Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Heifetz v. Apex Clayton Inc.

Court of Appeals of Missouri, Eastern District, Second Division

April 11, 2017

GARY S. HEIFETZ, JEFFREY S. GERSHMAN, STEVEN B. SPEWAK, JEAN MAYLACK, FALLON MAYLACK, STEVEN M. STONE, INDIVIDUALLY AND AS PERSONAL REPRESENTATIVE OF THE ESTATE OF SIDNEY L. STONE AND, SIDNEY M. STONE, Respondents,
v.
APEX CLAYTON INC., Appellant.

         Appeal from the Circuit Court of St. Louis County 10SL-CC04883 Honorable Robert S. Cohen

          OPINION

          Mary K. Hoff, Judge

         Apex Clayton, Inc. ("Apex") appeals from the Amended Judgment in favor of Gary S. Heifetz, Jeffrey S. Gershman, Steven B. Spewak, Jean Maylack, Fallon Maylack, Steven M. Stone, Individually and as Personal Representative of the Estate of Sidney L. Stone, and Sidney M. Stone (collectively "Limited Partners") on the claims of breach of contract, breach of fiduciary duty, and the punitive damages awards. We dismiss for lack of a timely appeal. [1]

         Factual and Procedural Background

         Apex is a Missouri corporation and the general partner of the 8182 Maryland Associates Limited Partnership ("8182 Partnership") which was formed in 1984 and whose purpose it was to acquire, construct, lease, and operate various structures, including an office building and parking garage in the downtown Clayton business district. In forming 8182 Partnership, Apex entered into a limited partnership agreement ("Partnership Agreement") that included several limited partnerships, including PS Maryland Avenue Associates ("PSMI") and PS Maryland Avenue Associates II ("PSMII"). Limited Partners originally were limited partners in both PSMI and PSMII. Collectively, Limited Partners' current ownership interest in 8182 Partnership totals approximately 5.79%.

         Section 9.2(A) of the Partnership Agreement provides that "Available Cash Flow shall be distributed at such reasonable intervals during the fiscal year as shall be determined by the General Partner and in any event shall be distributed within ninety days after the close of each fiscal year." The Partnership Agreement also contained a forced sale clause, Section 18, which provided in relevant part as follows:

18.1 First Option-General Partner. If, after September 1, 2005, [PSMI] and [PSMII], collectively, Limited Partners hereunder, (hereinafter "PSMs") desire that the Partnership liquidate and sell the Project, PSMs shall so notify the General Partner. Thereafter, the General Partner, shall be obligated to purchase all of PSMs' interests for the purchase price determined in the manner and upon the terms and conditions hereinafter set forth, unless within thirty (30) days after its receipt of the notice sent by PSMs, the General Partner notifies PSMs that it does not wish to purchase PSMs' interests. In the event the General Partner notifies PSMs that it does not wish to purchase PSMs' interests, the General Partner shall forthwith offer and continue to offer the Project for sale on the open market to prospective third-party purchasers at a price equal to its Fair Market Value or at such other price as may be mutually agreeable to the General Partner and PMSs.

         In June 1993, PSMI and PSMII were dissolved through a Resolution and Plan of Liquidation agreed to and approved by at least two-thirds of the partners of PSMI and PSMII. The Partnership Agreement was amended with regard to PSMI, substituting Gary Heifetz, James Chervitz, and S.M. Stone as limited partners in place of PSMI and referring to them as the PS I and II Partners. The Partnership Agreement was also amended with regard to PSMII, substituting Heifetz, Chervitz, Ronald Lurie, Nancy Lurie, and the Stones as limited partners in place of PSMII and referring to them as the PS II Partners. Both amendments to the Partnership Agreement stated that each of the substituted limited partners would be "subject to and bound by all provisions of the Partnership Agreement as if he were originally a party to the Partnership Agreement."

         In July 1993, under another amendment to the Partnership Agreement, Gershman, Jeffrey Michelman, Spewak, Fallon, and the Maylacks became substituted limited partners in 8182 Partnership. Like the previous amendments, this amendment stated that each of the substituted limited partners was "subject to and bound by all provisions of the Partnership Agreement as if he or she was originally a party to the Partnership Agreement."

         Over a decade later, on September 9, 2005, Heifetz sent a certified letter to Apex stating that he wished to exercise buyout rights under Section 18 of the Partnership Agreement. Thereafter, Chervitz, Gershman, Michelman, Spewak, and the Stones requested that Apex buy their interests in 8182 Partnership under Section 18. Apex declined the demands as inconsistent with the Partnership Agreement.

         In 2007, Heifetz, Chervitz, Gershman, Michelman, Spewak, and the Stones ("the 2007 Limited Partners") filed their initial lawsuit against Apex. Their First Amended Petition alleged in relevant part that Apex had breached the Partnership Agreement and a "fiduciary duty" to them in connection with Section 18, the forced sale provision.

         After briefing and argument on cross-motions for partial summary judgment, the trial court granted Apex's motion for partial summary judgment on the breach of contract and fiduciary duty claims, finding the 2007 Limited Partners did not have the non-economic right to a forced buyout of their interests in 8182 Partnership and that the interests they acquired were limited by statute or agreement.

         The 2007 Limited Partners appealed, and on February 9, 2010, this Court affirmed the trial court's judgment. This Court did not decide whether the 2007 Limited Partners acquired rights under Section 18 as a result of the dissolution and amendments to the Partnership Agreement. It simply held that it did not need to reach that issue because the record showed "that not all of the limited partnership expressed a desire to invoke Section 18" to pursue a forced sale "collectively."

         On August 4, 2010, counsel for Limited Partners sent a demand letter to Apex stating that they wished to exercise the buyout rights in Section 18 of the Partnership Agreement and Apex again declined. On December 3, 2010, Limited Partners filed their Petition against Apex in the underlying lawsuit alleging breach of contract ("Count I") and breach of fiduciary duty ("Count II").[2] The Petition alleged Apex was required but failed to make cash distributions to Limited Partners under Section 9.2(A) of the Partnership Agreement. The Petition also alleged Apex was required but failed to purchase Limited Partners' interests in 8182 Partnership. In Count I of their Petition, Limited Partners alleged that by "refusing to comply with the 'forced sale' provision of the Partnership Agreement, " Apex breached the Partnership Agreement. Limited Partners sought compensatory damages in amounts specified in the Petition. In Count II of their Petition, Limited Partners alleged that Apex breached a purported fiduciary duty in not making cash ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.