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Santiago v. Villoresi


June 22, 2007


On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-00205-04.

Per curiam.


Argued May 31, 2007

Before Judges Parrillo and Sapp-Peterson.

Plaintiffs Philip and Susan Santiago, husband and wife, appeal from the June 23, 2006 summary judgment dismissal of their complaint against defendants Allison Villoresi-Litus, Jennifer VilloresiLiodice and Amy Villoresi (the Villoresi daughters). Defendant Alfred Villoresi (Villoresi) cross-appeals from the July 18, 2006 judgment in favor of plaintiffs for $103,277.20, following denial of his motion for summary judgment and a bench trial. We affirm.

These are the facts. On March 27, 1995, plaintiffs loaned Villoresi the sum of $50,000.00. Villoresi verbally agreed to repay this amount in ten days with ten percent interest. Sometime thereafter, Villoresi's daughters executed a document dated "March 1995"*fn1 which reads:

The undersigned promises to pay to the order of [plaintiff] the sum of FIFTY THOUSAND ($50,000.00) DOLLARS, with interest at ten (10%) percent from the date hereof, on behalf of our father, ALFRED J. VILLORESI.

Villoresi subsequently tendered to plaintiffs two checks, dated April 26, 1995 and May 4, 1995, but they were each dishonored. Numerous attempts thereafter by plaintiffs to collect the debt were unsuccessful. Then five years later, on June 12, 2000, Villoresi wrote plaintiffs, acknowledging his debt, otherwise payable on demand, but requesting a short extension:

I have not forgotten my debt to you and only ask that you give me some time to get my feet on the ground . . . . Please give me 6 [months] to get going.

Implicitly agreeing to the request, plaintiffs foreswore demanding payment until six months later when, by letter of January 4, 2001, they expressly demanded payment. Villoresi responded by letter of January 11, 2001, assuring plaintiffs he was "well on the road to having some money again", citing various pending development projects and writing:

I know I've made promises before which all washed out due to my 5 yrs. of horror but I am putting my life back together and should be able to start sending some money this spring.

I will write you in 30 days with a progress report. I do not intend to hurt any friend.

Neither payments nor progress reports were forthcoming. Plaintiffs wrote again in November 2001, demanding the debt be paid, with interest, by December 3, 2001. Villoresi responded in a note of December 2001, promising that plaintiffs would "be the first to be repayed [sic]" once his development project came to fruition in the next six months. Plaintiffs received no payment by the December 3, 2001 deadline but took no action. Villoresi sent plaintiffs a Christmas card in December 2002, writing:

You will see a miracle come true when the subdivision is approved in 2003 and I am finally going to be able to repay you for sticking with me.

Finally, on July 27, 2004, plaintiffs filed a complaint against Villoresi on the promissory note, and against the Villoresi daughters on their "guaranty" to pay, seeking the sum of $50,000 plus ten percent interest per year. Defendants moved for summary judgment, arguing that the six-year statute of limitations governing plaintiffs' contract claims, N.J.S.A. 2A:14-1, had expired. The motion was denied as to Villoresi because his subsequent acknowledgement of the debt and promise to pay revived the debt and tolled the running of the statute of limitations, but was granted as to the Villoresi daughters, whose separate and independent obligation was not similarly revived. Thus, plaintiffs' claims against the Villoresi daughters were barred by the statute of limitations:

The daughter[s'] note or guaranty was never renewed or extended when Mr. Villoresi acknowledged his debt as set forth in the last motion. And, while it may generally be true that a guarantor's liability is coextensive with the maker's, Mr. Villoresi, in effect, set an end to the guaranty or term of the note when he acknowledged the debt without a further instrument from the daughters.

The claim against Villoresi proceeded to a bench trial, at the conclusion of which defendant was found liable for the original debt plus interest. On the issue of "revival of debt", the court reasoned:

In this case, the defendant agreed before the statute of limitations ran in March of 2001 that he had not forgotten the debt that he owed to the plaintiff, that at that time he asked for more time, but in writing, he acknowledged the debt.

In January 2001, six months after acknowledging the debt in June of 2000, he indicated again that there was a debt and that he would begin paying it this spring. When he hadn't paid it in the spring, a demand was made in November 2001 for the full repayment, plus the agreed upon interest by December 3, 2001. And the only response the plaintiff got was a Christmas card which he deemed to be insulting . . .

The defendant did not take the stand and testify that the original deal was ever modified, but the defendant did in writing acknowledge the debt, acknowledge that he was going [to] repay it, and simply tried to hold the plaintiff off from beginning suit.

