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Debaron Associates (A Partnership) and Ronald A. Durante v. Barbara R. Van Slooten and Debra S. Scheibel

June 28, 2012


On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-0034-10.

Per curiam.


Argued March 27, 2012

Before Judges Reisner and Simonelli.

Plaintiffs DeBaRon Associates (the partnership) and Ronald Durante (plaintiff),*fn1 appeal from the August 4, 2011 Law Division order for judgment, which appointed a receiver for the partnership and ordered its dissolution, among other things. We affirm.

We derive the facts from the evidence presented at a bench trial.*fn2 The parties' father, John Durante (Durante), was a successful builder and real estate investor. For estate-planning purposes to avoid negative tax consequences after his death, Durante formed the partnership in 1977, transferred title to his substantial real estate assets to the partnership, and made his children, plaintiff and defendants Barbara Van Slooten (Van Slooten) and Debra Scheibel (Scheibel),*fn3 equal one-third partners.*fn4 Durante was not a named partner; however, from 1977 until his death in 1999, he controlled the partnership with support staff that included operations manager, John Mazza, who was employed by Durco Services, Inc. (Durco Services), the partnership's management company.*fn5

At the time of Durante's death, the partnership owned twenty-three condominium units and one commercial property in Ramsey, New Jersey, and four commercial properties in Albany, New York. The partnership also owned property in Lake George, New York, consisting of a vacant lot, a tennis court lot, a building lot with a large dock (the Lake George building lot), and two small boathouse docks (the Lake George boathouse docks).

The Lake George building lot abuts the Durante family home, which the parties jointly inherited after their father died. Because Durante wanted Scheibel and her husband to have the building lot, in 1989 he assisted, albeit unsuccessfully, in their application to local zoning and planning boards for approval to build a house on the lot. Plaintiff admitted in his deposition that his father told him about the application and that his father said "[h]e would like to get a house approved for the lot so that [Scheibel] could have a house[,]" and he "was making peace as a father, so that was his way of working out the long-term peace of the family."

In October 1984, the parties signed an Amended and Restated Partnership Agreement (the partnership agreement). Article III states that the partnership's purpose is to acquire, own, mortgage, develop, improve, maintain, lease and sell real and personal property, to invest in partnerships, corporations and other entities which may be engaged in such activities, and to do such other business as the partners may determine from time to time and which is allowed by law.

Article IV provides that the partnership's term "shall commence on the date of this agreement and shall continue until terminated as hereinafter provided." Article XI provides, in pertinent part, that "[t]he partnership may be dissolved upon the vote of all of the partners," and establishes the procedures for such voluntary liquidation.

After Durante's death, Scheibel advised plaintiff and Van Slooten that she wanted to withdraw as a partner and have her partnership interest purchased. The parties consulted the partnership's accountant, Tony Torso, to determine how to dissolve the partnership. Torso advised that they had to wait five years in order to avoid negative tax consequences, and provided a dissolution plan. The parties agreed at that time to dissolve the partnership in five years.

Plaintiff later refused to dissolve the partnership. He also refused to conduct any partnership business or participate in any partnership matters unless defendants agreed to give him the Lake George boathouse docks, as well as their interest in the Durante family home. Also, except for a partnership meeting in October 2007, beginning in 2006, plaintiff refused to attend any partnership meetings. The parties could not unanimously agree on any partnership matters, as required by Article V of the partnership agreement, and plaintiff only communicated with defendants through Mazza or Durco Services' accountant, Maria Bushman. In May 2006, defendants advised plaintiff that they would seek judicial dissolution of the partnership.

In addition, the partnership had not acquired or sold any real estate since Durante's death, and had no plans to do so. Although the partnership continued to operate profitably primarily through Mazza's efforts, it lacked direction, and it was at a stalemate because the parties could not agree on anything. The discord between the parties also affected Bushman, as it made her job more stressful and difficult.

At the October 2007 partnership meeting, the parties agreed that Scheibel would submit an application for approval to build a house on the Lake George building lot, and she would purchase the ...

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