Magid v Magid

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Magid v Magid 2017 NY Slip Op 32603(U) December 12, 2017 Supreme Court, New York County Docket Number: 653440/2015 Judge: Eileen Bransten 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. [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 1] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 SUPREJ\.1E COURT OF THE STATE OF NE\V YORK COUNTY OF NEW YORK: IAS P.AJlT 3 -----------------------------------------------------------------------x l\.1ARC l\.1IAGID, :fv11\.113 REALTY, LLC, RICHARD MAGID, Rl3 REALTY, LLC, HAROLD !v1AGID, E:fv1JULI REALTY, LLC, ABRAHAl\.1 AND SALLY J\.IV\GID FAivHL Y PARTNERSHIP, L.P., and l\1.A.GID FAMILY 13 LLC, Plaintiffs, Index No.: 653440/2015 -against- l\.1ot Seq. Nos. 002, 004 LA \\r1RENCE l\.'LAGID, MAGID HOLDINGS, LLC, and 110 EAST 13TH STREET ASSOCIATES, Defendants. ------------------------------------------------------------------------x EILEEEN BRANSl'EN, J·.s.c.: On motion sequence No. 002, plaintiffs Marc lVIagid (!vt Magid), l\.{~,1113 Realty, LLC, Richard Ivfagid (R. l\fagid), R13 Realty LLC, Harold l\1agid (H. l\fagid), Emjuli Realty, LLC, Abraham and Sally Magid Family Partnership, LP. (the Partnership), and l\1agid Family Realty 13 LLC .move, pursuant to CPLR 3212, for summary judgment on their first cause of action for judicial dissolution, pursuant to Partnership Law § 63, of nominal defendant 110 East 13th Street Associates (1 lO East). On motion sequence No, 004, defendants Lawrence tv'1agid (L. l\fagid) and Magid Holdings, LLC move, pursuant to CPLR 3212, fiJr summary judgment dismissing plaintiffs' amended complaint in its entirety. Iv1otion sequence Nos. 002 and 004 are hereby consolidated for disposition, 2 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 2] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v. Magid 653440/2015 Page 2 of21 BACKGROUND 1 110 East was formed as a general partnership as of March 19, 198L Plaint(f.fs' Rule 19-a statement, if 1. I 10 East was fonned to manage the building located at 110 East 13th Street (the Premises), a six-story rental property that is 110 East's sole asset Id., ,, 2-4. Originally, the two sole managing partners were Abraham l\!fagid (A. Ivfagid), the father ofL. Magid, l\tt fl.1fagid, R l'.vfagid and H. l\!fagid, and Norman Roberts (Roberts), while L Yvfagid was a non-managing partner. Id., i; 5. As of May 1991, by way of a third amendment to the partnership agreement ( 110 East Agreement), L Ivfagid was made the third managing partner. Id., iJ 8, Over the years, Abraham transferred various amounts of his interest in 110 East to his sons, L. i\.fagid, lv'.L l\!Iagid, and R Yvfagid (see, e.g Fried Affirm., Exhibit 4), and, as of December 31, 2000, transferred his remaining interest in the Premises to a Partnership, an entity, formed by Abraham and his wife Sally Jvfagid (S. !vfagid), that replaced Abraham as managing partner, PlaintU,Ts ·Rule 19-a statement, 2004, a Trnst established by Roberts transferred his own 45~·-0 ~] 10. On October 31, interest in 110 East to L. J\!Iagid, H. 1-fagid, R. 1-fa.gid, and M, Magid, in varying percentages. Fried Affirm., Exhibit 6. Currently, 110 East is owned by the Partnership, ofvvhfoh S. Magid is the 1 Except where otherwise noted, the parties have admitted to the following cited facts contained in their respective Rule 19-a statements of material facts (Rules for Comm Div of the Supreme Ct [22 NYCRR] § 202.70 [g], Rule 19-a). '') ..:..- 3 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 3] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v. Magid 653440/2015 Page 3 of21 general partner (Plaintiff..~' Rule 19-a statement, ' l 0), and the four Magid brothers. Pursuant to the seventh amendment to the 110 East Agreernent, M. l'Vfagid was third managing partner, along with L. rvfagid and the Partnership. Id.,~ mad~ the 9. Each partner's interest is held by a separate single-purpose limited liability company (LLC). Id.,,-;,-; 12, 13. The ovvnership structure is as foHows: ~'J\fagid Holdings LLC ([L. ]'vfagid, managing fftember]): 39.5% R 13 Realty LLC ([R. J\1agid]): 2125g.