Opinion
2013-1250 K C
04-07-2015
ERNEST & MARYANNA JEREMIAS FAMILY PARTNERSHIP, L.P., Appellant, v. Yuriy SADYKOV, Respondent.
Leon I. Behar, P.C., New York City (Leon I. Behar of counsel), for appellant.
Leon I. Behar, P.C., New York City (Leon I. Behar of counsel), for appellant.
PRESENT: PESCE, P.J., SOLOMON and ELLIOT, JJ.
Opinion
Appeal from a final judgment of the Civil Court of the City of New York, Kings County (Eleanora Ofshtein, J.), entered April 11, 2013. The final judgment, after a nonjury trial, dismissed the petition in a nonpayment summary proceeding. ORDERED that the final judgment is affirmed, without costs.
On April 20, 2012, landlord, a limited partnership, served tenant with a notice of petition and petition alleging the nonpayment of rent totaling $5,421.66, due from November 2011 through January 2012 for a rent-stabilized apartment. Ernest Jeremias, a partner of landlord, verified the petition as landlord's agent. On April 25, 2012, tenant filed an answer, asserting a general denial and a warranty-of-habitability defense. After a nonjury trial, the Civil Court found that tenant was entitled to a complete setoff and, among other things, dismissed the petition. On appeal, landlord principally argues that the entire proceeding is a ity because landlord appeared by Mr. Jeremias, who is not an attorney, citing CPLR 321(a), which requires that corporations and voluntary associations be represented by counsel in court proceedings.
The requirement that corporations and voluntary associations be represented by counsel in court proceedings was added to section 236 of the Civil Practice Act in 1939 (L. 1939, ch. 694, § 2 [“A party ... may prosecute or defend a civil action in person or by attorney, except that a corporation or voluntary association shall appear by attorney”] ) and was subsequently carried over to CPLR 321(a) (4th Prelim. Rep. of Advisory Comm. on Practice and Procedure, at 190–191 [Jan. 2, 1960]; see also Judiciary Law § 495[1][a] ). Authority for the application of CPLR 321(a) to entities other than corporations is sparse. The general rule in New York is that “[w]hen the party to an action is a fictional person—a legal entity with limited liability ... it cannot represent itself but must be represented by a licensed practitioner, whether outside counsel or staff counsel, answerable to the court and other parties for his or her own conduct in the matter” (Matter of Sharon B., 72 N.Y.2d 394, 398, 534 N.Y.S.2d 124, 530 N.E.2d 832 [1988] ). The rule has been applied to the limited liability company, which is “a hybrid entity, combining the corporate limitation on personal liability with the operating and management flexibility of a partnership” (People v. Highgate LTC Mgt., LLC, 69 A.D.3d 185, 187, 887 N.Y.S.2d 298 [2009] ; see Limited Liability Company Law §§ 102[w] ; 203[d] ), and, “like a corporation or voluntary association, ... once formed is a legal entity distinct from its members ... [which] may only be represented by an attorney and not by one of its members who is not an attorney” (Michael Reilly Design, Inc. v. Houraney, 40 A.D.3d 592, 593–594, 835 N.Y.S.2d 640 [2007] ). In dicta, a Supreme Court, New York County, case states that a registered limited liability partnership must be represented by counsel but “a partnership that is not a registered limited liability partnership may appear pro se in a civil action” (Net Leased v. Air Chef, Inc., LLC, 2014 N.Y. Slip Op. 31592 [U], *3, 2014 WL 2859262 [Sup.Ct., N.Y. County 2014] ; cf. Hsu v. Shields, 2012 WL 11846853, *2 [Sup.Ct., Queens County 2012], affd. on other grounds 111 A.D.3d 674, 974 N.Y.S.2d 800 [2013] [“the requirement that a corporation must appear by an attorney does not extend to (a limited liability partnership)”] ).
The federal rule (28 USC § 1654 ), which, like CPLR 321(a), does not explicitly refer to partnerships, has been construed to require that partnerships and other “juridical” entities be represented by counsel (see Rowland v. Cal. Men's Colony, Unit II Men's Advisory Council, 506 U.S. 194, 201–202, 113 S.Ct. 716, 121 L.Ed.2d 656 [1993] [“It has been the law for the better part of two centuries ... that a corporation may appear in the federal courts only through licensed counsel.... As the courts have recognized, the rationale for that rule applies equally to all artificial entities. Thus ... the lower courts have uniformly held that 28 USC § 1654... does not allow corporations, partnerships, or associations to appear in federal court otherwise than through a licensed attorney”]; Reiseck v. Universal Commc'ns of Miami, Inc., 2014 WL 1100140 [S.D.N.Y.2014] ).
