| Neilson v 6D Farm Corp. |
| 2014 NY Slip Op 08409 [123 AD3d 676] |
| December 3, 2014 |
| Appellate Division, Second Department |
[*1]
| Verna B. Neilson, Individually and as a Shareholder of6D Farm Corporation, Respondent, v 6D Farm Corporation et al., Defendants,and Benedict Dairy Farms et al., Appellants. |
Patrick J. Carr, Scarsdale, N.Y., for appellants.
Sandor Frankel, P.C., New York, N.Y. (M. Breeze McMennamin ofcounsel), for respondent.
In an action for an accounting and to recover damages for breach of contract, thedefendants Benedict Dairy Farms and the Estate of Elena Duke Benedict appeal, aslimited by their brief, from (1) so much of an order of the Supreme Court, WestchesterCounty (Jamieson, J.), dated January 24, 2013, as denied their motion for leave to file alate answer, for leave to file an amended answer to add additional counterclaims, and forsummary judgment dismissing the fifth cause of action, which alleged breach of contract,and granted that branch of the plaintiff's cross motion which was to authorize thedefendant 6D Farm Corporation to wind up the business of the defendant Benedict DairyFarms, and (2) so much of an order of the same court dated May 8, 2013, as granted thatbranch of the plaintiff's motion which was to direct their counsel to turn over all books,records, and assets belonging to the defendant Benedict Dairy Farms to the defendant 6DFarm Corporation.
Ordered that the orders are affirmed insofar as appealed from, with one bill ofcosts.
The defendant 6D Farm Corporation (hereinafter 6D) and Elena Duke Benedict(hereinafter Mrs. Benedict), were equal partners in the defendant partnership, BenedictDairy Farms (hereinafter BDF), which was dissolved, by agreement, in 1998. Mrs.Benedict was the managing general partner of BDF, and undertook the winding up ofBDF's business following dissolution.
The plaintiff, one of Mrs. Benedict's daughters and a shareholder of 6D, has beenengaged in various litigation with BDF and Mrs. Benedict since 1997. In 2005, theplaintiff commenced this action seeking, inter alia, an accounting of BDF's assets and torecover damages for Mrs. Benedict's alleged breach of a 1997 agreement to provide 6Dwith information about BDF's business transactions. In 2007, the Supreme Court grantedthe cross motion of Mrs. Benedict to dismiss the complaint in its entirety. On appeal fromthat order, this Court reinstated only the fifth cause of action, which alleged, inter alia, abreach of contract based on a number of transactions in which BDF engaged between2000 and 2005 (see 6D FarmCorp. v Carr, 63 AD3d 903 [2009]).
In August 2009, upon remittal, the plaintiff moved for leave to enter a default [*2]judgment against BDF and Mrs. Benedict, asserting thatthey had not filed an answer to the fifth cause of action. BDF and Mrs. Benedictcross-moved for leave to file a late answer. During the pendency of the motions, Mrs.Benedict, for whom a guardian had been appointed, died. Consequently, the SupremeCourt denied the motion and the cross motion, with leave to renew, and transferred thecase to the Surrogate's Court, Westchester County. In August 2011, the Supreme Courtvacated its prior order, directed the Surrogate's Court to return the case to the SupremeCourt, and again denied the motion and cross motion, with leave to renew.
Almost one year later, in August 2012, attorney Patrick J. Carr, on behalf of BDFand the estate of Mrs. Benedict (hereinafter the estate), moved for leave to serve and filea late answer on their behalf, for leave to serve and file an amended answer to assert acounterclaim alleging fraud against the plaintiff's attorneys, and for summary judgmentauthorizing the estate to wind up BDF's business and fixing the amounts due from 6D toBDF and from BDF to the estate. The plaintiff cross-moved for leave to enter a defaultjudgment and to authorize 6D to wind up BDF's affairs. In an order dated January 24,2013, the Supreme Court, inter alia, granted that branch of the plaintiff's cross-motionwhich was to authorize 6D alone to wind up BDF's business.
Subsequently, the plaintiff attempted unsuccessfully to obtain BDF's books, records,and assets from Carr and Mrs. Benedict's former guardian. The plaintiff thereaftermoved, inter alia, to hold Carr and the guardian in contempt, to impose sanctions uponthem, and to direct them to turn over any books, records, and assets in their possession to6D. In an order dated May 8, 2013, the Supreme Court, inter alia, granted that branch ofthe plaintiff's motion which was to direct Carr and the guardian to turn over the books,records, and assets of BDF to 6D.
Under Partnership Law § 68, "[u]nless otherwise agreed the partnerswho have not wrongfully dissolved the partnership or the legal representative of the lastsurviving partner, not bankrupt, has the right to wind up the partnership affairs; provided,however, that any partner, his [or her] legal representative, or his [or her] assignee, uponcause shown, may obtain winding up by the court." Further, on the death of a partner,"his [or her] right in specific partnership property vests in the surviving partner orpartners, except where the deceased was the last surviving partner, when his [or her]right in such property vests in his [or her] legal representative" (Partnership Law§ 51 [2] [d]; see Silberfeld v Swiss Bank Corp., 273 App Div 686,688 [1948], affd 298 NY 776 [1948]). The representative of a deceased partner isnot entitled to participate in or interfere with the continuation of or winding up ofpartnership business by the surviving partner (see Fogel v Neiman, 288 AD2d429, 430 [2001]).
Based on this authority, the Supreme Court correctly determined that, upon Mrs.Benedict's death, 6D was the only entity with a legal right to wind up BDF's businessaffairs because 6D was the only surviving partner. Moreover, upon Mrs. Benedict'sdeath, the estate had no legal right to BDF's assets, books, records, or business. Rather,all rights to such property vested immediately in 6D, which was the only entityauthorized to wind up BDF's business.
In addition, the Supreme Court correctly denied the appellants leave to serve and filea late answer. CPLR 3012 (d) provides that, "[u]pon the application of a party, the courtmay extend the time to appear or plead, or compel the acceptance of a pleading untimelyserved, upon such terms as may be just and upon a showing of reasonable excuse fordelay or default." Upon an application for an extension of time under CPLR 3012 (d), thecourt may exercise "its discretion in the interests of justice to excuse delay or defaultresulting from law office failure" (CPLR 2005). However, any claim of law office failuremust be supported by a detailed and credible explanation of the default at issue (see Lugauer v Forest City RatnerCo., 44 AD3d 829, 830 [2007]; see also People's United Bank v Latini Tuxedo Mgt., LLC, 95AD3d 1285, 1286 [2012]). A conclusory, undetailed, and uncorroborated allegationof law office failure does not amount to a reasonable excuse (see Forward Door of N.Y., Inc. vForlader, 41 AD3d 535 [2007]; Piton v Cribb, 38 AD3d 741, 742 [2007]; EliteLimousine Plus v Allcity Ins. Co., 266 AD2d 259, 259 [1999]).
Here, as the Supreme Court correctly noted, Carr provided no explanation as to whythe appellants failed to serve and file a timely answer to the fifth cause of action or tomove in a [*3]timely fashion to renew their prior motionfor leave to serve and file a late answer. In fact, there was an unexplained delay of oneyear between the retransfer of the case to the Supreme Court and the motion for leave toserve and file a late answer on behalf of the appellants. Carr's unsubstantiated andconclusory claims were insufficient to establish a reasonable excuse for the failure ofBDF and the estate to serve and file an answer.
The appellants' remaining contentions are without merit. Leventhal, J.P., Hall, Austinand Roman, JJ., concur.