Flouret v Sagland, LLC
2026 NY Slip Op 05009
August 19, 2026
Appellate Division, Second Department
Golia
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This decision is uncorrected and subject to revision before publication in the Official Reports.
Muffy Flouret, etc., appellant,
v
Sagland, LLC, respondent.
Supreme Court of the State of New York, Appellate Division, Second Judicial Department
Decided on August 19, 2026
2024-09359, (Index No. 600983/22)
Francesca E. Connolly, J.P.
Linda Christopher
Lourdes M. Ventura
Donna-Marie E. Golia, JJ.
Cullen and Dykman LLP, Uniondale, NY (Andrew P. Nitkewicz and Brittany L. Froning of counsel), for appellant.
Esseks, Hefter, Angel, Di Talia & Pasca, LLP, Riverhead, NY (Anthony C. Pasca and Patricia M. Carroll of counsel), for respondent.
APPEAL by the plaintiff, in an action for the partition and sale of real property, from an order of the Supreme Court (C. Stephen Hackeling, J.), dated June 24, 2024, and entered in Suffolk County. The order denied the plaintiff's motion for summary judgment on the amended complaint.
Golia, J.
[*1]
OPINION & ORDER
I. Introduction
In a case of first impression before this Court, we are asked to determine whether property owned wholly by a trust and a limited liability company may constitute "heirs property" pursuant to the Uniform Partition of Heirs Property Act (RPAPL 993). That question requires a determination as to whether a trust and a limited liability company are "individual[s]" within the meaning of RPAPL 993. For the following reasons, we find that trusts and limited liability companies are not "individual[s]" under RPAPL 993. Property wholly owned by such entities, and not owned by individuals who acquired title from a relative, cannot be "heirs property" within the meaning of the statute. Accordingly, we reverse the order appealed from and remit the matter to the Supreme Court, Suffolk County, for a new determination on the merits of the plaintiff's motion for summary judgment on the amended complaint.
II. Factual and Procedural History
The factual and procedural history of this matter is not complex. At issue is certain real property located at 615 Daniels Lane, also known as Potato Road, in Suffolk County (hereinafter the subject property), which the parties do not contest is used for residential or agricultural purposes. The subject property was originally part of a larger lot that was conveyed to brothers Stephen Perlbinder (hereinafter Stephen) and Barton Mark Perlbinder (hereinafter Mark and, together with Stephen, the brothers), as tenants in common, by an individual who is not related to them by deed dated May 22, 1969. The lot was thereafter subdivided into three lots, with the brothers separately owning two lots, upon which they maintained homes, and jointly owning the subject property. The subject property consists of approximately 17.41 acres of undeveloped land, which includes a man-made pond and a cultivated field.
By deed dated December 11, 2020, Stephen conveyed his 50% interest in the subject property to the defendant, Sagland, LLC, the manager of which happens to be Stephen's daughter. [*2]By quitclaim deed dated September 3, 2023, Mark conveyed his 50% interest in the subject property to a trust, namely, the Mark Perlbinder 2023 Irrevocable Trust, the trustee of which is Muffy Flouret. Flouret happens to be the daughter of Mark and, in her capacity as trustee of the Mark Perlbinder 2023 Irrevocable Trust, is the plaintiff in this action (hereinafter the plaintiff). Thus, as of September 2023, the subject property was wholly owned by a trust and a limited liability company, as tenants in common.
This action was commenced against the defendant by Mark in January 2022, seeking the partition and sale of the subject property. The defendant answered the complaint and asserted affirmative defenses, including, inter alia, that the subject property is heirs property and, as such, is subject to the protections of RPAPL 993 and that Mark failed to comply with the procedural requirements thereunder.
In December 2023, upon the parties' stipulation, an amended complaint was filed substituting the plaintiff for Mark and seeking the same relief. The defendant thereafter answered the amended complaint, again asserting as an affirmative defense, among others, that the subject property is heirs property within the meaning of RPAPL 993 and that the plaintiff failed to comply with the requirements of RPAPL 993.
The plaintiff moved for summary judgment on the amended complaint in March 2024, contending, as relevant to this appeal, that the subject property does not qualify as heirs property within the meaning of RPAPL 993 because the subject property is wholly owned by a trust and a limited liability company. The plaintiff specifically argued that a trust and a limited liability company could not constitute an "individual," "relative," or "co-tenant who acquired title from a relative," as those entities did not have ascendants, descendants, or other relations by blood, marriage, adoption, or law, and such a finding would be in derogation of the spirit of the legislative intent of RPAPL 993. In support of the motion, the plaintiff submitted, inter alia, the 1969 deed, the 2020 deed, and the 2023 deed FN1. As to the merits of the motion for summary judgment, the plaintiff contended that she established, prima facie, that the Mark Perlbinder 2023 Irrevocable Trust had an ownership interest in the subject property and that a physical partition would lead to great prejudice to the owners.