{, JVIJVI13 Realty LLC ([M. 1vfagid, managing member]): 21.25% Emjuli Realty LLC ([H. 1v1agid]): 3% l\1agid Family 13 LLC ([The Partnership, managing member]): 15%'' id., i114. Each owner is also the sole member of the respective LLC Id., i114. L :Magid, through his entity 1VLAIV1 Services (fv1Afv1), also serves as property manager for the Premises. Id.,~ 16. The 110 East Agreement provides that 110 East shall continue until November 30, 2030, except upon mutual written consent of the partners, upon the sale of all or substantially all of the real estate mvned by 110 East, or upon other specified events . .f"'ried A...f!irm ... Exhibit 4 at ii 3.1. The consent of all of the managing partners is required to sell the Premises, and to "enter into any agreement the effect of which shall be a burden on [1 !O East or its propertyr'. Id., iJ 8.L The third amendmentto the 110 East Agreement provides that, notwithstanding the foregoing requirements, any one of the 3 4 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 4] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v. Magid 653440/2015 Page 4 of21 managing partners may bmTow money on behalf of 110 East, secured by means of a mortgage on the Prernises, assigmnents of rents, or other form of collateral related to the Premises, without the consent of the rest of the members. Fried Afflrm., Er:hibit 4, at ,I 2. The partners may not receive any compensation for services rendered to 110 East, save for profit allocations. 110 East Agreement, ,I 11.1. Finally, the managing partners may hire outside vendors that they "in their sole judgment, shall deem advisable in the operation and management of the business of [ 110 East.]". Id, ,f 1 L3, To the extent that the events leading up to this lawsuit are uncontested, they are briefly set forth as fo1lmvs: On May 25, 2015, .NL l\1agid emailed the other partners to tell them that he had received a $25,000,000 offer for the Premises. L. Magid Affidavit, Exhibit 9. Plaintiffs wished to sell the Premises, and defendants do not Indeed, L l'v1agid testified at his deposition that he did not then, and does not now~ have any interest in selling his interest in the Premises. Pried Affirm., Exhibit 8 at 143:7-143:15. Accordingly, L. l\1agid refused to consent to a sale, which he asserts is his right as a managing partner. Id. at 187:5-12, 210:15-19; L. lvfagid Affidvait, i14126, 29, ivt .Nfagid asserts that L fvfagid has threatened Utigation if the other partners attempt to sell the building, lvf lvfagid Aj]idavit, ~~ 2, 13-16; L Magid denies any threats oflitigation. Defendants' response to Plaintiffs' Rule 19-a statement, 2 ir 32. 2 Plaintiffs argue that L Magid had previously received other offers to sell the building (L Magid Deposition at ]23:9-124:19), vvhich he did not pass on to his partners (id at 130:4-16). It 4 5 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 5] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 .Magid v, Magid 653440/2015 Page 5 of21 On June 8, 2015, Ivt :Magid called a meeting of the partners to discuss whether 1V1A.M, and by extension L. Magid, should be removed as property manager for the Premises, Fried Affirm .. E'<hibit 10. Ultimately, all of the partners except L. :Magid voted to remove Jv1AM as property manager. Fried .~ffirm.~ Exhibit 11 and 13. L. Jv1agid, believing that his consent \Vas required for this removal, told the remaining partners that the meeting had heen improperly convened, and that he (L. f\.11agid) wou1d resort to court intervention if the partners attempted to oust him. L }vfagid Affidavit, ,-r 54. Shortly thereafterj l\.1. 'fv1agid proposed that 110 East should refinance its mortgage on the Premises. Fried A/firm., Exhibit 14, It is noted that the 110 East Agreement provides, and L. Ivfagid's testimony confinns, that any individual managing partner may encumber the Premises. Fried At.1lrm., Exhibit 4 at ir 2; Exhibit 7 - L. lviagid Deposition Testimony at 23:6-27:10. Nonetheless, L. fv1agid, through counsel, wrote to IvL l\.fagid and informed him that, though he (Jvt !vfagid) had the right to refinance the mortgage, L. J\.fagid believed it would not benefit the partnership financially, and therefore, he (L. Jvfagid) would sue I\.1. f\.1agid for waste and breach of fiduciary duty if he went through -with the refinancing. Fried Affirm., Exhibit 14. should be noted that L Magid also testified that he forwarded the formal offers he received to his partners (id at 124:20~128:19), and that M. Magid also received offers to buy the building at the same time (id at 130:18-131:8). 