Gerard v Cahill
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Gerard v Cahill 2012 NY Slip Op 30305(U) February 3, 2012 Supreme Court, Suffolk County Docket Number: 26224/2005 Judge: Paul J. Baisley Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] SUPREME COURT ~ STATE OF NEW YORK CALENDAR CONTROL PART ~ SUFFOLK COUNTY PR ES ENT: HON.I'AUL.J. .......~~~ BAISLEY. JR., J.S.C. ~ ··········X NELSON GERARD and BUCKSKILL FARM. LLC, Plaintiffs, -againstCATHERINE CAHILL. AS EXECUTRIX OF THE ESTATE OF MARVIN HYMAN, Defendant. ...... ¢~~.~~ ~................................ ¢ ¢ ¢ ¢. ~ .. ~~·········X INDEX NO.: 26224/2005 CALENDAR NO.: 2010022410T MOTION DATE: 10/27/2011 MOTION SEQ. NO.: 009 MD PLAINTIFFS' ATTORNEY: MEYER, SUOZZl, ENGLISH & KLEIN, p.e 990 Stewart Ave., Suite 300 Clarden City, New York 11530 DEFENDANTS' ATTORNEY: ESSEKS. HEFTER & ANGEL. ESQS. 108 East Main Street P.O. Box 279 Riverhead, New York 11901 Upon the following papers numbered 1 to 31 read on this motion ill jimil1l.:_Notic~ of Motion! Order tQ Show C:aus~ illll! supporting papers~, Notice ofCio~.' Motioll llnd $tlppoilil\g jJ<ipC13_; Answering A1l1davils and ~upporling papers 17-29 , Replying AtTiJavits and supporting papers 30-31 : 6ther_ , (,mt! Mte, liem illS eo,ilLlci in .\tIpp'" t ~ltd "ppoMd tb tlie liilliioll) it is. ORDERED that the motion by plaintiffs Nelson Gerard and Buckskill Farm, LLC, improperly denominated as a motion in limine, is denied. In 2003, plaintiff Buckskill Fanu, LLC, was organized for the purpose of acquiring, subdividing and selling a 9.6~aere parcel of property located in the Town of East Hampton. The members of Buckskill Farm were plaintiffNclson Gerard, who allegedly made a capital contribution of $2,000,000, and Marvin I-lyman, who allegedly made a capital contribution of less than $300,000. Both members agreed to act as managers of Buckskill Farm, and Hyman, an attorney, further agreed to provide legal services and to make an additional capital contribution. Significantly, it was anticipated by Gerard and Hyman that the Town of East I-Iampton would require a portion of the property be set aside as an agricultural reserve. The operating agreement of Buckskill Farm, which allegedly was adopted in June 2003, states, in part, that every member orthe company shall contribute the amount set f()I"thin Exhibit B, and that contributions may be made "in cash, property or services rendered or a promissory note or other obligation to contribute cash or property or to render services." Exhibit B of the operating agreement lJsts capital contributions of$2,000,000 for Gerard and $350,000 for Hyman. Exhibit 13 also states that Gerard will make a capital contribution of $2,000,000 "by delivery of a certified or bank check ... at the time and place established for closing of title," and that I-lyman made a capital contribution of$J 17,900 "in cash and services and will make the additional contribution as designated above as required." The operating agreement further states that the property to be acquired by the company is zoned for single family residential use, that Hyman has spent $117,900, including $110,250 as a down payment on a contract, and that the amount spent represents a portion of his capital contribution. Additionally, it states that I-lyman will take all steps necessary or [* 2] Nd.wll Gem!"d 131Cli. I' Callrerine flldex No, 26224/2()()j Coli!!! desirable at his sole cost and expense to process the application for subdivision approval; that, "based upon [llyman's] experience, it IS not likely that less than five (5) lots will be obtained on a final approved plan"; and that Hyman will consult with Gerard during the process for obtaining subdivision approval and "all decisions to be made shall be made jointly." Moreover, in recognition of the parties' different capital contributions to the company, the operating agreement provides that upon the filing of a subdivision map, the lots and reserve area on such map would be distributed to the members, with the distribution dependent upon the number of buildable lots approved by the Town. Specifically, Exhibit C of the operating agreement states that upon the filing of a subdivision map with the Suffolk County Clerk's office, the lots on such map shall be distributed to the members, their heirs, agents or assigns in accordance with one of five possible scenarios, eaeh distribution scenario dependent upon the number of lots designated on the map. For example, if the filed subdivision map contained eight lots plus a reserve area, five lots and an undivided one-half interest in the reserve area would go to Gerard, and three lots and an undivided one-half interest in the reserve area would go to Hyman; ifit contained only four or five lots, than all of the lots would be distributed to Gerard and the reserve area would be distributed to Hyman. However, if the subdivision map contained less than three lots, Gerard \.