The defendant opposed the motion and contended that the plaintiff was not entitled to summary judgment on the amended complaint. Specifically, the defendant argued that the subject property satisfied all of the requirements of heirs property promulgated in RPAPL 993 and, thus, the defendant was entitled to the protections provided by the statute. The defendant further contended that the owners of the subject property, a trust and a limited liability company, were created for the benefit of the individuals who had immediately preceded in ownership of the subject property, the brothers, such that they should be treated as individuals covered by the statute.
In reply, the plaintiff asserted that, as it relates to RPAPL 993, a trust and a limited liability company cannot qualify as a "relative" or an "individual" under the statute and that "the appropriate question in determining whether a property is an heirs property is not whether one or more co-tenants is a trust or limited liability company, but whether one or more co-tenants is an individual capable of establishing the remaining elements of RPAPL § 993(2)(e)." The plaintiff further argued that since neither owner of the subject property is an individual or a relative of a co-tenant, the subject property cannot be considered heirs property within the meaning of the statute, and thus, that the procedural requirements of RPAPL 993 do not apply. Additionally, for the first time, the plaintiff argued that the subject property is not heirs property because the owners did not inherit their rights to the subject property through inheritance from a relative.
In an order dated June 24, 2024, the Supreme Court denied the plaintiff's motion for summary judgment on the amended complaint because the court determined that the subject property is heirs property pursuant to RPAPL 993 and that, as a result, the procedures of RPAPL 993 are applicable. Other than finding that the subject property is heirs property, the court did not reach the merits of the plaintiff's motion for summary judgment on the amended complaint. The plaintiff [*3]appeals.
On appeal, the plaintiff argues that the Supreme Court erred in finding that the subject property is heirs property within the meaning of RPAPL 993 and, thus, that the procedural requirements of RPAPL 993 are applicable. The plaintiff contends that the fact that the subject property is owned by a trust and by a limited liability company as tenants in common precludes relief pursuant to RPAPL 993, since, under the language and the purpose of the statute, the subject property is not owned by individuals. The plaintiff further argues that neither brother acquired the subject property through an inheritance and that neither owner inherited its interest in the subject property.
The defendant responds that the subject property, as the Supreme Court found, meets the requirements set forth in RPAPL 993. The defendant asserts that the plaintiff is an "individual" and "relative" for the purpose of RPAPL 993, thereby making the subject property heirs property. Further, since both owners were formed by the brothers, who previously had owned the subject property, and because the owners are managed by relatives of the brothers, the defendant argues that the subject property should be considered heirs property within the meaning of RPAPL 993.
In reply, the plaintiff substantially reiterates its contentions that the subject property is not heirs property within the meaning of RPAPL 993.
III. RPAPL 993 and Its Application to the Instant Appeal
At the center of this appeal is the question of whether the subject property constitutes heirs property within the definition of the Uniform Partition of Heirs Property Act (RPAPL 993). With that, a question that must also be answered is whether either owner, a trust and a limited liability company, constitutes an individual under RPAPL 993. These issues necessitate a review of the text of and intention behind RPAPL 993.
A. The Legislative History of RPAPL 993
RPAPL 993 is a relatively new equitable statute that was enacted by the Legislature in December 2019 (see L 2019, ch 596, § 1 [eff Dec. 6, 2019]), which supersedes the general partition statutes for those properties that so qualify as heirs property (see RPAPL 993[3][c]; 901). RPAPL 993 was passed to protect individuals from predatory entities who purportedly own a fraction of the property and seek to divest those individuals from property they acquired or inherited from family members (see Laurelton Estates, LLC v Prince, 247 AD3d 19, 28; Senate Introducer's Mem in Support, Bill Jacket, L 2019, ch 596 at 6). Specifically, the statute was meant to shield "family-held lands from speculators who acquire properties by leveraging minority interests to force a partition sale [and] to allow relatives holding fractional interests to acquire full ownership or receive full value of their interest in legacy real property" (Gelinas LLC v Hayes, 85 Misc 3d 1012, 1025 [Sup Ct, Bronx County]; see Dan M. Blumenthal, Prac Commentaries, McKinney's Cons Laws of NY, RPAPL 993). Given that RPAPL 993 is a recently enacted statute, there is limited case law and no binding precedent analyzing whether a property owned wholly by entities may constitute heirs property, as far as can be discerned.
