Friday, November 22, 2013

P.A. Properties, Inc. v. B.S. Moss' Criterion Center Corp. case brief

P.A. Properties, Inc. v. B.S. Moss' Criterion Center Corp. case brief summary
2004 WL 2979984

Plaintiff, a consultant, brought a breach of contract action against defendant, a movie theatre operator, regarding a consulting agreement between the consultant and the operator's former partner. The operator brought a third-party indemnification action against the partner. The consultant and operator cross-moved for summary judgment. The operator moved to strike affidavits proffered by the consultant. The partner moved to dismiss.

The operator argued that the consultant's claim was defeated by a provision in its joint venture agreement with the partner denying the partner unilateral authority to retain or replace independent accountants.


  • The court initially held that the operator was jointly liable under the partner's consulting agreement with the consultant pursuant to N.Y. Partnership Law § 26(a)(2) because the consulting agreement was an obligation of the operator's joint venture with the partner pursuant to N.Y. Partnership Law § 20(1) as it was entered into during the life of the joint venture and was clearly for the benefit of the joint venture. 
  • The court further held that the dissolution of the operator's joint venture with the partner did not discharge the operator's liability under the consulting agreement pursuant to N.Y. Partnership Law § 67, but that there were factual issues regarding whether the joint venture's obligations under the consulting agreement had been met. 
  • The court finally held that the partner's bankruptcy did not extinguish the operator's indemnification claim because the operator's claim under their joint venture constituted a valid pre-petition claim under 11 U.S.C.S. § 101(5).

The operator's motion for summary judgment was granted in part regarding the consultant's abandoned claims, and otherwise denied. The consultant's motion for summary judgment was denied. The operator's motion to strike certain of the consultant's affidavits was granted in part. The partner's motion to dismiss the third-party complaint was denied.

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