\'ould have the option "to have Marvin Hyman purchase [Gerard's1 interest in the company for the amount of elson Girard's [sicl capital contribution of $2,000,000." If the option was not exercised by Gerard, all lots on the subdivision map would be distributed to Gerard and the reserve area would be distributed to Ilyman. In August 2004, after months of negotiations, the Town alTered $1.9 million to purchase four lots, located in the northern portion of the parcel, and the agricultural reserve area [rom Buc.kskill Farm, leaving four lots available for residential development. Prior to such offer, Hyman engaged in discussions with the Town regarding the proposed development of the subject parcel, and Gerard allegedly offered to buyout I-lyman's interest in Buckskill Farm for $500,000. The offer was rejected by Hyman, who allegedly counteroffered to sell his interest in the company for $1 mIllion. After learning of the $1.9 million purchase offer by the Town, Gerard allegedly offered to pay $950,000 for I lyman's interest in Buckskill Farm. In October 2004, Gerard allegedly made another offer to I·lyman to purchase his interest in the company for either $850,000 or one lot of the subdivision. A dispute exists between the parties as to whether Hyman, who passed away in December 2005, accepted Gerard's October 2004 offer to buyout his interest in Buekskill Farm. Gerard alleges an agreement to purchase Hyman's interest in BuckskiJl Farm was reached in October 2004, after he advised I lyman that his approval of the filing of a subdivision map and the Town's purchase offer was contingent upon Hyman selling his interest in the limited liability company, and that the terms oCtile agreement to buy Hyman's interest were memorialized in a lettcr dated October 29,2004. Subsequently, on September 2],2005, Hyman filcd a subdivision map with the Clerk of Suffolk County. Four days later, hc transj-(~rrcdtitle to the agricultural reserve area, which had increased in size to 6.8 acres due to a merger with the four lots, to the Town in exchange for a check in the approximate amount of$1.8 million made payable to 13uckskill Fann. Hyman allegedly deposited the check from the Town in the company's bank account. After the check cleared. Hyman allegedly withdrew all but $6,000 of the sale proceeds from the Huckskill Fann account by wTiting a check to himself The sale proceeds, then, allegedly were deposited by I lyman into a joint bank account held by he and his wife, Catherine Cahill. -2- [* 3] rl1de.~Nu. 2622412005 .I.,'e{soll Gerard et at v Catherine ('ahill In 2005, plaintilfs commenced the instant action for a judgment declaring the rights and obligations of the parties to the operating agreement. The amended complaint alleges, in part, that the transfer oftitle to the four lots and the reserve area was made without Gerard's knowledge or approval. It alleges Hyman misrepresented to Gerard in September 2005 that he was undecided about whether to take the $850,000 or a lot for his interest in Buckskill Farm, and that no closing date had been set for the transfer of title to the Town. It also asserts Hyman refused demands to rcturn the proceeds of the sale. As to the cause of action for declaratory relief, the amended complaint seeks, among others, declarations that Hyman, by his actions, "signified his choice to accept $850,000 for his interest in [Buckskill Farm]." that Hyman has no right or interest in Buckskill Fan11,and that Hyman owes Buckskill Farm $1,050,000 "plus the costs of purchase and development (not to exceed $2,350,000), less the capital contribution" he made to the company. A second cause of action seeks damages for fraud, and the remaining four causes of acrion seek injunctive relief Following Hyman's death, Cahill, in her capacity as executrix of his estate, was substituted as the defendant in this action. Thereafter, in 2007, Gerard and Buckskill farm commenced another action against Cahill. The action, assigned index number 37856/2007, seeks damages from Cahill individually based on her refusal to return to Buckskill Farm the proceeds from the sale of the reserve area. By order dated July 16,2008, this Court (Whelan, J.) granted a cross motion by Cahill for summary