Magee v Weinstock
Annotate this CaseDecided on May 22, 2017
Supreme Court, Nassau County
Robert P. Magee and JOAN GREENBERG, Plaintiff(s),
against
Steve Weinstock, DAVID W. GREENWALD and GREENWALD & WEINSTOCK, LLP, Defendant(s).
606015/16
Attorneys for Plaintiff
David W. Graber, Esq.
55 Watermill Lane
Great Neck, NY11021
516-292-8500
Attorneys for Defendant Greenwald
Kilhenny & Felix
350 West 31st Street, Ste. 401
New York, NY10001
212-419-1492
Jeffrey S. Brown, J.
The following papers were read on this motion: Efile Docs Numbered
MS 1MS2
Notice of Motion, Affidavits, Memoranda, Exhibits Annexed 815
Answering Affidavit 24
Reply Affidavit 28
Plaintiff moves pursuant to CPLR 3215 to enter a default judgment against defendants Steve Weinstock and Greenwald and Weinstock, LLP (G & W LLP). Defendant David W. Greenwald moves pursuant to CPLR 3215 for summary judgment dismissing the action as against him.
Before this court is an action for breach of a promissory note and legal fees pursuant to the terms of the note. In support of the motion to dismiss is an affidavit from defendant David Greenwald. He states that he is an attorney duly admitted to practice law in the State of New York. On August 28, 2003 he formed a limited liability partnership with defendant Steve Weinstock under the name Greenwald & Weinstock, LLP. Each of the named individual defendants own a 50% limited partnership interest. There has never been a written partnership agreement and neither Weinstock nor Greenwald were authorized to borrow funds on behalf of G & W LLP without approval of the other limited partner.
The complaint alleges that on March 18, 2014, plaintiffs loaned the defendants the sum of $175,000 secured by a second Promissory Note. The Promissory Note contains the following language: "For value Received, GREENWALD & WEINSTOCK, LLP, (the "Borrower") hereby promise to pay to the order of ROBERT P. MAGEE AND JOAN GREENBERG (the "Lender") at such place as the Lender may specify from time to time, the principal sum of ONE HUNDRED SEVENTY FIVE THOUSAND DOLLARS ($175,000.00), in both the manner and on the dates prescribed herein." The note is signed on behalf of Greenwald & Weinstock, LLP by Steve Weinstock, Partner. The note was not signed by defendant David W. Greenwald.
By his affidavit, Greenwald states that in August of 2003 he formed G & W LLP with defendant Weinstock as a limited liability partnership. Defendant Greenwald further states that not only did he not sign the note but he never authorized Weinstock to sign the Note. Further, he states that he did not know of this Promissory Note until he was contacted by plaintiff's counsel by letter dated March 15, 2016. He states that he never had any dealings with the plaintiffs, never acknowledged any independent duty of payment nor did he receive any consideration from plaintiffs. The only contract that can be claimed by the plaintiffs is the one between defendant Greenwald and Weinstock, LLP and the plaintiffs.
In opposition, plaintiff Robert P. Magee submits his own affidavit. He states that "Defendants" in or about July of 2012 signed a Promissory Note in the sum of $300,000. The $300,000 was wired to the IOLA account maintained by the defendants. Of that sum, $225,000 was repaid by the defendants. In March 2014, another $100,000 was wired to the defendants' IOLA account. The outstanding balance due and owing of $175,000 was memorialized in the March 18, 2014 Promissory Note.
Mr. Magee states that the Note was clearly signed by the law firm of Greenwald and Weinstock by the signature of Steve Weinstock. The note was payable in full on April 7, 2014 but was not paid. At all times, Mr. Magee believed that between 2012 and 2014 Steve Weinstock had full authority to bind the law firm. Mr. Magee explains that he began to question whether the funds would be repaid upon learning of Weinstock's arrest in October of 2014. Mr. Magee does not indicate whether he had any dealings with defendant Greenwald.
A motion for summary judgment is granted in favor of the moving party where there are [*2]no material issues of fact, and as a result, the moving party is entitled to judgment as a matter of law. Alvarez v. Prospect Hosp., 68 NY2d 320 (1986). The burden then placed upon the party opposing the motion requires that they produce "evidentiary proof in admissible form" sufficient to impose a trial as to the material issues of fact on which the opposing claim depends upon. Frank Corp. v. Federal Ins. Co., 70 NY2d 966 (1988)" (Rebecchi v. Whitmore, 172 AD2d 600 [2d Dept. 1991]). It is insufficient for a party opposing a motion for summary judgment to use "mere conclusions, expressions of hope or unsubstantiated allegations or assertions" (Zuckerman v. City of New York, 49 NY2d 557, 562 [1980]).
