Joseph Marini, Plaintiff, v. LP MARINI BUILDERS LP MARINI SERVICES LLC ROBERT MARINI JR STEVEN MARINI MICHAEL MARINI (2025)

Plaintiff Joseph Marini commenced this commercial action on April 19, 2024, seeking a judicial declaration that he "has a viable 25% interest in Marini Realty, LP and status as a limited partner . . . under the Partnership Agreement" (NYSCEF Doc No. 1 ["Complaint"], Wherefore).

At the preliminary conference, held on November 6, 2024, all parties "agree[d] [that] this matter is ripe for judicial review" in the form of cross motions for summary judgment on a stipulated factual record (NYSCEF Doc No. 23).

Plaintiff now moves under CPLR 3212 for a declaration recognizing him as a limited partner of defendant Marini Realty, LP ("Marini Realty"). Defendants oppose the motion and cross-move for a declaration that plaintiff "is not a partner of defendant Marini Realty LP and that, as an assignee [of a partnership interest,] Plaintiff is entitled" only to a proportionate "distribution of profits and losses" (NYSCEF Doc No. 45).

BACKGROUND

Robert V. Marini, Sr. ("Robert Sr.") and Nancy Marini ("Nancy") were the parents of plaintiff Joseph Marini ("Joseph") and defendants Robert Marini, Jr. ("Robert Jr."), Steven Marini ("Steven") and Michael Marini ("Michael") (see NYSCEF Doc No. 26 ["Stipulated Facts"], ¶ 1).

Defendants Marini Realty, Marini Builders, LP ("Marini Builders") and Marini Services, LLC ("Marini Services") are domestic limited partnerships engaged in the businesses of commercial and residential real-estate development, homebuilding and construction (see id., ¶¶ 2-4). Marini Builders is the general partner of Marini Realty, and Marini Services is a limited partner (see id., ¶¶ 3-4).

Robert Sr. and Nancy formed Marini Realty on December 31, 1997 pursuant to a Limited Partnership Agreement (see NYSCEF Doc No. 27) that was amended and restated in 2012 (see NYSCEF Doc No. 2 ["Partnership Agreement"]; see also Stipulated Facts, ¶ 5).

When Marini Realty was formed, Robert Sr. and Nancy were the only partners, and the partnership "became a vehicle through which [they] could make equal gifts for the benefit of their four sons" (Stipulated Facts, ¶¶ 6-7). "This process was effectuated through the creation of four additional partnerships: Marini Asset Management I LP, Marini Asset Management II LP, Marini Asset Management III LP, and Marini Asset Management IV LP, each of which had a 25% partnership interest in Marini Realty" (id., ¶ 8).

"Joseph was the general and managing partner of Marini Asset Management IV ('Marini IV')" (id., ¶ 9), which "had a 25% limited partner interest in Marini Realty" (id., ¶ 10). However, Joseph executed "a Redemption Agreement with respect to his interest in Marini IV and resigned as general partner [thereof] on November 10, 2010" (id., ¶ 11; see NYSCEF Doc Nos. 3-4). "Marini IV's 25% partnership interest in Marini Realty was ultimately transferred to Michael, Robert Jr., and Steven" (Stipulated Facts, ¶ 12).

"In 2012, the Huntington Associates Asset Protection Trust (the 'Trust') was created pursuant to an irrevocable agreement dated July 1, 2012 (the 'Trust Agreement') among Robert Jr., Steven, and Michael, as grantors, and Robert Sr. as sole trustee, with Joseph named sole lifetime beneficiary" (id., ¶ 13; see NYSCEF Doc No. 5). "Robert Jr., Steven, and Michael . . . funded [the Trust] with a 25% partnership interest in Marini Realty" (Stipulated Facts, ¶ 16).

"At or about the time of the transfer of a 25% partnership interest in Marini Realty to the Trust, Robert Jr., Steven, and Michael caused their remining interests in Marini Realty to be transferred to Marini Builders and Marini Services" (id., ¶ 17). "Thus, as of July 2, 2012," the date on which the amended and restated Partnership Agreement was signed (see Partnership Agreement at 9; see also Stipulated Facts, ¶ 19), "Marini Realty consisted of three partners: the Trust, Marini Builders LP, and Marini Services LLC" (Stipulated Facts, ¶ 18).

