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Puma v. Sullivan

February 24, 2000

PAUL AND SHERYL PUMA, APPELLANTS,
V.
ANN SULLIVAN, APPELLEE.



Before Farrell and Ruiz, Associate Judges, and Mack, Senior Judge.

The opinion of the court was delivered by: Mack, Senior Judge

Appeal from the Superior Court of the District of Columbia

(Hon. Geoffrey M. Alprin, Trial Judge)

Submitted December 10, 1998

On March 31, 1997, appellants Paul and Sheryl Puma brought a claim against appellee Ann Sullivan to recover Ms. Sullivan's share of a $15,000 promissory note consummated with the Pumas by her then-husband Eric Ewoldt. Appellants contest the motions court's granting of appellee's motion for summary judgment. Appellants argue that the three-year statute of limitations does not preclude recovery of the loan because the note's original May 25, 1984 maturity date (and thus the date of the breach) was orally extended to June 8, 1996, by Ewoldt during his marriage to Ms. Sullivan. We reverse and remand for trial.

I.

On November 25, 1983, Eric Ewoldt, who at the time was appellee Ann Sullivan's husband, borrowed $15,000 from appellants Paul and Sheryl Puma. On the same day, Ewoldt and the Pumas, who were personal friends, created a handwritten promissory note requiring the $15,000 principal be paid in six monthly installments at twelve percent interest, for a total of $15,600. According to the Pumas, Ewoldt requested the loan on behalf of himself and his wife, Ms. Sullivan, in order to purchase a marital home. Notably, the handwritten promissory note does not indicate the purpose of the loan, nor does Ms. Sullivan's name or signature appear on it. Shortly after taking the loan, Ewoldt and Ms. Sullivan purchased a home as tenants by the entirety in the Northwest section of Washington, D.C.

In an affidavit, Mr. Puma avers that after Ewoldt and Ms. Sullivan failed to make any of the agreed monthly payments, but before the May 25, 1984 maturity, Ewoldt indicated "that while he and Sullivan could not repay the loan, in no event would it be paid later than such time as the [jointly owned] house was sold or transferred." In addition, Mr. Puma's affidavit recounts Ewoldt's repeated reassurances of repayment made many times over the years, which allegedly deterred Mr. Puma from taking any collection action against Ewoldt or Ms. Sullivan.

According to the Pumas, Ewoldt continued to guaranty repayment for the next ten years. On January 5, 1994, Ewoldt and Ms. Sullivan entered into a divorce agreement. The divorce agreement stipulated that the sale of the marital home would be used to satisfy

settlement costs including pay-offs of the existing Loyal F.S.B. first trust note, Bank of Baltimore home equity loan, [and] Puma loan (in an amount not to exceed $15,000), . . . and the net proceeds, after payment of all proper expenses and reductions, shall be distributed in equal (50-50) shares to the parties.

Sometime after the divorce agreement was completed, the Pumas became aware of its existence and its reference to their loan. In addition, the Pumas contend that they continued to rely on Ewoldt's promise that they would be repaid by both himself and Ms. Sullivan when the house was transferred.

On June 8, 1996, Ms. Sullivan purchased Ewoldt's interest in their home. Shortly thereafter, the Pumas allege Ewoldt repaid them $7,500 from an escrow account established jointly with Ms. Sullivan. On December 28, 1996, the Pumas asked Ms. Sullivan to pay the remaining $7,500 of principal. After Ms. Sullivan refused, on March 31, 1997, the Pumas filed a complaint alleging breach of contract and unjust enrichment. In response to the Pumas' complaint, Ms. Sullivan moved to dismiss, or in the alternative, for summary judgment on the basis that the Pumas' claim was barred by the three-year statute of limitations.

The motions court granted Ms. Sullivan's motion for summary judgment holding: (1) Ms. Sullivan was initially liable for the Pumas' note under D.C. Code § 30-201, which provides for spousal liability on a debt for "necessaries," such as the purchase of a home; *fn1 and (2) the Pumas' claim was barred by the three-year statute of limitations, because Ewoldt's repayment of the $7,500 following divorce could not renew ...


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