Framson, Inc. v. Queens Inner Unity Cable Systems

• Court: New York Supreme Court — Appellate Division
• Writing for the Court: Before BRACKEN
• Citation: Framson, Inc. v. Queens Inner Unity Cable Systems, 562 N.Y.S.2d 545, 168 A.D.2d 419 (N.Y. App. Div. 1990)
• Decision Date: 03 December 1990
• Parties: FRAMSON, INC., Respondent, v. QUEENS INNER UNITY CABLE SYSTEMS, etc., et al., Appellants, et al., Defendant.

Page 545

562 N.Y.S.2d 545

168 A.D.2d 419

FRAMSON, INC., Respondent, v. QUEENS INNER UNITY CABLE SYSTEMS, etc., et al., Appellants et al., Defendant.

Supreme Court, Appellate Division Second Department.

Dec. 3, 1990.

Rivkin, Radler, Dunne & Bayh, Uniondale (Robert L. Folks, Evan H. Krinick and Steven R. Faber, of counsel), for appellants.

Zimmer, Victor, Schwartz & Bernstein, P.C., New York City (Farrell, Fritz, Caemmerer, Cleary, Barnosky & Armentano, P.C. [Steven L. Herrick], of counsel), for respondent.

Before BRACKEN, J.P., and BROWN, KUNZEMAN and HARWOOD, JJ.

MEMORANDUM BY THE COURT.

In an action, inter alia, to declare the rights of the parties pursuant to an agreement establishing a joint venture, the defendants Queens Inner Unity Cable Systems, Unity Cable, Inc., Inner City Cable, Inc., Percy Sutton Intercontinental, Inc., Inner City Broadcasting Corp., Unity Broadcasting Corporation, Eugene Jackson, Percy Sutton and Sydney Small appeal from stated portions of an order of the Supreme Court, Nassau County (Murphy, J.), dated June 1, 1989, which, inter alia, granted that branch of the plaintiff's motion which was for summary judgment declaring that it retains a 10% interest in the joint venture and denied their cross motion for summary judgment in their favor.

ORDERED that the order is affirmed insofar as appealed from, with costs.

In 1981, the plaintiff and the appellants entered into a written agreement whereby they formed a joint venture to obtain and operate a cable television franchise. All parties were to advance certain funds to facilitate obtaining a franchise award and thereafter, inter alia, to pay certain assessments as fixed by a management committee established by the agreement. If a joint venturer failed to contribute its share of preaward funds, the agreement provided that that venturer "may" be expelled by an affirmative vote of 90% of the joint venture's owners, but the expelled venturer was entitled to return of any funds advanced. The agreement also contained provisions governing transfer by a venturer of its interest and for automatic termination of the entire venture in the year 2031 or earlier upon consent of venturers holding at least 90% of the venture interests. At termination, proceeds and assets were to be distributed in accordance with ownership interests at the time of termination. The plaintiff's original interest in the venture was 5% of the capital, profits and losses.

Thereafter, the agreement was modified and reaffirmed in 1981 and the plaintiff's preaward funding share to date was fixed and paid. In 1983, the venture was awarded a franchise by agreement with the City of New York, which agreement provides, inter alia, that the plaintiff is a 5% owner. Several months later, the venturers again modified their agreement, this time to, inter alia, increase the plaintiff's ownership share to 10%. Disputes arose, however, as to additional amounts of the plaintiff's preaward share and as to post-award assessments. In 1988, the plaintiff learned that all the defendants save the defendant C.V. Cable Corp., which had earlier opted out of the venture, deemed the plaintiff no longer a part of the enterprise. This litigation ensued.

On appeal, the appellants assert that the plaintiff's failure to make certain payments caused its interest in the venture to dissolve by operation of law. However, since this...