As of yet, this Court has only had one occasion to opine on RPAPL 993. In Laurelton Estates, LLC v Prince (247 AD3d 19), this Court analyzed RPAPL 993(5), dealing with mandatory settlement conferences, and RPAPL 993(9), which sets forth equitable factors to consider in determining whether partition in kind would result in great manifest prejudice. In doing so, this Court highlighted the Senate Introducer's Memorandum in Support, which provided that
"[i]n recent years, predatory real estate speculators have taken advantage of New York's laws governing partition actions by purchasing a stake in a residential property—usually after a number of family members have inherited the property—and then using that ownership stake to file a partition action to dispossess the family of the property through a forced sale, often for pennies on the dollar relative to the actual value of the property. Lower- and middle-class families are particularly susceptible to these types of schemes, as they often do not engage in the kind of sophisticated estate planning that could prevent predatory partitioning actions" (Senate Introducer's Mem in Support, Bill Jacket, L 2019, ch 596 at 6; see Dan M. Blumenthal, Prac Commentaries, McKinney's Cons Laws of NY, RPAPL 993).
Moreover, the Senate Introducer's Memorandum in Support further provided that "[t]his legislation would address the issue of predatory partition actions, while preserving a co-owner's right to sell his or her share of the property" (Senate Introducer's Mem in Support, Bill Jacket, L 2019, ch 596 at 6). Indeed, RPAPL 993 was intended to "only apply in situations where at least one of the co-owners has inherited their property interest from a relative and there is no written agreement otherwise governing partition among the owners" (Senate Introducer's Mem in Support, Bill Jacket, L 2019, ch 596 at 6). In underscoring the pervasiveness of the issues that RPAPL 993 was enacted to prevent, this Court astutely emphasized that the Legislature identified certain property, namely, heirs property, "as warranting certain protections and procedures that must be followed in those matters by the courts to ward off deed-theft and equity-stripping schemes" (Laurelton Estates, LLC v Prince, 247 AD3d at 28).
B. The Definitions in RPAPL 993 Governing this Appeal
Pursuant to RPAPL 993(2)(e), "heirs property" is defined as
"real property held in tenancy in common which satisfies all of the following requirements as of the filing of a partition action:
"(i) there is no agreement in a record binding all of the co-tenants which governs the partition of the property;
"(ii) any of the co-tenants acquired title from a relative, whether living or deceased;
"(iii) the property is used for residential or agricultural purposes; and
"(iv) any of the following applies:
"(A) twenty percent or more of the interests are held by co-tenants who are relatives;
"(B) twenty percent or more of the interests are held by an individual who acquired title from a relative, whether living or deceased;
"(C) twenty percent or more of the co-tenants are relatives of each other; or
"(D) any co-tenant who acquired title from a relative resides in the property" (emphasis added).
As relevant to this appeal, "relative" is defined in the statute as "an ascendant, descendant, or collateral or an individual otherwise related to another individual by blood, marriage, adoption, or law of this state other than under this section" (id. § 993[2][i]). Similarly, "ascendant" is defined as "an individual who precedes another individual in lineage, in the direct line of ascent from such other individual" (id. § 993[2][a]), and "descendant" is defined as "an individual who follows another individual in lineage, in the direct line of descent from such other such [sic] individual" (id. § 993[2][c]). "Collateral" is defined as "an individual who is related to another individual under the law of intestate succession of this state but who is not such other individual's ascendant or descendant" (id. § 993[2][b]).
The statute continues that, should certain property satisfy all of the requirements set forth in RPAPL 993, it shall be deemed heirs property and shall be partitioned in accordance therewith (see id. § 993[3][b]). Importantly, the statute imposes, among other things, certain notice and settlement conference requirements not otherwise required for a partition and sale of real property so as to protect certain individual persons from predatory real estate speculators (see id. at § 993[4], [5]). It is under this statutory scheme that this appeal, where the only owners of the real property in question are a limited liability company and a trust, ensues.
C. By Definition, the Owners Are Not Individuals under RPAPL 993
In light of the above legislative backdrop, we are asked to interpret the definitions set forth in RPAPL 993 and to determine whether the subject property falls within the definition of heirs property. "When presented with a question of statutory interpretation, a court's primary consideration 'is to ascertain and give effect to the intention of the Legislature.' The clearest indicator of legislative intent is the statutory text and unambiguous language should be construed pursuant to its plain meaning" (Matter of Lemma v Nassau County Police Officer Indem. Bd., 31 NY3d 523, 528 [citation omitted], quoting Riley v County of Broome, 95 NY2d 455, 463; see People v Williams, 37 NY3d 314, 317-318; People v Williams, 19 NY3d 100, 103; Matter of Yeung v Assessor of the Vil. of Great Neck Estates, ___ AD3d ___, ___, 2026 NY Slip Op 00784, *4). "The statutory text is the clearest indicator of legislative intent and courts should construe unambiguous language to give effect to its plain meaning" (Matter of Mestecky v City of New York, 30 NY3d 239, 243 [internal quotation marks omitted]; see Matter of 160 E. 84th St. Assoc. LLC v New York State Div. of Hous. & Community Renewal, 43 NY3d 275, 282 ["Inasmuch as the clearest indicator of legislative intent is the statutory text, the starting point in any case of interpretation must always be the language itself, giving effect to the plain meaning thereof" (internal quotation marks omitted)]).
