                            State of New York
                     Supreme Court, Appellate Division
                        Third Judicial Department
Decided and Entered: June 18, 2015                       520081
________________________________

SHELDON B. STAUNTON et al.,
                    Respondents,
      v                                       MEMORANDUM AND ORDER

RICHARD B. BROOKS,
                    Appellant.
________________________________


Calendar Date:   May 1, 2015

Before:   McCarthy, J.P., Egan Jr., Lynch and Clark, JJ.

                               __________


      Assaf & Siegal, PLLC, Albany (David M. Siegal of counsel),
for appellant.

      Hiscock & Barclay, LLP, Albany (David B. Cabaniss of
counsel), for respondents.

                               __________


Clark, J.

      Appeal from an order of the Supreme Court (Kramer, J.),
entered February 20, 2014 in Schenectady County, which, among
other things, denied defendant's motion for summary judgment.

      In 1984, defendant and plaintiffs, all medical doctors,
along with two other individuals, formed a partnership named
Medical Arts Associates, which owned real property containing
office and storage space located at 1401 and 1405 Union Street in
the City of Schenectady, Schenectady County. In the same year,
defendant and plaintiffs formed a corporation called Neurologic
Associates of Northeastern New York (hereinafter NANNY), which
rented office and storage space at both 1401 and 1405 Union
Street from Medical Arts. In 2005, defendant, who had become the
sole shareholder of NANNY, terminated plaintiffs from their
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employment with NANNY. Plaintiffs then formed a separate
corporation called Schenectady Neurological Consultants
(hereinafter SNC), which also rented space from Medical Arts. In
the spring of 2006, NANNY stopped renting space at 1401 and 1405
Union Street and, subsequently, SNC's rent was reduced, resulting
in financial instability for Medical Arts. As a result, 1405
Union Street was sold and 1401 Union Street was foreclosed upon
and sold at auction.

      Plaintiffs thereafter commenced this action, seeking, among
other things, an accounting between the parties, a declaration of
defendant's share of Medical Arts and monetary judgments against
defendant for breach of contract and unjust enrichment.
Defendant subsequently moved for summary judgment, seeking, among
other things, a determination that he withdrew as a partner from
Medical Arts in July 2008, that SNC owed rent to Medical Arts,
and that, in calculating defendant's share in the partnership, he
is entitled to a credit relative to SNC's rental arrears plus
$100,000 that he paid to avoid a deficiency judgment. Defendant
also moved pursuant to CPLR 4212 requesting that Supreme Court
schedule an inquest before a referee to determine the value of
his interest in Medical Arts. Supreme Court denied defendant's
motions and determined that plaintiffs had a right to a trial by
jury. Defendant appeals, and we affirm.

      To prevail on a motion for summary judgment, the moving
party must establish prima facie entitlement to judgment as a
matter of law by adducing sufficient competent evidence to show
that there are no issues of material fact (see Alvarez v Prospect
Hosp., 68 NY2d 320, 324 [1986]; Lacasse v Sorbello, 121 AD3d
1241, 1241 [2014]). Only when the movant bears this burden and
the nonmoving party fails to demonstrate the existence of any
material issue of fact will the motion be properly granted
(see Lacasse v Sorbello, 121 AD3d at 1241-1242). As relevant
here, the Medical Arts partnership agreement provides that a
partner may compel the partnership to buy his or her interest in
the partnership so long as the partner gives notice to the
management committee along with a written appraisal assessing the
fair market value for the transferring partner's share. Within
10 days of receipt of the initial notice, the management
committee is required to hold a meeting of the remaining partners
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to decide whether to accept the transfer at the transferring
partner's proposed rate (the transfer option), to convene an
appraisal committee to get a second opinion on the value of the
transferring partner's share (the appraisal option) or to sell
the property in question and dissolve the partnership (the sale
option). Thereafter, within three days of such meeting, the
management committee must notify the transferring partner which
option it has chosen and, if it chooses the appraisal option,
within 10 days after electing this option, the remaining partners
are to contact an appraiser who, together with the transferring
partner's appraiser, will choose a third independent appraiser to
form an appraisal committee. Within 30 days of the appraisal
committee's formation, it must provide an appraisal of the fair
market value of the share to be transferred and the management
committee must thereafter hold a closing, upon notice to each
partner.

