Williamson v. Culbro Corp. Pension Fund

In Williamson v. Culbro Corp. Pension Fund, 41 AD3d 229 [1st Dept 2007], lv denied, 10 NY3d 702 [2008], the Appellate Division, First Department considered whether claims for unjust enrichment and money had and received asserted by a successor liquidating trustee on behalf of a partnership to recover distributions allegedly wrongful paid to defendants were governed by the three-year statute of limitations provided by RLPA 121-607(c). The trial court decision found that subdivision (c) did not apply because section 121-607 limits the three-year period to wrongful distributions described in subdivisions (a) and (b), that is those distributions which would render the partnership insolvent and were received by a partner knowingly that such distribution would lead to insolvency. The First Department rejected the trial court analysis writing that it was "contrary to [the statute's] plain language" and that "the limitation period applies when a limited partner receives a 'wrongful distribution.' The term 'wrongful' is plain and refers not only to distributions that render a partnership insolvent, but any improper distribution. Moreover, the subdivision states that the limited partner receiving a 'wrongful distribution' shall have no liability after three years 'under this article or other applicable law.'" 41 AD3d at 231. The First Department explained that "while subdivision (b) makes a limited partner liable for a violation of subdivision (a) only to the extent that the limited partner knew the distribution rendered the partnership insolvent, it expressly states that this does not affect 'liability of a limited partner under a partnership agreement or other applicable law for the amount of a distribution' but such liability is 'subject to subdivision(c).'" The court then wrote "it is hard to imagine how this sentence can mean anything other than that the limited partner's liability for distributions 'under the partnership agreement or other applicable law' is subject to the three-year statute of limitations." Id. at 232.