"A statute must be construed as a whole, and its various sections must be considered together and with reference to each other. Further, in appropriate circumstances, the Court may inquire into the . . . purpose of the legislation, which requires examination of the statutory context of the provision as well as its legislative history" (Matter of Peyton v New York City Bd. of Stds. & Appeals, 36 NY3d 271, 280 [citation and internal quotation marks omitted]; see Matter of DCH Auto v Town of Mamaroneck, 38 NY3d 278, 292 ["Although the text itself is generally the clearest indicator of legislative intent, where the language is ambiguous, we may examine the statute's legislative history" (internal quotation marks omitted)]).
Thus, this Court must first look to the statutory text before analyzing the Legislature's intent in enacting RPAPL 993.
As noted above, the plain text of the statute defines "heirs property" as real property owned by tenants in common where, inter alia, "any of the co-tenants acquired title from a relative, whether living or deceased," and "twenty percent or more of the interests are held by co-tenants who are relatives," "twenty percent or more of the interests are held by an individual who acquired title from a relative, whether living or deceased," "twenty percent or more of the co-tenants are relatives of each other," or "any co-tenant who acquired title from a relative resides in the property" (id. § 993[2][e][ii], [iv][A]-[D] [emphasis added]). Moreover, the statute provides that "relative" is "an ascendant, descendant, or collateral or an individual otherwise related to another individual by blood, marriage, adoption, or law of this state other than under this section" (id. § 993[2][i]). The definitions of "ascendant," "descendant," and "collateral" are similarly couched in terms of "individual" (id. § 993[2][a]-[c]). Thus, the specific language of the statute makes clear that RPAPL 993 was intended to protect humans from predatory entities seeking to deprive families of their ancestral homes and attempting to take advantage of those families in the hopes of a partition and sale creating a windfall in the entities' favor, necessitating the protections promulgated in the statute (see Senate Introducer's Mem in Support, Bill Jacket, L 2019, ch 596 at 6). This intention is reflected in the text of the statute itself, in which the Legislature took great care to choose appropriate descriptors such as "individual," "relative," "ascendant," "descendant," "collateral," and "persons," which did not include entities such as trusts and limited liability companies (see RPAPL 993).
Despite the distinct definitions included in RPAPL 993, it is noted that absent from the statute is a definition of the term "individual." However, although we need not look further than the plain text of the statute, "[i]n the absence of a statutory definition, 'we construe words of ordinary import with their usual and commonly understood meaning, and in that connection have regarded dictionary definitions as useful guideposts in determining the meaning of a word or phrase'" (Yaniveth R. v LTD Realty Co., 27 NY3d 186, 192, quoting Rosner v Metropolitan Prop. & Liab. Ins. Co., 96 NY2d 475, 479-480; see People v Holz, 35 NY3d 55, 59). An "individual" is defined as "1 a: a particular being or thing as distinguished from a class, species, or collection: such as . . . a single human being as contrasted with a social group or institution [or] a single organism [*4]as distinguished from a group[;] b: a particular person" (Merriam-Webster.com Dictionary, individual [https://www.merriam-webster.com/dictionary/individual]). Trusts and limited liability companies are not "particular being[s] or thing[s] as distinguished from a class, species, or collection," and they are not "particular person[s]." Simply put, a trust and a limited liability company are not, by definition, individuals, let alone relatives, ascendants, descendants, collaterals, or "individual[s] otherwise related to another individual by blood, marriage, adoption, or law of this state" (RPAPL 993[2][i]), as is required under RPAPL 993. Trusts and limited liability companies do not have relatives, cannot have children, cannot be married, cannot adopt, and so on. Thus, the defendant's invitation to construe RPAPL 993 as including limited liability companies and trusts as individuals is unpersuasive, as it is plainly unsupported by the language of the statute itself.
D. By Application, the Owners Cannot Be Individuals under RPAPL 993
Notwithstanding, the defendant argues that in this case we should construe the statute so as to include limited liability companies and trusts as individuals within the meaning and purpose of RPAPL 993 and thereby find that the subject property is heirs property. Such a finding, under these circumstances, would be in derogation of the language of the statute and, indeed, the intent of the Legislature.
