Heard: May 18, 2016.
action commenced in the Superior Court Department on March 4,
case was heard by Peter B. Krupp, J.
Michael P. Utke (Steven F. Smoot with him) for the plaintiff.
Rosseel for Jordan L. Ring, III.
Present: Katzmann, Carhart, & Sullivan, JJ.
plaintiff, JB Mortgage Co., LLC, appeals from a judgment of
the Superior Court dismissing its action to enforce defendant
Jordan L. Ring, Ill's guaranty of a promissory note
secured by a mortgage on real property. The trial judge found
that the plaintiff's suit was barred by the applicable
statute of limitations because it was filed more than twenty
years after a default existed on the underlying note. The
central issue before us is when the cause of action on the
guaranty of the note accrued. We affirm.
21, 1988, Edward C. Simonian, as trustee of the DX Trust
(trust), executed a promissory note in favor of Bank Five for
Savings (bank) in the face amount of $400, 000. Under the
note, the trust was required to make monthly payments of
principal and interest, with all remaining unpaid balances
due two years from the date of execution. In addition to
other penalties for failure to make timely payments, the note
provided that, "If default be made in the payment of any
installment under this note, or if there is a failure to
carry out the terms and conditions of the mortgage or any
other instrument given as security for this note, . . . the
entire principal sum and accrued interest shall at once
become due and payable without notice at the option of the
holder of this note." The note was secured by a first
mortgage on commercial property in Hull.
note was also backed by a guaranty executed by Simonian and
Ring under seal the same day, July 21, 1988. In pertinent
part, the guaranty stated:
"[T]he undersigned hereby guarantees to the [b]ank the
prompt payment and the faithful performance and observance of
every liability, obligation, covenant and condition . . . to
be paid, performed or observed by the [trust] under said
[p]romissory [n]ote, [r]eal [e]state [m]ortgage and
[s]ecurity [a]greement, [a]ssignment of eases and
[r]entals, and [f]inancing [s]tatement.
"The liability of the undersigned hereunder is direct
and unconditional, and joint and several, and the [b]ank
shall not be required to pursue or exhaust any of its rights
or remedies against the [trust], or any other guarantor or
endorser . . . or to resort to any security before enforcing
this [g]uaranty against any of the undersigned."
February 28, 1991, the bank and the trust agreed to extend
the term of the note until July 21, 1994, and to increase the
interest rate. Thereafter, the bank went into
liquidation and, on September 20, 1991, the Federal Deposit
Insurance Corporation (FDIC) became the liquidating agent. On
May 26, 1994, the FDIC foreclosed on the property secured by
the mortgage, selling it for $165, 000 and leaving a
substantial deficiency. As of December, 1995, the trust still
owed an outstanding balance of $362, 193.26 with a total
amount then due of $417, 591.53. The interest on the debt was
continuing to accrue at 11.75 per cent annually.
to a chain of assignments from the FDIC through several
intermediary holders, the trust's debt was ultimately
acquired by the plaintiff. The plaintiff commenced this
action on March ...