Dissolution of Anderson, Zangari & Bossian

• Decision Date: 13 January 2006
• Docket Number: No. 2004-187-Appeal.,2004-187-Appeal.
• Citation: 888 A.2d 973
• Parties: In the Matter of the DISSOLUTION OF ANDERSON, ZANGARI & BOSSIAN.
• Court: Rhode Island Supreme Court

888 A.2d 973

In the Matter of the DISSOLUTION OF ANDERSON, ZANGARI & BOSSIAN.

No. 2004-187-Appeal.

Supreme Court of Rhode Island.

January 13, 2006.

Paul A. Anderson, Carol A. Zangari, and Dennis D. Bossian.

Present: WILLIAMS, C.J., GOLDBERG, FLAHERTY, SUTTELL, and ROBINSON, JJ.

OPINION

Justice ROBINSON for the Court.

This is an appeal from a judgment of the Superior Court regarding a dissolution petition filed with respect to the law partnership of Anderson, Zangari & Bossian. The trial justice considered a great volume of testimonial and documentary evidence, as well as the written and oral arguments of counsel, and he then wrote a fact-filled decision reflecting his findings of fact and his assessments of credibility. One of the three parties to the now-dissolved partnership, Attorney Dennis Bossian, has appealed to this Court.

For the reasons set forth herein, we affirm the judgment of the Superior Court.

Travel

Attorneys Paul Anderson, Carol Zangari, and Dennis Bossian orally agreed to form a law partnership that came into existence on January 1, 1995. After practicing law as partners for a few years, the three partners agreed to dissolve their partnership, with an effective dissolution date of August 31, 1999. The present controversy centers around the formula according to which the former partnership's remaining funds should be distributed to the three attorneys referred to above.¹

This case was tried before a justice of the Superior Court, sitting without a jury, over the course of numerous days beginning in November 2002 and ending in April 2003. On June 3, 2003, the trial justice issued a written decision, in which he made various findings of fact regarding the nature of the Anderson, Zangari & Bossian partnership and the terms of the partnership agreement that had existed among the three partners. The trial justice's decision set forth a mechanism by which the remaining partnership funds held in escrow were to be distributed to the three former partners in accordance with his findings. Clearly dissatisfied with the Superior Court's decision, Attorney Bossian has appealed to this Court, challenging, among other things, the factual findings and credibility assessments made by the trial justice.

Standard of Review

Our review of the findings of a trial justice sitting without a jury is quite deferential; this Court (like virtually all appellate courts) traditionally accords a great deal of respect to the factual determinations and credibility assessments made by the judicial officer who has actually observed the human drama that is part and parcel of every trial and who has had an opportunity to appraise witness demeanor and to take into account other realities that cannot be grasped from a reading of a cold record. The criteria that control our review in this context have been cogently summarized as follows:

"The findings of fact by a trial justice sitting without a jury are entitled to great weight and shall not be disturbed on appeal unless the record shows that the findings are clearly wrong or unless the trial justice overlooked or misconceived material evidence on a controlling issue." Burke-Tarr Co. v. Ferland Corp., 724 A.2d 1014, 1018 (R.I.1999).

See also Blue Cross & Blue Shield of Rhode Island v. Najarian, 865 A.2d 1074, 1080-81 (R.I.2005); Donnelly v. Cowsill, 716 A.2d 742, 747 (R.I.1998); Thomas v. Ross, 477 A.2d 950, 953 (R.I.1984).²

Analysis

In reaching a decision regarding the dissolution petition at issue in the present case, the trial justice was required to make a factual determination regarding the terms of the partnership agreement that former partners Anderson, Zangari, and Bossian entered into—and he was required to do so largely on the basis of oral testimony. After considering and weighing the plethora of testimonial and documentary evidence before him, the trial justice made factual findings, the essence of which we summarize as follows.

After being admitted to the Rhode Island Bar, Paul Anderson embarked upon a law partnership with his father, the late Charles H. Anderson, forming the firm of Anderson & Anderson (AA). In January of 1979, Carol Zangari joined that firm as an associate. On January 1, 1986, Charles H. Anderson withdrew from the active practice of law, and Paul Anderson and Carol Zangari formed a new law partnership. Attorney Anderson had a 60 percent interest in the new partnership, while Attorney Zangari had a 40 percent interest. The new firm of Anderson & Zangari (AZ) financed its business operations using all the money that was collected after January of 1986. This money was derived from legal work performed both before that date (by AA) and after that date (by AZ). Records were kept that differentiated revenue attributable to services rendered by AA from revenue attributable to services rendered by AZ. The partnership of AZ also purchased furnishings and equipment from AA. The agreement between AZ and AA provided that AZ would pay AA for the furniture and equipment in monthly sums and that the pre-1986 money utilized by AZ would be repaid to AA as the cash flow and resources of AZ would permit. It was further agreed that the sums due to Charles H. Anderson would be repaid more aggressively than the sums due to Paul Anderson. All agreements regarding AA and AZ were oral.

In January 1988, Dennis Bossian joined AZ as an associate. At that time, Attorney Bossian was given a base salary and a certain percentage of the fees that he generated and collected from his private clients. Just as were the agreements between AA and AZ, all agreements between AZ and Attorney Bossian were oral.

Seven years later, the partnership of Anderson, Zangari & Bossian (AZB) was formed. In determining what, if any, partnership agreement existed among the three partners, the trial justice chose to accept the view of the partnership agreement advanced by Attorney Anderson and largely corroborated by Attorney Zangari. Under this agreement, Anderson was to receive a gross draw of $2,000 weekly ($104,000 per year); Zangari was to receive a gross draw of $1,750 weekly ($91,000 per year); and Bossian was to receive a gross draw of $1,250 weekly ($65,000 per year). The expenses of the firm were to be divided equally among the three partners. A computation would then be made in which the three gross draws would be added to the overhead to arrive at a gross figure referred to as the "partnership nut." This amount would then be divided by three to determine each individual partner's "nut." The partnership agreement further provided that, after all expenses and the three agreed-upon base draws had been paid, any partner who generated sums in excess of his or her "partner's nut" would receive 50 percent of the excess, with the remaining 50 percent being divided according to a 40/35/25 ratio to Anderson, Zangari, and Bossian, respectively.

According to the AZB partnership agreement, as described by Anderson and accepted by the trial justice, when the new partnership of AZB was first formed, the financial aspects of the change of ownership from AZ to AZB were handled using a methodology similar to that used during the change of ownership from AA to AZ. Records were kept that differentiated the revenues attributable to AZ from the revenues attributable to AZB, and balances in various AZ accounts were transferred into parallel AZB accounts. In addition, as the partners collected fees from their private cases, these fees were allocated between pre-1995 and post-1995 work.

The trial justice found that two major...