"The Trust Agreement was amended on or about December 10, 2013 to appoint Nancy as co-trustee" (id., ¶ 20; see NYSCEF Doc No. 6). "Nancy took primary control of carrying out the terms of the Trust because of Robert Sr.'s declining health" (Stipulated Facts, ¶ 22). "Robert Sr. died on April 22, 2020" (id., ¶ 23).

"By written request dated August 4, 2021, Joseph sought termination of the Trust and distribution of all Trust assets to him, including 25% partnership interest in Marini Realty" (id., ¶ 24; see NYSCEF Doc No. 7). "In response, Nancy caused the Trust to execute a document entitled 'Assignment of Limited Partnership Interest' " (Stipulated Facts, ¶ 25; see NYSCEF Doc No. 8 ["Assignment"]). Robert Jr., Steven, and Michael objected to distribution of the Trust corpus, claiming, among other things, that (i) Nancy was not the sole Trustee, and (ii) their consent to the transfer was required (see id., ¶ 26).

"Joseph and Nancy, through counsel, commenced a proceeding by filing a Verified Petition in the State of New York Surrogate's Court, Albany County. Plaintiff, and Nancy as trustee, sought an order declaring that . . . Nancy was the sole trustee of the Trust; and that the distribution of the Trust assets to Plaintiff, including the Assignment, was a valid exercise of her power under the Trust Agreement" (id., ¶ 27). Surrogate's Court granted the petition on December 14, 2022 (see NYSCEF Doc No. 11 ["Surrogate's Decision"]).

Following the Surrogate's Decision, Joseph made various requests of Marini Realty, including requests to be recorded as a 25% limited partner and for access to tax returns and other financial information (see Stipulated Facts, ¶¶ 29-31). Defendants denied the bulk of Joseph's requests, taking "the position that Joseph was not a limited partner of Marini Realty, but merely an assignee of a partnership interest" (id., ¶ 32).

This action ensued, and each side now moves under CPLR 3212 for a declaration of rights in their favor.

DISCUSSION

To obtain summary judgment, the movant "must establish [its] 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" (Staunton v Brooks, 129 AD3d 1371, 1372 [3d Dept 2015]).

A. The Parties' Contentions

1. Plaintiff's Position

In maintaining that he is a limited partner of Marini Realty, Joseph relies principally on a section of the Partnership Agreement captioned "Partners; Assignment," which reads as follows:

(a) No additional partner or partners shall be admitted to the Partnership without the consent of all the Partners. Any new partner duly admitted to the Partnership shall promptly execute this agreement or a counterpart hereof.

(b) No Partner may sell, assign, pledge, or transfer in any other manner, with or without consideration, all or any part of his interest in the Partnership without having first obtained the written consent of the other Partners and such consent shall not be unreasonably withheld. Notwithstanding the foregoing, a Partner may transfer all or any portion of his Partnership Interest, by will or gift, to his spouse, his descendants, ancestors or any trust created for the benefit of such persons or the Partner himself (Partnership Agreement at 5).

According to plaintiff, the language of part (b) ("Assignments Clause") allowed "a partner (in this instance the Trust) . . . to confer the interest in the Trust created for the benefit of Joseph directly to Joseph" (NYSCEF Doc No. 43 ["MOL"] at 7). Plaintiff further contends that he is not an "additional partner" within the language of part (a) ("Admissions Clause") because "he previously held a partnership interest in Marini Realty through Marini IV, that interest was subsequently transferred to the Trust for his benefit, and then retransferred from the Trust back to him through the Assignment" (id.). "Under the terms of the Partnership Agreement, Joseph has therefore been returned to all of the rights and privileges he previously had (through Marini IV) as a limited partner of Marini Realty" (id. at 7).

