Leonard v. Cummins

• Citation: 151 N.Y.S.3d 510,196 A.D.3d 886
• Decision Date: 08 July 2021
• Docket Number: 531497
• Parties: Alan LEONARD, Appellant–Respondent, v. Stephen CUMMINS, Respondent–Appellant.
• Court: New York Supreme Court Appellate Division

196 A.D.3d 886
151 N.Y.S.3d 510

Alan LEONARD, Appellant–Respondent,
v.
Stephen CUMMINS, Respondent–Appellant.

531497

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

Calendar Date: June 3, 2021
Decided and Entered: July 8, 2021

151 N.Y.S.3d 512

Coughlin & Gerhart, LLP, Ithaca (Dirk A. Galbraith of counsel), for appellant-respondent.

Miller Mayer, LLP, Ithaca (Adam R. Schaye of counsel), for respondent-appellant.

Before: Garry, P.J., Egan Jr., Aarons, Pritzker and Reynolds Fitzgerald, JJ.

MEMORANDUM AND ORDER

Pritzker, J.

196 A.D.3d 887

Cross appeals from an order of the Supreme Court (Keene, J.), entered May 8, 2020 in Tompkins County, which partially granted defendant's motion to dismiss the complaint.

Defendant is the owner of certain real property (hereinafter the farm) on which he operates a tree farm and farm stand business. Plaintiff alleges that, sometime in 2004, he and defendant entered into a business partnership, although their agreement was never reduced to writing. According to plaintiff, he thereafter complied with all the terms of the agreement. On December 1, 2018, following several years of disagreements between them, defendant asked plaintiff to leave the partnership.

Plaintiff commenced the present action demanding various relief associated with the alleged partnership, including declarations that he and defendant had formed a partnership, that the farm was the property of the partnership, and that the partnership had been dissolved. Plaintiff also sought the appointment of a receiver for an accounting of the parties' respective interests in the partnership, as well as related injunctive relief. Defendant answered and set forth several affirmative defenses. Defendant thereafter moved to dismiss the complaint, in its entirety, for failure to state a cause of action. In the event that the complaint was not dismissed, defendant moved to dismiss that part of the complaint that sought a declaration that the farm was property of the partnership¹ based on the statute of limitations

151 N.Y.S.3d 513

and the statute of frauds (see CPLR 3211[a][5], [7] ). Plaintiff opposed the motion. Supreme Court found that the complaint stated a cause of action and that the part of plaintiff's complaint as sought a declaration that the farm was property of the partnership was not time-barred and, as such, denied the motion to said extent. However, the court found that plaintiff's claim seeking said declaration was barred by

196 A.D.3d 888

the statute of frauds and granted the motion to that extent. Plaintiff appeals from that part of the court's order that dismissed the claim related to the farm based upon the statute of frauds, and defendant cross-appeals from that part of the order as declined to dismiss the entire complaint for failure to state a cause of action and as found that the statute of limitations did not bar plaintiff's claim seeking the above declaration.

Turning first to defendant's cross appeal, defendant contends that Supreme Court erred in denying that branch of his motion that sought to dismiss the entire complaint for failure to state a cause of action. To determine whether a complaint states a cause of action, this Court "afford[s] the complaint a liberal construction, accept[s] the facts alleged as true, accord[s] the plaintiff the benefit of every favorable inference and determine[s] only whether the alleged facts fit within any cognizable legal theory" ( Gagnon v. Village of Cooperstown, N.Y., 189 A.D.3d 1724, 1725, 137 N.Y.S.3d 193 [2020] [citations omitted]; see He v. Apple, Inc., 189 A.D.3d 1984, 1984–1985, 139 N.Y.S.3d 409 [2020] ). "A partnership is an association of two or more persons to carry on as co-owners a business for profit" ( Partnership Law § 10[1] ). "Where, as here, there is no written partnership agreement between the parties, a court looks to the parties' conduct, intent, and relationship to determine whether a partnership existed in fact. The relevant factors are (1) the parties' intent, whether express or implied; (2) whether there was joint control and management of the business; (3) whether the parties shared both profits and losses; and (4) whether the parties combined their property, skill, or knowledge" ( Hammond v. Smith, 151 A.D.3d 1896, 1897, 57 N.Y.S.3d 832 [2017] [citations omitted]; see Sterling v. Sterling, 21 A.D.3d 663, 665, 800 N.Y.S.2d 463 [2005] ).

In his complaint, plaintiff alleges that he and defendant entered into a verbal agreement to form an equal partnership for the purpose of conducting a tree farm and farm stand business. Defendant agreed to contribute the farm and the business assets, equipment and inventory to the partnership and plaintiff agreed to devote his time and effort to the partnership, including...