judh'll1Cnt,declaring, in effect, that Hyman had an interest in Buckskill farm at the time of his death, and dismissing plaintiffs' remaining causes of action. The Court also denied, as moot, a motion by plaintiffs for an order consolidating this action with their action against Cahill bearing index number 37856/2007. Thereafter, the Appellate Division modified this Court's order by denying the branch of Cahill's cross motion seeking summary judgment in her favor on the cause of action for declaratory rclief(see Gerard 11 Cahill, 66 AD3d 957, 959, 888 NYS2d 104 [2d Depl 2009]). More particularly, the Appellate Division rejected Cahill's argument that, because a provision in the operating agreement prohibits oral modifications, an oral agreement between Gerard and Cahill to redeem I-lyman's interest in the company was barred by General Obligations Law § 15301. Instead, it determined that the alleged oral agreement between Gerard and Hyman "was a separate, additional agreement addressing a scenario that was not anticipated and not covered by the terms of the operating agreement, " and that such alleged agreement "did not set f0l1h a new distribution scheme but, rather, provided for a buy-out of I-lyman's interest" (Gerard 11 Cahill, 66 AD3d 957, 959, 888 NYS2d 104). The Appellate Division, however, rejected plaintiffs' argument that they were entitled to summary judgment in their favor on the claim for declaratory relief, holding that "questions of fact exist for trial, including whether Hyman accepted the plaintiffs' offer to redeem his interest in the subject property" (Gerard \I Cahill, 66 AD3d 957. 960, 888 NYS2d 104). Further, while determining that summary judgment was properly granted to Cahill on the cause of action sounding in fraud, the Appellate Division modified the provisions of the order granting summary judgment in Cahill's favor on the third through sixth causes of action, finding that she failed to meet her burden on the cross motion as to the claims for injunctive relief. Subsequently_ by order dated June 25, 2010, Justice Whelan ordered the instant action be joined for trial with the action brought by plaintiffs against Cahill assigned index number 37856/2007, and granted Cahill leave to serve an amended answer. Referring to the order issued by the Appellate Division in 2009, the amended answer contains an affil1113tivedefense, set-off and counterclaim seeking a "declaration regarding the value or fair value of the respective interests of -J- [* 4] Ne/soll Gaun/ 1'1 af. V Ca/Iierilli: Cahill Index No 26224/2005 members Marvin l-lyman and Nelson Gerard to Buekskill Farm, LLC." It also contains a second affirmative defense, set-oJfand counterclaim seeking an accounting of the value or fair value of Hyman's and Gerard's interests as members of Buckskill Farm. It is noted that an appeal of Justice Whelan's June 20] 0 order filed by plaintiffs in October 2010 was withdrawn in february 201]. A review· of the Court's computerized records sho\v that a note of issue and certificate of readiness were filed in this action on October 26,2010, and that no demand for ajury was filed. Plaintiffs no\v move for an order precluding defendant Catherine Cahill from presenting evidence at trial "as to the value or fair value of the contributions ofT-lyman and Gerard in plaintiff 13uckskill Fann, LtC ... pursuant to Exhibit 'C' to the LLC's operating agreement." According to plaintiffs, Cahill improperly is seeking to argue at trial that under the terms set forth in Exhibit C, Hyman's interest in the company was equal to the value of three of the eight lots plus one-half of the reserve area. Referring to evidence presented at a hearing on an application for a preliminary injunction, as well as arguments raised on the appeal ofJustice Whelan's 2007 order, plaintiff" assert that the evidence shows Gerard and Hyman entered into an oral agreement to redeem Hyman's interest in Buckskill Farm. Plaintiffs argue that the Appellate Division "conclusively ruled that none of the sections of Exhibit 'C' to the operating agreement covers" the "scenario" of the sale to the Town that actually occurred. Therefore, according to plaintifJs, the distribution of assets of Buekskill Farm is govemed by Limited Liability Law §§ 503 ffild 504. Plaintiffs further argue that as the operating agreement states that member capital accounts are to be maintained in accordance with the Internal Revenue Code and the Treasury Department's regulations, and Exhibit B specified a capital contribution of $350,000 on behalf of Hyman, Cahill may not argue Hyman's