Sullivan v. Lawlis
Sullivan v. Lawlis
Opinion of the Court
*409The 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 *410jurisdiction. 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.
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 *411the 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.
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 *278ground 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.
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,
In the present case, the deed under which the parties acquired their title to the property did not specify how they *279would 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,
"To determine whether or not a partnership exists, the Legislature has enacted a set of rules that may be applied to the circumstances. G. L. c. 108A, § 7. In addition, other factors may be considered on the issue of the existence or nonexistence of a partnership. See Shain Inv. Co. v. Cohen,
Conflicting evidence concerning the existence of a partnership must be resolved by a finder of fact. See Fenton v. Bryan, supra at 691,
The evidence in the record of the present case leaves us with considerable doubt whether the parties are in a partnership. To be sure, there are numerous indicia consistent with the existence of a partnership, including the shared ownership and operation of the property and the sharing of profits therefrom. However, the presence of such factors does not by itself establish the existence of a partnership. See G. L. c. 108A, § 7(2), (3). And there are a variety of indicia calling into question whether a partnership existed, including the manner in which the parties held themselves out to others, including tenants and taxing authorities, and the policy of title insurance Palmieri and DiNatale obtained when they first acquired the property, insuring their interests as tenants in common. In particular, the like-kind exchange by which Lawlis's father acquired his interest in the property is incompatible with a conclusion that the property was owned by a partnership rather than by Palmieri and DiNatale as cotenants; under the Internal Revenue Code in effect at the time, partnership property was ineligible for a like-kind exchange. See
We also observe that there appear to be few advantages from the perspective of judicial economy in resolving the question on summary judgment. As described in the introduction, the question whether the property is held in partnership or in common arose in the context of the question of the Land Court's jurisdiction over the plaintiff's petition. But Massachusetts courts have long discouraged dismissal in circumstances where the question of jurisdiction arises from distinctions among the various departments *416of the Trial Court. "[W]hen a court of limited jurisdiction is confronted with a case over which its jurisdiction is doubtful or lacking, the court should not dismiss the case out of hand; rather, 'the proper procedure is for the judge to ask the [Chief Justice of the Trial Court] to transfer the case, or the judge, or both, to the appropriate department of the Trial Court.' " Arno v. Commonwealth,
So ordered.
Though the parties have filed separate record appendices, the materials in each include references to numerous exhibits that are not included, but which apparently were a part of the record before the Land Court judge. Though our ability to evaluate the presence or absence of genuine issues of material fact is consequently impaired, our review of the record we do have, along with the description of undisputed facts contained in the memorandum of decision entered by the motion judge, supports the factual summary that follows.
DiNatale and Palmieri subsequently refinanced the property on several occasions.
Lawlis's father subsequently conveyed his 5/9 interest to an unrecorded trust identified in the deed as "The Lawlis Trust."
The accounts were in the name of "Philip Palmieri, Louis DiNatale or Robert Lawlis, John Dubsky [care of] James O'Malley CPA"; "Philip Palmieri, Palmieri Lawless & Sullivan"; "Phillip Palmieri [doing business as] Palmieri, Lawless and Sullivan"; "Philip Palmieri and Robert Lawlis"; "Phillip Palmieri and Louis DiNatale"; and "Phillip Palmieri, Louis DiNatale and Gail Sullivan."
The leases themselves are not in the record appendix submitted by either the plaintiff or the defendants, and the judge's memorandum of decision does not relate whether the various leases were executed by each person named as landlord or only one of them on behalf of a partnership. The summary in the judge's memorandum of decision does not include a description of any lease identifying Palmieri, Lawlis, and Sullivan as the landlord, and it does not suggest that any of the leases refer to the landlord as a partnership.
Alternatively, the District Court judge could have concluded that Palmieri was authorized to act on behalf of Lawlis and DiNatale, either as agent or otherwise. The record does not include the motion, Palmieri's opposition, or the order denying the tenant's motion (which the defendants describe as a marginal endorsement).
No tax returns appear in the record before us, and the defendants have not repeated in their brief in this appeal their claim before the Land Court judge that no partnership tax return is required for a partnership comprised of only three partners. But see
General Laws c. 108A, § 7, provides as follows:
"In determining whether a partnership exists, these rules shall apply:
"(1) Except as provided by section sixteen persons who are not partners as to each other are not partners as to third persons.
"(2) Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership does not of itself establish a partnership, whether such co-owners do or do not share any profits made by the use of the property.
"(3) The sharing of gross returns does not of itself establish a partnership, whether or not the persons sharing them have a joint or common right or interest in any property from which the returns are derived.
"(4) The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, but no such inference shall be drawn if such profits were received in payment:
"(a ) Of a debt by instalments or otherwise,
"(b ) As wages of an employee or rent to a landlord,
"(c ) As an annuity to a widow or representative of a deceased partner,
"(d ) As interest on a loan, though the amount of payment vary with the profits of the business,
"(e ) As the consideration for the sale of the good will of a business or other property by instalments or otherwise."
See G. L. c. 108A, § 7 ; Mitchell v. Gruener,
By St. 2011, c. 93, § 52, the Chief Justice of the Trial Court was substituted for the Chief Justice for Administration and Management, who previously was designated to effect such interdepartmental assignments and transfers.
For example, the plaintiff's verified complaint includes, in addition to the request for partition and several counts for waste of the property, counts for conversion of funds held in bank accounts and fraud. (Although the plaintiff withdrew, without prejudice, all claims other than her request for partition during the initial case management conference, her brief indicates that she intends to reinstate them.) The defendants' separate complaint, filed in the Superior Court in Worcester County after commencement of this action, includes counts for dissolution of the alleged partnership and an accounting.
We express no view on whether the case should be transferred to the Superior Court, with a cross-departmental assignment of the Superior Court judge to hear and decide any claims (such as partition) that lie outside the Superior Court's jurisdiction, or should instead remain in the Land Court, with a cross-departmental assignment of the Land Court judge to hear and decide any claims that lie outside the Land Court's jurisdiction. In either event, however, we note that it would appear to be in the interest of judicial economy to merge and consolidate the defendants' subsequently filed Superior Court complaint with the present action. See note 12, supra.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.