As partnerships and limited partnerships preexisted the enactment of Civil Practice Act § 236, the omission therefrom could be deemed intentional (McKinney's Cons. Laws of N.Y., Book I, Statutes § 240; Patrolmen's Benevolent Assn. of City of N.Y. v. City of New York, 41 N.Y.2d 205, 208–209, 391 N.Y.S.2d 544, 359 N.E.2d 1338 [1976] ), but there is authority predating both CPLR 321(a) and Civil Practice Act § 236 which consider partnerships to be subsets of voluntary associations (see e.g. Mabbett v. White, 12 N.Y. 442, 455 [1855] ; Bulkley v. O'Donnell, 148 Misc. 186, 187, 265 N.Y.S. 495 [Sup.Ct., Albany County 1933] ; but see Palladino v. CNY Centro, Inc., 23 N.Y.3d 140, 146, 989 N.Y.S.2d 438, 12 N.E.3d 436 [2014] [“a voluntary unincorporated association ‘is neither a partnership nor a corporation. It is not an artificial person, and has no existence independent of its members' ”], quoting Martin v. Curran, 303 N.Y. 276, 280, 101 N.E.2d 683 [1951] ; cf. Michael Reilly Design, Inc. v. Houraney, 40 A.D.3d at 593–594, 835 N.Y.S.2d 640 ) which could render reference to partnerships and limited partnerships redundant in these statutes. However, unlike a limited liability company, a partnership is generally not considered to be a fictional entity within the meaning of Matter of Sharon B. (see Ederer v. Gursky, 9 N.Y.3d 514, 521–522, 851 N.Y.S.2d 108, 881 N.E.2d 204 [2007] [“Partnership Law § 26... (has) always been understood to mean what (it) plainly say(s): general partners are jointly and severally liable to nonpartner creditors for all wrongful acts and breaches of trust committed by their partners in carrying out the partnership's business, and jointly liable for all other debts to third parties. This proposition follows naturally from the very nature of a partnership, which is based on the law of principal and agent”]; Buckner v. Motor Veh. Acc. Indem. Corp. 66 N.Y.2d 211, 214, 495 N.Y.S.2d 952, 486 N.E.2d 810 [1985] [partnerships are “combination[s] of individuals, who can suffer injuries and do have spouses, households and relatives”]; cf. Partnership Law § 10[1] [“A partnership is an association of two or more persons ... and includes a registered limited liability partnership”]; § 90 [“A limited partnership is a partnership formed by two or more persons ... having as members one or more general partners. The limited partners as such shall not be bound by the obligations of the partnership”] ).
There is an implicit assumption in several New York cases that partnerships require representation. For example, in Old Saratoga Sq. Partnership v. Compton, 19 A.D.3d 823, 825, 798 N.Y.S.2d 743 [2005], the Appellate Division, Third Department, concluded that although a partnership “is not an entity separate from the persons who compose it,” an attorney may represent a partnership of which he or she is a member even if not all of the partners are attorneys, implying that, if the member were not an attorney, outside counsel would be required. In Gilberg v. Lennon, 212 A.D.2d 662, 664, 622 N.Y.S.2d 962 [1995], the Appellate Division, Second Department, found that the plaintiff, a partnership of attorneys, was “not subject to the rule against corporations and voluntary associations appearing pro se in civil actions set forth in CPLR 321(a),” not because the plaintiff partnership need not be represented by counsel, but, apparently, because it was a partnership of attorneys any one of whom could represent the partnership. As such, the representative would be “answerable to the court and other parties for his or her own conduct in the matter” (Matter of Sharon B., 72 N.Y.2d at 398, 534 N.Y.S.2d 124, 530 N.E.2d 832 ). Moreover, the requirement that partnerships and limited partnerships be represented by counsel is not only the rule in the federal system but in many sister states (Forrest Prop. Mgmnt., Inc. v. McGinnis, 2010 WL 4572384 [Tex.App.-Waco 2010] [limited partnerships]; Naylor Senior Citizens Housing, LP v. Side Const. Co., Inc., 423 S.W.3d 238, 246 [Mo.Sup.Ct.2014] [limited partnerships]; E & A Assoc. v. First Nat. Bank of Denver, 899 P.2d 243, 246 [Colo.App.1994] [partnerships]; Matter of Lawrence County Tax Claim Bureau, 998 A.2d 675, 680 and n. 9 [Pa.Commw.2010] [limited partnerships]; Expressway Assoc. II v. Friendly Ice Cream Corp. of Conn., 34 Conn.App. 543, 642 A.2d 62, 66 [1994] [partnerships]; Lee v. Mt. Ivy Press, L.P., 63 Mass.App.Ct. 538, 827 N.E.2d 727 [2005] ; Investors Group I, Ltd. v. Knoxville's Comm. Dev. Corp., 2001 WL 839837 [Tenn.App.2001] [limited partnership] ).
