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Federal Deposit Insurance Corp. v. Valencia Pork Store Inc.

Decided: May 18, 1988.

FEDERAL DEPOSIT INSURANCE CORPORATION, PLAINTIFF-RESPONDENT,
v.
VALENCIA PORK STORE, INC., JAMES MUSILLO AND ANGELO GRECO, DEFENDANTS-APPELLANTS



On appeal from the Superior Court, Law Division, Monmouth County.

Gaulkin, Gruccio and D'Annunzio.

Per Curiam

[225 NJSuper Page 111] Plaintiff Federal Deposit Insurance Corporation (FDIC) brought this action to collect monies allegedly due under three equipment leases between U.S. Funding Corporation (U.S. Funding) as lessor and Valencia Pork Store, Inc. (Valencia) as lessee. The obligations of Valencia were personally guaranteed

by defendants James Musillo and Angelo Greco, Valencia's corporate officers. The interests of U.S. Funding were assigned to the Bank of Bloomfield and then, when the Bank of Bloomfield failed in early 1976, to FDIC.

FDIC's three-count complaint, filed November 18, 1985, described the agreements as follows:

FIRST COUNT: A November 18, 1974 lease with rental payments totalling $13,327.92 at $370.22 per month for 36 months, maturing on November 18, 1977.

SECOND COUNT: A December 2, 1974 lease with rental payments totalling $55,949.80 at $933.33 per month for 60 months, maturing on November 20, 1979.

THIRD COUNT: A January 29, 1975 lease with rental payments totalling $50,953.80 at $849.23 per month for 60 months, maturing on January 28, 1980.

The complaint alleged "default of payment" under each lease but did not specify any amounts or dates of default.

Based upon the undisputed fact that the last payment on the leases had been made to FDIC on or about August 13, 1977, defendants moved for summary judgment, claiming that the November 18, 1985 complaint was time-barred. In an opinion reported at 212 N.J. Super. 335 (Law Div.1986), Judge Selikoff held that (1) the statute of limitations applicable to FDIC contract claims is 28 U.S.C.A. ยง 2415(a), which fixes a six-year limitation (id. at 337); (2) the statute "should not run from each default on an installment without manifestation of intent by the lessor that maturity of later installments shall be accelerated" (id. at 339); (3) the First Count lease agreement, maturing on November 18, 1977, was accordingly time-barred; but (4) the Second and Third Count agreements, maturing on November 20, 1979 and January 28, 1980, were not time-barred. Id.

Following a bench trial as to the Second and Third Counts, Judge Stamelman entered judgment against defendants jointly and severally on the Second Count in the sum of $40,847.16. Apparently finding insufficient proofs in support of the Third Count "allegation of another loan," Judge Stamelman rejected that claim. Defendants appeal. FDIC has not cross-appealed.

Defendants' principal argument is, again, that the Second Count cause of action is time-barred. Defendants urge that (1) the appropriate statute of limitations is N.J.S.A. 2A:14-1; (2) FDIC's cause of action "accrue[d] immediately upon the default of payments due" in late 1977, more than six years before the complaint was filed; and (3) the proofs in any event ...


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