82 N.E.3d 1067
Mass. App. Ct.2017Background
- VideogeniX’s predecessor signed a $30,000 promissory note on March 24, 2005, due March 25, 2006.
- Zelby (assignee) demanded payment; on June 1, 2010 VideogeniX issued a $250 check (no other payments). Zelby sued July 24, 2015.\
- Superior Court dismissed all counts as time-barred under G. L. c. 106, § 3-118 (six-year limitations period for negotiable instruments) and dismissed unjust enrichment on 12(b)(6) grounds.\
- On appeal the core dispute was whether the common-law partial-payment rule (which can reset a limitations period) applies to actions governed by § 3-118.\
- The Appeals Court accepted Zelby’s allegations as true for Rule 12(b)(6) purposes and reviewed applicability of common-law tolling alongside the UCC.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the common-law partial-payment rule applies to actions governed by G. L. c. 106, § 3‑118 | §3-118 sets a six-year limit but does not displace common-law tolling; §1‑103(b) preserves supplemental common-law rules, so the June 1, 2010 partial payment reset the limitations period | §3-118’s plain language ties the limitations period to the due date and was intended to create uniformity; no provision revives or tolls the period by partial payment, so the common-law rule should not apply | The partial-payment rule remains applicable; §3‑118 did not displace common-law tolling under §1‑103(b), so the complaint survives 12(b)(6) as timely if the payment implies renewed promise |
| Whether the $250 check constituted an acknowledgment/renewal restarting the limitations period | The $250 payment was a partial payment and implied a new promise to pay, resetting the six‑year period to June 1, 2016 | The payment did not change the accrual date (due date governs) and thus suit was late | Court did not decide the factual question; held only that the complaint plausibly alleged facts that, if proven, could support tolling and survive dismissal |
| Accrual date for an account stated claim | An account stated accrues when debtor acknowledges the debt; the June 1, 2010 payment could be such an acknowledgment, so the claim is timely | Accrual should be measured from the note’s due date | Court held the account-stated claim was plausibly timely because accrual could have been June 1, 2010; factual sufficiency not resolved on 12(b)(6) |
| Viability of unjust enrichment claim given an existing contract | Alternative pleading is permitted; unjust enrichment may proceed at pleading stage even if a contract exists | Unjust enrichment is barred where a valid contract defines parties’ obligations | Court held unjust enrichment pleadings were permissible as alternative relief and could survive dismissal until the record develops |
Key Cases Cited
- Day v. Mayo, 154 Mass. 472 (1891) (establishes partial‑payment rule that a partial payment can toll/reset limitations)
- Provident Inst. for Sav. v. Merrill, 311 Mass. 168 (1942) (partial payment implies a new promise to pay and restarts limitations)
- DiCarlo v. Lattuca, 60 Mass. App. Ct. 344 (2004) (discusses requirements for inferring renewed promise from partial payment)
- Premier Capital, LLC v. KMZ, Inc., 464 Mass. 467 (2013) (adoption of G. L. c. 106, § 3‑118 created uniform six‑year limitations for negotiable instruments)
- Harrington v. Costello, 467 Mass. 720 (2014) (motion to dismiss standard: accept complaint allegations and draw reasonable inferences in plaintiff’s favor)
- Boston Tow Boat Co. v. Medford Natl. Bank, 232 Mass. 38 (1919) (at common law, breach accrues at time payment is due)
- King v. Davis, 168 Mass. 133 (1897) (account stated accrues when debtor acknowledges outstanding debt)
- Metropolitan Life Ins. Co. v. Cotter, 464 Mass. 623 (2013) (unjust enrichment is displaced where a valid contract governs the subject matter)