Kelemen v. Smith

CourtDistrict Court, D. New Hampshire
DecidedFebruary 26, 1997
DocketCV-95-501-M
StatusPublished

This text of Kelemen v. Smith (Kelemen v. Smith) is published on Counsel Stack Legal Research, covering District Court, D. New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kelemen v. Smith, (D.N.H. 1997).

Opinion

Kelemen v . Smith CV-95-501-M 02/26/97 UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE

Robert J. Kelemen, Plaintiff,

v.

Suzette M . Smith and Randy C . Smith, Defendants. Civil N o . 95-501-M Randy C . Smith, Cross-Claim Plaintiff,

Suzette M . Smith, Cross-Claim Defendant.

O R D E R

On October 1 7 , 1995, Robert J. Kelemen brought suit in this

court against his nephew, Randy C . Smith, and Smith’s former wife, Suzette M . Smith, to recover on a demand note dated

September 5 , 1981. Kelemen invoked this court’s diversity

jurisdiction, as he is a citizen of Vermont, the defendants are

citizens of New Hampshire, and the amount in controversy exceeded

the then applicable $50,000.00 minimum requirement. 28 U.S.C. §

1332. In addition to suing Randy Smith on the 1981 note Randy

executed, Kelemen also asserts claims directly against Suzette

Smith, alleging in Count II that Suzette should be deemed liable

to him for one-half the amount due on Randy’s note on an unjust

enrichment theory. In Count I I I , he claims that Suzette should

be held liable to him as a third party beneficiary of the decree

divorcing the couple, which provided that Suzette would be

“equally responsible” [along with Randy] to Kelemen if Kelemen

proved the “legitimacy” of his claims on the note.

Randy Smith filed a cross-claim against his former wife, asserting three theories of recovery. In Count I , he describes an unjust enrichment claim, stating that his uncle, M r . Kelemen, lent him the sum of $75,000.00; that the loan was intended to benefit both him and his former wife jointly; that the money was used to construct their marital residence; that both he and his former wife considered the loan a marital debt; and that his former wife would be unjustly enriched (presumably he means at his expense) were she not held liable to pay “one-half of any judgment-recovered by [Mr. Kelemen].” In Count II he asserts that his former wife “breached the parties’ agreement to repay” Mr. Kelemen and, therefore, should be liable to “pay one-half of

2 any judgment recovered by [Mr. Kelemen].” Finally, in Count I I I ,

he says that he is entitled to contribution and indemnity from

Suzette in the amount of one-half of the debt owed (or, perhaps

more accurately, one-half of the amount of any judgment obtained

against him by M r . Kelemen).

Defendant and cross-claim defendant Suzette Smith has moved

for summary judgment as to all claims against her.

Discussion

I. Robert J. Kelemen v . Randy C . Smith.

In Count I of his Amended Complaint, Kelemen asserts that he is the holder of a demand note executed by Randy C . Smith, dated September 5 , 1981, in the original principal amount of $75,000. Kelemen further asserts that, on October 1 5 , 1995, he made demand on Randy Smith for payment of $61,037.52, “being the amount then due under the Note, which demand has not been satisfied." Notwithstanding the existence of potential defenses available to him (e.g., statute of limitations bar; absence of any provision for interest in the note; and evidence of prior repayment of the entire principal amount), Randy Smith has, nevertheless, confessed judgment both in court on the record and in his

3 pleadings. Randy, in essence, agrees that he signed the note,

owes the amount claimed plus interest at the rate of 12% per

annum from 1981 to 1986 and 9% thereafter (the interest, he

agrees, is owed pursuant to a collateral oral agreement between

him and his uncle), and reaffirms the debt, waiving any available

legal or equitable defenses he might have. Indeed, Randy also

consented to a prejudgment attachment in favor of his uncle on

his home, to secure payment of the acknowledged debt.

Accordingly, there being no genuine dispute as to any material fact, and indeed no case or controversy, between Kelemen and Randy Smith (Randy having confessed judgment), Kelemen is entitled to the entry of judgment against Randy Smith on Count I as a matter of law; no trial is required as to that “dispute.” Judgment shall be entered in favor of plaintiff and against defendant Randy Smith in the amount of $61,037.52 plus interest.

II. Robert J. Kelemen v . Suzette M . Smith.

In Count II of his Amended Complaint, M r . Kelemen sues his

nephew’s former wife, Suzette, on a theory of unjust enrichment.

He claims that because the proceeds of the loan were used to

construct the Smith marital home, and because the loan was, in

4 essence, one to both Randy and Suzette, “[i]t would be an unjust

enrichment for Suzette . . . to retain the benefits provided to

her through the improvement of her property via the proceeds of

the note.” In Count I I I , Kelemen claims third-party beneficiary

status under the New Hampshire Superior Court decree dissolving

the Smiths’ marriage. Kelemen says that under the terms of that

divorce order, Suzette Smith is liable for one-half of the amount

owed on the 1981 note, if that debt is determined to be

“legitimate.” Thus, he seeks to establish in this court the

debt’s “legitimacy” and, based upon that showing, obtain judgment

against Suzette, apparently for half the amount claimed to be

due.

A. Laches

As an initial matter, the court notes that Kelemen cannot

sue Suzette on the note, because she was never a party to i t ; she did not sign or make the note. See N.H. Rev. Stat. Ann. (“RSA”)

382-A:3-401.

Kelemen's equitable claims against Suzette are barred by the

doctrine of laches. While Kelemen’s theory is not entirely

clear, he seems to claim that Suzette is liable to him because

5 the Smiths used the loan proceeds to construct their marital home

and, therefore, Suzette was directly benefitted by that loan.

Kelemen says that it would be unjust to allow Suzette to retain

any benefits from the loan without bearing a corresponding

responsibility to repay i t .

Because Kelemen's equitable claims against Suzette Smith are

based upon her alleged "equitable" obligation to repay the note,

they are roughly analogous to a suit at law on the note.

Therefore, for laches analyses, the appropriate analogous

limitations period is that applicable to demand notes like the

one executed by Randy in 1981. “Unless it is inequitable, a

court of equity in applying the doctrine of laches will follow

substantially the analogy of the statute of limitations. ‘As a

general rule, courts of equity, equally with courts of law, are

bound by the statute of limitations.’" Cote v . Cote, 94 N.H. 372, 374 (1947) (quoting Wentworth v . Wentworth, 75 N.H. 5 4 7 , 550

(1910)).

When the note was made, RSA 382-A:3-122(1)(b) “provided that

a cause of action occurred against the maker of a demand note . .

. on the date of the note regardless of demand. Thus, the

6 limitations period began to run on the date of the note.” John

R. Harrington, Revised Article 3 of the Uniform Commercial Code:

Some Changes to N.H. Case Law, 37 N.H. Bar Journal 1 , 46 (March

1996) (citing Guild v . Meredith Village Savings Bank, 639 F.2d

2 5 , 28 (1st Cir. 1980)). Importantly, Kelemen does not allege

that he ever made demand on Suzette for payment under the note.

To be sure, Kelemen asserts that he made demand on Randy Smith,

on or about October 1 4 , 1995, but does not claim that he ever

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