barred because the note constituted an "in-
divisible" contract, rather than a divisible "installment" contract call-
ing for payment or performance in installments. See Heirs of Roberts
v. Coal Processing Corp., 369 S.E.2d 188 (Va. 1988) (noting that an
indivisible contract "differs from those providing for payment in
installments, due at specified times" for purposes of determining
when statute of limitations commences). Therefore, American Inn
argues, it was entitled to wait until it paid off the note in 1998 to sue
for all overcharges paid pursuant to the note. Because SunTrust billed
American Inn for principal payments and interest on a monthly basis,
and American Inn paid in monthly installments for the duration of the
note, however, the district court correctly characterized the note as an
"installment" contract and not an "indivisible" contract. American Inn
therefore had no right or option to wait until it paid off the note to
object to SunTrust’s calculation of interest as to all payments made
pursuant to the note.

  American Inn alternatively argues that the statute of limitations
began to run on the individual payments as each payment became
due, and, therefore, it has stated a claim at least with respect to those
overpayments on installments due within the five-year limitations
period. With this contention, we agree.

   After determining that the note constituted an "installment" con-
tract, the district court concluded that "a separate cause of action
arose, and the statute of limitations began to run, in 1987 and 1993
when the interest rate was improperly adjusted." Given the court’s
correct characterization of the note as an installment contract, this
conclusion inaccurately captures the relevant law and threatens to
produce inequitable results for claims on long-term installment con-
tracts. Indeed, Garver v. Brace, 55 Cal. Rptr. 2d 220 (Cal. Ct. App.
1996), on which the district court relied, expressly recognizes that
"[c]ourts have uniformly agreed . . . causes of action arising from pay-
ments made under a promissory note accrue when demand for pay-
                AMERICAN INN v. SUNTRUST BANKS, INC.                    7
ment is made or the payment is due. . . . [W]hen a note is payable in
installments, the statute of limitations begins to run on the date each
installment is due." Id. at 223 (emphasis added). The Garver court
explained that the statute of limitations "does not begin to run on
installments not yet due until the creditor, by some affirmative act,
manifests his election to declare the entire sum due." Id. (internal quo-
tation marks and citations omitted).

   Garver is correct that courts generally have agreed that for claims
based on an installment contract, a cause of action accrues, and the
statute of limitations begins to run, when each installment becomes
due. See 15 Richard A. Lord & Samuel Williston, Williston on Con-
tracts § 45:20 (4th ed. 2000) ("Where a contract is divisible, and, thus,
breaches of its severable parts give rise to separate causes of action,
the statute of limitations will generally begin to run at the time of
each breach."); Keefe Co. v. Americable Int’l, Inc., 755 A.2d 469, 472
(D.C. 2000) (stating that the rule "in most of the nation, for at least
a century" is that "where a debt is payable in independent instalments
[sic] the right of action accrues upon each as it matures").

   Virginia follows this general rule. See tenBraak v. Waffle Shops,
Inc., 542 F.2d 919, 924 n.6 (4th Cir. 1976) ("[W]e note that Virginia
does follow the majority rule recognizing contracts for installment
payments are divisible, thereby permitting separate actions to be
maintained to recover installment payments as they fall due." (citation
omitted)); Williams v. Matthews, 48 S.E. 861 (Va. 1904) (holding that
statute of limitations on claim to recover five unpaid installments of
stock subscription ran from dates on which unpaid installments were
due); Cromer v. Molden Real Estate Corp., 1991 WL 835194 (Va.
Cir. Ct. 1991) (holding that statute of limitations commenced when
plaintiff made first excess installment payment, not when defendant
wrongfully raised interest rate on loan); LaFratta v. Fid. Bankers Life
Ins. Co., 1980 WL 143116 (Va. Cir. Ct. 1980) (stating that "the stat-
ute of limitations runs against each installment from the time it
becomes due, that is, from the time when an action might be brought
to recover it"). Thus, the relevant breach triggering the statute of limi-
tations is SunTrust’s alleged overcharge on each installment, and the
statute of limitations commenced as to each installment as of the date
it became due. Accordingly, American Inn stated a cause of action
8               AMERICAN INN v. SUNTRUST BANKS, INC.
with respect to any installments that became due within the relevant
five-year limitations period.

                                   III.

  SunTrust argues that even if American Inn had a right to sue for
overcharges on the note, it has waived this right.

