Garber v. Stevens

• Decision Date: 03 April 2012
• Citation: 941 N.Y.S.2d 127,2012 N.Y. Slip Op. 02437,94 A.D.3d 426
• Parties: Harold E. GARBER, et al., Plaintiffs–Respondents, v. Troy D. STEVENS, Jr., etc., et al., Defendants–Appellants.
• Court: New York Supreme Court — Appellate Division

2012 N.Y. Slip Op. 02437

94 A.D.3d 426

941 N.Y.S.2d 127

Harold E. GARBER, et al., Plaintiffs–Respondents,

v.Troy D. STEVENS, Jr., etc., et al., Defendants–Appellants.

Supreme Court, Appellate Division, First Department, New York.

April 3, 2012.

Hogan & Cassell, LLP, Jericho (Michael D. Cassell of counsel), for appellants.

Edward B. Safran, New York, for respondents.

FRIEDMAN, J.P., DeGRASSE, FREEDMAN, ABDUS–SALAAM, JJ.

Order, Supreme Court, New York County (Eileen Bransten, J.), entered August 18, 2011, which, to the extent appealed from as limited by the briefs, granted plaintiffs Harold E. Garber, Ronald Seiden, Seymour C. Nash, Robert C. Magoon, Gordon Miller, Stephen M. Kulvin, Steven Zaron and Lee Dufner's motion for partial summary judgment as to their breach of fiduciary duty, breach of contract and violation of Real Property Law (RPL) article 12–A causes of action, and denied defendants Troy D. Stevens, Jr., individually and d/b/a Development Co., Kinpit Realty Corp., Kinpit Realty, Inc., Kinpit Realty Co., Kinpit Management and Dawmich Industries, Inc.'s motion for summary judgment on their affirmative defenses, unanimously modified, on the law, to deny plaintiffs summary judgment on the RPL cause of action, and otherwise affirmed, without costs.

In support of summary judgment, plaintiffs submitted a fully executed Partnership Agreement, which, inter alia, precluded the general partners from: employing the credit or capital of the partnership in any other than partnership business; refinancing the property without the approval of 51% of the limited partners; and receiving compensation for services rendered to the partnership, and required any payment of proceeds to be paid to the limited partners first. It is undisputed that the general partner defendants refinanced the property six times without prior approval from plaintiffs; paid defendant Stevens proceeds from those refinancings, presumably for loans he had made for property renovations; did not pay any of the loan monies to the limited partners; and paid themselves management fees for services provided to the partnership. As such, plaintiffs established prima facie entitlement to judgment as a matter of law ( see Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 325, 508 N.Y.S.2d 923, 501 N.E.2d 572 [1986] ) on the issue of liability as related to the breach of contract and breach of fiduciary duty claims.

In response, defendants failed to raise an issue of fact precluding summary judgment ( see id. at 324, 508 N.Y.S.2d 923, 501 N.E.2d 572) as to those claims. Although defendants dispute whether the agreement submitted by plaintiffs was the final version, that version was the same one appended to an affidavit submitted by Stevens in a prior litigation, and the court was entitled to rely on Stevens' representation as to the document's authenticity ( Pippo v. City of New York, 43 A.D.3d 303, 304, 842 N.Y.S.2d 367 [2007] [“(a) party's affidavit that contradicts (his or) her prior sworn testimony creates only a feigned issue of fact, and is insufficient to defeat a properly supported motion for summary judgment”] ). Moreover, there is no evidence in the record to suggest that plaintiffs ever agreed to the alterations in the version of the agreement offered by defendants.

However, the grant of summary judgment on the RPL claim, which was premised solely upon the general partner defendants' collection of rent without a broker's license (§§ 440, 440–a), was error. This Court has held that “[t]he statute is inapplicable where the collection of rent is incidental to responsibilities which...