Plaintiff also supports his reading of the Partnership Agreement by reference to the language governing "Successors and Assigns":

This Agreement and all the terms and provisions hereof shall be binding upon and shall inure to the benefit of the Partners and their respective heirs, executors, administrators, successors and permitted assigns. Any person acquiring or claiming an interest in the Partnership, in any manner whatsoever, shall be subject to and bound by all the terms, conditions and obligations of this Agreement to which its predecessor in interest was subject or bound . . . . No person shall have any rights or obligations relating to the Partnership greater than those set forth in this Agreement and no person shall acquire an interest in the Partnership or become a Partner thereof except as permitted by the terms of this Agreement (Partnership Agreement at 7 [emphasis added]).

Arguing that he was a "permitted assign[ ]" under the quoted language ("Successors & Assigns Clause"), plaintiff maintains that "all the terms and provisions of the Agreement inure to his benefit" (MOL at 8).

Plaintiff also seeks to draw support for his position from the Surrogate's Decision upholding "the distribution of the [T]rust corpus to Joseph, including the distribution of a certain limited partnership interest" (Surrogate's Decision at 1-2; see MOL at 8-10).

2. Defendants' Position

Defendants contend that the "plain language of the 2012 Partnership Agreement establishes that the Assignment did not bestow upon Joseph the status of a 25% partner in Marini Realty" (NYSCEF Doc No. 50 ["Opp Mem"] at 9).

"As established by the uncontested facts of this case, . . . Joseph has never been a partner of Marini Realty. Instead, . . . Joseph's historical connection to Marini Realty derived exclusively from the fact that [Marini] IV was a 25% partner in Marini Realty — and that Joseph, in turn, was a partner of [Marini] IV" (id. at 9-10 [internal citations omitted]). Moreover, "at the time the 2012 Partnership Agreement came into existence, the only partners of Marini Realty were (1) the Trust; (2) Marini Builders; and (3) Marini Services" (id.). "Because Plaintiff was not a partner of Marini Realty at any time . . . , he would by definition constitute an 'additional partner,' " for whom the consent of all partners is required under the Admissions Clause.

"Given that the partners of Marini Realty did not consent to the admission of Plaintiff as an additional partner, then the assignment did not result in Plaintiff being admitted as an additional partner of Marini Realty" (id. at 11). Under the Assignments Clause and New York's Revised Limited Partnership Act ("RLPA"), "[t]he only effect of [such] an assignment is to entitle the assignee to receive, to the extent assigned, the distributions and allocations of profits and losses to which the assignor would be entitled" (RLPA § 121-702 [a] [3]).

Defendants also dismiss plaintiff's reliance on the Successors & Assigns Clause, arguing that its "generic language" must be read together with the Admissions Clause, which permits an assignee to become a partner only with the affirmative consent of all partners (see Opp Mem at 14-15).

Finally, defendants argue that the Surrogate's Decision did not address the effect of the Assignment or Joesph's status in relation to Marini Realty following execution of the Assignment (see id. at 17).

B. The RLPA and Partnership Agreement

All parties agree that the RLPA is the statutory framework governing Marini Realty.¹ The RLPA "is in many respects a 'default statute' that allows limited partnerships to chart their own course of governance, but imposes rules if the partnership does not explicitly opt out of specific provisions. Many substantive provisions in the act are qualified by the phrase 'except as may be provided otherwise in the partnership agreement' " (A&F Hamilton Hgts. Cluster, Inc. v Urban Green Mgt., Inc., 186 AD3d 409, 414 [1st Dept 2020]).

Under the RLPA's default rules, "[a] partnership interest is assignable in whole or in part" (RLPA § 121-702 [a] [1]), but "[a]n assignment of a partnership interest does not dissolve a limited partnership or entitle the assignee to become or to exercise any rights or powers of a partner" (id. [a] [2]). "The only effect of an assignment is to entitle the assignee to receive, to the extent assigned, the distributions and allocations of profits and losses to which the assignor would be entitled" (id. [a] [3]).

The default provisions for an assignee to become a limited partner are set forth in RLPA § 121-704 (a), which reads: "An assignee of a partnership interest, including an assignee of a general partner, may become a limited partner if (i) the assignor gives the assignee that right in accordance with authority granted in the partnership agreement, or (ii) all partners consent in writing, or (iii) to the extent that the partnership agreement so provides."

