Zapolsky v. Sacks
| Decision Date | 23 August 1983 |
| Citation | 464 A.2d 30,191 Conn. 194 |
| Court | Connecticut Supreme Court |
| Parties | Belle ZAPOLSKY v. Morris SACKS et al. |
Alvin M. Murray, New Haven, for appellants (defendants).
Jonathan J. Einhorn, New Haven, for appellee (plaintiff).
Before PETERS, HEALEY, SHEA, GRILLO and SPONZO, JJ.
In this appeal from a judgment awarding damages for breach of contract and ordering a reconveyance of property because of fraud, the defendants claim that the court erred in that (1) it failed to conclude that the statute of limitations barred the plaintiff's recovery of a portion of damages under a certain agreement and (2) it concluded that the defendants participated in a fraudulent conveyance.
In a well written memorandum of decision the trial judge detailed the following facts which are substantially unchallenged: On August 21, 1963 the plaintiff Belle Zapolsky (then Belle Russin) and the defendant Morris Sacks entered into a written agreement for the organization and management of a corporation. This agreement provided that the corporation would be the medium of a joint venture through which the parties would equally own, improve and operate certain property owned by the plaintiff and known as 762-768, 770-774 Grand Avenue, New Haven, and consisting of eighteen apartments and five stores. These buildings were in a state of disrepair and in violation of governmental building codes. Under the terms of the agreement the plaintiff, a resident of Philadelphia, conveyed these properties to Belmor Realty, Inc. in return for 50 percent of the outstanding shares of stock. Morris Sacks received 50 percent of the shares of stock in return for his promise to manage the property and to pay for all repairs, renovations and improvements necessary to bring said property and buildings into full compliance with the building codes.
Paragraph 12 1 of the 1963 agreement provided that the plaintiff would receive minimum annual payments of $3000 for each of the first two years and $4000 per year thereafter. If Belmor, Inc. did not make the annual payments in full, the defendant Morris Sacks personally guaranteed that he would pay the minimum amount if the corporation failed to do so. While the first two annual payments were made, only partial payments were made to the plaintiff between 1966 and 1974, at which time payments ceased entirely.
Upon default the plaintiff, through her attorney, made numerous demands for payment. On March 31, 1976 Morris Sacks proposed that the plaintiff execute a general release discharging all claims against him in exchange for $7000. The plaintiff refused to sign such a release whereupon the defendant Morris Sacks issued a check in the amount of $7000 containing no restrictions. The plaintiff applied that check against the underpayments for the years 1966-1971 as well as a portion of the payment due for 1972.
On March 2, 1978 Morris Sacks quitclaimed to his wife, the defendant Bella Sacks, his interest in their residence. After the conveyance, both defendants continued to live in the home and Morris Sacks continued to pay the mortgage and other bills associated with its maintenance from his income. The parties stipulated that Morris Sacks' equity in the home was approximately $36,750 when he made the conveyance to his wife. The defendants contend, however, that at the time of the conveyance, Morris Sacks owed Bella Sacks approximately $70,000. This indebtedness purportedly arose from loans made to Morris Sacks on his wife's certificate of deposit. The defendants, therefore, assert that Morris Sacks transferred his interest in their home only at Bella Sacks' request to decrease his debt to her and to provide her with "a little bit of security." The defendants further aver that at the time of the conveyance Morris Sacks was the sole owner of a realty holding corporation, Sacks Realty Company, which allegedly had a net worth of between $350,000 and $400,000. Indeed, they claim that he did not have a large number of debts when the conveyance to his wife was accomplished.
The defendant's first claim of error is based on the trial court's decision to include in its award sums due under the 1963 agreement which accrued prior to 1973. Although the defendants do not dispute that Morris Sacks breached the 1963 agreement before 1973, they argue that the trial court erred in denying their special defense that the statute of limitations barred claims arising prior to 1973. The defendants contend that the six-year statute of limitations upon any contract in writing embodied in General Statutes § 52-576 2 had run on such claims when plaintiff initiated this action in March, 1979. They seek, therefore, a credit toward the money damages awarded by the trial court in the amount of $8012.91 plus interest computed on that sum. 3 The plaintiff avers that Morris Sacks' partial payment of $7000 in March, 1976 constituted an acknowledgement of the entire debt which tolled the statute of limitations and prevented the defendants from raising it as a special defense. The defendants counter by asserting that a debtor tendering payment has an absolute right to direct the application of the payment and that Morris Sacks intended the $7000 partial payment to be applied to his debts under the 1963 agreement prospectively from 1973.
Partial payment of a debt which is barred by the statute of limitations removes a case from the statute provided that, "under the circumstances, it constitutes an acknowledgement of the indebtedness sued upon as a then existing debt." Clark v. Diefendorf, 109 Conn. 507, 515, 147 A. 33 (1929). In Wells v. Carson, 140 Conn. 474, 476, 101 A.2d 297 (1953), we stated: Buckley v. Buckley, 144 Conn. 403, 411, 133 A.2d 604 (1957). Whether partial payment constitutes "unequivocal acknowledgement" of the whole debt from which an unconditional promise to pay can be implied thereby tolling the statute of limitations is a question for the trier of fact. Apuzzo v. Hoer, 125 Conn. 196, 200, 4 A.2d 424, 425 (1939); Clark v. Diefendorf, supra, 109 Conn. at 515. Turgeon v. Turgeon, 190 Conn. 269, 275-76, 460 A.2d 1260 (1983).
A review of the record reveals that Morris Sacks initially conditioned his $7000 payment of March 31, 1976 on its acceptance as settlement of all claims then existing between himself and the plaintiff. After the plaintiff refused to accept such a proposal and sign a general release form, the defendant Morris Sacks tendered to the plaintiff a $7000 check which was unconditional on its face. Moreover, the record includes a letter from the plaintiff's attorney to Morris Sacks dated January 30, 1976 confirming that the $7000 payment would be merely a partial payment, on account. Morris Sacks never denied the accuracy of that letter. Indeed, the record is devoid of any documentary evidence to support Morris Sacks' contention that the $7000 check issued to the plaintiff constituted payment only for debts which arose subsequent to 1973 under the 1963 agreement. The evidence bearing on the factual issue of Morris Sacks' intent when he made the $7000 payment on March 31, 1976, therefore, adequately supports the conclusions drawn by the trial court. It cannot be said that the finding was clearly erroneous, i.e., "as a matter of law unsupported by the record, incorrect, or otherwise mistaken." Kaplan v. Kaplan, supra, 186 Conn. at 392, 441 A.2d 629.
The defendants' second assignment of error claims that the trial court incorrectly concluded that the transfer of Morris Sacks' interest in...
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