Opinion ID: 1972014
Heading Depth: 1
Heading Rank: 9

Heading: The Green Parrot Bar

Text: The evidence as to whether respondent had an ownership interest in the liquor licensee whether this interest was disclosed, and whether his conduct constituted gainful pursuit is intertwined. The extensive record reveals that in early 1981, Gordon Long and Craig Brierley sought investors to participate in the purchase of the Green Parrot Bar. A meeting between the interested parties, including respondent and his wife, was arranged at respondent's home. At this meeting, respondent made it known to the others that he was interested in the purchase of the real estate only and not the ownership and operation of the bar. However, he was interested in the bar to the extent that its income would help defer the debt service incurred in purchasing the real estate and suggested his wife as an acceptable partner. Respondent testified that he informed the others at this meeting that they would have to separate the land and the bar by establishing a realty and separate operating company. However, Long and Brierly had already entered into a purchase and sale agreement for the Green Parrot, which included the land and the bar. Nonetheless, a partnership, Green Parrot Realty, was formed to take title to the land, and a corporation, Green Parrot, Inc., was formed to operate the bar. Dennis Crawford, an investor and the attorney who drew up all the necessary papers, testified that respondent was not involved, but that his wife, Gail Yaccarino, was involved in both companies as a partner. No lease was ever drawn up between Green Parrot, Inc. and Green Parrot Realty, and no rent was provided by any method. No mention of respondent was made on Green Parrot, Inc.'s application for a liquor license. Moreover, the deeds and mortgages did not list respondent as a purchser, nor did they reflect his having an interest in the real estate. Respondent testified that his wife prepared and executed a deed transferring her interest in the property to herself and respondent as tenants by the entirety, in order to reflect his ownership interest. However, this deed was never recorded. [3] The Green Parrot purchase-and-sale agreement executed between the partnership, the corporation, and the disclosed owners in their individual capacities subsequent to the closing demonstrate the lack of separation between the partnership and the corporation. [4] Paragraph 8 of the purchase and sale agreement expressly provides that Gail Yaccarino holds the stock in Green Parrot, Inc. and the partnership interest in Green Parrot Realty as the nominee of the respondent. [5] Respondent was also considered to have an insurable interest in the Green Parrot enterprise, reflected in both the purchase-and-sale agreement and the insurance policy obtained on behalf of the corporation. [6] The parties, other than respondent, described the characterization of his wife's interest as a nominee to be a mere formality necessary to obtain insurance on respondent's life. Whether nominal or substantial, respondent's interest in the real estate and the license was interdependent with that of his wife. Moreover, respondent actively participated in the business affairs of the Green Parrot partnership and corporation enterprise. Crawford testified that respondent was present at and participated in the majority of the corporate meetings held for Green Parrot. Respondent's wife, on the other hand, attended fewer than one-half and possibly fewer than one-quarter of these meetings. When the project ran short of funds during the course of renovation, it was respondent whom Long contacted to resolve this problem. Based upon our independent assessment of the record, we find from this evidence beyond a reasonable doubt that respondent was the true owner of the partnership interest in the realty and had a beneficial interest in the stock of the corporation involved in the Green Parrot enterprise. We also find that by not including his name on the Green Parrot deed and mortgage and by not recording the deed between him and his wife and by not including his name in the application for the Green Parrot liquor license, respondent failed to disclose his interest in the property and liquor licensee. In addition, we find that respondent did not merely hold an interest in the real estate and the corporation as an investment; his active participation in the commercial business and operations of the Green Parrot liquor licensee exceeded any need to protect his investment or proprietary interest and was for the purpose of assuring the profitability of the enterprise.