JAMES FLYNN v. NICHOLAS SEVASTAKIS AND DALE SEVASTAKIS

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3263-04T23263-04T2

JAMES FLYNN,

Plaintiff-Appellant,

v.

NICHOLAS SEVASTAKIS AND DALE SEVASTAKIS,

Defendants-Respondents,

and

MARGARET FLYNN,

Defendant.

_________________________________________

 

Argued February 1, 2006 - Decided March 17, 2006

Before Judges Conley and Weissbard.

On appeal from Superior Court of New

Jersey, Law Division, Monmouth County,

MON-DC-4681-04.

Kenneth P. Westreich argued the cause for

appellant (Swain & Westreich, attorneys;

Mr. Westreich, of counsel and on the brief).

Francesco P. L. Suglia argued the cause for

respondents (Wolf, Block, Schorr & Solis-Cohen,

LLP, attorneys; Mr. Suglia and Ralph P.

Ferrara, on the brief).

PER CURIAM

Plaintiff James Flynn appeals from a verdict in favor of defendants Nicholas Sevastakis and Dale Sevastakis after a one-day non-jury trial. We affirm.

On May 17, 1988, plaintiff and his then-wife, Margaret Flynn, loaned $15,000 to defendants, his sister and her then-husband. Nicholas, a fishing captain, had requested the loan so that he could purchase a fishing boat and go into business on his own. According to Margaret, when she gave Nicholas the check for $15,000 she stated, "Get it back to us when you can." No terms were mentioned. With respect to repayment, Margaret "did not have a timeframe in mind. When he was financially able to get the money back we expected the money back." The hope was that Nicholas's business would "progress financially and he would be able at some time in the future [ ] to be able to pay us back." On the other hand, Nicholas testified that he did not recall any specific conversation with Margaret when he received the check; rather, she simply gave him the check and said, "Good luck." Nicholas expected to repay the loan if his business was successful. Unfortunately, the business was not successful and, in 1990, Nicholas sold his interest in the boat to his partner for $1000.

At some point in 1990, plaintiff testified that he asked Nicholas if he could pay back the loan. Nicholas told him that he could not at that time. About six times over the ensuing years, beginning within a few years of the loan, plaintiff asked defendants if they could repay the loan, but they told him they did not have the money and would pay when they could afford it.

In 2003, plaintiff learned that defendants, who were in the process of divorce, were selling their house. Believing that the sale proceeds would be sufficient to pay back the loan, plaintiff called and wrote to both defendants asking for the money when their house was sold. Although he was assured that he would be paid, plaintiff did not receive the money. On January 3, 2004, plaintiff asked an attorney friend to write a letter to defendants asking for repayment of $17,000, the amount mentioned to him by plaintiff. After receiving the letter, Nicholas called the attorney and said that while he did owe the money to plaintiff, the correct amount was $15,000.

The issue at trial, and on appeal, is whether plaintiff's loan to defendants was a "pay when able" loan, see Guerin v.Cassidy, 38 N.J. Super. 454 (Ch. Div. 1955), or a "payable on demand" loan, see Denville Amusement Co. v. Fogelson, 84 N.J. Super. 164 (App. Div. 1964). The importance of the distinction is that the statute of limitations on a "pay when able" loan does not begin to run until the debtors are capable of paying the loan, Guerin, supra, 38 N.J. Super. at 460, whereas the limitation clock begins ticking on a demand loan when it is made. Denville, supra, 84 N.J. Super. at 169. Thus, in the context of this case, if the obligation were to be deemed a "pay when able" loan, the statute of limitations did not begin until defendants were able to pay, that being when they sold their house. If it were deemed a demand loan, the six year statute of limitations, N.J.S.A. 2A:14-1, had long passed by the time suit was instituted.

In deciding the case, Judge Sullivan fully recognized the applicable legal principles and stated:

THE COURT: [T]he Court finds the following, by a preponderance of the evidence. There's really no dispute that on May 17th, 1988 the plaintiffs lent the defendants $15,000. As a matter of fact the check was given by Mrs. Flynn to Mr. Sevastakis.

The particular complaint in this action was filed in April of 2004 which is about 16 years later. And the real dispute now is whether the Statute of Limitations bars it. The defendant says yes, it is barred by the Statute of Limitations because this was a demand note and the Statute of Limitations on a demand note begins to run from the making of the note, making of the loan, to six years down the Statute of Limitations, so it would run in 1994 or in the alternative in 1996. If we run this from the demand that was made for payment in 1990.

The plaintiff says no, that's not the case. This was not a demand loan, this was a pay when you are able loan which is recognized in the Guerin case of 38 NJ Super 454. Now the Guerin case is a case where there actually was a written promissory note that said the defendant would not be required to pay the loan until he was able to pay the loan. And the Court in that case did discuss the Statute of Limitations and did say the Statute would not begin to run until the defendant was able to pay.

