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Central State Bank v. Hudik-Ross Co.

Decided: December 7, 1978.

CENTRAL STATE BANK, A BANKING CORPORATION OF THE STATE OF NEW YORK, PLAINTIFF-RESPONDENT,
v.
HUDIK-ROSS CO., INC., MARIAN HUDIK, ET AL., DEFENDANTS, AND MARIAN HUDIK, DEFENDANT-APPELLANT



On appeal from Superior Court, Law Division, Bergen County.

Lynch, Crane and Horn. The opinion of the court was delivered by Horn, J.A.D.

Horn

[164 NJSuper Page 319] Defendant Marian Hudik, the sole appellant in this appeal (hereinafter sometimes referred to as "defendant"), challenges a summary order of the trial court which she claims would subject her condominium

apartment to levy and sale under plaintiff's judgment, in violation of an alleged agreement with plaintiff that would exempt said apartment therefrom.

The principal facts leading to this controversy are not controverted. Hudik-Ross Co., Inc. borrowed money from time to time from plaintiff Central State Bank, a banking corporation of the State of New York. On or about September 18, 1975 the corporation executed a promissory note to plaintiff in the principal sum of $200,000, payable at the expiration of two months from said date. On or before said date, at the demand of plaintiff, certain corporations and individuals (including Frank Hudik, president of Hudik-Ross, Inc., and his wife, defendant Marian Hudik) executed and delivered to plaintiff their individual personal written guaranties of payment of said loans. Frank Hudik delivered Marian's signed guaranty to John P. Condon, a senior vice-president of the bank. At the bottom of said guaranty, with the knowledge of Condon, Frank wrote:

This guarantee does not extend to nor does it include any or all interest in a residence located at 411 N. Woodland St., Englewood, N.J.

On August 16, 1976 a default judgment was entered against defendant and the others in the Supreme Court of the State of New York for the amount of $62,318.58 and interest and costs. Thereafter, in February 1977, the bank instituted an action in the Superior Court of New Jersey, Law Division, on the New York judgment, for the recovery of $64,383.73 and interest, costs and attorneys' fees.

In June 1977 Marian sold her residence at 441 Woodland Street and used the proceeds to partially pay for a condominium apartment in Cliffside Park, New Jersey.*fn1

In response to plaintiff's motion for summary judgment in this action,*fn2 defendant filed affidavits seeking only to exclude from the effect of the judgment to be entered her current condominium residence as an asset which could be sold under execution. On October 17, 1977 the judge decided that defendant's objection to the entry of judgment was premature. He ordered that summary judgment should be entered for plaintiff and that the issue raised as to plaintiff's right to levy upon the condominium should be decided on order to show cause after a writ of execution was issued against the condominium residence.

On November 17, 1977 plaintiff caused a writ of execution to be issued on its judgment in this State and the sheriff duly levied on the interests of Frank Hudik and defendant in the condominium premises. On December 12, 1977 the trial judge issued an order directing plaintiff to show cause why the condominium property should not be "adjudged to be exempt from the judgment." In the meantime, plaintiff was restrained from causing execution upon said property.*fn3

Defendant argued before the trial court, as she argues before us, that the foregoing endorsement written on the guaranty by her husband was intended to exclude from the effect of the judgment her residence wherever it was located, and not just the house that was referred to in the writing; that if reformation was necessary, she should be afforded the opportunity through a hearing to establish that ...


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