5 6 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 6] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v. Magid 653440/2015 Page 6 of21 Currently, there is some kvel of acrimony and dysfunction among the parties (lvf A1agid Affidavit, iii! 2-3,· R. Afagid Affidavit, ~~ 2-5; H. A1agid Affidavit, iri; 2, 10-1), though they do not agree on how badly the relationship among the pmt.ners has deteriorated (L. rvfagid Affidavit, ii 76). Beginning either \Vith the death of Abraham, the family patriarch (:P.1. IVfagid Affidavit, 13; R. :Magid Affidavit, ir 3; S. Magid Affidavit, ii 10-11 ), or with L. l\.fagid' s refusal to consent to a sale of the building, (L 1v1agid, ~- 49), the parties have, allegedly, been unable to engage with each other in a civil manner. E.g A1. Afagid Affidavit, 18; H: lvfagid .4/lldavit, ~ 9, The documented instances of such incivility include acrimonious email exchanges between the brothers, behveen S ..Magid and L. l\fagid, and between the parties and various individuals, Fried -~tlirm., Exhibit 9; L Afagid Affidavit, Exhibit 13. Verbal altercations also occurred bet\-veen the brothers, with involvement of the parties' counsel, during the pendency of the instant case. Fried Affirm., Exhibit 16 at 66:6-74:15; Exhibit 17 at 72:6-74.·24, 190:9-23, 251:19-257:25. H. l\.fagid avers that there was a physical altercation between him and L. IVfagid at I'v1. I'vfagid's deposition (H lvfagid .{{ftdavit, Aflidavit, ir 9), though L ivfagid denies this. L. A1agid ii 86 n 6. The court has previously been compelled, because of such behavior, to enjoin the parties from communicating with each other, except through counsel, NYSCEF Doc. No. 54, at 8-10. I'vforeover, the parties have been involved in other litigation in Westchester 6 7 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 7] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v. Magid 653440/2015 Page 7 of21 and Nassau counties, although, as with almost every other factual issue, the parties differ as to how many other lawsuits they have brought against each other. Ai A1agid Affidavit, ~~ 7; 11; H. Afagid Atlidavit, ii 7; L lvfagid Affidavit, ~ 49. Despite all of this, L. 1'.1agid argues that the day to day business of the pminership continues uninterrupted, the building remains competently managed, and 110 East has been very profitable, even during the pendency of this action. L. 1vfagid Affidavit, il 67-68, 73-74, 78-79, 82. Plaintiffs counter that numerous issues have gone unaddressed; including New York City Department of Buildings violations and necessary repairs to the Premises, lvl ~Magid Reply Affidavit, ,-r 18 and E'!Chibit 26. DISCUSSION It is well-undt~rstood that summary judgment is a drastic remedy and should only be granted if the moving party has sufficiently established the absence of any material issues of fact, requiring judgment as a matter of law. Vega v. Restani Const!·. Cor/'J., 18 N.Y.3d 499, 503 (2012) (citing Alvarez v. Prospect Hosp., 68 N.Y2d 320, 324 (1986)), Once this showing has been made, the burden shifts to the party opposing the motion to produce evidentiary proot~ in admissible form, sufficient to establish the existence of material issues of fa'-~t which require a trial of the action. Zuckerman v, City ofNeiv York, 49 N,Y.2d 557~ 562 (1980). 7 8 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 8] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v. Magid 653440/2015 Page 8 of21 When deciding a motion for summary judgment, the Court must view the evidence in the light most favorable to the non-rnovant Branham v. Loews Orpheurn Cinemas, Inc., 8 N.Y.3d 931, 932 (2007). However, mere conclusions, unsubstantiated allegations or expressions of hope are insufficit~nt to defeat a summary judgment motion. Zuckerman, 49 N.Y.2d at 562; see also Ellen v. Lauer, 210 A.D.2d 87, 90 (1st Dep't 1994) ('"[it] is not enough that the party opposing summary judgment insinuate that there might he some question with respect to a material fact in the case. Rather, it is imperative that the party demonstrate~ by evidence in adrnissible forrn, that an issue of fact exists .. ,'') (citations omitted). A, Judicial Dissolution (First Cause ofAction) On their first cause