New York Partnership Law § 26 (b), covering registered limited liability partnerships provides that subject to two exclusions,
no partner of a partnership which is a registered limited liability partnership is liable or accountable, directly or indirectly (including by way of indemnification, contribution or otherwise), for any debts, obligations or liabilities of, or chargeable to, the registered limited liability partnership or each other, whether arising in tort, contract or otherwise, which are incurred, created or assumed by such partnership while such partnership is a registered limited liability partnership, solely by reason of being such a partner or acting (or omitting to act) in such capacity or rendering professional services or otherwise participating (as an employee, consultant, contractor or otherwise) in the conduct of the other business or activities of the registered limited liability partnership.The first exclusion applies to negligent or wrongful conduct committed by such partner or by a person under his direct supervision or control, while rendering professional services on behalf of the limited liability partnership. The second exclusion applies to debts incurred upon agreement of a majority of the partners, unless otherwise provided in an agreement between partners. (See NY P'ship Law § Ch. 39, art. 8-B, Bruce A. Rich, Practice Commentaries [McKinney]; see Ederer v. Gursky, 9 NY3d 514, 523-524 [2007]). Here, Greenwald avers that there was no written partnership agreement regarding G & W LLP and neither he nor Weinstock were authorized to borrow funds on behalf of the partnership without approval of the other partner. Further, Greenwald avers that he did not sign, authorize, or even know about the Weinstock promissory note before being contacted by plaintiff's counsel. Accordingly, defendant Greenwald cannot be held personally liable for the debt incurred in the name of the G & W LLP.
Moreover, generally speaking, a promise to answer for the debt of another is unenforceable unless it is in writing. (See General Obligations Law § 5-701[a][2]). As Greenwald is not liable for the debts of the limited liability partnership merely by virtue of his status as a partner, any agreement to be personally liable for the loan must be evidenced by a writing. Here, in opposition to defendant Greenwald's motion, the plaintiffs have not alleged facts that would take a personal obligation on Greenwald's part outside of the statute of frauds.
As a result, defendant Greenwald's motion for summary judgment is granted.
Plaintiffs cross-move for entry of a default judgment against the defendants who have not appeared in this action, namely Steve Weinstock and Greenwald & Weinstock LLP.
Pursuant to CPLR 3215 (f) a motion for default judgment requires proof of service of the summons and complaint, proof of the facts constituting the claim and amount due by affidavit made by the moving party, and proof of the default. In support of this application is an affirmation made by counsel for plaintiff establishing the default, an affidavit in support from [*3]Robert Magee constituting proof of facts of the claim and the amount due, and affidavits of service upon each of the defaulting defendants. In addition, plaintiffs' motion is supported by an affirmation by plaintiffs's attorney showing additional mailing on Steve Weinstock pursuant to CPLR 3215(g)(3)(i).
The application for a default judgment is granted, and a judgment will be entered in the principal amount of $175,000.00 plus interest. An inquest, however, is necessary to determine the amount of attorney's fees. A request for reasonable attorneys fees must be determined at a hearing. (Matter of First National Bank of E. Islip v. Brower, 42 NY2d 471, 474 [1977] ["At the outset there should be recognition of the traditional authority of the courts to supervise the charging of fees for legal services under the courts' inherent and statutory power to regulate the practice of law."]).
Subject to the approval of the justice there presiding and provided a note of issue has been filed at least 10 days prior thereto, this matter shall appear on the calendar of CCP on June 26, 2017 at 9:30 a.m.
A copy of this order shall be served on the calendar clerk and accompany the note of issue when filed. The failure to file a note of issue or appear as directed may be deemed an abandonment of the claims giving rise to the hearing.
The directive with respect to a hearing is subject to the right of the justice presiding in CCP to refer the matter to a justice, judicial hearing officer or a court attorney/referee as he or she deems appropriate.
The movant is directed to serve a copy of this order with notice of entry upon the defendant.
Submit judgment upon conclusion of the inquest.
This constitutes the decision and order of this court. All applications not specifically addressed herein are denied.
Dated: Mineola, New York
May 22, 2017
ENTER:
_________________________________
HON. JEFFREY S. BROWN
J.S.C.
Efile for participating parties
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
