McKay's Estate v. Moses

• Decision Date: 20 January 1976
• Docket Number: No. 60469,60469
• Citation: 343 N.E.2d 45,35 Ill.App.3d 458
• Parties: ESTATE of Thomas McKAY, Plaintiff-Appellant, v. Walter H. MOSES et al., Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 45

343 N.E.2d 45

35 Ill.App.3d 458

ESTATE of Thomas McKAY, Plaintiff-Appellant, v. Walter H. MOSES et al., Defendants-Appellees.

No. 60469.

Appellate Court of Illinois, First District, Second Division.

Jan. 20, 1976.

Wildman, Harrold, Allen & Dixon, Chicago (Max Wildman, John M. Lison, John J. Arado, Chicago, of counsel) for plaintiff-appellant.

Wm. Bruce Hoff, Jr., Chicago (Mayer, Brown & Platt, Chicago, of counsel) for defendants-appellees.

DOWNING, Presiding Justice:

Thomas McKay ¹ (plaintiff) filed a complaint for an accounting to collect monies allegedly owed him upon the termination of his association with the law partnership of Moses, ² McGarr, Gibbons, Abramson & Fox (defendants). Both plaintiff and defendants moved for partial summary judgments. The circuit court of Cook County granted defendants' motion and entered an order limiting plaintiff's partnership termination rights to those specified in paragraphs 5(d) and 12(b) of a partnership agreement entered into by these parties. Plaintiff's motion was denied. The correctness of the trial court's ruling is challenged by the plaintiff in this appeal.

This court initially held that the trial court was in error in granting defendants' motion for summary judgment. Our conclusion was grounded on the finding that the partnership agreement was uncertain and ambiguous, consequently a genuine issue of material fact had to be determined and evidence should be submitted to give the trier of fact a basis for its decision. Thereafter the defendants filed a petition for rehearing in which it was asserted that both parties agreed '(n)either plaintiff nor defendants have any such extrinsic evidence to offer.' The petition for rehearing was granted, whereupon the plaintiff filed an answer to said petition. In effect, the parties in an effort to resolve this prolonged litigation, jointly requested this court to consider the record in this case and resolve the substantive issues presented by the appeal. Subsequently, at the suggestion ³ of this court, the parties filed the following stipulation:

'1. That, in resolving the substantive issues presented, this Court may consider the parties' answers to the Bill of Particulars and Interrogatories, documents produced and plaintiff's depositions heretofore filed with the Court; and

2. That the parties agree that the Court should resolve the substantive issues raised by the respective parties in this litigation.'

We have therefore withdrawn our original opinion and substitute this opinion which considers the substantive issues presented by the parties. The following is a summary of the pertinent facts determined from the pleadings, answers to bill of particulars and interrogatories, as well as the plaintiff's discovery deposition, all filed with this court.

On June 1, 1965, after plaintiff and some of the defendants had been associated for a number of years in the practice of law, a modified detailed partnership agreement was entered into by the parties. The portions of that agreement relevant to this appeal are paragraphs 5(d), 9(a), 12(a) and (b), and 16 ⁴. Paragraph 5(d) sets forth a partner's rights upon the Death or Withdrawal from the partnership; paragraph 9 deals with the partners' rights upon Termination of the partnership; paragraphs 12(a) and (b) allow for the Expulsion of a partner giving the expelled partner the same rights as a withdrawing partner under paragraph 5(d); and paragraph 16 requires a vote of 66--2/3% Interest of the partnership for a Dissolution. This agreement provided it '* * * shall continue to and including May 31, 1966 (except as to such parties hereto as shall become deceased or whose interests shall cease as herein provided), unless the parties hereto, or the survivors or remainder of them, shall in writing agree to continue said partnership thereafter.'

Upon the expiration of this partnership agreement on June 1, 1966, the parties signed an extension and revision of the existing agreement. The percentage interest of the partners was revised by this extension and the duration of the agreement was extended. Paragraph two of the extension and revision provided as follows:

'The term of said agreement dated June 1, 1965 shall be extended for one year to and including May 31, 1967, and from fiscal year to fiscal year thereafter, Subject to the right of any partner to terminate pursuant to said agreement.' (Emphasis supplied.)

On April 26, 1967, plaintiff served notice on defendants that he intended to terminate his association with the partnership pursuant to paragraph two of the extension and revision, and that the termination would be effective as of May 31, 1967. On that same date, April 26, 1967, defendants served a demand and notice on plaintiff pursuant to paragraph 12(a) of the partnership agreement requiring that plaintiff withdraw from the partnership or be expelled as of Friday, April 28, 1967.

