In the Matter of the Estate of Solomon Z. Balk

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1197-14T2
APPROVED FOR PUBLICATION
May 12, 2016
IN THE MATTER OF THE ESTATE
OF SOLOMON Z. BALK, DECEASED. APPELLATE DIVISION
_______________________________
Submitted April 19, 2016 – Decided May 12, 2016
Before Judges Fisher, Espinosa, and Currier.
On appeal from the Superior Court of New
Jersey, Chancery Division, Atlantic County,
Docket No. 91349.
Jarred S. Freeman, attorney for appellant
Mark Roseman.
Indik & McNamara, P.C., and Kulzer &
DiPadova, P.A., attorneys for respondents
Michael Balk, individually and as co-
administrator of the Estate of Solomon Z.
Balk, and Mark S. Pinnie, Esquire, as
executor of the Estate of Mark Balk, and as
co-administrator of the Estate of Solomon Z.
Balk (Thomas S. McNamara, of counsel; Eric
A. Feldhake, on the brief).
The opinion of the court was delivered by
CURRIER, J.S.C. (temporarily assigned).
Mark Roseman, the prior executor of the estate of Solomon
Z. Balk (the Estate), appeals the September 2, 2014 order
granting judgment against him for an unpaid principal due under
a settlement agreement and promissory note associated with the
Estate. After reviewing the contentions advanced on appeal in
light of the facts in the record and the applicable law, we
affirm.
Prior to Solomon's1 death, he executed a will naming Roseman
as the executor, trustee and a beneficiary. His two sons, Mark
and Michael, were residuary beneficiaries of a trust designated
in the will.
After Solomon's death and probate of the will in New
Jersey, Mark and Michael filed an action against Roseman,
alleging breach of fiduciary duty and seeking to remove him as
the executor of the estate. On June 4, 2007, Roseman entered
into a settlement agreement with the Estate and both
beneficiaries, agreeing to execute a promissory note in the
amount of $800,000, as settlement of all claims between the
parties.2 The terms of the note required Roseman to make an
initial installment of $10,000 within sixty days of its signing.
The remaining payments were to be made in installments as
follows: $40,000 on December 3, 2007; $80,000 on June 3, 2008;
$100,000 on December 3, 2008; and the outstanding balance of the
1
We use the first names for purposes of clarity. We intend no
disrespect in doing so.
2
A consent order executed the same day removed Roseman as
executor and appointed new co-administrators, dismissing all
litigation between the parties.
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note was to be satisfied within twenty-four months of the date
of execution. Failure to pay the initial or any subsequent
installment payment entitled the Estate to a judgment for the
entire unpaid amount. The agreement contained a choice-of-law
provision requiring it to be governed by New Jersey law.
Between August 2007 and January 2009, Roseman remitted
$37,047 towards the promissory note repayments. He failed to
pay the initial sum or the installment payments later required
by the note in full. On June 2, 2014, Michael for the first
time sought to recover damages for Roseman's failure to honor
his obligations by filing a motion to enforce the settlement
agreement and for entry of judgment against Roseman.3
Roseman opposed the motion, contending that Pennsylvania
law should govern this matter as he and Michael resided in
Pennsylvania, the acts alleged against him had taken place
there, and the promissory note contained a Pennsylvania choice-
of-law provision and had been executed in that state. Under
Pennsylvania law, the four-year statute of limitations on
contract claims had already expired. In contrast, New Jersey
3
Prior to filing the New Jersey action, Michael caused judgment
by confession to be entered in the Court of Common Pleas of
Delaware County, Pennsylvania, against Roseman in November 2013.
The judgment was later vacated by praecipe and the Estate
dismissed the action without prejudice in March 2014.
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applies a six-year statute of limitations to contract claims.
N.J.S.A. 2A:14-1.
In a written decision, the judge noted the presumptive
application of New Jersey statutes of limitations to New Jersey
cases unless: "maintenance of the claim would serve no
substantial interest of New Jersey; or the claim would be barred
under the statute of limitations of a state having a more
significant relationship to the parties and the occurrence." He
held:
The State of New Jersey has a
substantial interest in protecting the
rights and interests of beneficiaries of the
estates of New Jersey decedents whose wills
have been admitted for probate in New Jersey
from breaches of duty and other misconduct
by executors . . . who are responsible for
the administration of such estates. In
addition, the State of New Jersey has a
strong public policy favoring the settlement
of litigation. Accordingly, the State . . .
has a substantial interest in ensuring that
the beneficiaries of New Jersey decedents
who enter into settlement agreements with
executors responsible for the administration
of the estates of New Jersey decedents, to
resolve claims for breaches of duty and
other misconduct against such executors, are
able to enforce such agreements and recover
for their breach.
Finding that Pennsylvania did not have a more significant
relationship to the parties or the occurrences than did New
Jersey, the judge concluded that New Jersey's six-year statute
of limitations was applicable. Using the installment contract
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approach to determine the accrual date of the Estate's claims,
the judge found the Estate was entitled to collect on each of
the installment payments that was due and owed by Roseman on and
after June 3, 2008.
