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Sullivan v. Lawlis

Appeals Court of Massachusetts, Suffolk

June 19, 2018

GAIL F. SULLIVAN
v.
ROBERT M. LAWLIS & another.[1]

          Heard: February 9, 2018.

          Petition for partition filed in the Land Court Department on August 1, 2016. A motion to dismiss was heard by Keith C. Long, J.

          Gail F. Sullivan, pro se.

          Mel L. Greenberg for the defendants.

          Present: Green, C.J., Henry, & Singh, JJ.

          GREEN, C.J.

         The parties to this action together own property located at 172-174 Shrewsbury Street in Worcester (property). The plaintiff, Gail F. Sullivan, holds her 2/9 interest as the result of a property division incident to her divorce from her former husband, who purchased the property with the defendant Philip P. Palmieri in 1986. As the parties' relations deteriorated, Sullivan filed a petition in the Land Court, seeking to partition the property. In response, the defendants challenged the jurisdiction of the Land Court, claiming that the property is ineligible for partition because the relationship among the parties is in substance and actuality as partners in a partnership, and jurisdiction over dissolution of a partnership is in the Superior Court rather than the Land Court. A judge of the Land Court agreed with the defendants, dismissing the plaintiff's petition for want of subject matter jurisdiction. We conclude that the petition should not have been dismissed and remand the matter for further proceedings.

         Background.

         We summarize the evidence in the record before us.[2] By deed dated February 5, 1986, Louis C. DiNatale and Palmieri acquired title to the property. DiNatale and Palmieri financed their purchase in part by a mortgage note made jointly and severally by them to Guaranty Bank and Trust Company, secured by a mortgage on the property.[3] The deed did not specify whether the two men acquired their interests as joint tenants, tenants in common, or otherwise. However, the two obtained a policy of title insurance from Chicago Title Insurance Company insuring their interests as tenants in common. DiNatale and Palmieri subsequently conveyed a 5/9 interest in the property to the father of the defendant Robert M. Lawlis by deed dated June 9, 1995, and duly recorded.[4] Lawlis's father acquired his interest in the property as part of a "like-kind exchange" under the Internal Revenue Code, 26 U.S.C. § 1031 (1994) (as in effect when Lawlis, DiNatale, and Palmieri signed the like-kind agreement). In the agreement for that conveyance, DiNatale and Palmieri represented that they were the owners of the property "in fee simple and in common." Sullivan acquired an undivided 2/9 interest in the property by deed dated January 13, 2006, and duly recorded, as the result of a property division incident to her divorce from DiNatale. The deed recites that it was supported by consideration of less than $100. Like the 1986 deed pursuant to which DiNatale and Palmieri first acquired their interests in the property, the 2006 deed to Sullivan includes no statement describing or defining the nature of the estate conveyed.

         There is no written partnership agreement among the parties, nor is there a business name certificate filed in the name of a partnership. However, the record reflects that the property is a commercial building, leased to commercial tenants. Rents from the building are deposited into one of various bank accounts in various names; the record includes conflicting information about whether all of the accounts are joint or whether Palmieri is the sole authorized signatory on one or more of them.[5] According to the judge's memorandum of decision, various leases of the property refer to the landlord in different ways, sometimes as "Palmieri, Dinatale & Lawliss" [sic], sometimes as Louis DiNatale and Philip Palmieri, and other times as Palmieri and the Lawlis Trust.[6] Palmieri manages the property, collecting rents, paying utilities and other expenses of the property, hiring contractors to maintain the property, and taking other actions as necessary to manage the property. As funds are available in the bank account, Palmieri makes periodic distributions to himself, Lawlis, and Sullivan, in proportion to their respective interests in the property.

         The question whether the parties have formed a partnership has arisen in prior court proceedings, if somewhat obliquely. In a civil dispute brought in the Worcester Division of the District Court Department by Lawlis, DiNatale, and Palmieri against a tenant of the property, the tenant moved to vacate an agreement for judgment signed only by Palmieri on the ground that Palmieri was without authority to bind the other two plaintiffs. In that action, a District Court judge denied the tenant's motion; the defendants assert that the order of denial signifies agreement with Palmieri's argument that, as a partner, he was authorized to bind the others.[7] For her part, Sullivan has referred to "the partnership" in certain correspondence with Palmieri and Lawlis, and referred to her former husband and Palmieri as "partners" in filings made in the Probate and Family Court incident to her divorce from DiNatale. In his memorandum of decision, the motion judge observed that "[n]o partnership tax returns or Schedule K-l's have ever been filed. The defendants contend that no such returns or schedules are required for a partnership with this few partners so long as the income and expenses are properly reflected on Schedule E's, but have not cited any authority supporting that contention."[8]

         Discussion.

         Partition is historically an equitable remedy rooted in common law that has since been reformed and modified by statute. See O'Brien v. Mahoney, 179 Mass. 200, 203 (1901). It is a division between two or more persons of property, effected by the setting apart of their interests so that they can enjoy and possess the property in severalty, or by a sale of the whole and the awarding to each their share of the proceeds. See G. L. c. 241, §§ 1, 4, 31; Delta Materials Corp. v. Bagdon, 33 Mass.App.Ct. 333, 337-338 (1992). Properties owned in trust are not subject to partition, see Rolland v. Hamilton, 314 Mass. 56, 60 (1943), nor are those held in partnership, see Webber v. Rosenberg, 318 Mass. 768, 769 (1945). For cotenants, however, partition is a matter of absolute right; it is not dependent on the consent of any of the cotenants or the discretion of the court. See Crocker v. Cotting, 170 Mass. 68, 70 (1898); O'Brien v. Mahoney, supra at 203-204. In Massachusetts, partition is governed by G. L. c. 241, and "[a]ny person, except a tenant by the entirety, owning a present undivided legal estate in land" may petition for the partition of such interest. G. L. c. 241, § 1. A petition for partition may be filed either in the Probate and Family Court or the Land Court. G. L. c. 241, § 2.

         In the present case, the deed under which the parties acquired their title to the property did not specify how they would hold their title. In the absence of language in a deed specifying otherwise, a conveyance of land to two or more persons creates "an estate in common and not in joint tenancy." See G. L. c. 184, § 7. However, the form of property ownership may be other than as provided under the deed itself, based on evidence of a contrary intent of the parties. In particular, title to property acquired with partnership funds for partnership purposes is presumed to be partnership property, even though the deed conveys title in the names of one or more individuals. See Diranian v. Diranian, 55 Mass.App.Ct. 605, 609 (2002), citing G. L. c. 108A, § 8(2). See also Fall River Whaling Co. v. Borden, 10 Cush. 458, 461 (1852) ("[L]and, whatever the aspect of the legal title, may nevertheless be proved in equity to be part of the joint stock of a copartnership, and as such, ...


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