As noted above, since RPAPL 993 is a relatively new statute, there is limited case law regarding when and under what circumstances certain property is considered heirs property under RPAPL 993. Some trial courts have found certain property to constitute heirs property; however, in each of those cases, at least some part of the property was held by an individual as defined above (see Gelinas LLC v Hayes, 85 Misc 3d 1012 [finding that certain property was heirs property where, at the time of the commencement of the action, the property was owned by the original owner's niece, the original owner's life partner, and a limited liability company]; Lightcap1 LLC v 350 Patton LLC, 2023 NY Misc LEXIS 26466 [Sup Ct, Bronx County, No. 800007-2021E] [finding that certain property was heirs property where it was owned by individuals and limited liability companies]; 153-41 78th St., LLC v Abdel-Qader, 2023 NY Misc LEXIS 22553 [Sup Ct, Queens County, No. 708576/2021] [finding that the property at issue was heirs property where the property was owned by the original owner and a limited liability company]; Tiwary v 125 E. 169th St. LLC, 2023 NY Misc LEXIS 12173 [Sup Ct, Bronx County, No. 802459/2022E] [finding that certain property was heirs property where the property was owned by the decedent's son and a limited liability company]; Antioco v Antioco, 2022 NY Slip Op 34420[U] [Sup Ct, Kings County] [finding that certain property was heirs property where it was owned by only individuals]; Varick Equities Corp. v Griffin, 2022 NY Misc LEXIS 32992 [Sup Ct, Bronx County, No. 22155/2020E] [finding, in effect, that certain property was heirs property where the property was owned by the decedent's nephew and a corporation]; South Bronx Ventures LLC v Cortez, 2022 NY Misc LEXIS 30685 [Sup Ct, Bronx County, No. 29168/2020E] [finding, in effect, that certain property was heirs property where the property was owned by individuals related to each other and a limited liability company]; 1847 Nereid LLC v Browne, 2022 NY Misc LEXIS 20253 [Sup Ct, Queens County, No. 700141/2020] [finding that certain property was heirs property where the property was owned by the decedent's brother, other family members, and a limited liability company]). These cases all differ from the instant appeal, where no interest in the subject property is held by an individual. Indeed, there appears to be very little dispute that heirs property must be owned by at least one human individual.
Within the Appellate Division, there appears to be, to date, two cases that address RPAPL 993 generally (see Laurelton Estates, LLC v Prince, 247 AD3d 19; Smith v Smith, 217 AD3d 1484), and only Smith discusses whether certain property meets the definition of heirs property (see Smith v Smith, 217 AD3d 1484). In Smith, the property at issue was owned by two trusts as tenants in common (see id. at 1485). Yet, the Appellate Division, Fourth Department, did not address the issue before us—whether the trusts that wholly owned the property may be considered individuals and receive the protections of RPAPL 993. Rather, the Smith case turned on whether the property was used for agricultural or residential purposes. Since the property was not used for agricultural or residential purposes, the Fourth Department found that it did not qualify as heirs property because "the plain text of the statute restricts its application to property that 'is used for residential or agricultural purposes'" (Smith v Smith, 217 AD3d at 1486, quoting RPAPL 993[2][e][iii]).
Similarly, there is limited case law in the New York federal courts discussing RPAPL 993, as there is, as far as we can tell, only one case. In Rubino v Estate of Betancourt (2023 WL 2682935, 2023 US Dist LEXIS 54251 [ED NY, No. 21-CV-3992 (PKC) (RER)]), the United States [*5]District Court for the Eastern District of New York (hereinafter the Eastern District of New York) addressed the question of whether certain property was heirs property within the meaning of RPAPL 993. In that case, the property at issue was an apartment building with a commercial space that was owned by two siblings as tenants in common upon the death of their mother in 2015 (see Rubino v Estate of Betancourt, 2023 WL 2682935, *2, 2023 US Dist LEXIS 54251, *2-3). Thereafter, in 2020, one sibling died and her interest in the property passed to her four children, with the remaining sibling still possessing her 50% interest in the property (see Rubino v Estate of Betancourt, 2023 WL 2682935, *2, 2023 US Dist LEXIS 54251, *3-4). The Eastern District of New York found that the property was heirs property within the meaning of RPAPL 993 (see Rubino v Estate of Betancourt, 2023 WL 2682935, *5, 2023 US Dist LEXIS 54251, *14). However, whether the property was heirs property was never disputed by the parties. Indeed, the Eastern District of New York stated that "the parties themselves agree that the property is heirs property" (id.).
