CHALINE ESTATES INC v. FURCRAFT ASSOCIATES (2000)

Order, Supreme Court, New York County (Herman Cahn, J.), entered July 26, 2000, which, insofar as appealed from as limited by defendants' brief, in an action seeking, inter alia, dissolution of a partnership and an accounting, granted plaintiff's motion for appointment of a temporary receiver of the partnership's real property, and denied defendants' motion to dismiss the first and third causes of action, unanimously affirmed, with costs.

The motion court correctly granted plaintiff's motion for appointment of a temporary receiver of the real property owned by defendant partnership, in which plaintiff holds a 20% interest and the other defendants collectively hold an 80% interest, based on the fact, admitted by defendants, that the managing partners had purported to cause the partnership to transfer such real property to defendant limited liability company, a newly created entity, without any prior notice to plaintiff.   Such undisputed unlawful disposition of partnership property, regardless of the subsequent notice to plaintiff inviting it to acquire a substitute interest in the transferee entity, manifests a predisposition to take unilateral action in disregard of plaintiff's rights, thereby demonstrating a danger of material injury to the property within the meaning of CPLR 6401(a) (see, Butler v. Gibbons, 225 A.D.2d 335, 638 N.Y.S.2d 634;  Wong v. Wong, 161 A.D.2d 710, 711, 555 N.Y.S.2d 847;  Johnson, Matthey & Co. v. Permadent Mfg. Corp., 16 A.D.2d 750, 227 N.Y.S.2d 281, affd. 12 N.Y.2d 747, 234 N.Y.S.2d 222, 186 N.E.2d 419).   The motion court also correctly denied the motion to dismiss the accounting cause of action, since defendants' purported offer to provide a voluntary accounting only to a minority shareholder of plaintiff, and without providing access to the partnership's books and records, was illusory.   Under these circumstances, we also perceive no error in the denial of the motion to dismiss the cause of action for breach of fiduciary duty and waste.

MEMORANDUM DECISION.