34 Misc.3d 1207(A), 2011-52439, Weir v. Holland & Knight, LLP

Docket Nº2011-52439
Citation34 Misc.3d 1207(A), 943 N.Y.S.2d 795
Opinion JudgeMARCY S. FRIEDMAN, J.
Party NameJohn K. WEIR, Plaintiff(s), v. HOLLAND & KNIGHT, LLP, et al., Defendant(s). No. 603204/07.
Case DateDecember 09, 2011

Page 1207(A)

34 Misc.3d 1207(A)

943 N.Y.S.2d 795

John K. WEIR, Plaintiff(s),

v.

HOLLAND & KNIGHT, LLP, et al., Defendant(s).

No. 603204/07.

No. 2011-52439

Supreme Court of New York, New York County.

December 9, 2011

Editorial Note:

This decision has been referenced in a table in the New York Supplement.

MARCY S. FRIEDMAN, J.

This action arises out of the expulsion of plaintiff John Weir, in November 2002, from defendant Holland & Knight, LLP, a law firm partnership. Defendant partnership and partners individually named as defendants (collectively Holland & Knight) move for summary judgment dismissing plaintiff's complaint and for summary judgment and an accounting on their counterclaims. Plaintiff moves for summary judgment on his cause of action for breach of contract and for summary judgment dismissing the counterclaims.

The complaint alleges nine causes of action: the first and second, for age discrimination and retaliation, respectively, under the New York State and City Human Rights Laws; the third, for breach of fiduciary duties; the fourth, for breach of contract; the fifth, for breach of implied contract and breach of the covenant of good faith and fair dealing; the sixth, for fraudulent inducement; the seventh, for fraud and misrepresentation; the eighth, for conversion and unjust enrichment; and the ninth, for tortious interference with contract. (Compl., Ex. A to Aff. of Renee Phillips [Ds.' Atty] In Opp. To P.'s Motion [Ds.' Aff. In Opp.].) The answer asserts four counterclaims: the first, for breach of contract; the second, for breach of fiduciary duty; the third, for money had and received; and the fourth, for unjust enrichment. (Answer, Ex. B to Aff. of John Giansello [Ds.' Atty] In Support of Ds.' Motion [Giansello Aff.].)

The standards for summary judgment are well settled. The movant must tender evidence, by proof in admissible form, to establish the cause of action " sufficiently to warrant the court as a matter of law in directing judgment." (CPLR 3212[b]; Zuckerman v. City of New York, 49 N.Y.2d 557, 562 [1980].) " Failure to make such showing requires denial of the motion, regardless of the sufficiency of the opposing papers." ( Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853 [1985].) Once such proof has been offered, to defeat summary judgment " the opposing party must show facts sufficient to require a trial of any issue of fact' (CPLR 3212, subd .[b]." ( Zuckerman, 49 N.Y.2d at 562.)

Plaintiff's Breach of Contract Claim

Plaintiff, a former partner in Haight Gardner Poor & Havens (Haight Gardner), became a " New Class B Capital Partner" in Holland & Knight, pursuant to an Asset Contribution and New Partner Admission Agreement (Asset Agreement), dated July 1, 1997, under which Haight Gardner combined with Holland & Knight. (Asset Agreement, Ex. C to P.'s Motion.)

Plaintiff's breach of contract claim seeks damages for Holland & Knight's failure to pay him " dissociation benefits," also referred to as Schedule C benefits, upon his expulsion from the Holland & Knight partnership, and damages for lost compensation based on Holland & Knight's alleged wrongful refusal to permit him to retire, at his option, at age 62 or 70. In claiming entitlement to such damages, plaintiff relies on section 21(a) of the Asset Agreement, which provides that the committee negotiating the combination of the firms will recommend, and bring to a vote before the Holland & Knight partners, that the New Class B Capital partners from Haight Gardner be entitled to the same death, disability, expulsion, and retirement benefits (the Schedule C benefits) to which existing Holland & Knight partners are entitled under the Holland & Knight Partnership Agreement. In claiming that he has a guaranteed right to Schedule C benefits upon expulsion, plaintiff cites the absence of any provision in the Asset Agreement for termination with or without cause. He also relies upon section 22 of the Asset Agreement which states: " The New Partners shall have no Schedule C Benefits upon withdrawal (other than retirement, death, disability or expulsion) from Holland & Knight, but shall, except as otherwise provided above, have the rights provided by the Partnership Agreement relevant to a return of Capital Accounts."

