Napoli v. Domnitch

• Decision Date: 08 March 1962
• Citation: 226 N.Y.S.2d 908,34 Misc.2d 237
• Parties: Nate NAPOLI v. Irving DOMNITCH and Harold Domnitch.
• Court: New York Supreme Court

Page 908

226 N.Y.S.2d 908

34 Misc.2d 237

Nate NAPOLI v. Irving DOMNITCH and Harold Domnitch.

Supreme Court, Special Term, Queens County, Part I.

March 8, 1962.

Joseph J. Shapiro, New York City, for plaintiff.

Harry Wilson, Forest Hills, for defendants (Copal Mintz, New York City, of counsel).

HAROLD J. CRAWFORD, Justice.

Motion by plaintiff and cross-motion by defendants for summary judgment.

The pleadings may be briefly summarized. Plaintiff alleges in a single cause of action that on or about January 15, 1958, he and the defendants formed a co-partnership for the purpose of erecting two apartment houses in this County under a partnership agreement which is annexed to and made part of the complaint. That agreement, plaintiff further alleges, was not for a definite term and was, therefore, one at will. On or about June 21, 1961, plaintiff gave defendants written notice of his election to terminate and dissolve the partnership. Plaintiff demands judgment that the partnership be dissolved, that a receiver be appointed, and that, after payment of the just debts of the partnership and the costs and disbursements of this action and the receivership, the residue be divided among the parties according to their respective rights.

The answer consists of general denials, and an affirmative defense and counterclaim pleaded as one. The sum and substance of the latter is that the partnership was not terminable at will, that plaintiff's notice of termination and dissolution of June 21, 1961, was a breach of the agreement and that plaintiff's remedy was to follow the procedure provided in paragraph 14 of the agreement for the withdrawal of a partner. It is also alleged that 'it is not reasonably practicable to carry on the business of the parties in partnership with the plaintiff.' Defendants pray for a judgment that the complaint be dismissed, that the partnership be dissolved, that they be permitted to continue the business of the partnership in accordance with the terms of the agreement, that the value of plaintiff's interest be determined in accordance with paragraph 14 of the agreement and that plaintiff be paid that amount, less the damages sustained by defendants because of his breach.

Plaintiff's reply consists of general and specific denials and a prayer that the counterclaim be dismissed.

The substance of plaintiff's moving affidavit is as follows: He has been engaged in the masonry construction business for almost three decades. Long prior to the formation of this partnership in 1958, he had known and dealt with both of the defendants. Defendant Irving Domnitch (hereinafter referred to as Irving) is a builder and his brother, defendant Harold Domnitch (hereinafter referred to as Harold), is an attorney licensed to practice law in this State.

Irving and the plaintiff owned two parcels of land located in this County. Harold had represented them in the purchase of those properties. In January of 1958, a partnership consisting of the plaintiff and both defendants was formed to exploit those parcels by building apartment houses thereon, one on each. Harold drew all of the instruments necessary to carry out their purposes, including the partnership agreement attached to and made part of the complaint and identified as Exhibit 'A', and acted as sole attorney for all of the parties. While defendants refer in their answer to an earlier agreement than that annexed to the complaint, it is undisputed that since November, 1959 the sole articles of partnership are contained in said Exhibit 'A'. Both agreements were signed by plaintiff in reliance on Harold as attorney for all of the parties.

The purpose of the partnership agreement, continues the plaintiff, was to erect two apartment houses. Those houses were completed and rented long before plaintiff gave his notice of dissolution. Since the partnership agreement states no term, it is one at will and may be dissolved by any partner upon proper notice. In June of 1961, plaintiff no longer wished the partnership to continue and demanded its dissolution.

In the affidavit submitted in support of the cross-motion and in opposition to plaintiff's motion, Irving states in substance as follows: The written instruments speak for themselves. He and the plaintiff had participated in several real estate ventures prior to December, 1957. In each instance, there was an agreement in writing which was prepared by an attorney of Irving's choice. However, in each instance, before plaintiff signed the agreement, he took a copy away with him and signed it after some interval of time. It was Irving's impression that in each instance plaintiff consulted an attorney who advised him concerning the contents of the papers. A permanent certificate of occupancy was issued for one building on October 13, 1959, and for the other on October 23, 1959. The agreement, states Irving, was not terminable at will. Plaintiff's election to terminate and dissolve the partnership was therefore ineffective and his sole remedy was to proceed under the withdrawal provisions of the partnership agreement.

