First Hawaiian Bank v. Zukerkorn
1981 Haw. App. LEXIS 239, 633 P.2d 550, 2 Haw.App. 383 (1981)
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Rule of Law:
A new promise to pay a debt barred by the statute of limitations binds the debtor for a new limitations period. An express acknowledgment or partial payment of the debt constitutes only prima facie evidence of such a promise, which can be rebutted by other evidence, creating a question of fact for the trier of fact.
Facts:
- On November 22, 1965, and September 23, 1966, Jack Zukerkorn executed two separate promissory notes in favor of First Hawaiian Bank.
- Zukerkorn made no payments on either note, and the six-year statute of limitations for collecting on them expired in the early 1970s.
- On or about December 11, 1975, Zukerkorn applied for a credit card from the Bank.
- The Bank stated it would issue the card on the condition that Zukerkorn agree to pay $100 per month on an 'old account'.
- Zukerkorn agreed to the condition and received the credit card.
- The Bank asserts the two specific 1960s notes were identified during this agreement, which Zukerkorn denies.
- Between May and August 1976, Zukerkorn made four payments totaling $500 pursuant to the agreement.
Procedural Posture:
- First Hawaiian Bank sued Jack Zukerkorn in a state trial court on March 3, 1978, seeking to collect on the two notes from 1965 and 1966, as well as a balance on a master charge account.
- The trial court entered summary judgment in favor of the Bank on all of its claims.
- Zukerkorn, as appellant, appealed the trial court's grant of summary judgment to the Intermediate Court of Appeals of Hawaii. First Hawaiian Bank is the appellee.
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Issue:
Does a debtor's agreement to make payments on a vaguely described 'old account' in exchange for new credit, without specifically identifying time-barred debts, revive those debts as a matter of law, thereby justifying summary judgment for the creditor?
Opinions:
Majority - Burns, J.
No. A debtor's agreement to pay an unspecified 'old account' does not revive specific time-barred debts as a matter of law where the facts are in dispute, because a genuine issue of material fact exists as to whether a new promise was made. A new promise to pay a stale debt, which can be implied from acknowledgment or part payment, starts a new limitations period. However, acknowledgment or part payment is only prima facie evidence of a new promise and may be rebutted by other evidence and circumstances. Here, Zukerkorn denies that the two specific notes were ever identified or that he agreed to pay them. This factual dispute over whether his agreement and payments were directed at these specific debts prevents the court from implying a promise as a matter of law. Therefore, the question must be decided by a trier of fact, making summary judgment inappropriate.
Analysis:
This decision reinforces the principle that the revival of a time-barred debt requires a clear and specific new promise from the debtor. By holding that a partial payment or a general acknowledgment only creates a rebuttable presumption, the court prevents creditors from easily reviving old debts through ambiguous agreements. The ruling emphasizes that the debtor's intent is a crucial question of fact, thereby making it more difficult for creditors to win such cases on summary judgment. This precedent protects debtors by ensuring that a full factual inquiry is conducted before they are held liable for debts that are otherwise legally uncollectible.
