On March 09, 2010 a
REMITTITUR
was filed
involving a dispute between
Kuplesky, Harold, Individually And On Behalf Of Starrett City Preservation Llc, Derivatively,
Rudman, Harvey, Individually And On Behalf Of Starrett City Preservation Llc, Derivatively,
and
Carol Gram Deane,
Dd Shopping Center Llc,
Dd Spring Creek Llc,
Disque D. Deane,
Salt Kettle Llc,
Sk Shopping Center Llc,
Sk Spring Creek Llc,
Spring Creek Plaza Llc,
Starrett City Preservation Llc,
St. Gervais Llc,
for Commercial Division
in the District Court of New York County.
Preview
FILED: NEW YORK COUNTY CLERK 04/29/2016 11:34 AM INDEX NO. 650159/2010
NYSCEF DOC. NO. 373 RECEIVED NYSCEF: 04/29/2016
SUPREME COURT, APPELLATE DIVISION
FIRST DEPARTMENT
APRIL 19, 2016
THE COURT ANNOUNCES THE FOLLOWING DECISIONS:
Renwick, J.P., Andrias, Saxe, Moskowitz, JJ.
16606 Harvey Rudman, et al., Index 650159/10
Plaintiffs-Appellants,
-against-
Carol Gram Deane, etc., et al.,
Defendants-Respondents.
Golenbock Eiseman Assor Bell & Peskoe LLP, New York (Jacqueline
G. Veit of counsel), for appellants.
Warner Partners, P.C., New York (Kenneth E. Warner of counsel),
for respondents.
Order, Supreme Court, New York County (Shirley Werner
Kornreich, J.), entered on or about July 30, 2014, and amended
order, same court and Justice, entered September 24, 2014, which,
to the extent appealed from as limited by the briefs, granted
defendants' motion for partial summary judgment to the extent of
declaring that the managing member of defendant/derivative
plaintiff Starrett City Preservation LLC (Preservation) has the
-
power to reallocate the Sharing Ratios of any member of said
company once (i) nonparty Starrett City Associates LP (SCA) or
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its successors has distributed to Preservation all the
distributions that SCA is required to make to its managing
general partner and general partner under Sections 3.02 and 3.03
of the SCA partnership agreement, (ii) Preservation has
distributed to its members, in accordance with Section 4.2 of its
LLC Agreement, any and all distributions it received from SCA,
and (iii) such distributions by Preservation are $10 million or
more, unanimously modified, on the law, to declare that
Preservation's Managing Member has the power to reallocate the
Sharing Ratios of any Member once Preservation has distributed to
its Members, in accordance with Section 4.2, at least $10
million, and otherwise affirmed, without costs.
"Ambiguity is determined within the four corners of the
document" (Brad H. v City of New York, 17 NY3d 180, 186 [2011]).
Hence, in deciding whether section 3.3 of Preservation's LLC
Agreement is ambiguous, we have not considered the extrinsic
evidence that plaintiffs urge us to consider, such as the
sixteenth amendment to SCA's partnership agreement,
organizational charts and tax documents, and correspondence to
SCA's limited partners.
"Ambiguity is present if language was written so imperfectly
that it is susceptible to more than one reasonable
2
2 of 4
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f
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interpretation" (id.). Section 3.3 is susceptible to only one
reasonable interpretation - the one that defendants advanced on
the motion.
The first sentence of section 3.3 states, "At any time after
the Funding Event (as hereinafter defined), the Managing Member
may . . . reallocate the Sharing Ratios of all Members in
whatever amounts it deems . . . to be appropriate (including
. assigning a Member a Sharing Ratio of zero)." The second
sentence of section 3.3 defines "Funding Event" as "the
distribution to Members, in accordance with their then current
Sharing Ratios ... , of at least $10,000,000 in aggregate
distributions pursuant to Section 4.2(iv)." Plaintiffs cannot
dispute that Preservation has distributed at least $10 million to
its members pursuant to section 4.2(iv). (It is true that
plaintiff Harold Kuplesky's distributions were based on a Sharing
Ratio of 3.49% rather than 11.63%. However, that particular
reduction is not at issue on appeal.)
Plaintiffs rely on the last sentence of section 3.3, which
says, "All Members acknowledge and agree that the Managing
Member's reallocation power ... is intended to facilitate
providing a new management incentive program after the full
distribution from the proceeds of a substantial refinancing
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"
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pursuant to Section 3.02 or 3.03 of SCA's partnership agreement."