The interest in protecting individuals and families from predatory entities intent on partitioning ancestral homes is significant. Indeed, beginning in 2011, 22 states, in addition to New York, have enacted analogous statues to our RPAPL 993: New Jersey, Michigan, Arizona, Washington, Tennessee, Utah, California, Mississippi, Florida, Missouri, Illinois, Iowa, New Mexico, Texas, Hawaii, South Carolina, Connecticut, Arkansas, Alabama, Montana, Georgia, and Nevada (see NJ Stat Ann § 2A:56-46 [eff Aug. 7, 2025]; Mich Comp Laws § 600.3402 [eff Apr. 2, 2025]; Ariz Rev Stat Ann § 12-3402 [eff Sept. 14, 2024]; Wash Rev Code § 7.54.010 [eff July 23, 2023]; Tenn Code Ann § 29-27-302 [eff July 1, 2022]; Utah Code Ann § 78B-6-1270 [eff May 4, 2022]; Cal Civ Proc Code § 874.312 [eff Jan. 1, 2022]; Miss Code Ann § 91-31-3 [eff July 1, 2020]; Fla Stat § 64.202 [eff. July 1, 2020]; Mo Rev Stat § 528.700 [eff Aug. 28, 2019]; 755 Ill Comp Stat 75/2 [eff Aug. 23, 2019]; Iowa Code § 651.1 [eff July 1, 2018]; NM Stat Ann § 42-5A-2 [eff Jan. 1, 2018]; Tex Prop Code Ann § 23A.002 [eff Sept. 1, 2017]; Haw Rev Stat § 668A-2 [eff Jan. 1, 2017]; SC Code Ann § 15-61-320 [eff Jan. 1, 2017]; Conn Gen Stat § 52-503g [eff Oct. 1, 2015]; Ark Code Ann § 18-60-1002 [eff Jan. 1, 2016]; Ala Code § 35-6A-2 [eff Jan. 1, 2015]; Mont Code Ann § 70-29-402 [eff Oct. 1, 2013]; Ga Code Ann § 44-6-180 [eff Jan. 1, 2013]; Nev Rev Stat § 39.630 [eff Oct. 1, 2011]).
Insofar as we can discern, the appellate courts of Texas, Iowa, and Georgia have been called upon to analyze their heirs property statutes, in situations where the property was owned, in part, by an entity or entities (see Atkinson v Land Endeavors, LLC, 2025 WL 1773247 [Tex App, No. 06-24-00024-CV] [parties did not contest whether the property was heirs property where the property was owned by two sisters and a limited liability company]; Matter of Will of Youngerman, 998 NW2d 889 [Iowa Ct App] [table; text at 2023 WL 8069976, 2023 Iowa App LEXIS 913] [finding that Iowa's heirs property statute did not apply where the property was owned entirely by a trust and where the decedent's daughter did not have an interest in the property, thus there was no tenancy in common]; Morton v Pitts, 357 Ga App 513, 851 SE2d 141 [parties did not contest property was heirs property where the plaintiff was a trustee acting in her representative capacity and the defendant was an individual]). In each of those decisions, unlike here, at least some portion of the property was owned by an individual or individuals.
However, based on this Court's review, there appears to be two jurisdictions, California and the United States District Court for the Southern District of Florida, that have addressed the issue presented on this appeal as it related to statutes that are nearly identical to RPAPL 993. First, in 2023, the Superior Court of California was asked in a strikingly similar case to determine whether certain property was heirs property within the meaning of former California Civil Procedure Code § 874.312,FN2 which defined "heirs property" as
"'real property held in tenancy in common which satisfies all of the following requirements as of the filing of a partition action: (1) There is no agreement in a record binding all the cotenants which governs [*6]the partition of the property. (2) One or more of the cotenants acquired title from a relative, whether living or deceased. (3) Any of the following applies: (A) Twenty percent or more of the interests are held by cotenants who are relatives. (B) Twenty percent or more of the interests are held by an individual who acquired title from a relative, whether living or deceased. (C) Twenty percent or more of the cotenants are relatives'" (Best v Best, 2023 WL 2621227, *3 [Cal Super Ct, No. 22SMCV01095] [alterations omitted], quoting former Cal Civ Proc Code § 874.312[e]).
In that case, the property at issue was owned by three trusts and a limited partnership (see id. at *1). In finding that "a trust is not quite a person" (id. at *4), the Superior Court of California astutely recognized that
"[t]rustees and beneficiaries can, and often are, one and the same (or at least they largely overlap), but sometimes not. The beneficiary can be a charitable organization, a good friend, or a for-profit organization. . . . The trustee owes significant duties to the beneficiaries but has great power to act while fulfilling those duties; trustees are also protected from personal liability for their actions unless they acted intentionally or negligently. And importantly, a trustee must be chosen and agree to the appointment" (id. at *3 [footnote and citations omitted]).
Thus, the court found that while the trustees in that case happened to be relatives, that would not always be the case, and that "[t]he court cannot endorse a reading of the statute where the words' meaning (as opposed to outcomes) will vary depending on the facts" (id. at *4). Moreover, the court found that
"[t]he language [of the statute] refers [to] individual humans who are part of a family's lineage and the Legislature's intent to follow intestate succession. A trustee fits this definition only if the court strips the trustees at issue here from the representative capacity by which they hold their interests. . . . While a human trustee may have relatives and a human beneficiary may have them too, a trust as an entity does not; a corporate trustee does not; and a corporate beneficiary does not" (id. at *5).
