BEECH MOUNTAIN VACATIONS, INC., Plaintiff, v. NEW YORK FINANCIAL,
INC., BEECH MOUNTAIN DEVELOPMENT CONSTRUCTION CORPORATION,
Defendants, v. GARY P. EIDELSTEIN, BEECH MOUNTAIN VACATIONS,
INC., Third-Party Defendants
Summary judgment should not have been granted for plaintiff and for the third-party
defendant in an action to quiet title. There were divergent claims about material facts, including
the date the last partial payment was made on a note to defendant and the date the last promises
of payment were made. Furthermore, defendant has invoked equitable estoppel, which raises a
jury question.
Di Santi Watson Capua & Wilson, by Anthony S. di Santi, for
plaintiff-appellee.
Chad F. Brown, for defendant-appellant.
WYNN, Judge.
Defendant New York Financial, Inc. (“NY Financial”) appeals
from an order of the trial court granting summary judgment for
Plaintiff Beech Mountain Vacations, Inc. (“Beech Mountain”) and
Third Party Defendant Gary P. Eidelstein (“Eidelstein”) in Beech
Mountain
's action to quiet title to certain properties. NY
Financial
argues the trial court erred in concluding (1) that no
material dispute of fact existed, and (2) that judgment as a matter
of law was therefore warranted. For the reasons set forth herein,we reverse the trial court's order granting summary judgment and
remand the case to the trial court for further proceedings not
inconsistent with this Court's opinion.
The procedural and factual history of the instant appeal is as
follows: Beech Mountain is the record owner of timeshare
properties known as the Cherokee Condominiums located in Watauga
County, North Carolina. NY Financial assisted in the development
of the Cherokee Condominiums through monetary investment; in
exchange, Beech Mountain conveyed to NY Financial
numerous deeds of
trust and promissory notes on the Cherokee Condominiums. These
deeds of trust and promissory notes were granted in 1981 and 1982.
NY Financial
contends that, from 1985 through May 1999,
Eidelstein, Beech Mountain's president, told Aaron Goldman
(“Goldman”), agent and authorized representative of NY Financial,
with whom Eidelstein maintained a business relationship preceding
NY Financial's 1981 investment in the Cherokee Condominiums, that
Beech Mountain had cash flow problems. NY Financial further
contends Eidelstein proposed that NY Financial advance monies to
cover Cherokee Condominium maintenance expenses such as taxes and
utilities to enable Beech Mountain to repay its deeds of trust and
promissory notes to NY Financial. Eidelstein promised fully to
repay the maintenance and debt monies, plus any interest
accumulated thereon, and requested that NY Financial therefore
refrain from filing a lawsuit to recover the funds. NY Financial
states that “[i]mplicit in these promises that he would pay . . .
was the promise that [Eidelstein] would not invoke the statute oflimitations against these debts.” Further, NY Financial alleges
that Beech Mountain's May 1999 payment of $2,250 constituted
“consideration for agreement by NY Financial, Inc.
to not
immediately pursue the debts in court[.]”
Beech Mountain contends that the May 1999 payment of $2,250 to
NY Financial was unrelated to the subject of this action. Beech
Mountain asserts that any promises regarding payment of the
promissory notes and deeds of trust “were made in '87, '88, the
last one was made in April of 1992” and that “there comes a point
in time that equitable estoppel has got to stop.”
On 20
August 2001, Beech Mountain filed an action to quiet
title on Cherokee Condominium properties subject to promissory
notes and deeds of trust held by NY Financial. Beech Mountain
requested the removal of adverse claims held by NY Financial and
title in fee simple to the Cherokee Condominium properties
. In its
answer, NY Financial alleged that its right to proceed with an
action for foreclosure on the properties was not barred by the
statute of limitations due to, inter alia, Beech Mountain's and
Eidelstein's promises of repayment and partial payment. NY
Financial further moved to add Eidelstein as a third-party
defendant to the action; that motion was granted on 26
July 2002.
On or around 21
August 2002, NY Financial filed an amended
counterclaim/counter-complaint.
On or around 26 June 2003, Beech
Mountain and Eidelstein filed a motion for summary judgment
pursuant to N.C. Gen. Stat. § 1-A1, Rule 56.
The trial court
granted the motion for summary judgment and NY Financial appeals. _______________________________________________________
The dispositive issues on appeal are whether the trial court
erred in concluding (1) that no material dispute of fact existed
(Assignment of Error No. 1) and (2) that judgment as a matter of
law through summary judgment was therefore warranted (Assignments
of Error Nos. 1 and 2). For the reasons set forth below, we find
that material disputes of fact exist and that the trial court erred
in granting summary judgment.
