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.

[U] Seidman v. Caplan

Superior Court of Pennsylvania

January 13, 2014

MERRILL SEIDMAN, A GENERAL PARTNER, AND MERRILL SEIDMAN AND PHILIP B. GOODMAN T/A MS & RS INVESTMENT LIMITED PARTNERSHIP, A GENERAL PARTNER, COLLECTIVELY T/A JACOB AND MERRILL SEIDMAN PARTNERSHIP AND WASHINGTON SQUARE PARTNERS, L.P., Appellants
v.
RONALD L. CAPLAN, PMC WASHINGTON SQUARE PARTNERS GP AND ROOSEVELT'S INC., Appellees MERRILL SEIDMAN, A GENERAL PARTNER, AND MERRILL SEIDMAN AND PHILIP B. GOODMAN T/A MS & RS INVESTMENT LIMITED PARTNERSHIP, A GENERAL PARTNER, COLLECTIVELY T/A JACOB AND MERRILL SEIDMAN PARTNERSHIP AND WASHINGTON SQUARE PARTNERS, L.P., Appellees
v.
RONALD L. CAPLAN, PMC WASHINGTON SQUARE PARTNERS GP AND ROOSEVELT'S INC., Appellants

NON-PRECEDENTIAL DECISION

Appeal from the Judgment Entered January 23, 2013 In the Court of Common Pleas of Philadelphia County Civil Division at No. September Term, 2008, No. 2385.

BEFORE: BENDER, P.J., LAZARUS, J., AND FITZGERALD [*], J.

MEMORANDUM

BENDER, P.J.

Merrill Seidman, the Jacob and Merrill Seidman Partnership (the Seidman Partnership), and Washington Square Partners (WSP) (collectively, the Seidman Parties) appeal from the judgment entered on January 23, 2013, following a non-jury trial and the denial of their post-trial motions. Ronald Caplan, PMC/Washington Square Partners GP, LLC, and Roosevelt's Inc. d/b/a Philadelphia Management Company (collectively, the Caplan Parties) cross-appeal. We affirm.

Ronald Caplan organized WSP in 1996 for the express purpose of purchasing and disposing of real property then known as the Farm Journal Building located at 230-234 Washington Square, Philadelphia, Pennsylvania. Caplan served as general partner to WSP. Caplan invited the Seidman Partnership to join WSP as a special limited partner and capital contributor. The Seidman Partnership contributed $200, 000 to WSP and facilitated an $800, 000 mortgage loan. Max Berger and David Nyberg joined WSP as limited partners but made no capital contribution.[1]

WSP purchased the Farm Journal Building on December 20, 1996, and sold it six months later on June 18, 1997. On June 19, 1997, Caplan, on behalf of WSP, agreed to purchase another property, located at 1411 Walnut Street, Philadelphia, Pennsylvania, from S-L Walnut, L.P., another entity partially owned by Caplan.

Following the sale of the Farm Journal Building, the Seidman Partnership received a return of its capital investment. The partners agreed to defer receipt of proceeds from the sale in order to accomplish a tax-free exchange. Further, each of the limited partners agreed to reduce their interest in WSP from the date of the exchange to a de minimus percentage for the purpose of the tax-free exchange.

On December 18, 1997, WSP completed the purchase of the Walnut Street property, thus perfecting the exchange. On January 1, 1998, the Seidman Partnership assigned 19.5% of its interest to Caplan.[2] On March 16, 1998, and March 19, 1998, the Seidman Partnership received distributions of the proceeds from the Farm Journal Building sale in the respective amounts of $400, 000 and $200, 000.[3]

In December 1998, the WSP partners signed a new agreement, reallocating the interests of the partnership and restating the provisions governing the partnership. At this time, WSP admitted Crusader Bank (Crusader) as an investor limited partner. In exchange for a substantial amount of capital, Crusader received a 99.8% interest in WSP and access to certain historic tax credits generated by the Walnut Street property.[4]

Once Crusader earned the tax credit, Caplan purchased Crusader's interest in WSP with his personal funds. However, the transaction was erroneously structured as a redemption of the interests by WSP. This error caused WSP accountants to reallocate the remaining partners' ownership interests. As a result, the Seidman Partnership was reported to own a 20% interest in WSP. Subsequent tax returns for 2004 and 2005 reflected this error. In 2006, when Caplan discovered the error, he directed that the tax statements be corrected, and he prepared an amended and restated agreement of the partnership, resetting the ownership interests so that the Seidman Partnerhsip had a .5% interest in WSP.[5]

The Seidman Parties commenced this action in September 2008, asserting numerous individual and derivative claims, including breach of fiduciary duty, breach of contract, conversion, unjust enrichment, tortious interference with contractual relations, aiding and abetting tortious interference, and civil conspiracy. Central to the Seidman Parties' claims was their contention that the Seidman Partnership owned a 20% interest in WSP. The Seidman Parties also filed a petition for audit and accounting, which was later withdrawn after a stipulation of the parties was filed and approved by the trial court. The trial court dismissed the claims for conversion and tortious interference on the basis of preliminary objections filed by the Caplan Parties. The trial court also entered partial summary judgment in favor of the Caplan Parties, dismissing the claims for aiding and abetting tortious interference and civil conspiracy.

In September and October 2011, the remaining claims were tried non-jury. In August 2012, the trial court issued extensive findings of fact and conclusions of law. Most significantly, the trial court found that the Seidman Partnership interest in WSP was .5%, not 20%. In addition, the trial court found in favor of the Seidman Parties on the breach of contract claim, based on Caplan's failure to provide the Seidman Partnership with annual financial statements. The trial court awarded the Seidman Parties damages, representing interest accrued on a deposit account controlled by Philadelphia Management Company and distributions associated with refinancing secured by WSP through Sovereign Bank.[6] The trial court found in favor of the Caplan Parties on all remaining claims.

The parties filed post-trial motions, which were denied by the trial court. Judgment was entered, and thereafter, the Seidman Parties timely appealed; the Caplan Parties cross-appealed. The parties complied with ...


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.