The renewed promises to pay revived the debt. These were made in 2000 and 2001, and possibly even later. And as a result, the statute of limitations began to run again and this Court does not find that defense to be applicable at this point.

On appeal, plaintiffs argue it was error to dismiss their claim against the Villoresi daughters because an action against them as guarantors accrues at the same time as against the debtor Villoresi, and is therefore not barred by the statute of limitations. On cross-appeal, defendant Villoresi argues that summary judgment should also have been granted as to him because he did not revive the debt, but created only a conditional debt, which does not operate to commence running the statute of limitations anew. We disagree with both these contentions.


There appears no dispute that the March 27, 1995 promissory note may be characterized as a debt payable on demand. See Denville Amusement Co., Inc. v. Fogelson, 84 N.J. Super. 164, 169 (1964) ("Where there is no time stated between debtor and creditor as to when the payment of a money obligation shall be due, it is deemed payable on demand."). "A cause of action based upon a money obligation which is payable on demand is deemed to accrue at the time of the loan." Ibid. Therefore, the six-year limitations period on plaintiffs' cause of action under N.J.S.A. 2A:14-1 began to run as of the date of the loan, March 27, 1995. However, "a statute of limitations which applies to a presently existing contractual debt or obligation may be tolled by an acknowledgement or a promise to pay." Burlington County Country Club v. Midlantic Nat'l Bank South, 223 N.J. Super. 227, 234 (Ch. Div. 1987) (citing Howell v. Wallace, 18 N.J. Misc. 48, 61 (Cir. Ct. 1939)). Here, the court below determined that Villoresi's writing of June 12, 2000, acknowledging his then-presently-existing debt to plaintiff, renewed the limitations period. We agree.

N.J.S.A. 2A:14-24 provides that in respect of a contract action "no acknowledgement or promise by words only" shall suffice to take any case out of the statute of limitations, and that a writing signed by the party to be charged is required therefor. Denville Amusement Co., Inc., supra, 84 N.J. Super. at 170. Thus, N.J.S.A. 2A:14-24 provides:

In actions at law grounded on any simple contract, no acknowledgement or promise by words only shall be deemed sufficient evidence of a new or continuing contract, so as to take any case out of the operation of this chapter, or to deprive any person of the benefit thereof, unless such acknowledgement or promise shall be made or continued by or in some writing to be signed by the party chargeable thereby.

In addition to the requirement of a writing, it is also necessary that the acknowledgement relied upon be such as in its entirety fairly supports an implication of a promise to pay the debt immediately or on demand. Denville Amusement Co., Inc., supra, 84 N.J. Super. at 170 (citing Bassett v. Christensen, 127 N.J.L. 259, 261 (E. & A. 1941) (debt not revived because although the writer affirmed the amount of the debt, he did not promise to pay, but only wrote that he was attempting to procure a second mortgage and wanted to wait to "discuss the subject" until after he had "obtained something to offer")). Thus, whether the bar of limitation has been lifted depends not on whether a defendant "unequivocally promised to pay" as Villoresi contends, but rather on "whether [the acknowledgement of the debt], when considered in [] context . . . can justly support an inference of a new promise to pay the debt on demand". Id. at 171.

Applying these principles to the facts at hand, the June 12, 2000 correspondence from Villoresi to plaintiffs is in writing and signed by him. Moreover, its language, in our view, "fairly supports an implication of a promise to pay the debt immediately or on demand", in that Villoresi recognized that plaintiffs were entitled to immediately demand payment and requested that they instead delay that demand for six months.

We reject defendant's contrary construction of the June 12, 2000 writing as forced and without basis. In essence, defendant argues that he conditioned his promise to pay upon his financial recovery, and that such new conditional debt, which is inconsistent with the terms of the original debt, operates neither to revive the latter nor renew the statute of limitations. See Guerin v. Cassidy, 38 N.J. Super. 454, 461 (Ch. Div. 1955) (a promise to pay when able is a conditional promise). However, we have long recognized that for a new conditional debt to be created, the acknowledgement must be "positively inconsistent on [its] face with an unconditional promise to pay at once". Denville Amusement Co., Inc., supra, 84 N.J. Super. at 171 (emphasis added). The language of Villoresi's writing not only fairly implies that plaintiffs have the right and the power to demand payment immediately and that Villoresi is requesting siX month's forbearance, but contains no language, such as "I will pay you when I have the money", that could be reasonably interpreted as "positively inconsistent" with a finding that payment could be demanded immediately if plaintiffs did not agree to wait six months to make that demand.