of action, plaintiffs seek an Order dissolving 110 East, and giving plaintiffs the right to wind up 110 East by selling the Premises and conducting a final accounting and distribution of the partnership ass~ts. Amended Complaint, iiir 68- 71. Plaintiffa argue that the persistent acrimony and irreconcilable differences betvveen plaintiffs and defendants make it impossible to can-yon the business of the partnership. In particular, plaintiffs argue that L fv'lagid's threat to commence Htigation in response to actions proposed by the rest of the partners has fonctionaUy deadlocked the partnership, and his refusal to consent to a sale, L. Ivfagid's refusal to submit to a vote of the partnership to remove him as property manager, and his rcfosal to maximize the money- 8 9 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 9] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v. Magid 653440/2015 Page 9 of21 making potential of the Premises all warrant dissolution. In addition, plaintiffs point out that L fvlagid has commenced related litigation against 1\1. 1v1agid and H. Nfagid, and that the partners have not spoken in person in more than a year and are incapable of communicating, except through counsel, to the point vvhere the court ordered the patties not to speak to each other directly, In opposition, and in support of their mvn motion for summary judgment dismissing the cause of action for judicial dissolution, defendants argue that L l\fagid has the right to withhold his consent to selling the building pursuant to if 8. 1 of the 110 East Agreement. l'vforeover~ defendants claim that, because the paities are not divided 50/50 in terms of mvnership of 110 East, there can be no actual deadlock. Further, defendants assert that the reports of acrimony and dysfunction are largely manufactured by plaintiffa to justify a dissolution and thereby get around L Jv1agid's refusal to sell. In this regard, defendants argue that 110 East has remained profitable, and that the parties have been able to continue to operate the partnership in all respects, save for the issues of a potential sale and the removal ofL 1'v1agid, through 1'v1AN1, as prope1iy manager of the Premises. Defondants argue that L l'viagid's status as property manager is not a breach of the I 10 East Agreen:1ent Finally, defondants claim that L 1v1agid 'IVill be financially harmed by a dissolution, as a forced sale of the Premises \Vill not retum market value to the partners. 9 10 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 10] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v. Magid 653440/2015 Page 10 of21 Partnership Law· § 63 provides that the court may order the dissolution of a partnership where "'a partner willfully or persistently commits a breach of the partnership agreement, or otherwise so conducts himself in matters relating to the partnership business that it is not reasonably practicable to carry on the business in partnership with him," or where "'[o]ther circumstances render a dissolution equitable';. Partnership Lmv §§ 63 [l} [d], [f]. 3 Vlhere the partners are deadlocked, and the partnership is consequently unable to make any decisions, it is equitable to dissolve the partnershipo Seligson v Russo, 16 AD3d 253, 253 (1st Dept 2005); KrulH;ich v Posner; 291AD2d301, 302 (lst Dept 2002). "No one can be forced to continue as a pa1tner against his will'~. lVapoti v Domnitch, 18 AD2d 707, 708 (2d Dept 1962), ajfd 14 NY2d 508 ( 1964 ). .A.s the Appellate Division, First Depaitment has said when discussing the related area of the duties of shareholders in a closely held corporation: "The law exacts a high degree of fidelity and good faith in dealings beti,,veen partners in the conduct of the affairs of the partnership. The same obligations are likevvise applicable to shareholders in a close corporation. Hmvevcr, where a deadlock exists to the extent that dissension bec.omes the order of the day, the impasse may c:ffoctively destroy the loyalty and good faith expected of such stockholders in their dealings with each other. The inevitable result is the downfall of the business. In such a case, dissolution affords to the court an appropriate remedy to judicially direct 1 : Defendants argue that Partnership Law § 63 does not apply, as the 110 East Agreement provides a provision for dissolution of the partnership. They do not, however, cite any authority for this argument Additionally, Plaintiffs' amended complaint cites Partnership Law§ 63 fl] [c] ratfa~r than [d], however from the context and plain wording of plaintiffs' allegations, it is clear that this is a mere scrivener's error (CPLR 2001; Albilia v Ht!lcrest Gen. Hosp., 124 AD2d 499, 500 [1st Dept 1986]). 