MEMORANDUM
SUPREME COURT : QUEENS COUNTY
IA PART 13
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JOHN JAKACIC INDEX NO. 920/97
- against - BY: THOMAS, CHARLES J., J.
MLADEN JAKACIC DATED: JULY 26, 1999 ____________________ x
Plaintiff John Jakacic has brought this action against defendant Mladen Jakacic, his son, for the purpose of, inter alia, imposing a constructive trust upon certain property held by the latter. The action was tried on May 4, 1999 and May 5, 1999.
Plaintiff is a seventy-seven (77) year old retired mechanic who came to this country from Croatia in 1965. During the course of his life in the United States he learned English, raised a family and was able to save significant sums of money. He raised two (2) sons, one of whom unfortunately died in 1975. Defendant is plaintiff's older son, who is an architect.
In August 1985 plaintiff gave $23,000.00 to his son for the purchase of a Porsche automobile. Plaintiff seeks the return of $7,200.00 of these moneys as the balance was acknowledged to be a gift and a wedding present.
In August 1987, plaintiff loaned defendant $30,000.00 to renovate property in Merrick, Long Island, owned by defendant and his wife. Eleven months later plaintiff and defendant went to the office of plaintiff's lawyer, where defendant executed a bond and mortgage. The mortgage was to be paid on or before AJuly 26, 1993, with interest at the rate of 6%, to be paid on July 26, 1989, next ensuing and annually thereafter.@
At all times during the periods in controversy, including the present, plaintiff and defendant resided in the same premises at 15-57 208th Street, Bayside, N.Y. Defendant lived in the basement in 1988, and a tenant, paying $750.00 monthly, occupied the second floor. The defendant subsequently took the upper apartment, but he could not pay $750.00 a month as rent. Plaintiff agreed to lower the rent to $500.00, and he later charged an additional $20.00 for use of an electric dryer. Defendant introduced thirty-nine (39) checks into evidence, claiming they were paid to reduce the $30,000.00 mortgage from 1987, but the court finds they were actually rent payments. The court finds that no moneys have been paid on the $30,000.00 mortgage.
In 1985, just prior to her death, plaintiff's wife asked him to transfer one half of the house to the defendant. The defendant approached plaintiff several months later, concerning ownership of the house. Plaintiff took no action on her request at that time. Three (3) years later, after a conversation between the parties, they went to an attorney's office at the request of the defendant. The plaintiff executed a deed to the house for defendant, and defendant gave plaintiff a life estate. Plaintiff was not to pay rent and all income derived from the property was to be retained by plaintiff. Plaintiff additionally paid the outstanding mortgage until it was paid off sometime in 1998.
Plaintiff claims he was pressured and the only reason he executed the deed was that in the event he died he could lose or partly lose the house to his new wife and her family as defendant did not want to share the house with these newcomers.
In 1991 defendant asked plaintiff to loan him some money to buy a house in Bayside for investment purposes, the price being $380,000.00. Plaintiff agreed and came to the closing with $86,260.76. No formal conversation concerning repayment of the money was made, although plaintiff clearly expected the money would be repaid. There was no understanding that plaintiff's name would be on the deed. Significantly, this was the second house they considered. The first one went to contract but the bank appraisal was not satisfactory and the down payment of $13,000.00, which had been advanced by plaintiff, was returned to him.
In 1994 plaintiff and defendant had a conversation with respect to buying a vacation home on Long Island. Defendant located a property in Southold, which was purchased for $275,000.00. At the closing the plaintiff gave the seller a check for $150,000.00, the son gave a check for $90,000.00, and the seller took back a mortgage for $35,000.00. The plaintiff paid the mortgage payments of $1,080.00 per month for nineteen (19) months.
The plaintiff's cause of action to recover on a loan he made to the defendant in August, 1985 to purchase a Porsche is time-barred. An action upon a contractual obligation must be commenced within six years (CPLR 213[2]). Since the parties did not fix a time for repayment, the father's right to demand repayment was complete at the time he made the loan, and, thus, the Statute of Limitations began to run on August 5, 1985 (see, CPLR 206[a]; Mundaca Inv. Corp. v Rivizzigno, 247 AD2d 904; Skaneateles Savings Bank v Modi Associates, 239 AD2d 40; Galietta v Galietta, 15 AD2d 603). The plaintiff did not begin this action until January 14, 1997. The defendant did not make any partial payments which would have had the effect of renewing the operation of the Statute of Limitations (see, Skaneateles Savings Bank v Modi Associates, supra).
