OLIVER v. Mary Boone Gallery, Defendant. (2021)

, J.), entered on or about November 19, 2020, which denied defendants’ CPLR 3211(a)(1), (3), (5), and (7) motion to dismiss the complaint, unanimously affirmed, with costs.

Contrary to defendants’ contention, sections 3.4 and 8.3 of the partnership agreement do not conclusively state a limited partner has to make a capital contribution in order to be entitled to any distribution.  They simply indicate the formula for how the profits are to be allocated and divided.  Although it is clear that the original limited partners made capital contributions, the roster of limited partners has changed drastically during the partnership's existence, and none of the documents provided by defendants conclusively establish whether the incoming limited partners made any contributions to the partnership or whether they received any distribution of the profits.  Further, plaintiff convincingly argues that defendants’ proposed interpretation would conflict with section 9.3 of the agreement, which permits assignment of interest by the general partner without a capital contribution.

The motion court properly determined that plaintiff has standing to pursue his derivative claims and that the claims are timely.  “Conversion is the ‘unauthorized assumption and exercise of the right of ownership over goods belonging to another to the exclusion of the owner's rights’ ” (State of New York v. Seventh Regiment Fund, Inc., 98 N.Y.2d 249, 259, 746 N.Y.S.2d 637, 774 N.E.2d 702 [2002] [citation omitted]).  “If possession of the property is originally lawful, a conversion occurs when the defendant refuses to return the property after a demand or sooner disposes of the property” (Matter of White v. City of Mount Vernon, 221 A.D.2d 345, 346, 633 N.Y.S.2d 369 [2d Dept. 1995]).  Here, there is no dispute that the 19 artworks at issue were lawfully acquired and therefore defendants’ argument that the conversion claim accrued at the time each work was purchased is without merit.  Thus, plaintiff's cause of action against defendants accrued, at the earliest, when Boone exercised ownership over the artworks by taking them to her home and subsequently selling some of them, to the exclusion of the rights of the partnership.  However, the record is silent as to the date when Boone removed the pieces from the gallery to her home.  Furthermore, the complaint alleged that the sale of the three artworks, for which the partnership was not properly compensated, took place at least three years after plaintiff became a limited partner.

Further, plaintiff's relationship with Boone was not shown to be so acrimonious or emotional as to demonstrate that plaintiff cannot act as an adequate representative for the partnership (see Gilbert v. Kalikow, 272 A.D.2d 63, 707 N.Y.S.2d 100 [1st Dept. 2000], lv denied 95 N.Y.2d 761, 714 N.Y.S.2d 711, 737 N.E.2d 953 [2000];  Cialeo v. Mehlman, 210 A.D.2d 67, 67–68, 619 N.Y.S.2d 276 [1st Dept. 1994]).  Next, plaintiff's claims are clearly pleaded, some as derivative and some as individual, there is no confusion, and plaintiff may bring both types of claims (see Pokoik v. Pokoik, 146 A.D.3d 474, 475, 45 N.Y.S.3d 50 [1st Dept. 2017]).

We also find that plaintiff's complaint sufficiently stated a claim for breach of contract (see Harris v. Seward Park Hous. Corp., 79 A.D.3d 425, 426, 913 N.Y.S.2d 161 [1st Dept. 2010]).  In light of the partnership's lack of assets, Boone may be found personally liable for the partnership's debts and plaintiff's claim against her individually is proper at this juncture (see Belgian Overseas Sec. Corp. v. Howell Kessler Co., 88 A.D.2d 559, 559, 450 N.Y.S.2d 493 [1st Dept. 1982]).