Forcellati Bros., Inc. v. Phillips

A-3354-97T3 (N.J. Super. App. Div. 1998) (Unpublished)
  • Opinion Date: December 17, 1998

DEBTS; STATUTE OF LIMITATIONS—Partial payments made against a specific debt toll the statute of limitations for collection, but payments against book accounts require an express, signed acknowledgment of the debt to do so.

On January 9, 1991, a landscaping contractor sent an invoice to a homeowner. The invoice did not state when the invoice was due. On July 8, 1991, the homeowner paid a part of the invoice, contending that it was dissatisfied with the quality of the landscaper’s services and telling the landscaper that the partial payment was intended as final payment. The landscaper continued to bill the homeowner for the remaining amount until May 27, 1997, when it sued for the unpaid balance. When the homeowner responded by claiming that the action was barred by the statute of limitations, the landscaper responded by claiming that the partial payment took the matter out of the bar of the statute of limitations. The lower court rendered an oral opinion in favor of the homeowner, relying on N.J.S. 2A:14-24 which states in part that, “no acknowledgment or promise by words only shall be deemed sufficient” to take a matter out of the statute of limitations “unless such acknowledgment or promise shall be made or continued by or in some writing to be signed by the party changeable thereby.” In the view of the lower court judge, in order for a partial payment to toll the statute of limitations, it must be accompanied by “a separate writing signed by the person to be charged” specifically acknowledging the greater debt. The Appellate Division ruled that the lower court judge clearly misread the statute. It held that the statutory provision was of ancient lineage and the partial payment exception does not require a writing in order to toll the limitation. According to the Appellate Division, the lower court should have recognized the difference between (a) a payment upon a book account which would require some act or declaration to show that the debtor recognizes the whole claim, and (b) a payment made against a larger, but specific debt. Consequently, the matter was remanded to the lower court to allow the homeowner to present evidence surrounding the nature of its partial payment.