   SunTrust first points to the 1991 Forbearance Agreement and con-
tends that the district court was correct in determining that American
Inn, by entering the Forbearance Agreement, contractually waived
any right to sue SunTrust in connection with the note. In the Forbear-
ance Agreement, American Inn released all claims, actions, causes of
action, defenses or setoffs existing "ONLY AS OF THE DATE OF
THIS AGREEMENT." (Emphasis in original). Because a cause of
action on an installment contract accrues as of the time each payment
is due, as discussed above, the only "claims, actions, causes of action,
defenses or setoffs" American Inn waived or released in the Forbear-
ance Agreement were those involving overpayments that it had
already made as of the date of the Forbearance Agreement. Thus, the
Forbearance Agreement only bars American Inn from challenging
overpayments on installments that became due prior to the date on
which it executed the Forbearance Agreement, November 1, 1991.

   SunTrust also at least implicitly contends that American Inn
waived its right to sue for overcharges by making repeated monthly
payments without objection. Under Virginia law, a course of dealing
is sufficient to establish waiver or modification only if the "circum-
stances surrounding the conduct of the parties [is] sufficient to sup-
port a finding of a ‘mutual intention’ that the [waiver or] modification
be effective, and such intention must be shown by clear, unequivocal
and convincing evidence, direct or implied." Cardinal Dev. Co. v.
Stanley Constr. Co., 497 S.E.2d 847, 850-51 (Va. 1998) (internal quo-
tation marks and citations omitted).

   At this juncture, we must reject the argument that the course of
dealing between the parties established that American Inn waived its
right to sue. On review of dismissal for failure to state a claim, a court
must credit a party’s allegations in its complaint. American Inn
alleges that it made monthly payments without knowledge that it was
                 AMERICAN INN v. SUNTRUST BANKS, INC.                       9
paying excess supplemental interest because the interest rate calcula-
tion formula was complicated, SunTrust provided no notice or expla-
nation of the supplemental interest charges, and the amounts billed by
SunTrust differed from month to month. These allegations preclude
a finding at this stage of "mutual intention," id., to establish a waiver
through course of dealing.

                                     IV.

   The parties raise a number of other issues, which we decline to
address at this time. For example, American Inn apparently contends
that SunTrust’s agreement in May 1998, when American Inn paid off
the note, to permit American Inn to "reserve its rights, to the extent
they exist, to object to the payoff amount", tolled the limitations
period. Thus, American Inn claims that it is entitled to recover for all
installments due during the last five years of the note, rather than
from the date in 2001 when American Inn filed the current action.
American Inn’s arguments in support of this contention depend on
further fact-finding, and we therefore leave this issue to the district
court for resolution without expressing any opinion as to the outcome.

   In addition, each party raises issues on appeal that relate to the sub-
stance of the claims alleged in the complaint. American Inn argues
that, in the event it proves that SunTrust miscalculated the interest
rate on the note, any overpayments must be retroactively credited as
prepayments of principal and that notice of prepayment was not
required for all prepayments.

   SunTrust, for its part, contends that no breach occurred for failure
to adjust the interest rate in 1993, when the corporate tax rate and
SunTrust’s corresponding yield on the note increased. SunTrust rea-
sons that it was entitled to adjust the interest rate pursuant to the yield
maintenance provision if there was a decrease in yield, but was not
required to adjust the interest rate if, instead, there was an increase in
yield.

   These and other arguments concern the merits of the case, and we
therefore leave them to the district court to consider in the first instance.4
  4
   The district court remarked in passing that the note required American
Inn to give notice of prepayment; it is unclear whether the court consid-
10              AMERICAN INN v. SUNTRUST BANKS, INC.
                                  V.

   We hold that American Inn has stated a breach of contract claim
for overcharges of interest with respect to installments due to Sun-
Trust during the relevant five-year limitations period. Therefore, the
district court’s judgment dismissing American Inn’s breach of con-
tract claim for failure to state a claim upon which relief can be
granted is reversed and remanded for further proceedings consistent
with this opinion.

                                       REVERSED AND REMANDED

ered American Inn’s argument as to the limited scope of the note’s pre-
payment notice requirement, or whether it would be inequitable to
require prepayment notice if the prepayments were assessed by SunTrust
as supplemental interest in violation of the note and American Inn had
no knowledge that it was paying amounts in excess of the payments due.