capital contribution to the company exceeded such amount. Cahill opposes the motion, arguing that it represents an improper attempt either to reargue plaintiffs' request to the Appellate Court that it grant summary judgment in their favor on the dcclaratolY judgment action or to reargue Justice Whelan's order granting her leave to serve an amended complaint. The function of a motion in limine is to pertnit a party, before or during a trial, to obtain a preliminary order excluding the introduction of anticipated inadmissible, immaterial or prejudicial evidence or limiting the use of such evidence (State ql"New York l' Metz, 241 AD2d 192, 198, 671 NYS2d 79 [1st Dept 1998])_ A trial judge has broad discretion as to the admissibility of evidence offered at trial (see Radosh v 5'hljJstad, 20 NY2d 504, 285 NYS2d 60 [1967]), and a ruling on a motion in limine, even when made in advance of trial and on paper, constitutes only an advisory opinion, which is not appealable as of right or by permission (Winograd v Price, 21 AD3d 956, 956, 800 NYS2d 649 [2d Dcpt 2005]; Rondout EIee. v Dover Union Free School Dist, , 304 AD2d 808, 758 NYS2d 394 1.2dDcpt 2003]). It is inappropriate for a party to use a motion in limine as a substitute for a motion for summary judgment (see Ojinal1 v Ginsherg, 89 AD3d 908, 933 NYS2d 103 [2d Dept 2011]; Brewi-B(jollx v City qj)·.,rew York, 73 AD3d 1112,900 NYS2d 885 [2d Dept 2010]; Rondout Elec. v Dover Union f<!-eeS'chool Disl., 304 AD2d 808, 758 NYS2d 394; Marshall v 130 N. Bed(hrd Rd Mount Kisco emp_, 277 AD2d 432,717 NYS2d 227 l2d Dept 2000], Iv denied 96 NY2d 714, 729 NYS2d 441 [2001j; Do--wnfown An Co. v Zimmerman, 232 AD2d 270, 648 NYS2d 101 [1st Dept 1996]). Plamtiffs' motion is denied. Although denominated as a motion in limine, plaintiffs do not argue in their moving papers as to the inadmissibility or prejudicial effect of either testimonial or documentary eVidence which they antiCipate will be presented by Cahill during the nonj ury trial of this action. Rather, relying upon a statement in the Appellate Division's 2009 order in this action that "none of [the] scenarios" for the distribution of lots set forth in Exhibit C "came to pass" -4- [* 5] ,o,!elsOJiGerard el af. v Catherine Cahill Iile/ex .No_ 26224/]()()5 (Gerard v CahilL, 66 AD3d 957, 959, 888 NYS2d 104), plaintiffs now seek a pretrial determination that Exhibit C of the operating agreement is irrelevant to determinations as to the respective values of Gerard's and Hymans's interests in BuckskiJl Fann and the distribution of the proceeds from the property sale to the Town. The Court rejects plaintiffs' argument that the order of the Appellate Division determined as a matter of law that Exhibit C is irrelevant to the distribution of the assc!s of Buekskill Farm, particularly the sale proceeds of the subject parcel, as such issue was not necessarily resolved on the merits as pan of its holding that Cahill failed to establish as a matter oflaw the defense that Gerard's claim of an alleged oral agreement to redeem Hyman's interest in the company was harred under General Obligations Law § 15-301 (see Franco v ,lezyCee e~fNY Corp., 36 AD3d 445, 827 NYS2d 143 [1st Dept 2007J; Puro v Puro, 79 AD2d 925, 434 NYS2d 424 [1st Dept 198]]). Moreover, if the requested relief is granted, Cahill will be precluded at trial from presenting relevant evidence in deJense to plaintiffs' action and in support of her counterclaims regarding the agreement between Gerard and I-lyman as to the distribution of company assets, namely the subject parcel of land in East Hampton, aher the tIling of a subdivision map, as well as evidence relating to the actual subdivision ortlle parcel and the disposition of the remaining four lots. Plaintiffs' motion, therefore, is the functional equivalent of a motion for partial summary judgment in their favor as to the mechanism for establishing the value of Gerard's and Hyman's interests in the company in the event it is determined that they did not enter into an oral agreement for a buy-out of Hyman's interest in Buckskill Farm (see Scalp & Blade, lnc. v Advest. Inc., 309 AD2d 219,765 NYS2d 92 [4th Dept 2003J; Rondouf Elec. v Dover Union Free School Dist., 304 AD2d 808, 758 NYS2d 394). Finally, as the note of issue was filed in this action on October 26, 2010, the statutory 120-day period for makjng a summary judgment motion expired on February 23,2011 (see CPLR 3212). Accordingly, plaintiffs' motion is denied. PAUU. i:lAfStE'l ,'HI . Dated: February 3, 2012 J.S.c. -5-
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