Taken in context, the language of the June 12, 2000 note does not condition payment upon Villoresi's financial recovery, as defendants assert, but merely explains the reasons for requesting an extension of time, in an attempt to persuade plaintiffs to wait six more months before demanding payment. In fact, the language in the remainder of the note supports this construction, as Villoresi attempts to assure plaintiffs that he is good for the money and that he is confident his recovery is on the horizon:

I never declared bankruptcy during all this because I have never stuck anyone in my entire life . . . I am confident I can recover financially. . . . Please give me 6 [months] to get going.

This language is readily distinguishable from that used in Bassett wherein the debtor expressly indicated his unwillingness to even talk terms with his creditor until he could obtain a second mortgage. Here Villoresi acknowledges the debt amount ("I would be furious also if I lent $50,000 to a friend and wasn't repayed [sic]"), implicitly acknowledges that plaintiffs could demand repayment at any time ("I have not forgotten my debt to you and only ask that you give me some time to get my feet on the ground"), and expressly asks for a six month extension of time to repay ("Please give me 6 [months] to get going").

Nevertheless, Villoresi further argues that his subsequent writings confirm his intention to condition payment upon his financial recovery. We reject this argument as well inasmuch as we are persuaded that Villoresi's writing of June 12, 2000 itself was sufficient to revive the debt.

Lastly, policy concerns support allowing plaintiffs' claim against Villoresi to go forward:

While the statute is one of repose, intended to protect honest debtors from the payment of stale claims where the evidence to refute them may be supposed to be lost or destroyed, it is not to be used to defeat an admittedly honest claim where the debtor, knowing of its existence admits the claim to be correct . . . and repeatedly promises in writing to make additional payments thereon. [Trenton Banking Co. v. Rittenhouse, 96 N.J.L. 450, 453 (E. & A. 1921) (statute tolled where debtor made partial payments).]

As the trial court noted, there is nothing stale about plaintiffs' claim. No evidence has been lost. Moreover, Villoresi issued a total of four written acknowledgments of the debt and promises to pay over the years. Thus, defendant has frankly and consistently admitted the debt over the years and no sound reason is presently advanced not to allow plaintiffs' claims against defendant Villoresi to go forward.


We also agree with the trial judge's decision that Villoresi's acknowledgment of the debt did not revive his daughters' obligation to pay that debt, and therefore summary judgment as to them was properly granted as the limitations period had long run when plaintiffs filed their complaint.

Whether characterized as a note, guaranty or surety agreement, plaintiffs' action against the Villoresi daughters accrued when they executed the document in March 1995. Plaintiffs' claim, however, that their action against the Villoresi defendants as guarantors accrued at the same time the cause of action accrued against Villoresi -- namely, when the six-month extension of time to repay, granted in June 2000, expired, and plaintiffs demanded payment in January 2001 -- and therefore the six-year statute of limitations had not run as to them by the time the complaint was filed in July 2004.

To be sure, a cause of action accrues against a third party guarantor of payment on the same date it accrues against the maker. Ligran, Inc. v. Medlawtel, Inc., 86 N.J. 583, 590 (1981). However, when a debt is revived by the debtor, that revival alone is ineffective as to the guarantors and the statute of limitations is not tolled as to them. For example, as the Ligran court explains in citing to Marinelli v. Lombardi, 16 N.J. Misc. 71, 73 (Sup. Ct. 1938), partial payments on a demand note by maker do not serve to extend the statute of limitations in regard to a guarantor because the guarantor's contract is separate from that of the maker. Id. at 590-91.

The payments made standing alone simply constitute an acknowledgment of the debt by the maker, and being an acknowledgment might create a continuing liability from the date of payment. But the relations of the parties are independent. The contract of the guarantor is distinct from that of the maker, and the acknowledgment by the maker did not inure of itself to create liability in the guarantor. [Marinelli, supra, 16 N.J. Misc. at 74 (internal citations omitted).]

Since both partial payments on a debt and written, signed acknowledgements of a debt serve to revive the obligation of the debtor, Marinelli, supra, 16 N.J. Misc. at 73; Denville Amusement Co., Inc., supra, 84 N.J. Super. at 170, it necessarily follows that if debtor's subsequent partial payments on the debt are insufficient to revive the obligation of his guarantors, a debtor's written acknowledgment of the debt should be similarly ineffective. Thus, we are satisfied that the Villoresi defendants' obligation to pay on behalf of Villoresi expired well before plaintiffs filed their complaint, and summary judgment dismissing the claim against them was therefore proper.


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