So, in this case, the plaintiff asserts that this was a pay when you are able loan like the promissory note was in Guerin. In support of this we really only have the following evidence. All we have is Mrs. Flynn's statement that when she handed the check to Mr. Sevastakis she said, well, pay us back when you're able to pay us back.

And we have the fact that when Mr. Flynn demanded payment in 1990, Mr. Sevastakis said something like, I'm not able to pay you now. We also have the fact that there was some discussion between Mr. Swain and Mr. Sevastakis. There's a dispute as to exactly what the conversation involved. There was some discussion of paying the Flynns out of the proceeds of the sale of their property in Brielle.

Mr. Sevastakis testified and he also indicated that the debt was no longer due and owing based on things that had been said to him by Mrs. Flynn. Mr. Swain when questioned about that second remark says, I don't recall.

In any event it really appears from this situation that we're talking about a demand loan here. The evidence that this was a pay when you are able loan similar to the one in Guerin, is just not compelling here. There's very little evidence in that regard. The closest we come to it really is Mrs. Flynn's testimony, that when she handed the check to the defendant she said pay us back when you're able to pay us back.

That's not enough to convert it to a pay when you're able loan. In fact, Mr. Flynn made a demand for payment by everybody's account in 1990. Now the mere fact that the defendant said, I can't pay you back now, I'm not able to, does not convert it to a pay when you are able loan anymore than if there was a promissory note calling for payment within three years and if the plaintiff demanded payment you know, on the third anniversary of the loan and the defendant said, I can't pay you now, and the plaintiff said okay, pay me when you're able, that doesn't covert the note to a pay when you are able loan and stop the Statute of Limitations from starting to run.

On a three year note the Statute of Limitations would start to run after three years. Not you know, when the defendant became able to pay simply because the plaintiff said when tried to collect payment, well, pay me when you're able to pay me. That doesn't convert it to a pay when you are able loan.

While you might not have to be on all fours with Guerin in order for the pay when you are able rule to apply, you have to have some clear indication that this is a pay when you are able loan as opposed to a demand loan. And here, all the evidence is that this was a demand loan.

Since it was a demand loan, whether we run the Statute of Limitations from the making of the loan in 1988 or the demand for payment in 1990, it's clear that the Statute of Limitations ran a good eight to 10 years ago.

And that being the case there cannot be recovery had on the loan at this point. So, if that's the truth, I would have to enter a judgment dismissing the complaint based on the affirmative defense of the Statute of Limitations.

On appeal, plaintiff argues, quite simply, that the loan was a "pay when able" loan, and the judge was mistaken in reaching a different conclusion. We disagree.

In Twp. of W. Windsor v. Nierenberg, 150 N.J. 111, 132-33 (1997), the Court reaffirmed the standard for appellate review of non-jury determinations as set forth in Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 483-84 (1974). Under that test, the findings of a trial judge should not be disturbed unless "they are so wholly insupportable as to result in a denial of justice." Ibid. The trial judge's findings are binding on appeal "when supported by adequate, substantial and credible evidence." Ibid.; W. Windsor, supra, 150 N.J. at 133. The trial judge has a "feel" for the case based on "his or her opportunity to hear and see the witnesses . . . [providing it with] a better perspective than a reviewing court in evaluating the veracity of witnesses." W. Windsor, supra, 150 N.J. at 132-33 (citations omitted).

Here, plaintiff argues that the judge found his evidence, particularly the testimony of Margaret, credible, and such a finding should have led inexorably to a conclusion that the 1988 transaction was a "pay when able" loan. While it is true that the judge did not explicitly reject Margaret's testimony, plaintiff's conclusion does not follow. As defendants point out, the long accepted rule is that "[w]here 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." Denville, supra, 84 N.J. Super. at 169. Plaintiff, of course, has the burden of proving that the loan was of the type he claimed, i.e., "pay when able." Snyder v. I. Jay Realty Co., 53 N.J. Super. 336, 347 (App. Div. 1958), aff'd in part, rev'd in part on other grounds, 30 N.J. 303 (1959). As we read the judge's opinion, he simply found, after weighing all of the testimony, that plaintiff had not met his burden of proof. In particular, the judge concluded that in the absence of "some clear indication" to the contrary, the loan was presumed to be a demand loan. Denville, supra. While that "clear indication" need not be in writing, as it was in Denville, it must reflect a meeting of the minds between the parties, here the debtor and the creditor. Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997).

While a conclusion that the loan was a "pay when able" would have been amply justified on the evidence presented, it was not, as plaintiff claims, the only possible conclusion. The fact that we might reach a different result does not justify setting aside findings of fact made by a trial judge. W. Windsor, supra, 150 N.J. at 132 (citing 5 Am. Jur. 2d Appellate Review 662 at 337 (1995)). Judge Sullivan's conclusion that plaintiff had not sustained his burden of proof was a finding of fact that we are bound to honor.

 
Affirmed.

(continued)

(continued)

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A-3263-04T2

March 17, 2006