The foregoing provisions concern the effect of an assignment of a "partnership interest." As used in the RLPA, the term " 'Partnership interest' means: (i) a partner's share of the profits and losses of a limited partnership; and (ii) a partner's right to receive distributions" (RLPA § 121-101 [m]; see In re Schick, 235 BR 318, 324 [SD NY 1999]). Thus, "partnership interest" is defined solely in economic terms.

It is apparent from the foregoing that the default provisions of the RLPA draw a fundamental distinction between the assignment of economic rights attendant to a partnership interest and the voting, management and other governance rights associated with status as a partner. Economic rights are freely assignable under the RLPA, but the governance rights of partnership are available only if authorized by the partnership agreement or if all partners consent in writing.

For the most part, the Partnership Agreement closely tracks the default provisions of the RLPA, with a few notable exceptions. Unlike the free assignability of partnership interests under the RLPA, the Assignments Clause generally prohibits the assignment of "all or any part of [a partner's] interest in the Partnership without . . . the written consent of the other Parties," subject to the requirement that such "consent shall not be unreasonably withheld." However, through the notwithstanding language of the second sentence, the Assignments Clause permits a partner to assign "all or any portion of [the partner's] Partnership Interest, by will or gift, to his spouse, his descendants, ancestors or any trust created for the benefit of such persons or the Partner himself."

The Admissions Clause, which provides that "[n]o additional partner . . . shall be admitted to the Partnership without the consent of all Partners," is substantially similar to RLPA § 121-704 (a), which requires the written consent of all partners or authorization in the partnership agreement.

Finally, the critical language of the Assignments Clause refers to the assignment of a "Partnership Interest" or "interest in the Partnership," but such terms are not defined within the Partnership Agreement.

C. Analysis

Reading the Partnership Agreement in light of the RLPA — the statutory framework pursuant to which Marini Realty was formed (see Partnership Agreement at 1) — the Court concludes that the Assignment of the Trust's 25% partnership interest in Marini Realty did not have the effect of admitting Joseph to the partnership; the only legal effect was conveyance of the economic rights associated with that 25% interest.

Initially, the Court agrees with defendants that the second sentence of the Assignments Clause, which allows a partner to assign a "Partnership Interest" by will or gift to a spouse, descendant, ancestor or a trust created for the benefit of such persons or the partner himself ("Family Gift Exception"), supersedes only the preceding sentence within the same clause — the requirement that all other partners consent to assignment — and does not affect the freestanding Admissions Clause preceding the Assignments Clause.

This reading is consistent with the text and structure of the "Partners; Assignment" section and the two-tier system of economic and governance rights reflected in the RLPA and Partnership Agreement. The focus of the Assignments Clause is the transfer of a "Partnership Interest," and under the default definition of RLPA § 121-101 (m), which was not superseded in the Partnership Agreement, that term is limited to the bundle of economic rights associated with an interest in the partnership. Moreover, the narrower construction of the Family Gift Exception advanced by defendants better comports with the fundamental principle "at the heart of the partnership concept[:] . . . partners may choose with whom they wish to be associated" (Gelder Med. Group v Webber, 41 NY2d 680, 684 [1977]).

The Court therefore concludes that the Family Gift Exception authorizes intra-familial assignments of economic interests without the consent of the other partners, but an assignment made pursuant to that authority does not admit the assignee as a partner of Marini Realty; that is a matter that must be addressed under the Admissions Clause and other provisions of the Partnership Agreement. Thus, the Assignments Clause with Family Gift Exception permits beneficial economic transfers within families, while protecting the governance rights of existing partners.

Here, the Trust validly assigned its "Partnership Interest" to Joseph through the Family Gift Exception. The effect of this assignment was to convey to Joseph the economic rights associated with a 25% interest in Marini Realty, thus entitling him to receive proportionate distributions and profit/loss allocations under RLPA § 121-101 (m).