Plaintiff's reliance on the Asset Agreement entirely ignores that section 32 of that Agreement expressly provides that upon the combination of the firms, " the Holland & Knight LLP Partnership Agreement shall be the surviving governing instrument for both the Holland & Knight partners and New Partners...." Plaintiff argues that he is not bound by the Partnership Agreement because section 32 of the Asset Agreement also required the New Partners to execute the Partnership Agreement, and he never did so. This claim is belied by plaintiff's execution, on July 31, 1997, of an " Agreement of Partners To be Bound by the Holland & Knight LLP Partnership Agreement." (Ex. 39 to Ds.' Aff. In Opp.)

Section 26.04 of the Partnership Agreement, which supersedes the Asset Agreement, unambiguously provides that " [a] partner may be expelled from the firm with or without cause," and that, effective as of the expulsion date, " the firm shall purchase the expelled partner's interest, if any, in the firm. The value of the interest will be determined and paid in the manner set forth in paragraph 27." (Partnership Agreement, Ex. A to Aff. of Kinder Cannon In Support of Ds.' Motion [Cannon Aff.].) Section 27.01 specifies that the value of a Class B Capital partner's interest upon termination is the value of the partner's capital account and Schedule C benefits. Section 27.02 further provides: " A withdrawn or expelled partner is not entitled to receive any Schedule C payment while, in the determination of the Managing Partner, he or she has failed to take all steps reasonably required to accomplish the recording and billing of his or her time or has failed to exhaust all reasonable efforts to effect collection of accounts for which he or she was primarily responsible." Section 24.06 provides that clients for whom the partners perform services " are clients of the firm and not of individual partners.... That general statement of principle endures, notwithstanding any withdrawal of partners from the firm."

Significantly, plaintiff does not dispute that he did not submit time sheets for work on which he represented clients in the approximately nine months between March 2002 and his expulsion in November 2002. Nor does he dispute that defendant partnership was entitled to fees for the clients he represented, and that defendants made repeated demands for the submission of the time sheets. Rather, he claims that he withheld the time sheets— an act that he describes as a " restrained countermeasure" — based on defendants' alleged wrongful demand that he withdraw from the firm or be expelled, and on defendants' alleged wrongful reduction of his compensation. (Reply to Ds.' Counterclaims, ¶ 7 [Ex. R to P.'s Reply Aff. On P.'s Motion]; Weir Dep. at 37 [Ex. C to Giansello Aff.].) Plaintiff wholly fails, however, to submit legal authority that his withholding of time sheets was an act of self-help that was justified based on his claim of wrongdoing on defendants' part.

Moreover, defendants make an unrebutted showing of material financial loss as a result of plaintiff's failure to cooperate with billing of the clients he represented in the nine months before his expulsion. The Schedule C benefits that plaintiff claims amount to approximately $300,000. The amount of the unbilled fees for plaintiff's services during the period of his non-cooperation is not fully established on this record. However, defendants submit evidence that after his expulsion, plaintiff billed one client (Stolt Nielsen Transportation Group) approximately $114,000, and a second client (United States Aviation Underwriters) $14,000, for services performed exclusively while he was a partner at Holland & Knight. ( See Ds.' Memo. Of Law In Opp. To P.'s Motion at 8-9 [Ds.' Memo. In Opp.]; Ex. 25 to Ds.' Aff. In Opp.) Defendants also submit evidence that they received only partial payment of approximately $70,000 on account of the fees for these clients. (Ds.' Memo. In Opp. at 8-9.) Plaintiff does not deny that he issued these bills, although he claims, without proof, that he was paid only for work performed after he left Holland & Knight for these clients. ( See Reply to Ds.' Counterclaims, ¶ 21 [acknowledging that plaintiff billed for services rendered before and after expulsion, but claiming receipt of payment only for " that portion of his bill which the client determined related to his services" after expulsion]; Weir Dep. at 44-45 [same].)

The undisputed record thus demonstrates that plaintiff refused to facilitate billing of clients of the firm he represented, with resulting financial loss to defendant partnership that was material in relation to the amount of plaintiff's claim for retirement benefits. Under these circumstances, plaintiff's claim for Schedule C benefits is barred as a matter of law by the clear terms of section 27.02 of the Partnership Agreement. The court further holds that plaintiff's claim that he had a guaranteed right to continue to work at least until the age of 62 is barred by the plain language of section 26.04.

In holding that these provisions bar plaintiff's breach of contract claim, the court rejects plaintiff's contention that the Florida Revised Uniform Partnership Act of 2005 (Fla St. §§ 620.81001, et seq. ) (FRUPA) mandates that a statutory dissociation payment be made to plaintiff. As a Florida partnership, Holland & Knight is subject to FRUPA. However, plaintiff blatantly misconstrues its terms. Citing FRUPA § 620.8103(2) for the proposition that a...

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