Birnbaum v. Birnbaum

• Decision Date: 02 April 1992
• Citation: 582 N.Y.S.2d 124,182 A.D.2d 382
• Parties: Victoria BIRNBAUM, Plaintiff-Appellant, v. Jay BIRNBAUM etc., et al., Defendants-Respondents.
• Court: New York Supreme Court — Appellate Division

Page 124

582 N.Y.S.2d 124

182 A.D.2d 382

Victoria BIRNBAUM, Plaintiff-Appellant, v. Jay BIRNBAUM etc., et al., Defendants-Respondents.

Supreme Court, Appellate Division First Department.

April 2, 1992.

Before MILONAS, J.P., and ELLERIN, ROSS, ASCH and KASSAL, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, New York County (William J. Davis, J.), entered September 7, 1990, which, inter alia, granted the motion of defendants Jay Birnbaum and Ilene Flaum for summary judgment dismissing the complaint and denied plaintiff's cross-motion to dismiss the defendants' affirmative defenses, unanimously reversed insofar as appealed from, on the law and the facts without costs and disbursements; defendants' motion for summary judgment dismissing the complaint is denied, and the plaintiff's motion for summary judgment dismissing defendants' collateral estoppel and res judicata defenses and for leave to amend the complaint is granted.

Plaintiff's husband, Saul Birnbaum, now deceased, and his brother, Bernard Birnbaum, also deceased, were engaged in various joint real estate enterprises. One such venture was a shopping center in Fox Hills, Staten Island. When Bernard Birnbaum died in 1976 his 50% interest in the Fox Hills shopping center passed to his children, defendants Jay Birnbaum and Ilene Flaum with each inheriting a 25% interest. Thereafter, Saul, who still owned 50% of the shopping center, arranged to exchange that shopping center for another in Cherry Hill, New Jersey. Soon after the acquisition of the Cherry Hill property, Saul, Jay and Ilene, signed a partnership agreement, naming Saul and Jay as managing partners and requiring that all parties convey their interest in the property to the partnership. Due to a conflict between the parties, Jay did not take an active roll in the management of the property, and neither Jay nor Ilene conveyed their interests in the property to the partnership.

The operation and management of the shopping center was the subject of an ongoing dispute which led to the commencement of numerous actions. However it was Saul's hiring of the plaintiff, the then Victoria Tree, shortly before their marriage, which gave rise to prior consolidated actions commenced by Jay Birnbaum and Ilene Flaum against Saul Birnbaum. The single issue that made its way to the Court of Appeals was that of whether Saul could hire the plaintiff and properly charge her compensation, which amounted to hundreds of thousands of dollars, to the property without the consent of Jay and Ilene (Birnbaum v. Birnbaum, 73 N.Y.2d 461, 464-465, 541 N.Y.S.2d 746, 539 N.E.2d 574).

In Birnbaum v. Birnbaum, the Court noted that both the Supreme Court and this Court declined to characterize the interest of the parties in those actions as partners joint venturers or tenants in common. However, it was concluded at all of the levels of review, that Saul owed a fiduciary duty to Jay and Ilene to protect their interests in the Cherry Hill shopping center. The Court of Appeals ultimately held that, "Saul's financial transactions with Victoria violated his fiduciary duty to Jay and Ilene" id. at 465, 541 N.Y.S.2d 746, 539 N.E.2d 574), and reinstated the Supreme Court's judgment (Martin Evans, J.) in which it was first held that Victoria's compensation could not be charged by Saul to the property.

During the pendency of the appeals in the prior action, Victoria Birnbaum commenced the action now before this Court, against Jay, Ilene and Saul individually, and as tenants in common and partners in the shopping center, to recover compensation she alleges she is owed for her work in developing the project. Specifically, plaintiff alleged that the defendants agreed to hire her to develop, lease and manage the Cherry Hill shopping center. Plaintiff admits, however, that Jay Birnbaum refused to sign a written employment agreement on...