      In support of his motion regarding his withdrawal,
defendant provided evidence of a letter that he sent to
plaintiffs in March 2007 expressing his desire to withdraw from
Medical Arts. Defendant does not dispute that he failed to
submit an appraisal with this letter or that he waited until over
a year later, in July 2008, to submit an appraisal. It was not
until February 2009 that an appraisal committee was formed and
appraised Medical Arts' assets. Given that both plaintiffs and
defendant failed to follow the procedure set out in the
partnership agreement, the agreement is susceptible to more than
one reasonable interpretation – both that defendant withdrew when
he submitted his appraisal and that he never withdrew because his
appraisal was one year late – and, therefore, the withdrawal
issue cannot be properly determined on a motion for summary
judgment (see LHR, Inc. v T-Mobile USA, Inc., 112 AD3d 1293,
1297-1298 [2013]; Schaufler v Mengel, Metzger, Barr & Co., 296
AD2d 742, 743 [2002]).

      Even if defendant had met his initial burden on the issue
of his withdrawal, plaintiffs raised an issue of fact through
their proof that defendant was considered a partner on Medical
Arts' tax returns from 2006 to 2011. The tax returns listed
defendant's share of Medical Arts' profit or loss as equal to
that of plaintiffs through 2011. Moreover, plaintiff Sheldon B.
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Staunton asserted that defendant never withdrew from the
partnership because he never paid his share of the partnership's
debt as required by the partnership agreement. Thus, we agree
with Supreme Court that a factual issue exists as to whether –
and, if so, when – defendant withdrew from Medical Arts, which
requires an interpretation of the partnership agreement to decide
if his actions constituted a withdrawal.

      With regard to the issue of SNC's rental arrears, defendant
adduced evidence that a lease for 1401 Union Street was signed
between SNC and Medical Arts in April 2006, which provided that
SNC was to pay $76,755.24 per year to Medical Arts. In September
2006, a second lease was signed between SNC and Medical Arts,
which provided for an annual rent of only $43,845.60. Defendant
submitted evidence that, rather than discuss the reduced rent
with him, plaintiffs informed him that they intended to change
the terms of SNC's lease and the rent was changed without his
knowledge, which, according to defendant, constituted an
unauthorized ultra vires action.1 Even if we were to find that
defendant established prima facie entitlement to judgment as a
matter of law that plaintiffs' reduction of SNC's rent was
outside of their authority, which we do not, plaintiffs
nonetheless presented conflicting evidence to raise an issue of
fact (see Martin v I Bldg Co., Inc., 126 AD3d 861, 862 [2015]).
Specifically, according to plaintiffs, all three partners agreed
to lower SNC's rent because they knew that SNC would move to a
different location if Medical Arts did not do so. Moreover,
Staunton asserted that defendant left Medical Arts in the lurch
when he assured plaintiffs that he would keep his practice at
1401 Union Street and continue paying rent there, and then
abruptly left the building and began practicing in the City of


     1
        We note that defendant presented undisputed evidence that
he paid $100,000 to satisfy his personal obligation with regard
to a deficiency judgment after 1401 Union Street was sold in
foreclosure. Issues of fact preclude summary judgment on the
issue of whether defendant is entitled to a credit for this
payment inasmuch as a deficiency judgment was thereafter entered
against plaintiffs for nearly $300,000 as a result of the same
foreclosure.
                              -5-                  520081

Albany. Staunton claimed that he and plaintiff Bruno P. Tolge
were each forced to contribute nearly $35,000 of their personal
funds to Medical Arts in an attempt to meet its expenses.
Viewing the evidence in the light most favorable to plaintiffs,
questions of fact remain as to whether, and to what degree,
defendant agreed to the arrangement in the second SNC lease
(see O'Neill v Pinkowski, 92 AD3d 1063, 1065-1066 [2012]; Nudi v
Schmidt, 63 AD3d 1474, 1477 [2009]).

      Finally, we agree with Supreme Court that plaintiffs are
entitled to a jury trial. In determining whether a party is
entitled to a jury trial, "the relevant inquiry 'is not whether
an equitable counterclaim exists but whether, when viewed in its
entirety, the primary character of the case is legal or
equitable'" (Moser v Devine Real Estate, Inc. [Florida], 42 AD3d
731, 736 [2007], quoting Cadwalader Wickersham & Taft v Spinale,
177 AD2d 315, 316 [1991]). Here, plaintiffs seek equitable
relief – an accounting of defendant's share of Medical Arts and
an account stated between the parties – only for the purpose of
determining the money judgment against defendant. Therefore,
Supreme Court properly determined that plaintiffs are entitled to
a jury trial (see Moser v Devine Real Estate, Inc. [Florida], 42
AD3d at 737; Harris v Trustco Bank N.Y., 224 AD2d 790, 791
[1996]).

     McCarthy, J.P., Egan Jr. and Lynch, JJ., concur.


     ORDERED that the order is affirmed, with costs.




                             ENTER:




                             Robert D. Mayberger
                             Clerk of the Court