“[T]he standard of review on appeal from summary judgment is
whether there is any genuine issue of material fact,” i.e.,
“whether the moving party is entitled to a judgment as a matter of
law.” Pompano Masonry Corp. v. HDR Architecture, Inc., 165 N.C.
App.401, 405, 598 S.E.2d 608, 611 (2004) (quoting Bruce-Terminix
Co. v. Zurich Ins. Co., 130 N.C. App. 729, 733, 504 S.E.2d 574, 577
(1998)). Summary judgment is appropriate only when, viewed in the
light most favorable to the non-movant, “the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that any party is entitled to a
judgment as a matter of law.” N.C. Gen. Stat. § 1A-1, Rule 56(c)
(2003); Pompano Masonry Corp., __ N.C. App. at __, 598 S.E.2d at
611. The party moving for summary judgment must establish that no
triable issue of material fact exists “'by showing through
discovery that the opposing party cannot produce evidence to
support an essential element of his claim or cannot surmount an
affirmative defense which would bar the claim.'” DeWitt v. EvereadyBattery Co., 355 N.C. 672, 681, 565 S.E.2d 140, 146 (2002) (quoting
Collingwood v. Gen. Elec. Real Estate Equities, Inc., 324 N.C. 63,
66, 376 S.E.2d 425, 427 (1989)).
In this case, Beech Mountain and Eidelstein have asserted that
any action on the promissory notes and deeds of trust to the
Cherokee Condominiums
are time barred. Beech Mountain
and
Eidelstein contend payments on the Cherokee Condominiums had not
been made in the past ten to thirteen years, that the 1999 payment
made to NY Financial was unrelated to this action, and that
Eidelstein's last promises of repayment occurred in 1992 _ nine
years prior to Beech Mountain
's filing the action to quiet title.
NY Financial, on the other hand, has asserted, first, that
Beech Mountain made payment toward its debt to NY Financial as
recently as 1999, and, second, that, in response to NY Financial's
continuing attempts to obtain payment, Beech Mountain and
Eidelstein made repeated promises, including as recently as 1999,
to repay the debt as soon as possible. NY Financial
alleges that
the partial payments and repeated promises of later repayment were
made, inter alia, explicitly in order to forestall NY Financial
's
“going to court to enforce payment of the debts[.]” NY Financial
claims that Beech Mountain and Eidelstein are therefore equitably
estopped from relying on statute of limitations defenses.
The doctrine of equitable estoppel prevents a party from
benefitting where that party “intentionally or through culpable
negligence, induces another to believe that certain facts exist and
that other person rightfully relies on those facts to hisdetriment.” Miller v. Talton, 112 N.C. App. 484, 488, 435 S.E.2d
793, 797 (1993); Thompson v. Soles, 299 N.C. 484, 487, 263 S.E.2d
599, 602 (1980) (same). Courts have applied equitable estoppel in
the creditor/debtor context. For example, in Duke Univ. v.
Stainback, 320 N.C. 337, 341, 357 S.E.2d 690, 692-93 (1987), the
Supreme Court held that the plaintiff had been induced by the
defendant's conduct to reasonably believe it would be paid for
medical services once the defendant's lawsuit against his insurance
carrier was concluded, thereby foregoing pursuit of its legal
remedy. The Supreme Court stated that “[i]f the debtor makes
representations which mislead the creditor, who acts upon them in
good faith, to the extent that he fails to commence his action in
time, estoppel may arise.” Id. Moreover, it is “the established
rule of law that estoppel, or the existence thereof, is a question
of fact for determination by the jury.” Troy's Stereo Ctr., Inc.
v. Hodson, 39 N.C. App. 591, 597, 251 S.E. 2d 673, 677 (1979)
(citation omitted).
In this case, Beech Mountain and NY Financial
have made
divergent claims as to material facts, including the date the last
partial payment was made to NY Financial
and the date the last
promises of repayment were made to NY Financial
. Further, NY
Financial
has invoked the doctrine of equitable estoppel, the
application of which raises a jury question. Therefore, viewing
the case in the light most favorable to the non-moving party, NY
Financial
, the trial court erred in determining that no material
dispute of fact existed and in granting as a matter of law summaryjudgment for Beech Mountain and Eidelstein.
For the foregoing reasons, we reverse the trial court's order
granting summary judgment and remand the case to the trial court
for further proceedings not inconsistent with this Court's opinion.
Reversed.
Chief Judge MARTIN and Judge HUDSON concur.
*** Converted from WordPerfect ***