10 11 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 11] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v. Magid 653440/2015 Page 11 of21 vvhat in actuality is obvious to all, that the deadlock and dissension have effectively destroyed the orderly functioning of the corporation." lvfatter ofT.J: Ronan Paint Cmp., 98 AD2d 413, 421-22 (1st Dept 1984), The reason for such dissension is irrelevant; the only issue is whether the relationship benveen the partners is irretrievably dysfunctional. Seligson, 16 AD3d at 253. "Given its extreme nature, judicial dissolution is a limited remedy that [courts grant] sparingly". }.fatter ofl 545 Ocean Ave., LLC, 72 AD3d 121, 129----30 (2d Dept 2010) (internal quotation marks and citations omitted). At the outset, the court notes that defendants do not accurately identify the requirements to show a deadlock \Vhile the cases cited by plaintiffs have largely concerned partnerships where the competing owners or ownership groups each held 50~·o of the partnership (e.g. Seligson, 16 AD3d at 253; lv!atter ofTJ. Ronan Paint Cor11., 98 AD2d at 414 )~ defendants do not point to any authority stating that a 50/50 division is necessary for the court to find that a partnership is irretrievably deadlocked. Indeed, it is seemingly disingenuous for L I'vfagid to argue that the partnership is not deadlocked on, at the very least, the issues of refinancing, a sale of the Premises, and the removal ofL l\!Iagid as property manager, when L rv1agid has responded to his partners' proposals related to those issues with threats of litigation. A.f A1agid Ajjidavif. A1agid Affidavit, ii 54; Exhibit 12; Fried Affinn._, Exhibit 14. ,~ 2, 13-16.,· L. Nor have defendants shown that 110 East's continued profitability and day-to-day operations necessarily defeat plaintiffs' claim. 11 12 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 12] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v. Magid 653440/2015 Page 12 of21 This Court notes, contrary to defendants~ argurnent, it has already had to intervene in this action to order the parties not to cmm:nunicate with each other, except through counsel. NY.SCEF Doc, No. 5 4, at 8-10, It is not at all clear that 110 East would continue to function in absence of this directive. Further, whether or not the dissension has impacted or will impact 110 East's or any partner's finances is irrelevant to whether dissolution is warranted. Afatter ofNeville v lV!artin, 29 AD3d 444~ 445 (1st Dept 2006) ("That the dissension had no appreciable irnpact on the firm 1s profitability was not a sufficient ground for the petition's denial"); see also Krulwich, 29 J AD2d at 303 (a paiiner "may not compel the partnership to structure the transaction to accornmodate his peculiar tax situation"), L. Magid argues that his status as property manager and his refusal to consent to a sale of the Premises are both protected by the 110 East Agreement, and, thus, cannot be the basis of a deadlock. Hmvever, the 110 East Agreement does not require the consent of all managing partners to terminate a contract with an outside entity, such as the prope1iy manager; though it does require such consent to enter into a contract in the first place. 110 East Agreement, ii 8.1. The 110 East Agreement also provides that the consent of all managing partners is required to sell the Pn.~mises, Id Plaintiffs argue the consent provision is ambiguous 12 13 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 13] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v. lVlagid Page 13 of21 653440/2015 because it was not modified after the number of managing partners was increased from two to three, and refers to "both managing partners''. Id. Despite that, ·~provisions contract are not ambiguous merely because the parties interpret thern differently". in a Ai~unt Vernon Fire Ins. Co. v. Creative Haus., 88 NY2d 347, 352 (1996). Plaintiffs have failed to offer any evidence that, at tht.