Hurley v. Merowitz

Massachusetts Appeals Court

Hurley v. Merowitz

774 N.E.2d 1168, 55 Mass. App. Ct. 920, 2002 Mass. App. LEXIS 1174

CourtMassachusetts Appeals Court

DecidedSeptember 16, 2002

DocketNo. 99-P-1814

StatusPublished

Cited by3 cases

This text of 774 N.E.2d 1168 (Hurley v. Merowitz) is published on Counsel Stack Legal Research, covering Massachusetts Appeals Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Hurley v. Merowitz, 774 N.E.2d 1168, 55 Mass. App. Ct. 920, 2002 Mass. App. LEXIS 1174 (Mass. Ct. App. 2002).

Pincite

Opinion

As between herself and the defendant-guarantor of a 1985 promissory note secured by a mortgage,¹ the plaintiff, Maty Hurley, had a 1991 agreement that rewrote the terms of the note and amortization schedule and increased the scope of the guaranty.² The defendant defaulted on the note, and in October of 1993, the plaintiff foreclosed on the mortgage and purchased the property at the foreclosure sale. There remained a deficiency on the note that possibly exceeded the $28,199.99 allegedly covered by the 1991 guaranty agreement. The defendant failed to honor the agreement. This action by the plaintiff followed. A judge of the Superior Court awarded summary judgment in favor of the defendant, and the plaintiff appealed. We reverse.

The defendant may not, as he claims, escape liability from a deficiency action under G. L. c. 244, § 17B, for lack of notice of foreclosure, because he was not a mortgagor or maker of the mortgage note. His obligation as a guarantor arises from an agreement that remains distinct from the primary ' obligation undertaken by the original mortgagors or makers of the note. SKW Real Estate Ltd. Partnership v. Gold, 428 Mass. 520, 523-524 (1998). Along similar lines, the two-year statute of limitation set by G. L. c. 244, § 17A, applies to actions on a mortgage note or deficiency actions and does not bar the plaintiff’s action. Here, liability flows from the 1991 independent written guaranty agreement, and the six-year limitation period on contract actions pursuant to G. L. c. 260, § 2, applies. See D’Annolfo v. D’Annolfo Constr. Co., 39 Mass. App. Ct. 189, 190-191 (1995). It also follows that the foreclosure action does not discharge the obligation the defendant may have on his guaranty where there is a deficiency.

Herbert D. Lewis for the plaintiff. Daniel Briansky for the defendant.

However, the materials that the plaintiff furnished in support of her own motion for summary judgment were less informative than one might wish with respect to the nature and extent of the guaranty and whether the amount it covered was more or less than the deficiency on the note. Indeed, the plaintiff conceded at oral argument that she had already recovered a portion of the deficiency by means of a settlement with the original purchasers, Grace, Wall, and Luscomb. See note 1, supra. That amount would necessarily reduce the deficiency. Consequently, there remains a genuine issue as to what, if anything, the plaintiff is entitled to recover on the guaranty.

We also dismiss the plaintiffs contention that she has the option under the default clause of the original 1985 promissory note to accelerate the note by foreclosure and maintain the right to future interest. She cannot have it both ways. Among other things, it would be unjust for her to have possession of the property and continue to receive interest on the defaulted note. See Plasko v. Orser, 373 Mass. 40, 43 (1977) (“Interest is compensation for the deprivation of the use of principal”). Accordingly, the plaintiff may not include in the deficiency compensation the present value of future payments on the note.

Because summary judgment for the defendant should not have been entered, the judgment is reversed, and the case is remanded for further proceedings.

So ordered.

Free access — add to your briefcase to read the full text and ask questions with AI

As between herself and the defendant-guarantor of a 1985 promissory note secured by a mortgage,¹ the plaintiff, Maty Hurley, had a 1991 agreement that rewrote the terms of the note and amortization schedule and increased the scope of the guaranty.² The defendant defaulted on the note, and in October of 1993, the plaintiff foreclosed on the mortgage and purchased the property at the foreclosure sale. There remained a deficiency on the note that possibly exceeded the $28,199.99 allegedly covered by the 1991 guaranty agreement. The defendant failed to honor the agreement. This action by the plaintiff followed. A judge of the Superior Court awarded summary judgment in favor of the defendant, and the plaintiff appealed. We reverse.

The defendant may not, as he claims, escape liability from a deficiency action under G. L. c. 244, § 17B, for lack of notice of foreclosure, because he was not a mortgagor or maker of the mortgage note. His obligation as a guarantor arises from an agreement that remains distinct from the primary ' obligation undertaken by the original mortgagors or makers of the note. SKW Real Estate Ltd. Partnership v. Gold, 428 Mass. 520, 523-524 (1998). Along similar lines, the two-year statute of limitation set by G. L. c. 244, § 17A, applies to actions on a mortgage note or deficiency actions and does not bar the plaintiff’s action. Here, liability flows from the 1991 independent written guaranty agreement, and the six-year limitation period on contract actions pursuant to G. L. c. 260, § 2, applies. See D’Annolfo v. D’Annolfo Constr. Co., 39 Mass. App. Ct. 189, 190-191 (1995). It also follows that the foreclosure action does not discharge the obligation the defendant may have on his guaranty where there is a deficiency.

Herbert D. Lewis for the plaintiff. Daniel Briansky for the defendant.

However, the materials that the plaintiff furnished in support of her own motion for summary judgment were less informative than one might wish with respect to the nature and extent of the guaranty and whether the amount it covered was more or less than the deficiency on the note. Indeed, the plaintiff conceded at oral argument that she had already recovered a portion of the deficiency by means of a settlement with the original purchasers, Grace, Wall, and Luscomb. See note 1, supra. That amount would necessarily reduce the deficiency. Consequently, there remains a genuine issue as to what, if anything, the plaintiff is entitled to recover on the guaranty.

We also dismiss the plaintiffs contention that she has the option under the default clause of the original 1985 promissory note to accelerate the note by foreclosure and maintain the right to future interest. She cannot have it both ways. Among other things, it would be unjust for her to have possession of the property and continue to receive interest on the defaulted note. See Plasko v. Orser, 373 Mass. 40, 43 (1977) (“Interest is compensation for the deprivation of the use of principal”). Accordingly, the plaintiff may not include in the deficiency compensation the present value of future payments on the note.

Because summary judgment for the defendant should not have been entered, the judgment is reversed, and the case is remanded for further proceedings.

So ordered.

Cite This Page — Counsel Stack

Bluebook (online)

774 N.E.2d 1168, 55 Mass. App. Ct. 920, 2002 Mass. App. LEXIS 1174, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hurley-v-merowitz-massappct-2002.

Opinion

Related

Cite This Page — Counsel Stack