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Carr v. Caputo

Supreme Court of New York, First Department

December 19, 2013

Estelle A. Carr, etc., Plaintiff-Appellant-Respondent,
Rose A. Caputo, etc., Defendant, Henry Alpizar, etc., Defendant-Respondent, Dennis Beaver, as Executor of the Estate of Royce K. Hoffman, Plaintiff-Respondent-Appellant, Philip Mangerino, etc., Defendant-Respondent-Appellant. Index 117185/97

Cross appeals from an order of the Supreme Court, New York County (Donna M. Mills, J.), entered November 17, 2010, which, to the extent appealed from as limited by the briefs, denied plaintiff Estelle A. Carr's motion for summary judgment, granted defendant Henry Alpizar's motion for summary judgment, and granted the motion for summary judgment of plaintiff Estate of Royce K. Hoffman and defendant Estate of John Gene Mangerino to the extent of declaring that Alpizar has an undivided 1/6 ownership interest in the subject building as a partner and tenant in common, and defendant Estate of Mangerino has only an undivided 1/12 ownership interest in the building as a partner and tenant in common.

Pollack Pollack Isaac & Di Cicco, New York (Michael H. Zhu and Brian J. Isaac of counsel), for appellant-respondent.

Herbert Adler, White Plains, for respondents-appellants.

Schwaber & Kafer, P.C., New York (Susan M. Kafer of counsel), for respondent.

David Friedman, J.P., Karla Moskowitz, Rosalyn H. Richter, Sallie Manzanet-Daniels, Judith J. Gische, JJ.


These appeals involve years of disputes and litigation over ownership interests in a building located at 45-47 Second Avenue in Manhattan (the Building), and interests in a partnership formed by the original owners of the Building, after the Building was purchased. Although a number of deeds have been recorded over the years purporting to convey interests in the Building, and the partners who died bequeathed their interests to heirs, plaintiff Estelle A. Carr, and others at various times, have claimed that such conveyances and bequests were in violation of the partnership agreement the original owners executed in connection with a venture known as 45-47 Enterprises (1969 Agreement). There were prior motions for summary judgment in 2001 before a different justice (Sheila Abdus-Salaam, J.), then presiding over this matter, which resulted in an order dated January 10, 2002 granting partial summary judgment (2002 Order). No allocation of interests was ordered at that time because the court found certain factual disputes needed to be resolved. Nonetheless, eight years later and following further discovery, the motion court has, in the order presently being appealed, allocated all of the undivided shares in the Building to the parties in various fractional shares "as partners and as tenants in common."

Only Carr, Philip Mangerino, as executor of the Estate of J.G. Mangerino and as Administrator of Frank Bradley's Estate (collectively, Mangerino, sometimes Mangerino's estate) have appealed from that order. Henry Alpizar, individually and as executor of the Estate of Dan Kampel (collectively, Alpizar) has filed responsive briefs. Rose A. Caputo, who is sued individually and in her capacity as the legal representative for interests previously held by Lil E. Dominguez and Joseph Sample, has not submitted any opposition to the appeal or cross appeal.

The issues presented by this limited appeal are whether, as argued by Carr, the 1969 Agreement governs the disposition of the ownership interests in the Building, as well as partnership interests or, as argued by Mangerino and Alpizar, ownership should be determined by the deeds and testamentary dispositions. Mangerino and Alpizar also argue that lack of standing, untimeliness and laches bar Carr's claims. In his cross appeal, Mangerino affirmatively claims that the Estate of Mangerino has a 1/6, not 1/12, ownership in the Building, based upon adverse possession. Carr argues that under the 1969 Agreement, Alpizar and Mangerino's interests are limited to book value, while Alpizar and Mangerino claim they have a direct interest in the Building itself and consequently, share in its market value. The market value of the Building exceeds book value by millions of dollars.