In his reply affidavit, plaintiff reiterates that Harold acted as sole attorney for plaintiff and the other parties, including himself, and that no denial of that fact is forthcoming from Harold.

Both in their papers, especially in their memoranda of law, and at a conference held in chambers on Friday, March 2, 1962, the parties insisted that no triable issue exists and that the sole question presented is one of law, to wit, the construction of Exhibit 'A', the agreement annexed to and made part of the complaint . Unanimity of the parties on that point is not conclusive (see R. M. & B., Inc. v. R. G. S. Realty Corp., 28 Misc.2d 679, 208 N.Y.S.2d 352 [App.Term 1st Dept.]; cf. Civil Practice Act, § 457-a, subd. 2), but the court agrees that this controversy may be disposed of without a trial of the substantive question involved although it has reached that conclusion via a route somewhat different than any of those urged by the parties.

The agreement provides in pertinent part as follows:

'WHEREAS, the parties hereto have acquired title to two parcels of land located on 41st Avenue between 79th Street and 81st Street, in Jackson Heights, New York; and

'WHEREAS, the parties desire to erect two apartment houses, one on each parcel; and 'WHEREAS, the parties hereto desire, in connection therewith to state and define their respective rights, duties and obligations towards each other.

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'2. IRVING, NATE [the plaintiff], and HAROLD hereby agree to contribute whatever monies that may be needed to the partnership in order to build the building contemplated by the agreement.

'3. * * * It is agreed that IRVING has 45%, NATE has 45% and HAROLD has 10% of this venture. The cash profits are to be distributed as follows: IRVING is to receive the first $25,000.00 of the cash profits for the first four (4) years, commencing in the year 1961 and continuing until 1965. * * *

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'5. Each party agrees to lend his name, signature and his credit towards and for the purpose of borrowing funds which may be necessary to continue with the joint venture.

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'8. In the event that it shall be found to be advisable for the benefit of the parties hereto to organize a corporation or corporations to construct the contemplated building and/or to own the same and/or to manage and operate the building or the joint venture, that then and in such event, IRVING is to have 51% of the stock and be in full control of the ventrue [sic], but in any event the profits will be distributed as set forth in Paragraph No. 3 of this agreement.

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'12. Notwithstanding anything to the contrary herein, should two partners desire to sell, the third partner agrees to consent to the sale. The third partner further agrees to sign any and all papers that may be necessary to carry out the intent of this agreement. The only time the third party will be able to interfere with this arrangement is if the sale is not being made in good faith.

'13. The death of one of the partners hereto shall not terminate this partnership agreement. * * *

'14. In the event one of the parties hereto desires to withdraw from the venture herein, he must first offer his interest to the remaining partners. * * *

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'19. The parties hereto mutually agree that for the year 1958, Harold Domnitch is to receive $5,000.00; for the year 1959, Harold Domnitch is to receive $10,000.00 as reimbursement for expenses incurred in running the office of the partnership. For the year 1960 and thereafter, so long as the parties hereto own the buildings which are being constructed, Harold Domnitch is to receive $15,000.00. This money is to be applied towards office expenses. All legal fees and management fees for the running and operation of these buildings contemplated to be constructed are to be paid out of this sum. * * *' (Emphasis supplied.)

Although the parties refer to themselves as partners, it may be observed, preliminarily, that in one breath the agreement describes their association as a partnership and in another as a joint venture. Since it has been said, however, that 'A joint adventure is subject to exactly the same rules as a technical partnership' (Hardin v. Robinson, 178 App.Div. 724, 729, 162 N.Y.S. 531, 535, affd. 223 N.Y. 651, 119 N.E. 1047; see also Zeibak v. Nasser, 12 Cal.2d 1, 12, 82 P.2d 375, 380) and that 'Generally speaking, the principles of the law of partnership apply, at least by analogy' (Conway, New York Fiduciary Concept in Incorporated Partnerships and Joint Ventures, 30 Fordham L. Rev. 297 n. 2; see also 1 Rowley on Partnership [2d ed.], p. 39), and since the basic elements of a partnership, except perhaps for limitation in scope, exist (Partnership Law, § 10, subd. 1; § 11), the court will treat the parties as partners and determine their rights and duties under the Partnership Law (see Haxton...