On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C-203-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Parker, C. S. Fisher and Yannotti.
Appellants Oradell Works Partnership, Ltd. (Oradell Works), Maybelle Schneider (Maybelle), and Oradell Associates appeal from an order filed on August 15, 2006, which dismissed their third-party complaint. For the reasons that follow, we reverse.
This matter arises from the following facts. Alfred Simon (Alfred), Jacob Schneider (Jacob), and C. Conrad Schneider (Conrad) entered into an agreement dated October 1, 1968, which provided for the formation of a partnership called Oradell Associates. The partnership was established for the purpose of owning, operating and managing certain garden apartments in Oradell, New Jersey. According to the agreement, the partners' respective capital interests in the partnership were: Jacob, 50%; Conrad, 25%; and Alfred, 25%. The agreement states that the partnership's net profits would be divided "in the proportions and percentages" of the partners' respective capital interests.
The agreement further states that the partners would have "equal rights in the management of the partnership," and Alfred would be the partnership's accountant.
The agreement includes several provisions that govern the sale or transfer of the partners' interests. Section 8 of the agreement states:
Except as otherwise provided, no partner shall, except with the consent of all the other partners, assign, mortgage, or otherwise encumber or sell his share in the partnership or in its assets or property nor enter into any agreement as a result of which any person shall become interested with him in the partnership nor do any act detrimental to the best interests of the partnership or which would made it impossible or unusually difficult to carry on the business or affairs of the partnership.
Section 9 of the agreement provides in pertinent part:
(A) In the event one partner desires to withdraw from the partnership, he shall offer to sell his share to all the remaining partners. Thereupon, the remaining partners shall have the right to share equally in the purchase of said retiring partner's share by paying for same equally. Each partner shall signify his intention within thirty days of the offer to sell, and those desiring to purchase shall share equally in same. In the event no partner desires to buy the share of the said partner, then he may offer same to a person other than a partner upon the same price and terms, provided, however, that said purchaser agrees to become a partner and execute the within agreement, subject, however, to the provisions of paragraphs (B) and (C) hereinafter set forth.
(B) In the event one partner desires to withdraw from the partnership and receives an offer of purchase from one of the remaining partners, the remaining other partner shall be informed of the details of the said offer and shall be afforded the opportunity of purchasing equally, in accordance with said offer. If none of the other partners expresses an intention to join in this purchase, the partner offering to purchase shall be entitled to purchase said retiring partner's share as offered. If some, but not all, of the partners desire to join in said purchase, they shall have an equal right to share in said purchase.
(C) In the event a partner desires to sell his entire share and receives a bona fide offer to purchase, the said partner shall immediately notify the other partners in writing of said offer, giving full details on price, and terms of the proposed purchase and the other partners shall be afforded the opportunity of purchasing equally, in accordance with said offer. In each instance where an offer is made or where a decision must be made by one of the partners, there shall be allowed thirty days for said partner or partners in which to act.
The agreement further provides that, upon the death of a partner, his share "may be assumed only by a spouse, child or grandchild."
Shortly after Alfred, Conrad and Jacob entered into the agreement, Alfred sold a percentage of his partnership interest to Howard Teitelbaum (Teitelbaum). In April 1969, Alfred sold a percentage of his interest in the partnership to Fay Zabrowsky.
Alfred sold another portion of his partnership interest to Joseph E. Salvatore and in March 1971, arranged for the sale of Salvatore's ...