The undisputed facts establish that Carr along with six other individuals, including Kampel, Dominguez, Caputo, Bradley, Sample, and Hoffman, purchased the Building as tenants in common, pursuant to a deed dated June 25, 1968 that was recorded. The Building was comprised of six residential apartments and commercial space that was leased to various businesses. The 1968 deed provided for the following undivided interests: Carr, 1/6; Kampel, 2/6; Caputo and Dominguez, 1/6 as joint tenants; Bradley and Sample, 1/6 as joint tenants; and Hoffman, 1/6. On June 26, 1968, Kampel conveyed one-half of his interest, i.e., 1/6, to Charles Caspar and Keith Whitten, as joint tenants. That deed was recorded as well.

On May 1, 1969, all nine of the Building's owners entered into the 1969 Agreement for an unnamed partnership which later became known as 45-47 Enterprises. Although no certificate of partnership was filed, there were tax filings and other documents filed for the partnership over the years. The 1969 Agreement recites that the parties have purchased the Building for the sum of $47, 000 and contains a detailed breakdown of how the purchase was financed. The agreement states that "the primary and sole purpose" for the partners having purchased the Building was to make sure they each had a "permanent place of residence." The 1969 Agreement itemizes, floor by floor, the "party" occupying each apartment, that person's monetary contribution towards the purchase of the Building and classifies 60% of such contribution as a "capital contribution" whereas 40% is classified as a "loan."

According to the 1969 Agreement, the parties' respective "percentage of interest and apartments occupied by each" is as follows: Carr, 1/6; Bradley, 1/12; Sample, 1/12; Caspar, 1/12; Whitten, 1/12; Kampel, 1/6; Hoffman, 1/6; Caputo, 1/12; Dominguez, 1/12. Although the partners agreed that they would be responsible for maintaining the apartment they each occupy, the agreement provides that the partnership is responsible for maintaining, improving, and making repairs to the common areas of the building they share. Another provision in the agreement (Section 19) prohibits the subletting of any apartment without the prior written consent of all the remaining partners. The 1969 Agreement does not contain any provision regarding the partnership's dissolution nor does the Agreement have an end date, rendering this an at-will partnership, as previously determined in this case by the court in the 2002 Order. There are no provisions in the 1969 Agreement indicating that title to or beneficial interest in the Building would be transferred to the partnership at that or a later time. In fact, at no time since the execution of 1969 Agreement has title to the Building, or any part thereof, been held by the partnership. Title ownership of the Building, as reflected in the recorded 1968 and 1969 deeds, remained unchanged when the 1969 Agreement was first made.

The 1969 Agreement contained limitations on how a partner's interest in the partnership could be sold or conveyed and also provided that a deceased partner's interest reverted to the partnership at death. Pursuant to Sections 10 and 11 of the 1969 Agreement, the partnership had a 30-day right of first refusal on any sale of a partner's interest and the partner wishing to sell was obligated to notify the partnership in writing of his or her desire to sell that interest. If the partnership declined to exercise its right, then the individual partners were given the opportunity to purchase the interest. The sale of an interest to the partnership or another partner was to be made at the "book value" of the interest at the time of the sale. Section 14 of the 1969 Agreement provides that upon the death, retirement or incapacity of any partner, that partner's interest reverted to the partnership and the value of such interest would, as with a sale, be determined by the book value of the interest when the deceased partner died. The legal representative of an estate was required to execute and deliver any documents necessary to transfer the deceased partner's interest to the surviving partners only after receiving payment for the interest (Section 15, 1969 Agreement).

Dissension arose among the owners/partners about how to pay for the operating expenses of the Building and by 1975, the fault line grew, dividing Caputo and Dominguez from the seven other owners. On November 20, 1975, those same seven owners met and signed a "Resolution and Dissolution with Statement of Accounting" (Resolution), purporting to dissolve the partnership. That dissolution agreement was never signed by Caputo or Dominguez. Thereafter, those same seven owners took steps to convert the building to condominium ownership by, among other things, executing among themselves a series of deeds which they recorded. On November 5, 1976, those same seven partners executed a "Plan of Apartment Ownership-Master Deed" (Plan). Despite the ...

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