~ time the 110 East Agreement was amended to add L. l\/fagid as the third managing partner, or at any time since, the partners intended that the requirement that all managing partners consent to certain major decisions be changed to allow such decisions to be made by two of the three. Plaintiffs' reference to L l\/Iagid's deposition testimony, as to what he believed the language of the 110 East Agreement and its amendments meant, is irrelevant, as the 110 East Agreement includes a rnerger clause, which provides that the agreement "may not be changed, modified, waived, or discharged, in whole or in part, unless in wTiting and signed by all the partners herein'l. 110 East Agreernent, if 22.1. Therefore, its terms are to be read as plainly stated in the Agreement Ultimately, a decision on this cause of action requires credibility judgments of the kind that are inappropriate on a motion for summary judgment. Ferrante, 90 NY2d at 631. It is clear that, despite defendants' efforts to dO\vnplay it, significant acrimony and dissension exists among the partners. Such dissension is farther amplified by the tact that, unlike many pminerships, 11 0 East is a family partnership, with aH of its attendant personal factors. Moreover, the alleged complaints regarding the management of the 13 14 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 14] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v. Magid 653440/2015 Page 14 of21 building are intertwined with the broader partnership disputes, as L 1'vfagid also serves as property manager. 4 Yet, dissension and animosity, by themselves, are not enough; the discord must raise "an irreconcilable barrier to the continued functioning and prosperity of the [pa1inership]". !Matter of TJ: Ronan Paint Corp., 98 AD2d at 421, Here, the parties have raised issues of fact as to the level of dysfunction caused by their personal animosity, and whether such dysfonction impacts the management of the Premises and 110 Easf s ability to function. L Magid Affidavit,~ 67-68, 73-74, 78-79, 82; J\,1. rv1agid Reply Affidavit,~ 18; Exhibit 26. Under these circumstances, smnmary judgment is not appropriate for either side. Hellenic Am, Educ. Found. v Trustees of Athens Coll. in Greece, 116 AD3d 453, 454 (1st Dept 2014) ("sharp disputes of fact over the misfeasance and existence of deadlock preclude the granting of summary judgment to either side"). Accordingly, both plaintiffs' motion for summary judgment on their first cause of action for judicial dissolution, and that branch of defendants' motion for summary judgment dismissing the first cause of action, are denied. L :Magid does not deny that MA1v1 is simply a "doing business as" name, or d/b/a, and that he is its only employee (L. Magid Deposition at 69~70). 4 14 15 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 15] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v. Magid 653440/2015 Page 15 of21 B. .Breach of Fiduciary Du(v (Second Cause o/Action) On their second cause of action, plaintiffs a.Hege that L Magid breached his fiduciary duty to plaintiffs by '~misallocating pminership funds in order to pay himself an annual management fee"; failing to tell the other partners about offers he received for the Premises; and unilaterally refusing to sell the building unless plaintiffs agreed to several concessions. Amended complaint, iii! 78-81. L J\fagid argues that his right to \Vithhold consent to a sale is governed by the 110 East Agreement and, thus, may not be the basis of a tort dai:m, such as breach of fiduciary duty, In opposition, plaintiffs assert that L. rvfagid's breaches of his fiduciary duty go beyond what is set forth in the 110 East Agreement, and that there are issues of fact with regard to those breaches that cannot be resolved on this motion . .. To establish a breach of fiduciary duty, the movant must prove the existence of a fiduciary relationship, misconduct by the other party, and damages directly caused by that party's misconduct", Pokoik v Pokoik, 1I5 AD3d 428, 429 (1st Dept 2014). '"A fiduciary relationship a.rises between two persons when one of them is under a duty to act for or to give advice for the benefit of another upon matters within the scope of the relation", Roni LLC v Arfa, 18 NY3d 846, 848 (2011) (internal quotation marks and citation omitted). For example, "[a] partner has a fiduciary obligation to the other partners" in a partnership. Drucker v A1ige Assoc. II_. 