Brodsky v. Bannon

• Citation: 362 N.Y.S.2d 792,46 A.D.2d 334
• Parties: Carol BRODSKY, as Executrix of the Estate of George Brodsky, Plaintiff-Respondent, v. Frank BANNON and Murray Neckman doing business under the firm name and style of Oakdale Home Village, Defendants-Appellants.
• Decision Date: 30 December 1974
• Court: New York Supreme Court Appellate Division

Page 792

362 N.Y.S.2d 792

46 A.D.2d 334

Carol BRODSKY, as Executrix of the Estate of George Brodsky, Plaintiff-Respondent, v. Frank BANNON and Murray Neckman doing business under the

firm name and style of Oakdale Home Village,

Defendants-Appellants.

Supreme Court, Appellate Division, First Department.

Dec. 30, 1974.

Leonard Feldman, New York City, for defendants-appellants.

Jacob Lewis Gold, New York City (Isidore Shapiro, New York City, with him on the brief), for plaintiff-respondent.

Before McGIVERN, P.J., and MARKEWICH, STEUER, TILZER and CAPOZZOLI, JJ.

STEUER, Justice:

The defendants, together with George Brodsky, were partners in the operation of a trailer park in South Brunswick, New Jersey. Brodsky died December 31, 1969. According to the partnership agreement the surviving partners had the right to acquire the deceased partner's interest by paying a sum arrived at by a specific formula. The sum came to $32,847, and defendants offered to pay this sum to plaintiff, the deceased's widow and executrix. Plaintiff countered with this action, which sought liquidation of the partnership assets and the appointment of a receiver. Defendants counterclaimed for specific performance of the option to purchase. Issue was joined in March 1971.

The instant motion was made by plaintiff in March 1972. In the interim the town of South Brunswick passed a resolution materially increasing the requirements for operating a trailer park. To meet these requirements an investment well beyond the resources of the partnership was needed. Efforts to obtain financing were unavailing, as were efforts to reach a compromise with the town. On March 7, 1972, the partnership's license was revoked. Its principal asset, its lease, became practically valueless.

At this point plaintiff made a notable discovery. She found that she had mistaken her remedy. She now agreed that what she was entitled to was the book value of the deceased's interest. She accordingly moved to amend her complaint to ask for the relief demanded in the counterclaim, namely, specific performance of the buy out agreement, and as there was no issue in regard to the amount she asked for summary judgment. The defendants countered with a claim that it was her fault that the permit was revoked on the ground that the suit for dissolution had prevented them from obtaining a loan. That issue was tried and the court found, quite properly we believe, that defendants did not substantiate the claim. Plaintiff's motion for summary judgment had been granted subject to a stay of execution until resolution of the counterclaim. Plaintiff now has a judgment.

The manifest unfairness of this result is sought to be justified by the correctness of each of the legal steps involved. The reasoning is that plaintiff had a perfect right to assert a claim for what she deemed to be the value of the deceased's interest. She furthermore had the right to withdraw that claim if she later found it to be untenable, and to accept the solution that the defendants had proffered. It was not her doing that caused the depletion of the partnership assets, so by every tenet of legal cause and effect she is entitled to the judgment awarded her.

This syllabus loses sight of a fundamental principle of equity--that the chancellor can shape the relief to be granted to the equities of the situation. When plaintiff was willing to accept the tender it no longer represented the value of the deceased's interest. By legal maneuver she sought to gamble on a larger sum, with the insurance of getting at least what the deceased's interest was at the time of death. It is hornbook learning that an equitable decree speaks as of the time of judgment, as contrasted with a judgment at law which reflects the rights as of the time the cause of action arose. Here, it is quite clear that the surviving partners did not waste the assets of the partnership, and nobody claims to the contrary. They offered the sum agreed upon. It was refused when offered, and belated acceptance attempted when it became obvious that the sum offered greatly exceeded what the deceased's share was then worth. Under these circumstances every instinct of fairness dictates that the value of the deceased's share be calculated as of the date of acceptance and that the plaintiff have judgment in that amount.

The judgment entered September 12, 1972, in New York County should be reversed on the law and judgment vacated; the judgment dismissing defendants' counterclaim, entered December 11, 1973, in New York County should be affirmed and the matter remanded to trial term for further proceedings in accord with this opinion, with costs and disbursements.

Judgment, Supreme Court, New York County entered on September 12, 1972, reversed, on the law, and vacated; and judgment of said court entered on December 11, 1973, affirmed, and the matter remanded to Trial Term for further proceedings in accordance with the Opinion of this Court filed herein. Appellants shall recover of respondent $60 costs and disbursements of this appeal.

All concur except McGIVERN, P.J., and CAPOZZOLI, J., who dissent in a dissenting opinion by CAPOZZOLI, J CAPOZZOLI, Justice (dissenting).

Plaintiff's testator and the two defendants formed a partnership on November 27, 1964, which operated under the name of Oakdale Mobile Home Village.

On December 31st, 1969 plaintiff's testator passed away and on February 13th, 1970 plaintiff was appointed executrix of the estate.

On March 10th, 1970 defendants, through their attorneys and in accordance with the terms of the partnership agreement, notified plaintiff that they elected to exercise their right under the agreement to acquire the interest of the testator for the sum of $32,847. Accordingly, they offered to pay this sum to the plaintiff.

At that time plaintiff, being represented by attorneys other than those who represent her in this action, instead of accepting the offer of the defendants, brought a law suit seeking liquidation of the partnership proper and the appointment of a receiver. Defendants, in their answer, counterclaimed for a dismissal of the complaint and specific performance to compel plaintiff to comply with the exercise of the defendants' option to purchase the interest of the testator, as above stated. Issue was joined on March 23rd, 1971.

On April 17th, 1972 plaintiff moved for summary judgment, expressing her willingness to accept the sum of $32,847, in accordance with the relief demanded in defendants' counterclaim. When plaintiff made this motion defendants, for the first time, by cross-motion, moved to amend their answer to withdraw their original counterclaim for specific performance of the buy-sell agreement and to interpose two new counterclaims for damages claimed to have been suffered as a result of plaintiff's earlier refusal to comply with the buy-sell agreement. The new theory upon which defendants relied was that, because of the plaintiff's refusal in the first instance to have accepted the sum above mentioned, the defendants suffered serious damage and the revocation of the permit issued to them by the Town of South Brunswick, New Jersey, in which the trailer park of the partnership was being operated.

Special Term granted the plaintiff's motion for summary judgment and directed judgment in her favor. However, execution of the judgment was stayed pending a determination of the validity of the defendants' new counterclaims. The counterclaims were thereafter tried and the Court dismissed the counterclaims because it concluded that the defendants did not prove their allegations. We agree with the majority that the decision of the Trial Court (Mr. Justice Greenfield) was quite proper. The Trial Court made its findings very clear that there was no relation whatever between the failure of the plaintiff to have accepted the original offer and any damage claimed by defendants with respect to the events which thereafter took place.

At pp. 270--274 Mr. Justice Greenfield said:-- '* * * I do not see, on the basis of the proof which has been adduced by the plaintiff, (defendants) that the bringing of that law suit was the proximate cause of the...