Statute of Limitation

[daydreemin]

In 1986 my husband purchased his fathers home. At the time, he was 20 yrs. old. He took a 40,000 mortgage from the bank and his father manipulated him into signing a $40,000 mortgage note at 12% annum based upon a 15 yr. payment schedule. He got him drunk the night before he signed and told him that the house would be worth a gold mine someday. That couldn't have been further from the truth. A few months later my husband came to realize that he was railroaded. Not only by that but because as a child his father took about $50,000 in settlement money from a gunshot wound he recieved when he was 12. He started to realize that the only reason his father adopted him was to take his money. Payments were never made to him and in a round about way told his father that he didn't think he should owe him anything considering the money he took from him and the condition that the house was in, his father told him the house was in very good condition and my husband took his word. We ended up having to remortgage so that we could fix it up to be liveable. His father seemed to have been ok with what my husband said, considering we made no payments to him, until 1992 when we recieved a letter from his lawyer saying payment must be commenced forthwith or they would take the appropriate legal actions. That's when my husband approached him for a sit down conversation to settle their differences. His father agreed verbally in front of his other son that he owed him nothing and he would disregard the note, my husband wanted to do it legally but his father became offended and said his word was good. My husband believed him again. In 1997 we lost our home to a fire after all of the money we sank into it fixing it up and adding on. Then in March of 1999 we recieved another letter from a lawyer saying we needed to pay the outstanding debt to him. We need to know where we stand legally. I've checked the statute of limitations for Massachusetts, that's where the house is located and we're a little confused as to which statute upholds our dilemna. There's Chapter 106:Section3-118. And there's the limitation of actions 260-1. We just don't know which one it should pertain to. We have never paid him a dime in almost 14 yrs. He wants us to sign over the deed or he will foreclose. We just can't let him do this without a fight. Is the verbal agreement good in a court of law, and is the statute of limitations on our side? He is no longer with the lawyer that sent us the letter in 1999, after speaking with his lawyer about the situation and telling him the real story, he no longer was contacting us to pursue the situation. Now, his father has changed to the same lawyer that drew up the contract and are asking us again to sign it over or they will take legal action. Please help!! I also would like to know if my husband can still go after him for the money he took from him as a child. The accident happened in 1978 and he thinks he got the settlement in 1980. Thankyou.

 

[Tracey]

1. Hubby can't sue for the settlement money. He had to bring that suit soon after turning 18. I don't know how soon, but certainly within 3-6 years of turning 18 or learning that he received a settlement as a child. It's way too late now.

2. Dad has a promissory note. Breach occurred in 1986 when hubby first failed to pay. Actions for breach of contract must be brought within 6 years of breach. 260-2. However, if the promissory note was signed in the presence of an attesting witness, dad has 20 years to sue. 260-1.

Dad will argue that the statute doesn't begin to run until the end of the 15 year promissory note period. If Dad wins on this argument, you can raise the following defenses:

1. Fraud - the 'worth a goldmine' statement was false and Dad knew it but hubby had no reason to know it.

2. Failure of Consideration - the house was only worth $40k considering its run-down condition, so hubby received nothing in exchange for the $40k 'promissory note'.

3. Recission - hubby and dad mutually agreed to rescind the debt in 1992, in front of a witness (brother). You'll then have to argue over whether an oral recission is sufficient under the contract terms, whether dad dropping collection efforts was acknowledgment of recission sufficient to substitute for a written recission, and/or whether dad's refusal to sign the recission because 'his word was good' and hubby's reliance on that statement estops dad from enforcing contract now.

4. If the house was worth more than $40k, can hubby argue that the low cash selling price was because dad was crediting hubby with the $50k of settlement money? Was routine 'forgivement' of the mortgage dad's way of paying hubby the settlement money? If that's the case, then an action for payment of the settlement money can be brought as a counterclaim to dad's action for the mortgage or raised as a defense (payment).

5. Mutual Mistake - Both dad and hubby thought house was worth $80k, but both were wrong because the house was so run down. You provide evidence of how much it cost to fix the house and its fair market value before the fire.

6. Unconscionability - It's just not fair to hold hubby to these terms, given the 'totality of the circumstances'.


Talk to a real estate attorney and **get brother's written statement that he heard dad rescind contract before dad has time to work on him.**


Good luck,
Tracey

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This is not legal advice and you are not my client. Double check everything with your own attorney and your state's laws.