225 AD2d 427, 428 (lst Dept 1996). "A cause of 15 16 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 16] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v ..Magid 653440/2015 Page 16of21 action for breach of fiduciary duty which is merely duplicative of a breach of contract claim cannot stand". Willian-z Kaufinan Org. v Graham & James, 269 AD2d 171, 173 (1st Dept 2000). lVforeover, a cause of action for breach of fiduciary duty may not be plead where there is "'a formal written agTeernent covering the precise subject matter of the alleged fiduciary duty", Pane v Citibank, NA., 19 AD3d 278, 279 (lst Dept 2005). Here, plaintiffs' arguments that L. l\!Iagid breached his fiduciary duty to them by refusing to consent to a sale of the building and by paying himself a managem.ent fee, are matters covered by the l 10 East Agreement. 110 East Agreement,~·~· 8.1, 1L1, l L3, Accordingly, these alleged breaches cannot be the basis for plaintiffs' claim. Pane~ 19 AD3d at 279. J\..foreover, the claim regarding L tvfagid/lv1Afv1's management foe is duplicafrve of the breach of contract claim (third cause of action) (compare amended complaint~[ 78 with ~; 90), and is thus improper. William Kaufrnan Org., 269 AD2d at 173. \Vith respect to L Magid's purported failure to inform his partners of offers to buy the building, plaintiffs fail to controvert L 1Vfagid's testimony that he forwarded to his partners the fimnal offer he received, and that any other offers were not bona fide. L. lvlagid Deposition at 123:9-128: 19. ]'vforeover, any argument that plaintiffs \Vere hanned by L l\tfagid)s failure to inform them of offers to buy the building is entirely speculative, and plaintiffs provide no evidence for damages they may have suffered as a result E.g. One Times Sq. Assoc. v Calmenson, 292 AD2d l 74, 174 (1st Dept 2002) ("Assuming fm1her that defendants again breached a fiduciary duty it owed to plaintiffs by fai1ing to 16 17 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 17] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v. Magid 653440/2015 Page 17 of21 disclose the potential business opportunity . , ,, such breach is based on unsupported speculation concerning future events that are insufficient as a matter of law to show any damages"). Accordingly, that branch of defendants' motion for summary judgment dismissing the second cause of action for breach of :fiduciary duty is granted. C Breach of Contract (Third Cause ofAction) On their third cause of action, p1aintifts allege that L Magid breached the partnership agreement by "allocating partnership funds to himself in the fonn of an annual management foe". Amended Complaint, ,-r 90. L Jvfagid argues that payment of a management fee to MAJ\1 for serving as property rnanager is pennitted pursuant to the 110 East Agreement, and has been authorized by the managing partners since the inception of the partnership. In opposition, plaintiffs argue that two of the three managing partners~ as well as the owners of a majority of the partnership, have objected to said payments, which they claim are in violation of the 110 East Agreemenfs prohibition on partners receiving additional compensation for services to the pa1inership. J\lforeover, plaintiffs argue that L Magid cannot avoid the application of this provision simply by acting as !\t1A!\t1, a d/b/a of which he is the sole employee. 17 18 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 18] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v, Magid 653440/2015 Page 18 of21 Breach of contract requires proof of "the existence of a contract, the plaintiffs performance thereunder, the de fondant's breach thereof, and resulting damages 11 • Harr is v Sevmrd Park Rous. Corp., 79 AD3d 425, 426 (1st Dept 2010))0 The plaintiff must establish "the essential terms of the parties 1 purported contract, including the specific provisions of the contract upon which liability is predicated". J'liatter ofSud v Sud, 211 AD2d 423, 424 (1st Dept 1995). Here, L 1v1agid's position as property manager potentialiy implicates several provisions of the 110 East Agreement First, the agreement provides that the partners are not entitled to compensation for servke to 110 East 110 East Agreement, ir 11. 