However, this is merely a statement of intention; it does not
actually require the full distribution of proceeds (see Sengillo
v Valeo Elec. Sys., Inc., 328 Fed Appx 39, 41-42 [2d Cir 2009]).
We have modified the lAS court's declaration accordingly.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: APRIL 19, 2016
.~
CLERK
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Preview
FILED: NEW YORK COUNTY CLERK 04/29/2016 11:34 AM INDEX NO. 650159/2010 NYSCEF DOC. NO. 373 RECEIVED NYSCEF: 04/29/2016 SUPREME COURT, APPELLATE DIVISION FIRST DEPARTMENT APRIL 19, 2016 THE COURT ANNOUNCES THE FOLLOWING DECISIONS: Renwick, J.P., Andrias, Saxe, Moskowitz, JJ. 16606 Harvey Rudman, et al., Index 650159/10 Plaintiffs-Appellants, -against- Carol Gram Deane, etc., et al., Defendants-Respondents. Golenbock Eiseman Assor Bell & Peskoe LLP, New York (Jacqueline G. Veit of counsel), for appellants. Warner Partners, P.C., New York (Kenneth E. Warner of counsel), for respondents. Order, Supreme Court, New York County (Shirley Werner Kornreich, J.), entered on or about July 30, 2014, and amended order, same court and Justice, entered September 24, 2014, which, to the extent appealed from as limited by the briefs, granted defendants' motion for partial summary judgment to the extent of declaring that the managing member of defendant/derivative plaintiff Starrett City Preservation LLC (Preservation) has the - power to reallocate the Sharing Ratios of any member of said company once (i) nonparty Starrett City Associates LP (SCA) or 1 of 4 its successors has distributed to Preservation all the distributions that SCA is required to make to its managing general partner and general partner under Sections 3.02 and 3.03 of the SCA partnership agreement, (ii) Preservation has distributed to its members, in accordance with Section 4.2 of its LLC Agreement, any and all distributions it received from SCA, and (iii) such distributions by Preservation are $10 million or more, unanimously modified, on the law, to declare that Preservation's Managing Member has the power to reallocate the Sharing Ratios of any Member once Preservation has distributed to its Members, in accordance with Section 4.2, at least $10 million, and otherwise affirmed, without costs. "Ambiguity is determined within the four corners of the document" (Brad H. v City of New York, 17 NY3d 180, 186 [2011]). Hence, in deciding whether section 3.3 of Preservation's LLC Agreement is ambiguous, we have not considered the extrinsic evidence that plaintiffs urge us to consider, such as the sixteenth amendment to SCA's partnership agreement, organizational charts and tax documents, and correspondence to SCA's limited partners. "Ambiguity is present if language was written so imperfectly that it is susceptible to more than one reasonable 2 2 of 4 -I f .1 interpretation" (id.). Section 3.3 is susceptible to only one reasonable interpretation - the one that defendants advanced on the motion. The first sentence of section 3.3 states, "At any time after the Funding Event (as hereinafter defined), the Managing Member may . . . reallocate the Sharing Ratios of all Members in whatever amounts it deems . . . to be appropriate (including . assigning a Member a Sharing Ratio of zero)." The second sentence of section 3.3 defines "Funding Event" as "the distribution to Members, in accordance with their then current Sharing Ratios ... , of at least $10,000,000 in aggregate distributions pursuant to Section 4.2(iv)." Plaintiffs cannot dispute that Preservation has distributed at least $10 million to its members pursuant to section 4.2(iv). (It is true that plaintiff Harold Kuplesky's distributions were based on a Sharing Ratio of 3.49% rather than 11.63%. However, that particular reduction is not at issue on appeal.) Plaintiffs rely on the last sentence of section 3.3, which says, "All Members acknowledge and agree that the Managing Member's reallocation power ... is intended to facilitate providing a new management incentive program after the full distribution from the proceeds of a substantial refinancing 3 3 of 4 " I pursuant to Section 3.02 or 3.03 of SCA's partnership agreement." However, this is merely a statement of intention; it does not actually require the full distribution of proceeds (see Sengillo v Valeo Elec. Sys., Inc., 328 Fed Appx 39, 41-42 [2d Cir 2009]). We have modified the lAS court's declaration accordingly. THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT. ENTERED: APRIL 19, 2016 .~ CLERK 4 4 of 4