In sum, given that partnerships and limited partnerships were largely subsumed within the definition of voluntary associations when Civil Practice Act § 236 was enacted, and because partnerships and limited partnerships are equivalent to the “artificial” or “juridical” entities recognized in federal and many state courts as requiring representation, as a matter of policy and uniformity of practice, the rule should be the same in New York. This result is consistent with the general rule against lay practice in the courts (Judiciary Law §§ 478, 484 ) and the preference for representation by someone accountable to the court and other parties for his or her malpractice or misconduct (Matter of Sharon B., 72 N.Y.2d at 398, 534 N.Y.S.2d 124, 530 N.E.2d 832 ).
Where it is the answering party that must be represented by an attorney, any action taken by a non-attorney representative of the party, who lacks standing to appear (Boente v. Peter C. Kurth Off. of Architecture & Planning, P.C., 113 A.D.3d 803, 804, 978 N.Y.S.2d 900 [2014] ; People v. Park Ave. Plastic Surgery, P.C., 48 A.D.3d 367, 367, 852 N.Y.S.2d 111 [2008] ; Bilello v. Genesis Seafood, Inc., 12 A.D.3d 474, 474, 783 N.Y.S.2d 876 [2004] ; Mail Boxes Etc. USA v. Higgins, 281 A.D.2d 176, 176, 721 N.Y.S.2d 524 [2001] ; Barretta Realty Skyline v. Principal Land Abstract, LLC, 38 Misc.3d 146[A], 2013 N.Y. Slip Op. 50327[U], *1, 2013 WL 842208 [App.Term, 2d, 11th & 13th Jud.Dists.2013] ), is a ity (Boente, 113 A.D.3d at 804, 978 N.Y.S.2d 900 ; Evans v. Conley, 124 A.D.2d 981, 982, 508 N.Y.S.2d 809 [1986] ), and an adverse determination against such a defending party is deemed entered on default (Boente, 113 A.D.3d at 804, 978 N.Y.S.2d 900 ; see e.g. Megan Holding LLC v. Conason, 37 Misc.3d 135[A], 2012 N.Y. Slip Op. 52117 [U], *1, 2012 WL 5523228 [App.Term, 1st Dept.2012] [dismissing landlord's appeal from a final judgment against it because, landlord, having appeared without counsel, the final judgment must be deemed to have been entered on default] ). Further, it is well settled that a defaulting party's attempt to vacate its default on the ground that it had violated CPLR 321(a) will be rejected “since the rule is not intended to penalize an adverse party for the ... improper appearance” (Jimenez v. Brenillee Corp., 48 A.D.3d 351, 352, 852 N.Y.S.2d 94 [2008] ; see also Lake George Park Commn. v. Salvador, 245 A.D.2d 605, 607, 664 N.Y.S.2d 847 [1997] ; 130 Cedar St. Corp. v. Ct. Press, Inc., 267 App.Div. 194, 197, 45 N.Y.S.2d 304 [1943] ). The failure of a plaintiff required to be represented by counsel to appear by counsel normally requires that its action be dismissed at the outset (Moran v. Hurst, 32 A.D.3d 909, 910, 822 N.Y.S.2d 564 [2006] ; Cinderella Holding Corp. v. Calvert Ins. Co., 265 A.D.2d 444, 444, 696 N.Y.S.2d 858 [1999] ). However, here, it is only after a trial of the merits resulting in an adverse determination that landlord seeks to have its action dismissed ab initio and without prejudice. We see no reason why the rule against penalizing an adverse party for the opposing party's misconduct, essentially one of estoppel, should not likewise be applied to landlord, which improperly commenced the action without counsel. Consequently, landlord's request to reverse the final judgment and to dismiss the petition is rejected.
In view of the foregoing, we need not address landlord's remaining contention.
Accordingly, the final judgment is affirmed.