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McFarland v. Harvey

A-4520-09T2 (N.J. Super. App. Div. 2011) (Unpublished)

CONTRACTS; STATUTE OF LIMITATIONS — Even though a law suit based on an original agreement may be time barred by reason of the statute of limitations, a later promise to make payments arising out of the original transactions may constitute a new contract and mark the start for the running of a new statute of limitations.

A lessee of real property purchased a mobile home in his name. The homeowner’s romantic partner alleged that the home was intended as a joint purchase, but was taken in only her boyfriend’s name because of her own poor credit. She expected her boyfriend to eventually convey a fifty percent interest in the mobile home to her. After various renovations, which she alleged were largely completed by her brother free of charge, and the joint purchase of home appliances, she and her boyfriend moved in together. According to her boyfriend, the couple intended to marry, but did not. However, they had a child together. The boyfriend sold the home and some of its contents. He immediately acquired a different parcel with a dwelling. He financed the purchase with a purchase money mortgage in his name alone.

His girlfriend alleged that the home had been acquired with the understanding that the property was being purchased jointly, and that the mortgage and deed were again placed in her boyfriend’s sole name for credit reasons. The mortgage was paid from a joint checking account. Her brother made improvements and her sister returned the real estate commission so that the couple could put the money towards the down payment.

The boyfriend then authorized an attorney to prepare a deed and affidavit of title that would have transferred one-half ownership in the real property to his girlfriend. However, he refused to sign either the deed or affidavit of title when they were presented to him. The parties then separated. The boyfriend gave his girlfriend a sum of money that he claimed was to enable her to find an alternate residence; he also contended that the funds represented a partial payment on account of the house. In a deposition, the boyfriend contended that he never promised his girlfriend a specific share of real estate, and instead told her that he would give her money when he sold the property. Finally, he sold the property, repaid three loans, and gave nothing to his girlfriend.

Two years later, the girlfriend sued the boyfriend alleging fraud and breach of an oral contract, seeking a declaration of her one-half interest in the property, punitive damages, counsel fees, and the imposition of a trust on any other real estate purchased by her boyfriend with the disputed funds. The lower court granted the boyfriend’s motion for summary judgment, finding that even though a trier of fact could conclude that a contract existed, the statute of limitations had expired and no actions of the part of the boyfriend had tolled the clock. The girlfriend moved for reconsideration, but the lower court’s law clerk wrote to the parties’ attorneys that the lower court was not accepting the motion because it was improperly filed.

On appeal, the Appellate Division agreed with the lower court that a reasonable trier of fact could find that a valid contract existed; in the absence of an express contract, the parties’ conduct raised the likelihood that there was an implied contract, which is a question of fact generally precluding summary judgment.

However, the Court disagreed with the lower court that the claim was time-barred. The man’s alleged promise to pay his girlfriend upon the sale of the property was entitled to its own statute of limitations analysis that would accrue only after the sale. It found that the lower court was incorrect in measuring the statute of limitations solely from the date in which the boyfriend had refused to sign the deed or add his girlfriend’s name to the title. Thus, the Court reversed and remanded for further proceedings.

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