1. The purposes of 110 East include '"[n1]anaging .. "and othenvise exercising complete control over the [Premises]," and '"[s]uch other activities incident or appropriate to the foregoing''. Id, ir 4. 1 [b ], [c]. The managing partners may collectively employ "such persons, firms or corporations as they, in their sole judgment, shall deem advisable in the operation and management of the building," (id., il l I .3), and the consent of all of the managing partners is required to enter into an agreement with such an entity. Id, [d]. 18 19 of 22 ~ 8. l [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 19] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v. Magid 653440/2015 Page 19 of21 Taken together, these provisions suggest that it ls improper for L Magid to receive a foe for managing the property. To argue otherwise would render the 110 East Agreement's prohibition on partners earning extra compensation for service to the partnership rneaningless. In interpreting an agreement, a court should not read it in a \Vay that renders any provision or clause meaningless E.g. Warner v Kaplan, 71 AD3d 1, 5 (1st Dept 2009). L Magid's argument, that he may avoid the application of paragraph 11. 1 by acting through NIANI, is specious. Nforeover, as set forth above, and contrary to L !vfagid's interpretation, the 110 East A.greement does not require the consent of all managing partners to terrninate an agreernent vvith an outside service provider, such as JV1Alvt L fvlagid' s argument, that l\.1Al\.1 has served as property manager since the 11 0 Easfs fom1ation in 1981, does raise a question of fact as to whether plaintiffs have waived any retroactive claim for damages during the time that they were avvare that L. I'vfagid was drawing a management fee through lV1Al\1 and did not voice any objection. E.g. Long Is. Light, Co. v American Re-Ins. Co., 123 AD3d 402, 403 (1st Dept 2014) ("\Vaiver is the voluntary relinquishment of a known right and must be predicated upon knowledge of the facts upon which the existence of the right depends"). The record does not reflect that plaintiffs raised an objection to L. l'vfagid's position, through MAJ\.1, as property manager until 2015. As of July 9, 2015, however, plaintiffs, holders of 60.5% 19 20 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 20] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid v. Magid 653440/2015 Page 20 of21 of the partnership, had voted to terminate 1 JO East's Agreement with lv!Alv.l Fried Affirm., Exhibits 11and13. Thus, at a minimum, it appears that it \Vas a breach of the 110 East Agreement for L. Magid to continue to draw a management fee subsequent to that vote, and such breach is sufficient to deny the motion. Accordingly, that branch of defendants' motion for summary judgment to dismiss the third cause of action for breach of contract is denied. Accordingly, it is hereby, ORDERED that the motion of plaintiffs Marc 1v1agid, 1v11v113 Realty, LLC, Richard Magid, Rl3 Realty, LLC, Harold 1\fagid, Emjuli Realty, LLC, Abraham and Sally l\fagid Family Partnership, LP., and l\fagid Family 13 LLC (Motion Sequence No. 002), for summary judgment on their first cause of action for judicial dissolution is DENIED; and it is further ORDERED that the rnotion of defendants Lawrence Magid and l\rfagid Holdings, LLC, for summary judgment disrnissing the amended complaint (1\.1otion Sequence No. 004 ), is DENIED with respect to the first cause of action for judicial dissolution and third cause of action for breach of contract, but GRANTED with respect to the second cause of action for breach of fiduciary duty; and it is further 20 21 of 22 [*FILED: NEW YORK COUNTY CLERK 12/14/2017 04:29 PM 21] NYSCEF DOC. NO. 171 INDEX NO. 653440/2015 RECEIVED NYSCEF: 12/14/2017 Magid Vo Magid 653440/2015 Page 21 of21 ORDERED that counsel are directed to appear for a status conference in Room 442, 60 Centre Street, on January 23, 2018, at 11 :30 A1\t1. 1.b_ _ ,20 I7 December ... ENTER: { .....•--·····-'·. \ ___...) \ ., ,fi '·-----------------.• \ ~ HON. EILEEN BRANSTEN, J.S.C. ------------------------------············••»••••••»»>•~~~~~~~~~···"""""""""'"'"""'"'"'"'"'"'"'"'"'"'"'"'"'"'"·""""". 21 22 of 22

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