Thus, the court determined that the happenstance circumstance that relatives of the original property owners manage a limited liability company and several trusts does not warrant a per se finding that trusts and limited liability companies are subject to the protections allotted to the owners of heirs property, as those entities cannot constitute individuals.
On the other hand, the United States District Court for the Southern District of Florida (hereinafter the Southern District of Florida) reached the opposite conclusion in Romade Asset Partners, L.P. v Lester (2024 WL 2928807, 2024 US Dist LEXIS 104645 [SD Fla, No. 22-81914-Civ-MATTHEWMAN]). In that case, the Southern District of Florida applied the relevant Florida statute, which, mirroring RPAPL 993, defined "heirs property" as
'"real property held in tenancy in common which satisfies all of the following requirements as of the filing of a partition action:
"'(a) There is no agreement in a record binding all the cotenants which governs the partition of the property;
"'(b) One or more of the cotenants acquired title from a relative, whether living or deceased; and
"'(c) Any of the following applies:
"'1. Twenty percent or more of the interests are held [*7]by cotenants who are relatives;
"'2. Twenty percent or more of the interests are held by an individual who acquired title from a relative, whether living or deceased; or
"'3. Twenty percent or more of the cotenants are relatives'" (Romade Asset Partners, L.P. v Lester, 2024 WL 2928807, *2, 2024 US Dist LEXIS 104645, *5-6, quoting Fla Stat § 64.202[6]).
The parties consisted of the following: the plaintiffs were multiple limited partnerships and a limited liability company, and the defendants included trustees of several trusts and a limited partnership (see Romade Asset Partners, L.P. v Lester, 2024 WL 2928807, *1, 2024 US Dist LEXIS 104645, *2-3). In reaching the opposite result as the Superior Court of California, the Southern District of Florida opined that entities such as a limited partnership and a trust could be individuals, and reasoned,
"If the legislature had wanted to exclude trustees from the statutory definition of relatives for purposes of determining whether a property is 'heirs property,' it could have done so. It did not. Thus, the Court cannot and should not read into section 64.202(10) that trustees do not constitute individuals who fit within the definition of a 'relative'" (Romade Asset Partners, L.P. v Lester, 2024 WL 2928807, *3, 2024 US Dist LEXIS 104645, *8-9).
The Southern District of Florida, looking beyond the plain meaning of the statute, as the defendant here asks this Court to do, ultimately found that the property at issue was heirs property. Put another way, the Southern District of Florida read limited partnerships and trusts into the definition of "individual," rather than relying on the plain meaning of the statute.
To the extent that the defendant argues here that the subject property is heirs property because the representatives of the owners are related to each other and were related to Mark and Stephen, this Court finds that contention to be unpersuasive. The fact that the trust and the limited liability company are managed by people related to each other and to the brothers is entirely happenstance. Today, the owners are managed by individuals related to each other and to the brothers, but tomorrow they may not be. To adopt the defendant's argument would leave this Court with an unworkable rule that is too reliant on coincidence. For example, the Best court recognized the interchangeable nature of a trustee and a manager and perceptively noted,
"The trustee can be a relative, a bank, a lawyer, or just about anyone else. . . . But trustees, as a practical matter, are not always part of a genealogical family tree and they need not be human at all. And they always stand in a representative capacity and never in an individual one" (Best v Best, 2023 WL 2621227, *3-5).
We find that, as articulated by the Best court, "[t]rustees or beneficiaries must always qualify, in the way a grandfather or niece will always qualify" (id. at *4).
Even assuming that a member of a limited liability company was related to a co-tenant, "a member of [a limited liability company] has no interest in specific property of the [limited liability company]" (Behrend v New Windsor Group, LLC, 180 AD3d 636, 638; see Limited Liability Company Law § 601 ["A membership interest in the limited liability company is personal property. A member has no interest in specific property of the limited liability company"]; Normandy Capital Trust v 223 15th St, LLC, 244 AD3d 986, 988; 459 Wash. Ave., LLC v Atkins, 230 AD3d 1282, 1283). Thus, the fact that the manager of the defendant and the plaintiff, as trustee, are relatives of the brothers is of no moment.
The defendant's further contention that the fact that the owners were created for the separate benefits of the brothers warrants a finding that the subject property is heirs property is similarly without merit. The defendant, a limited liability company created for the benefit of Stephen, seeks to enjoy the benefits of both a limited liability company and those of an individual under RPAPL 993. The defendant cannot have it both ways. Similarly, there is no dispute that Mark's interest in the subject property was not deeded to the plaintiff in her individual capacity, but [*8]rather was deeded to the Mark Perlbinder 2023 Irrevocable Trust. The brothers employed sophisticated means to transfer, and presumably to protect, their ownership interests in the subject property to a trust and a limited liability company,FN3 which, it is respectfully submitted, were not intended by the Legislature to be protected by RPAPL 993. As such, the owners presumably are not susceptible to deceptive schemes employed by predatory real estate speculators. The purpose behind RPAPL 993 was to protect families, who inherited or acquired their interests in property from their relatives, from deceptive schemes employed by predatory real estate speculators, and not to protect, as here, sophisticated entities (see Laurelton Estates, LLC v Prince, 247 AD3d 19). The statute's purpose further supports the plaintiff's position that the Legislature did not intend RPAPL 993 to apply to real property that was entirely held by trusts and limited liability companies.
