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[T] Joachim v. Flanzig11/6/2003
uoting, Slamow v. Del Col, 174 A.D.2d 725 (2nd Dept., 1991), aff'd, 79 N.Y.2d 1016 (1992). See also, AFBT-II, LLC v. Country Village on Mooney Pond, Inc., 305 A.D.2d 340 (2nd Dept., 2003).
The Court may not add or delete provisions of an agreement under the guise of interpretation nor may the Court interpret the language in such a way as would be contrary to the intent of the parties. Petracca v. Petracca, 302 A.D.2d 576 (2nd Dept. 2003); and Tikotzky v. New York City Transit Auth., supra.
Partnership Law §71 establishes the assets and liabilities of a partnership that is being dissolved. Partnership Law §71(b) provides for the priority of payment of partnership liabilities. However, the provisions of Partnership Law §71 do not apply if the partners have entered into a written agreement to the contrary. See, Livack v. Central General Hospital, 242 A.D.2d 684 (2nd Dept., 1997).
In this case, there is an agreement to the contrary. The February, 2003 Stipulation and Order defines partnership assets and further provides a specific method for their distribution which is contrary to and supercedes the provisions of Partnership Law §71(b). Under such circumstances, the provisions of the stipulated agreement must prevail.
The Stipulation does not provide for the payment to Joachim of the difference in the partnership's capital account. Nor does it make payment of the partnership share of the judgment or settlement proceeds when received contingent upon such payment. The percentage of the amounts that the Successor Firms are required to pay to the Partnership is clearly established by the Stipulation as is the distribution of the Partnership funds. The Stipulation does not make any provision for payment to Joachim on account of his capital account.
Joachim was, or should have been, aware of the discrepancy of the amounts in the respective capital accounts prior to entry into Stipulation. The equalization of that
account could have been provided for in the Stipulation but was not. The Stipulation is clear and unambiguous and provides a specific method for the distribution of the legal fees attributable to the Partnership. Permitting Joachim to withhold funds properly due to Flanzig pursuant to the terms of the Stipulation until the balance in the capital accounts has been equalized would constitute an improper modification of the Stipulation in the guise of interpretation. See, Petracca v. Petracca, supra. This would be contrary to express terms of the Stipulation.
Joachim's argument that this is an issue to be decided by the Special Referee assigned to oversee this matter is without merit. Paragraph 15 of the Stipulation refers to the Special Referee certain specific issues. The issue raised in this application is not within that class of referred issues. Paragraph 11 provides that all issues regarding the accounting and distribution of the settlement and judgment funds shall be heard by the Special Referee. However, the issue raised here is does not relate to the accounting or the distribution of funds. The issue before the Court is an issue relating to the interpretation of the Stipulation. Thus, it is an issue of law for the Court.
The Stipulation does not provide for the distribution of the 10% being paid into escrow to abide the claim of Stephen Frommer. Therefore, if the Court determines that Mr. Frommer was not a 10% partner in the Partnership, that fund should be distributed in accordance with Partnership Law § 71(b).
Joachim is directed to forthwith pay over to Flanzig his share of the Partnership fees received by Joachim, Frommer, Cerrato & Levine, LLP in accordance with the terms of the Stip
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