Specific performance; breach of contract; contract interpretation
By: Michael D. Manzo | Staff Writer
In this joined action, Brooklyn Portfolio, defendant in Camuso v. Brooklyn Portfolio, LLC (Sup Ct, Kings County, index No. 19269/2011) (“Action No. 1”) and plaintiff in Brooklyn Portfolio, LLC v. Regent Associates (Sup Ct, Kings County, index No. 507818/2013) (“Action No. 2”), moved for summary judgment in the latter action for specific performance of a contract and a dismissal of all claims imposed by Henry F. Camuso, the plaintiff, in the former action. Camuso cross-moved for summary judgment with respect to his cause of action for a declaratory judgment in Action No. 1, which declared that the contract was void and unenforceable.
Arthur Gallinaro, defendant in both Actions, entered into a contract with Brooklyn Portfolio to sell nine properties for $5.9 million. Regent Associates, a limited liability company (LLC) with partnership interests owned by Gallinaro and Camuso, owned these properties. Soon after Gallinaro’s contract with Brooklyn Portfolio, Camuso commenced Action No. 1 on the grounds that the contract was void because it was executed without his consent. Camuso argued that a decision to sell all of an LLC’s assets required the unanimous consent of all partners. Gallinaro sought to dismiss Camuso’s complaints, claiming that he had the authority to execute the agreement by holding the most ownership interest in Regents Associates. Brooklyn Portfolios agreed with Gallinaro and commenced Action No. 2, seeking a declaratory judgment that the contract was enforceable, specific performance of the contract, and damages for breach of contract.
When interpreting a contract, the Court stated, the intent of the parties must be found within the four corners of the written agreement when the language is clear and unambiguous. The Court found Brooklyn Portfolio’s reliance upon a provision within the Regents Associates partnership agreement to be “misplaced.” Because this provision solely pertained to “all policy and decisions in connection with the day-to-day operations of the [nine properties],” the sale of all of the properties did not constitute “day-to-day operations;” indeed, the partners’ “operations” with respect to the property would effectively cease upon sale. The Court also noted that Brooklyn Portfolio ignored clear contractual language mandating the unanimous consent of the partners before the partnership could be dissolved. Such dissolution occurs, and legally requires unanimous consent, when the sale of real property belonging to a partnership would result in the entire termination of the partnership business.
The Court held, with respect to Action No. 2, that the contract for sale was void for lack of unanimous consent and denied Brooklyn Portfolio’s motion for summary judgment, dismissing its causes of action for specific performance and damages as well. In regards to Action No. 1, the Court held that Camuso is entitled to a declaratory judgement that the contract was unenforceable.
Camuso v. Brooklyn Portfolio, LLC, Index No. 19269/2013 (Demarest, J.).