Here, the brothers, after owning the subject property themselves for more than half a century, put their interests in the subject property into these sophisticated legal entities. The owners' status as sophisticated legal entities provides its own protections from predatory parties. In any event, here, there is no outside third party who is seeking to invade a family's right to possess real property, further demonstrating that the owners are not entitled to the protections of RPAPL 993.
IV. Conclusion
Accordingly, the Supreme Court erred in denying the plaintiff's motion for summary judgment on the amended complaint on the basis that the provisions of RPAPL 993 applied, as the subject property does not qualify as heirs property within the meaning of the statute.
To succeed on a cause of action for the partition and sale of the subject property, the plaintiff was required to establish, inter alia, that a physical partition of the subject property would lead to great prejudice (see id. § 901[1]; Clarke v Clarke, 227 AD3d 659, 661-662). Since the Supreme Court, after determining that the subject property is heirs property, did not further consider the merits of the plaintiff's motion and whether a physical partition of the subject property would lead to great prejudice, the matter must be remitted to the Supreme Court, Suffolk County, for a new determination on the merits of that motion (see Wardally v Wardally, 186 AD3d 531, 532).
The plaintiff's remaining contention need not be reached in light of our determination.
Accordingly, the order is reversed, on the law, and the matter is remitted to the Supreme Court, Suffolk County, for a new determination on the merits of the plaintiff's motion for summary judgment on the amended complaint.
CONNOLLY, J.P., CHRISTOPHER and VENTURA, JJ., concur.
ORDERED that the order is reversed, on the law, with costs, and the matter is remitted to the Supreme Court, Suffolk County, for a new determination on the merits of the plaintiff's motion for summary judgment on the amended complaint.
ENTER:
Darrell M. Joseph
Clerk of the Court
Footnotes
Footnote 1
Entirely unrelated to this action, included in the plaintiff's submissions in support of her motion, presumably as background information as to the relationship between the brothers and the parties, was a petition/complaint filed in February 2024 by Stephen, among others, against Mark and the plaintiff, among others, seeking, inter alia, judicial dissolution of Perlbinder Holdings, LLC, a limited liability company jointly owned by the brothers.
Footnote 2
Before the Superior Court of California issued its decision, but after the action was filed, the California Legislature revised its Uniform Partition of Heirs Property Act (see Cal Bill Analysis, AB 2245 Assembly [Mar. 24, 2022] ["This bill modifies the default legal procedures for the partition of real property co-owned by multiple people as tenants in common regardless of how the property was acquired"]). The amendments removed limitations based on whether the owners were relatives (see Cal Civ Proc Code § 874.311[a]-[c]).
Footnote 3
To the extent that the defendant contends that the subject property is heirs property because Mark originally commenced the action, it is noted that the parties stipulated to the filing of the amended complaint substituting the plaintiff for Mark after Mark transferred the subject property to the Mark Perlbinder 2023 Irrevocable Trust, and the defendant thereafter filed an answer to the amended complaint (see CPLR 1003 ["Parties may be added at any stage of the action by leave of court or by stipulation of all parties who have appeared], 3025 ["A party may amend his or her pleading, or supplement it by setting forth additional or subsequent transactions or occurrences, at any time by leave of court or by stipulation of all parties"]; seealsoD'Angelo v Kujawski, 164 AD3d 648 [finding that the Supreme Court properly granted the plaintiff's motion for leave to amend the complaint where the amendment was to substitute herself in her representative capacity as the plaintiff in place of herself in her individual capacity and did not otherwise add additional causes of action]). Once the amended complaint was filed, "it superseded the original complaint and became the only complaint in the action" (Kolodziejski v North Shore Univ. Hosp., 242 AD3d 971, 972 [finding that the amended complaint superseded the original complaint and that the appellants, who were not named defendants therein, were no longer parties to the action]; see Rosas v Petkovich, 218 AD3d 814, 816 [finding that the original complaint was superseded by the amended complaint and, thus, no longer viable]; Rosa v Triborough Bridge & Tunnel Auth., 218 AD3d 810, 813 [finding that the amended complaint superseded the original complaint "and rendered it of no legal effect"]), and thus, at the time of filing, the subject property was owned by the Mark Perlbinder 2023 Irrevocable Trust and the defendant.