Estate of Deceased Partner Could Not Bring Action Regarding Forged Deed Owned by the Partnership

In a decision dated January 12, 2022, the Second Department in Abruzzi v. Bond Realty, Inc., 2022 NY Slip Op 00156, held, inter alia, that that portion of the complaint seeking a judgment declaring a deed to certain real property to be void and to recover damages for fraudulent concealment and unjust enrichment was properly dismissed on summary judgment. The property at issue was held by a partnership and the deed which purported to transfer the property from the partnership to a corporation included the signature of one partner who had been dead for approximately 23 years. The Court explained:

Pursuant to Partnership Law § 51(1), "[a] partner is co-owner with his partners of specific partnership property holding as a tenant in partnership." On the death of a partner his or her right in specific partnership property vests in the surviving partner or partners (see id. § 51[2][d]; Neilson v 6D Farm Corp., 123 AD3d 676, 678). The representative of a deceased partner is not entitled to participate in or interfere with the continuation of or winding up of partnership business by the surviving partner (see Neilson v 6D Farm Corp., 123 AD3d at 678; Fogel v Neiman, 288 AD2d 429, 430).

The Supreme Court properly granted that branch of the Abruzzi defendants' motion which was for summary judgment dismissing the complaint insofar as asserted against them. The [*2]Abruzzi defendants established, prima facie, that the disputed property was held by the three brothers, Thomas, Rocco, and Pasquale, as tenants in partnership, and therefore, upon Pasquale's death in 1969, his interest vested in Rocco and Thomas, the surviving partners of the partnership; and Pasquale's estate was not entitled to, and never acquired, any interest Pasquale may have had in the disputed property prior to his death. Moreover, under the circumstances, Pasquale's alleged signature on the 1992 deed has no significance, as at that point in time, his interest in the disputed property had already vested in the remaining partners, Thomas and Rocco. Further, while a forged deed is void ab initio (see Faison v Lewis, 25 NY3d 220, 225), here, the plaintiff was not aggrieved by the 1992 forged deed, and therefore, does not have standing to bring an action for a judgment declaring said 1992 deed void ab initio on behalf of the estate. For the same reasons, the Abruzzi defendants established their entitlement to summary judgment dismissing the causes of action seeking to recover damages for fraudulent concealment and unjust enrichment insofar as asserted against them. In opposition, the plaintiff failed to raise a triable issue of fact.

The attorneys at Schlam Stone & Dolan frequently litigate issues concerning partnerships and ownership of real estate. Please contact the Commercial Division Blog editors at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.