Opinion
2011-11-15
McLaughlin & Stern, LLP, New York (Jon Paul Robbins of counsel), for appellant.Robinson Brog Leinwand Greene Genovese & Gluck P.C., New York (Ronald S. Herzog of counsel), for respondent.
McLaughlin & Stern, LLP, New York (Jon Paul Robbins of counsel), for appellant.Robinson Brog Leinwand Greene Genovese & Gluck P.C., New York (Ronald S. Herzog of counsel), for respondent.
Order and judgment (one paper), Supreme Court, New York County (Carol R. Edmead, J.), entered July 19, 2010, which, among other things, granted plaintiff's motion for summary judgment on its first cause of action seeking a declaration that defendant is not entitled to share in any proceeds from the sale of all or part of plaintiff accounting practice to a third party, and so declared, unanimously affirmed, without costs.
Defendant failed to raise an issue of fact as to whether he is an equity partner in plaintiff ( see M.I.F. Sec. Co. v. Stamm & Co., 94 A.D.2d 211, 214, 463 N.Y.S.2d 771 [1983], affd. in part 60 N.Y.2d 936, 471 N.Y.S.2d 84, 459 N.E.2d 193 [1983] ). The motion court properly found that the letter of intent (LOI) controlling the terms of the parties' relationship was unambiguous. Thus, the court properly declined to consider extrinsic evidence to interpret its terms ( see Bailey v. Fish & Neave, 8 N.Y.3d 523, 528, 837 N.Y.S.2d 600, 868 N.E.2d 956 [2007] ). Initially, we note that the LOI's express reference to defendant as an “equity partner” is not determinative ( see Kyle v. Ford, 184 A.D.2d 1036, 1037, 584 N.Y.S.2d 698 [1992] ). The LOI clearly did not provide for defendant to share in plaintiff's profits or losses. Both are essential elements of a partnership agreement, and defendant failed to present any evidence to support his assertion that he would have shared in either profits or losses ( see Matter of Steinbeck v. Gerosa, 4 N.Y.2d 302, 317, 175 N.Y.S.2d 1, 151 N.E.2d 170 [1958], lv. dismissed 358 U.S. 39, 79 S.Ct. 64, 3 L.Ed.2d 45 [1958]; Chanler v. Roberts, 200 A.D.2d 489, 491, 606 N.Y.S.2d 649 [1994], lv. dismissed in part, lv. denied in part 84 N.Y.2d 903, 621 N.Y.S.2d 506, 645 N.E.2d 1204 [1994] ). Moreover, the LOI expressly provided for defendant to receive a Form 1099 rather than a Schedule K–1. As an accountant, defendant understood the difference between these two tax forms. Thus, he knew that his receipt of a 1099 meant that his compensation was not from profits and that he would not share in losses.