KENNETH ELLMAN v. KAREN BALDAUSKI

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

KENNETH ELLMAN,

Plaintiff-Appellant,

v.

KAREN BALDAUSKI,

F/K/A KAREN BANGHART and

KAREN'S CRAFTS, an alias and or

fictitious name of Karen

Banghart,

Defendant-Respondent.

______________________________

February 28, 2014

Argued October 23, 2013 Decided

Before Judges Fuentes, Simonelli and Haas.

On appeal from Superior Court of New Jersey,

Law Division, Sussex County, Docket No. L-0167-12.

Kenneth Ellman, appellant, argued the cause

pro se.

David C. Pennella argued the cause for respondent

(Pennella & Claps, attorneys; Mr. Pennella, on

the brief).

PER CURIAM

Plaintiff Kenneth Ellman filed a civil action against defendant Karen Baldauski to collect on a debt allegedly memorialized in two documents plaintiff denotes as promissory notes. Plaintiff appeals from the order of the Law Division granting defendant's motion for summary judgment and dismissing the suit. We affirm.

Because the court dismissed plaintiff's case as a matter of law, we will review all factual allegations in the light most favorable to plaintiff, including any rational inferences that can be drawn from the evidence presented. Angland v. Mountain Creek Resort, Inc., 213 N.J. 573, 577 (2013) (citing Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995)); R. 4:46-2(c).

Plaintiff purchased two alleged promissory notes from the sale of the Estate of Vera Banghart, defendant's former mother-in-law. According to plaintiff, the notes memorialized loans to defendant made by the late Vera Banghart. Defendant disputes plaintiff's characterization of these two events, claiming the alleged notes were gifts from decedent. Given the case's procedural posture, we will accept plaintiff's characterization for purposes of our analysis without reaching a definitive judgment on the veracity of plaintiff's claim. Brill, supra, 142 N.J. at 540.

The first alleged note is dated March 1, 1990 and is in the amount of $500. Allegedly handwritten by defendant, the note states: "I Karen A. Banghart am borrowing $500.00 cash from Vera R. Banghart to use toward starting my picture frame business. To be paid within one year from this date in full." The document is signed by "Karen's Crafts, Karen A. Banghart (owner)." The second alleged note is dated April 28, 1995 and is in the amount of $3,000. This document, which appears to have been written on the back of an envelope, reads as follows: "To be paid back when I receive back settlement. 3000. 00 Karen Banghart. 1996 28,00."

In a certification submitted to the Law Division in support of her motion for summary judgment, defendant admitted she "received a settlement for injury to my back on July 12, 1999." Plaintiff claims defendant paid $200 on this note, leaving a balance of $2800. According to plaintiff, defendant admitted to having signed both of these alleged promissory notes, and in the course of her deposition, she authenticated her signature as it appeared on the documents. Against this record, the Law Division dismissed plaintiff's collection action as untimely and barred under N.J.S.A. 2A:14-1 because it was filed more than six years after the right to recover accrued.

Plaintiff argues the motion judge erred in granting defendant's motion for summary judgment because there are questions concerning defendant's credibility that require resolution before a trier of fact. He also argues that under the terms of the promissory note dated April 28, 1995, defendant had an obligation to disclose to Vera Banghart that she had received her "back settlement." We disagree.

We review the trial court's decision to grant summary judgment de novo. Nicholas v. Mynster, 213 N.J. 463, 477-78 (2013). The same way the motion judge did here, we consider "'whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007) (quoting Brill, supra, 142 N.J. at 536). A court must grant summary judgment "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c).

Assuming the documents at issue were valid negotiable instruments or contracts,1 the motion judge held plaintiff's claims were precluded as a matter of law because they were barred by the six-year statute of limitations, which provides, in pertinent part, that

[e]very action at law . . . for recovery upon a contractual claim or liability, express or implied, not under seal, . . . shall be commenced within 6 years next after the cause of any such action shall have accrued.

[N.J.S.A. 2A:14-1 (emphasis added).]

The statute of limitations under New Jersey's version of the Uniform Commercial Code also requires that

an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six years after the due date or dates stated in the note[.]

[N.J.S.A. 12A:3-118(a) (emphasis added).]

The key issue here is when plaintiff's cause of action against defendant accrued. A cause of action is considered to have accrued when the facts that give rise to a right to judicial relief or redress occur. Alan J. Cornblatt, P.A. v. Barow, 153 N.J. 218, 232-33 (1998). A cause of action to recover on or enforce a note accrues on the date of default. In a contractual setting, a cause of action for breach of contract accrues when the breach occurs. See 31 Williston on Contracts 79:14 (Lord ed. 4th ed. 2004).

Assuming arguendo that the first document dated March 1, 1990 was a valid contract or negotiable instrument, plaintiff's cause of action accrued on March 1, 1991, when it was due to be paid as per its terms. Under the explicit terms of N.J.S.A. 2A:14-1 or N.J.S.A. 12A:3-118(a), plaintiff, or the late Vera R. Banghart as his predecessor-in-interest, had until March 1, 1997 to file an enforcement action. As a matter of law, the action filed on March 16, 2012 seeking to enforce the 1990 "instrument" is time-barred under the relevant statute of limitation.

The same reasoning applies to the "note" dated April 28, 1995. Assuming defendant's obligation to pay this loan was triggered by her receipt of the "back settlement" on July 12, 1999, the applicable statute of limitations bars any action to collect filed after July 12, 2005, regardless of whether or not the document is considered a valid negotiable instrument or a valid contract. Plaintiff did not file his complaint regarding this document until March 16, 2012.

1 Because we affirm the trial court's decision based only on statute of limitations grounds, we need not and specifically do not reach the question of whether these notes are negotiable instruments as defined in N.J.S.A. 12A:3-104. Defendant raised this issue as an alternative basis for affirming the trial court's ruling.