90 Broad Owner, L.L.C. v Flomenhaft & Cannata, L.L.P.
Annotate this Case
Download PDF
90 Broad Owner, L.L.C. v Flomenhaft & Cannata, L.L.P. 2010 NY Slip Op 34120(U) July 21, 2010 Supreme Court, New York County Docket Number: 116934/2009 Judge: Jane S. Solomon Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [* 1] SUPREME COUR'l' OF THE STATE OF NEW YORK COUNTY OF NEW YORK: IAS PART 55 ----------------------------------x Index No. :Ll6934/2009 90 BROAD OWNER, L.L.C., DECISION' and ORDER Plaintiff, -againstFLOMENHAFT & CANNATA, I,. I,, P. , MICHAEL FLOMENHAFT, and JACOBY MEYERS, L.L.P., & Defendants. --------------------------------- X SOLOMON, J. : BACKGROUND Plaintiff 90 Broad OWner, L.L.C. tOWner) sues defendants for breach of a lease for an o·ffice at its building located at 90 Broad Street in Lower Manha~tan(the Building). D~fendant Flomenhaft & Cannata, L.L.P. (F&C), a law firm, is tlie tenant and Michael Flomenhaft (Flomenhaft) is the ~anto~. The lease, made in 2006, was for 10 years. F&C vacated its ~£fices at the Building. In February of 2009 Flomenhaft and several of F&C's attorneys were hired by Jacoby & Meyers, L.L.P. (J&M), moved the majo~ity o~ F&C's law practice to J&M's offices, and formed the Neurolaw Trial Group within J&M. In the third cause of action, OWner seeks to hold J&M liable for the sums due from F&C under the doetrine of continuation of business or de f~cto merger even though J&M is not a party to the lease. The complaint has been resolved as to F&C and Flomenhafe,.leaving only the claim against J&M~ J&M [* 2] moves to dismiss the complaint as to it on tbe ground that Owner ~as failed to state a cause of action. DISCtJSSIOlf F&C and J&M are partnerships. owner contends that the newly formed Neurolaw '!'rial Group (not a partnership or corporation in and of itself) should be deemed the continuation of F&C's business and J&:M should be liable for 'payment of rent due under F&C's lease. 'l'he de facto merger doctrine and the continuation of business doctrine are corporate law doctrines. All of the cases cited by both parties involve corporate ent~ties, not partnerships! Neither party cites to any authori~y in support of · applying these doctrines to partnerships. Notwithstand:i:ng this, were the court to apply the de facto merger doct#ne to this matter, OWner has not established the elements of such a merger. •The de facto merger doctrine creates an exception to the general ~rinci~le that an acquiring corporation does not become responsible thereby for the pre-existing liabilities of the acquired corporation" (Fitzgerald v. Fahnestock « co., Inc., 286 AD2d 573, 574 [1st Dept, 2001]). · 'l'he elements of a de facto merger include (l) continuity of ownership; (2) cessatio~ of ordinary business operations and the dissolution of the selling corporation as soon as possible after the transaction; (3) the buyer's assumption of the liabilitie~ ordinarily necessary for the uninterrUPted continuation'of the se!ler's business; and (4) 2 [* 3] continuity of management, personnel, physical location, assets and general business operation (In re New York C'it:y Asbestos Litigation, 15 AD3d 254, 256 [1st Dept, 2005)), Continuity of ownership is "a necessary element of any de facto merger finding" (Id.), and is found when the parties to the transaction "become owners together of what formerly belonged to each" (Id.). J&M hired ilomenhaft and the majority of F&C's attorneys as attorney-employees, not as managers or partners in J&M. That they were hired to expand J&M's practice into "Neurolaw" and were kept as a "group" is of no consequence. Owner does not allege that any F&C partner is now in any way an owner or manager of J&M, Similarly, Owner has not alleged that F&C dissolved, or that there was a continuity of management, personnel, or physical location; indeed, the latter is not the case or this action would not have been brought. Notably, too, the hiring of some of the predecessor's employees is insufficient to establish continuity of management (see, Kretzmer v. Firesafe .Products Corp., 24 AD3d 158, 159 [1st Dept, 200?)), Accordingly, Owner's complaint agains,t J&M is inadequate to set forth a claim'tp hold J&M liable as a continuation of F&C; and it hereby is 3 [* 4] ORDERED that the motion of defendant Jacoby & Meyers, L.L.P.¾ to dismiss the complaint as to it is granted and the complaint is dismissed as against it, with Co$tS and disbursements as taxed by the Clerk of the Court, and the Clerk . . is directed to enter judgment accordingly. 4
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.