To become a limited partner of Marini Realty without the consent of its current partners, Joseph must show that "the partnership agreement so provides" (RLPA § 121-704 [a] [iii]). In this regard, Joseph relies on language within the Admissions Clause prohibiting the admission of an "additional partner . . . without the consent of all Partners." From this, Joseph argues that "he previously held a partnership interest in Marini Realty through Marini IV, that interest was subsequently transferred to the Trust for his benefit, and then retransferred from the Trust back to him through the Assignment" (MOL at 7). "Under the terms of the Partnership Agreement, Joseph has therefore been returned to all of the rights and privileges he previously had (through Marini IV) as a limited partner of Marini Realty" (id.).

The Court does not find plaintiff's argument to be persuasive for several reasons. First, Joseph never was a partner of Marini Realty. His historical connection derives solely from his former role as a partner of Marini IV (see Stipulated Facts, ¶¶ 8-10). When the amended and restated Partnership Agreement for Marini Realty was executed in 2012, there were just three partners: Marini Builders, Marini Services and the Trust. Under the plain language of the Admissions Clause, Joseph therefore is an "additional partner" of Marini Realty whose admission requires the consent of all partners.

And even if Joseph previously had been an admitted partner of Marini Realty, nothing in the text of the Admissions Clause provides for the automatic readmission of former partners. Joseph, as an assignee of a partnership interest, seeks to become an "additional partner" of Marini Realty, and absent the unanimous consent of the current partners, he is subject to the default provision of RLPA § 121-704 (a) (iii), which requires an affirmative source of authority for admission within the Partnership Agreement.

Plaintiff's reliance on the Successors & Assigns Clause as the source of that authority is unavailing. The boilerplate language of the clause merely ensures that assignees are bound by the Partnership Agreement's terms and obligations; the clause does not override the specific partner admission requirements established in the RLPA and confirmed in the Admissions Clause. In fact, the language of the Successors & Assigns Clause stating that no person shall "acquire an interest in the Partnership or become a Partner thereof except as permitted by the terms of this Agreement" expressly refers back to the agreement's other terms, including the Admissions Clause, and does not purport to constitute an independent source of "permi[ssion]" for an assignee to "become a Partner."

Finally, although the Surrogate's Decision upheld Nancy's authority as sole trustee to assign the Trust corpus to Joseph, including the Trust's 25% partnership interest in Marini Realty (see Surrogate's Decision at 1-2), that court was not called upon to determine the legal effect of the assignment relative to Joseph's right to be admitted to the partnership (see NYSCEF Doc No. 53 at 14 ["It is correct that the Surrogate's Court did not specifically address whether the Assignment resulted in Joseph becoming a limited partner."]).

Construing the Partnership Agreement "to give effect to the parties' intent as gleaned from the four corners of the document itself" (Elmira Teachers' Assn. v Elmira City School Dist., 53 AD3d 757, 759 [3d Dept 2008], lv denied 11 NY3d 709 [2008]), the Court is satisfied that its clear and unambiguous terms deny Joseph the status of a limited partner in Marini Realty. Joseph is entitled only to the economic benefits of the 25% interest received via the Assignment.

CONCLUSION

Based on the foregoing,² it is

ORDERED that plaintiff's motion for summary judgment is denied; and it is further

ORDERED that defendants' cross motion for summary judgment is granted; and finally it is

ORDERED, ADJUGED and DECLARED that: (i) plaintiff is not a limited partner of Marini Realty LP; and (ii) as an assignee of a partnership interest, plaintiff is entitled to receive profits/losses and distributions from Marini Realty LP in proportion to his interest therein.

This constitutes the Decision, Order & Judgment of the Court, the original of which is being uploaded to NYSCEF for entry by the Albany County Clerk. Upon such entry, counsel for defendants shall promptly serve notice of entry on all parties entitled to such notice.

Dated: July 2, 2025

Albany, New York

RICHARD M. PLATKIN

A.J.S.C.

Papers Considered:

NYSCEF Doc Nos. 1-18, 24-57.

FOOTNOTES

1.   The Partnership Agreement suffers from a scrivener's error, mistakenly referring to the "Revised Uniform Limited Partnership Act" (see MOL at 4 n 3; Opp Mem at 7).

2.   The Court has considered plaintiff's remaining arguments and contentions, but finds them unavailing.

Richard M. Platkin, J.