The plaintiff's cause of action to recover on the $30,000.00 loan he made to his son in August, 1987 is not time-barred. The court observes initially that the plaintiff did not sue to foreclose on the mortgage, but rather to recover on the debt itself. An action on a contractual debt must be commenced within six years (CPLR 213[2]). Although the terms of the instruments are not entirely free of ambiguity, as the court construes them, and based on the credible testimony in this case, the court finds that the $30,000.00 principal, as distinguished from the interest, was due on July 26, 1993. In regard to the principal, this action begun on January 14, 1997 is timely. The instruments also called for the annual payments of six percent interest ($1,800.00) beginning July 26, 1989. The plaintiff's cause of action is time-barred for those interest payments due on July 26, 1989 and July 26, 1990, but not for those interest payments due on July 26, 1991, July 26, 1992, and July 26, 1993. The plaintiff may recover $5,400.00 on the defaulted interest payments.
The plaintiff's cause of action for the imposition of a constructive trust on the Bayside family home is time-barred. CPLR 213(1), a six year Statute of Limitations which regulates actions for which no limitation is specifically prescribed by law, controls a cause of action to impress a constructive trust. (Lucci v Lucci, 227 AD2d 387; Mattera v Mattera, 125 AD2d 555.) The Statute of Limitations on a cause of action to impose a constructive trust Acommences to run upon the occurrence of the wrongful act giving rise to a duty of restitution and not from the time the facts constituting the fraud are discovered.@ (Mattera v Mattera, supra, 556-557, quoting Boronow v Boronow, 111 AD2d 735, 737; Krauss v Iliescu, ___ AD2d ___, 686 NYS2d 78.) The plaintiff executed the deed to the Bayside family home on July 15, 1988, and it was recorded on the same date. The plaintiff's cause of action for the imposition of a constructive trust on the Bayside family home became time-barred on July 15, 1994, approximately two and one-half years before he began this action.
The plaintiff carried his burden of proof on the cause of action to recover $86,260.76 loaned to his son to purchase an investment property in Bayside, New York. (The cause of action based on this loan, which was made on March 25, 1991 and which had no definite date of repayment, is not time-barred.) The plaintiff's testimony was credible in regard to this cause of action. The defendant did not establish by clear and convincing evidence that the plaintiff made him an $86,260.76 gift. (See, Gruen v Gruen, 68 NY2d 48.)
The plaintiff did not prove a cause of action to impress a constructive trust on the Southold vacation property. AA constructive trust may be imposed when property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest ***.@ (Sharper v Harlem Teams for Self-Help, ___ AD2d ___, ___ NYS2d ___, 1999 WL 357501; see, Matter of Estate of Knappen, 237 AD2d 677.) Generally, a plaintiff who seeks the remedy of a constructive trust must establish four elements: (1) a confidential or fiduciary relationship, (2) a promise expressed or implied, (3) a transfer in reliance thereon, and (4) unjust enrichment. (Neos v Neos, ___ AD2d ___, ___ NYS2d ___, 1999 WL 399045; Satler v Merlis, 252 AD2d 551; Salerno v Salerno, 241 AD2d 488.) The defendant's testimony that the plaintiff gave him money toward the purchase of the Southold property as a gift is credible under the facts and circumstances of this case. The defendant rationally explained the plaintiff's largesse as an attempt by the latter to divest himself of assets in contemplation of an impending divorce. The divorce or separation occurred in February, 1995, just approximately two months after the closing. The defendant also offered a rational explanation for the handwritten change on the deed to the Southold property. The defendant testified that because the plaintiff had given him a substantial gift toward the purchase of the property, the plaintiff insisted at the closing that the defendant have a 2/3's interest in the property and that the defendant's wife have only a 1/3 interest. When handwritten changes were made to the deed, the plaintiff, who attended the closing and who was aware that his name was not on the deed, had an opportunity to speak up. The plaintiff's testimony that he kept silent because he was ashamed of his son's actions is not credible. The plaintiff did not prove the elements necessary to impose a constructive trust over the Southold property.
Accordingly, the plaintiff shall recover $30,000.00 on that part of his cause of action which is based on principal loaned in August, 1987 plus $5,400.00 on that part of his cause of action which is for interest due thereon. Interest on these sums shall be computed as provided by CPLR 5001(b). The plaintiff shall also recover $86,260.76 with interest on the cause of action based on the loan made on March 25, 1991. The complaint is otherwise dismissed.
Settle judgment.
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J.S.C.