Plaintiff contends he is entitled to an accounting of the partnership assets as if the partnership was terminated under paragraph 9 of the agreement. This would entitle him to collect, amongst other things, unbilled, as well as, billed but uncollected hours earned by the partnership as of May 31, 1967.

Defendants contend plaintiff is not entitled to an accounting under paragraph 9; but rather, he is restricted to the provisions of paragraph 5(d)--the rights of a withdrawing partner. Defendants urge the word 'terminate' as used in the extension and revision is no more than a withdrawing from the partnership, and the plaintiff should not be able to dissolve the partnership without a 66 2/3% Vote for dissolution. In the alternative, defendants contend plaintiff is an expelled partner and thereby limited to the rights specified in paragraphs 12 and 5(d) of the partnership agreement. Under paragraph 5(d)--which defendants contend is applicable--plaintiff is only entitled to his proportionate share of the collected assets of the partnership on the date of his termination, and would not be entitled to unbilled or billed and uncollected time.

Plaintiff filed suit to collect the amounts allegedly owed to him by the partnership under his theory. Defendants answered by denying plaintiff's right to terminate and pleaded plaintiff's alleged misconduct as a partner resulting in expulsion pursuant to paragraph 12(a), and demanded an accounting for all sums due and owing to defendants. Defendants moved for summary judgment to determine whether under the partnership agreement between the parties and its supplement, or under the Illinois Partnership Act, plaintiff would be entitled '* * * to any rights as a 'withdrawing', 'expelled' or 'terminating' partner over and above those provided in paragraphs 5(d) and 12(b) of the Partnership Agreement.' In response, plaintiff moved for summary judgment requesting the trial court to hold that plaintiff is entitled to his proportionate share of unbilled time, billed but uncollected time, and fixed firm assets as of May 31, 1967.

The circuit court of Cook County denied plaintiff's motion and granted defendants' motion for partial summary judgment limiting plaintiff's rights upon termination to those specified in paragraphs 5(d) and 12(b) of the partnership agreement.

Our review of the record before us leads us to conclude that there is no evidence before us which aids in determining what the intent of the parties is with respect to the disputed paragraph two of the extension and revision dated June 1, 1966. In the discovery deposition taken of the now deceased plaintiff, he stated that prior to the dispute he had not read the partnership agreement, and had no intention of using technical words in his personal discussions with his partners.

I.

As previously noted, plaintiff originally challenged the propriety of the partial summary judgment entered by the circuit court of Cook County.

The summary judgment procedure has become a material part of the present pleading and practice in Illinois, and is a sizeable step in disposing of cases with more dispatch than formerly was available. (Klesath v. Barber (3rd Dist. 1972), 4 Ill.App.3d 86, 88, 280 N.E.2d 283.) The Illinois Civil Practice Act, Section 57(3) (Ill.Rev.Stat.1973, ch. 110, par. 57(3)) provides:

'The judgment or decree sought shall be rendered forthwith if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment or decree as a matter of law.'

In considering a motion for summary judgment, the court considers the entire record, and such a judgment should only be granted where it is clear there is no genuine issue of material fact. See Williams v. Chicago & Eastern Ill. R.R. Co. (5th Dist. 1973), 13 Ill.App.3d 596, 600, 300 N.E.2d 766; Roberts v. Dahl (1st Dist. 1972), 6 Ill.App.3d 395, 405, 286 N.E.2d 51.

We originally held that because the word Terminate in the June 1, 1966 extension of the partnership agreement created an ambiguity, extrinsic evidence should be introduced to explain the intent and true meaning of the parties, and the trial court was in error in granting the defendants' motion for summary judgment. However, as we have noted above, based on the stipulation of the parties, we are now passing this issue without resolution.

II.

We now consider whether the trial court was correct when it limited plaintiff's partnership termination rights to those specified in paragraphs 5(d) and 12(b) of the partnership agreement. Or to say it another way, we must now decide whether plaintiff's action on April 26, 1967 amounted to a termination of, or a withdrawal from the partnership.

A few basic principles should be stated. Partners have the right to establish between themselves, by a partnership agreement or by a dissolution agreement, their rights, duties and obligations so far as the partnership is concerned. (Meyer v. Sharp (4th Dist. 1950), ...