Opinion
No. 11–P–1752.
2012-07-2
Diane M. BAGG, executrix, & others v. Charlotte DWYER & another.
By the Court (GRASSO, GREEN & HANLON, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
On appeal from two postjudgment orders entered in the Superior Court, defendant Charlotte Dwyer
challenges the confirmation of findings and rulings by a master concerning (i) her right to the return of capital she contributed upon formation of the 15 Hallock Street partnership, and (ii) the treatment of certain mortgage obligations of that partnership. Dwyer also challenges an order approving an accounting of the 15 Hallock Street partnership and the 256 North Pleasant Street partnership conducted pursuant to a prior court order. We discern no clear error in the master's findings of fact, and no error of law warranting relief from the orders. We accordingly affirm the orders, addressing Dwyer's claims in turn.
Defendant Kim M. La Casse has not joined in the appeal.
1. Return of capital. Section 10 of the 15 Hallock Street partnership agreement provides that, upon termination of the partnership, “[t]he assets of the partnership business shall be used and distributed in the following order: (a) to pay or provide for the payment of all partnership liabilities and liquidating expenses and obligations; (b) to repay Charlotte Dwyer the amount paid by her for the ‘buy-down’ and for the $3,000 placed by her in the partnership operating account at the commencement of the partnership; (c) the sum remaining after a and b will be divided in proportion with the partnership interests.” Nowhere does the agreement provide for the repayment of capital contributions, except to the extent amounts might be distributed (in proportion to partnership interests) from remaining cash under clause (c). Dwyer's reliance on G.L. c. 108A, §§ 18( a ) and 40, is misplaced, as the statute governs only in the absence of the partners' agreement to the contrary. “Where an agreement addresses a particular issue, the terms of the agreement control.” BPR Group Ltd. Partnership v. Bendetson, 453 Mass. 853, 863 (2009). The master and the motion judge concluded that the 15 Hallock Street partnership agreement provided for a process of distribution upon dissolution, and that agreement, rather than the statute, therefore controls. We accordingly discern no error in their related conclusion that Dwyer is not entitled to a repayment of her capital contribution.
2. 15 Hallock Street mortgage. The master treated the mortgage on the 15 Hallock Street property as a partnership debt. Dwyer argues that the partnership agreement explicitly provides that the mortgage was assumed by the plaintiffs and La Casse and not by Dwyer, and that treating it as a general partnership debt unfairly shifts part of the debt from the plaintiffs to Dwyer. However, Dwyer cites no authority to support her assertion that the mortgage was not a partnership debt, nor does she refute or even address the applicability of the authority cited by the motion judge. This fails to rise to the level of appellate argument. See Mass.R .A.P. 16(a)(4), as amended, 367 Mass. 921 (1975); Zora v. State Ethics Commn., 415 Mass. 640, 642 n. 3 (1993).
In any event, we discern no clear error in the master's findings on this issue. The parties obtained the mortgage to allow the partnership to purchase the 15 Hallock Street property. The master credited the parties' testimony that they treated the mortgage as a partnership debt both for tax purposes and by paying it using partnership funds. “Where parties act on a particular construction of written instruments ‘such construction will be of great weight and will usually be adopted by the court.’ “ C.K. Smith & Co. v. Charest, 348 Mass. 314, 319 (1965), quoting from Canadian Club Bev. Co. v. Canadian Club Corp., 268 Mass. 561, 569 (1929). See Sher v. Malden Taxi, Inc., 4 Mass.App.Ct. 404, 409–410 (1976) (loan is not capital contribution if it is intended to be paid by partnership). The motion judge committed no error in concluding that “the master's determination that the mortgage was a partnership debt was not clearly erroneous.”
3. Accounting. The motion judge had ordered that the master “see to an accounting by a certified public accountant,” which was to be performed by examining “the books and records of the partnerships” to determine, among other things, the “profits distributed and retained.” Dwyer argues that the accountant's decision to look at the surplus funds available rather than calculating annual profits and losses was in error. She also asserts that the accounting was invalid because it was not based on “original books and ledgers.”
The accountant testified that he computed the amount owed to each party by looking to the “cash that was available at the end,” because it was immaterial whether “cash was generated through operating profits or whether it was generated through the sale of property.” Because there was no evidence that the partnership ever distributed any profits, we discern no error of law or abuse of discretion in the determination by the motion judge to accept the accountant's explanation.
The motion judge similarly did not abuse his discretion in concluding that the evidence on which the accounting was based was fundamentally accurate and sufficient to establish that there was an accounting in accordance with the prior court order. The accountant testified that he compared the summaries of loans that plaintiff Marlyn H. Reynolds provided with bank statements, and that he “believed that [the summaries] reflected an accurate statement of the partnership assets.” In addition, Reynolds testified that her summaries were copied directly from the original partnership ledgers.
The orders of the Superior Court entered on March 21, 2011, and April 8, 2011, are affirmed.
In the exercise of our discretion, we deny the plaintiffs' request for attorney's fees.
So ordered.