Court Opinion

ID: 4082115
Source: CourtListenerOpinion
Date Created: 2016-10-07 23:32:41.062997+00
Date Added: 2024-06-11T14:34:57.988958
License: Public Domain

SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

735
CA 14-02254
PRESENT: CENTRA, J.P., PERADOTTO, LINDLEY, VALENTINO, AND DEJOSEPH, JJ.

ESTATE OF DAVID J. KINGSTON, DECEASED, BY
EXECUTOR, MONICA KINGSTON,
PLAINTIFF-RESPONDENT-APPELLANT,

                    V                             MEMORANDUM AND ORDER

KINGSTON FARMS PARTNERSHIP, ROBERT KINGSTON AND
DANIEL J. KINGSTON,
DEFENDANTS-APPELLANTS-RESPONDENTS.

HARTER SECREST & EMERY LLP, ROCHESTER (BRIAN M. FELDMAN OF COUNSEL),
AND RANDOLPH A. MEYER, GENESEO, FOR DEFENDANTS-APPELLANTS-RESPONDENTS.

THE LAW OFFICE OF PETER K. SKIVINGTON, PLLC, GENESEO (PETER K.
SKIVINGTON OF COUNSEL), FOR PLAINTIFF-RESPONDENT-APPELLANT.

     Appeal and cross appeal from an order of the Supreme Court,
Livingston County (Dennis S. Cohen, A.J.), entered September 3, 2014.
The order granted that part of the motion of plaintiff for summary
judgment with respect to the first cause of action and denied that
part of the motion with respect to the second cause of action.

     It is hereby ORDERED that the order so appealed from is
unanimously modified on the law by denying the motion in its entirety,
and as modified the order is affirmed without costs.

     Memorandum: In this action arising out of a partnership
agreement among brothers, one of whom is now deceased, defendants
appeal from an order insofar as it granted that part of plaintiff’s
motion for summary judgment on the first cause of action, for specific
performance of the valuation provisions of the agreement. Plaintiff
cross-appeals from the same order denying that part of her motion for
summary judgment with respect to the second cause of action, for
breach of contract. We conclude that Supreme Court erred in granting
that part of the motion seeking summary judgment on the first cause of
action, and we therefore modify the order accordingly.

     Plaintiff’s decedent, David J. Kingston (David), and his two
brothers, defendants Robert Kingston and Daniel J. Kingston, were
partners in defendant Kingston Farms Partnership (Kingston Farms)
pursuant to a partnership agreement dated August 20, 1998. The
partnership agreement called for the partners to conduct an annual
March meeting for the purpose of determining the value of Kingston
Farms (Partnership Value), and directed that if the most recent
                                 -2-                           735
                                                         CA 14-02254

valuation mutually agreed upon by the partners was more than 18 months
old at the time of a partner’s death, withdrawal, or disability, the
Partnership Value would be determined by Kingston Farms’ accountant
using a formula set forth in the partnership agreement. It is
undisputed that the partners never met in March in any year during the
term of the partnership agreement, but the partners did meet each
December to sign a balance sheet for Kingston Farms’ line-of-credit
lender, Farm Credit, including on December 19, 2011, when the Farm
Credit balance sheet valued Kingston Farms at $2,995,835.

     David died on November 18, 2012 and, under the terms of the
partnership agreement, his estate is entitled to 90% of his one-third
share of the Partnership Value as of that date. After a dispute arose
over the Partnership Value, plaintiff commenced this action, alleging
that because the partners did not meet each March as required by the
partnership agreement, Kingston Farms’ accountant must calculate the
Partnership Value. Defendants responded that, because the partners
met annually in December and set forth the value of Kingston Farms by
signing the Farm Credit balance sheet, the amount recited on the 2011
Farm Credit balance sheet is the Partnership Value for purposes of
calculating the amount owed to David’s estate.

     “[T]he law is abundantly clear in New York that, even where a
contract specifically contains . . . a provision stating that it
cannot be modified except by a writing, it can, nevertheless, be
effectively modified by actual performance and the parties’ course of
conduct” (Aiello v Burns Intl. Sec. Servs. Corp., 110 AD3d 234, 245).
Waiver of a contract right through abandonment may be established by
“ ‘affirmative conduct’ ” of a contract party and, “[g]enerally, the
existence of an intent to forgo such a right is a question of fact”
(Fundamental Portfolio Advisors, Inc. v Tocqueville Asset Mgt., L.P.,
7 NY3d 96, 104).

     Here, although the partnership agreement provides that the
Partnership Value shall be determined in a signed writing at an annual
March meeting of Kingston Farms’ partners, the parties agree that the
partners never met in March; instead, they met annually in December to
sign the Farm Credit balance sheet, including in December 2011, less
than a year before David’s death. We therefore conclude that an issue
of fact exists whether the partners, by conducting an annual meeting
in December and signing thereat a writing arguably reciting the
Partnership Value, modified the partnership agreement through their
course of conduct. If the conduct of the partners modified the
partnership agreement, there is a related, consequent issue of fact
whether the Partnership Value is the amount recited on the December
2011 Farm Credit balance sheet or whether it must be calculated by
Kingston Farms’ accountant pursuant to the terms of the partnership
agreement. Those issues of fact preclude summary judgment on the
first cause of action, for specific performance of the valuation
provisions of the agreement, and on the second cause of action, for
breach of contract.

     We reject plaintiff’s contention on her cross appeal that
defendants’ opposition to the motion is precluded by the Dead Man’s
                                 -3-                           735
                                                         CA 14-02254

Statute (CPLR 4519), or by the doctrine of waiver. “[E]vidence
submitted . . . [that] may be excludable at trial under the Dead Man’s
Statute . . . is nevertheless sufficient to . . . defeat [a] motion
for summary judgment” (Lopez v Town of Gates, 258 AD2d 961, 961), and
evidence in opposition to plaintiff’s motion that David agreed to the
establishment of the Partnership Value by signing the Farm Credit
balance sheet each December is therefore not precluded by the Dead
Man’s Statute. With respect to waiver, “a defense established by the
papers is sufficient though unpleaded to warrant denial of a motion
for summary judgment” (Consumer Solutions Reo, LLC v Giglio, 78 AD3d
1609, 1610 [internal quotation marks omitted]), and although
defendants did not explicitly use the term “waiver” in their answer or
opposition to plaintiff’s motion, we conclude that, as outlined above,
the evidence submitted on the motion raises issues of fact whether
David waived strict adherence to the terms of the partnership
agreement.

Entered:   July 2, 2015                         Frances E. Cafarell
                                                Clerk of the Court