On appeal, Roseman argues: (1) the judge erred in applying
the installment contract approach; and (2) the Estate's claim
accrued when the initial payment was not made, and therefore
fails even under the six-year statute of limitations. He raised
a number of new issues in a supplemental brief.4
A settlement agreement is subject to the ordinary
principles of contract law. Thompson v. City of Atlantic City,
190 N.J. 359, 374 (2007). "Interpretation and construction of a
contract is a matter of law for the court subject to de novo
review." Fastenberg v. Prudential Ins. Co. of Am., 309 N.J.
Super. 415, 420 (App. Div. 1998). "Accordingly, we pay no
special deference to the trial court's interpretation and look
4
In a supplemental brief, Roseman makes an alternative argument
for the first time that the amount of the judgment should be
reduced because the settlement agreement imposed on the Estate
the duty to mitigate damages; he argues the Estate failed to
demonstrate reasonable efforts in complying with this clause.
This argument was not presented in Roseman's opposition to the
motion filed in the trial court, and therefore it need not be
addressed by us. State v. Robinson, 200 N.J. 1, 19 (2009) ("The
jurisdiction of appellate courts rightly is bounded by the
proofs and objections critically explored on the record before
the trial court by the parties themselves."). We also note that
Roseman entered into the agreement and promissory note for the
agreed-upon sum of $800,000.
5 A-1197-14T2
at the contract with fresh eyes." Kieffer v. Best Buy, 205 N.J.
213, 223 (2011); see Manalapan Realty, L.P. v. Twp. Comm. of
Manalapan, 140 N.J. 366, 378 (1995) ("A trial court's
interpretation of the law and the legal consequences that flow
from established facts are not entitled to any special
deference.").
In determining when the Estate's cause of action accrued,
the judge applied the "installment contract" approach. The
installment contract method provides that "claims based on
installment contracts or other divisible, installment-type
payment requirements accrue with each subsequent installment.
In other words, a new statute of limitations begins to run
against each installment as that installment falls due and a new
cause of action arises from the date each payment is missed."
Cnty. of Morris v. Fauver, 153 N.J. 80, 107 (1998) (citing
Metromedia Co. v. Hartz Mountain Assocs., 139 N.J. 532, 535-36
(1995)). Unless there is a repudiation, "a plaintiff may sue
for each breach only as it occurs because '[t]o hold otherwise
would allow a claimant to trigger the statute of limitations
upon presentation of a claim rather than having the existence of
a claim trigger the statute of limitations.'" Id. at 108
(alteration in original) (quoting Metromedia, supra, 139 N.J. at
536).
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Roseman does not contend that there was a repudiation in
this matter, but rather argues that his failure to make the
first installment payment constituted a total breach under the
agreement, preventing application of the installment approach
and theory of accrual. We disagree.
In looking at installment contracts, our Supreme Court has
held that, "absent a repudiation, a plaintiff may sue for each
breach only as it occurs, and the statute of limitations begins
to run at that time." Metromedia, supra, 139 N.J. at 535 (citing
Corbin on Contracts § 989 (1951)).
A repudiation "entails a statement or 'voluntary
affirmative act' indicating that the promisor 'will commit a
breach' when performance becomes due." Franconia Assocs. v.
United States, 536 U.S. 129, 143, 122 S. Ct. 1993, 2002, 153 L.
Ed. 2d 132, 146 (2002) (citing Restatement (Second) of Contracts
§ 250 (1981)). In an installment contract, the first instance
of a failure to perform is a "partial breach" and not a "total
breach" unless accompanied by a repudiation that is anticipatory
with respect to performances due in the future. Corbin, supra,
§ 954. Other jurisdictions have established this general rule,
finding that "a breach of an installment contract by non-payment
does not constitute a breach of the entire contract." U.S. Bank
Nat'l Ass'n v. Gullotta, 899 N.E.2d 987, 992 (Ohio 2008); see
7 A-1197-14T2
also Nat'l Util. Serv. v. Cambridge-Lee Indus., 199 F. App'x
139, 143 (3d Cir. 2006) ("In a[n] . . . installment contract,
the first instance of a continuing breach alone is not a 'total
breach' unless accompanied by an anticipatory repudiation of
performance due in the future.") (citing Corbin, supra, § 954).
In adhering to these principles, we find that a missed
payment is insufficient to constitute a total breach of an
installment contract or agreement unless accompanied by
anticipatory repudiation indicating a failure to perform future
obligations specified in the contract.
Although Roseman breached his obligation to pay the first
installment in 2007, there was no repudiation or total breach of
the promissory note at that time because there was no indication
that Roseman would not fulfill his future obligations. To the
contrary, Roseman remitted $37,000 to the Estate over the next
several years.
We find the judge appropriately applied the installment
method as there was no repudiation or total breach of the
promissory note. Roseman's conduct of paying monies over the
next several years belies any argument that he did not intend to
honor the agreement.
The Estate is entitled to all payments which were due from
the six years prior to the motion's filing date of June 2, 2014;
8 A-1197-14T2
therefore, we find the judge's conclusion that the Estate is
"entitled to collect on each of the installment payments that
was due and owing by Roseman on and after June 3, 2008" to be
correct.
Affirmed.
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