This matter comes before the court on cross-motions for summary judgment and presents issues of first impression since there is no New Jersey case law directly on point. The issues are whether the plaintiff, New Jersey Higher Education Assistance Authority ("NJHEAA") is barred from recovering an outstanding student loan that became due in 1982, because of the bar of the statute of limitations and the doctrines of laches and estoppel.
On August 24, 1977, the defendant Arthur Carlock submitted a student loan application for $9,500 which was approved by Hudson City Savings Bank ("Bank") and guaranteed by the plaintiff. The defendant made an undisclosed number of payments to the Bank prior to the transfer of the loan to plaintiff, which occurred in January 1982, when the loan became due, but refused to make additional payments after the assignment.
On August 16, 1983 plaintiff initiated suit against defendant to recover the principal and interest ($10,953.03). That action was dismissed without prejudice in March 1984 for want of prosecution. Plaintiff thereafter moved in July 1984 to reinstate the complaint at which time it was restored. Apparently it was once again dismissed which resulted in the filing of the present action in September 1989. Plaintiff now seeks to
recover the principal sum of $9,709.63 together with interest of $5,290.24 for a total of $14,999.87 plus continuing interest, costs and attorney's fees.
The first issue presented is whether the plaintiff is barred from recovery by virtue of the statute of limitations.
Pursuant to N.J.S.A. 2A:14-1 actions for recovery in a contract claim must be commenced within six years. It is well-settled, however, that "in the State of New Jersey . . . the Statute of Limitations does not run against the State or any of its agencies and subdivisions." Port Authority of N.Y. & N.J. v. Bosco, 193 N.J. Super. 696, 699, 475 A.2d 676 (App.Div.1984).
The defendant concedes that the statute is not applicable to the State or government agencies but argues that it is irrelevant. The loan was through Hudson City Savings Bank, thus, defendant argues that the plaintiff obtained its rights by assignment, and therefore the plaintiff, as the assignee may only obtain the same rights as the assignor bank. Since the statute of limitations would apply to the Bank, it is argued, it should also apply to the plaintiff as the assignee. The assignment clause provides:
For value received, the Hudson City Savings Bank hereby assigns (illegible) all right, title and interest arising from this sale to the New Jersey Higher Education Assistance Authority without recourse or warranty. (Defendant's Ex. A)
The original loan application was a standard form prepared by the NJHEAA. The Promissory Note was also prepared by the NJHEAA which indicated that the loan was guaranteed by the NJHEAA. The NJHEAA and the funding which it utilizes in providing student loans were created by statute, N.J.S.A. 18A:72-1, et seq.
The authority to make loans and the guidelines are set ...