Morris v. Crawford
| Decision Date | 17 April 2003 |
| Citation | 757 N.Y.S.2d 383,304 A.D.2d 1018 |
| Parties | MICHAEL J. MORRIS et al., Appellants-Respondents,<BR>v.<BR>DAVID J. CRAWFORD, Respondent-Appellant. |
| Court | New York Supreme Court — Appellate Division |
Crew III, J.
The underlying facts are set forth in this Court's prior decision in this matter (281 AD2d 805 [2001]). In August 1989, defendant entered into a purchase agreement with plaintiff Michael J. Morris, pursuant to the terms of which defendant was to acquire an ownership interest in Morris's engineering firm, plaintiff Morris Associates. Thereafter, in February 1992, defendant, Morris and a third individual executed and filed a certificate of business indicating that they were conducting business as a partnership. Shortly thereafter, defendant became disenchanted with the operation of the partnership and, by memorandum dated March 31, 1992, presented Morris with three possible options concerning the future of Morris Associates including, insofar as is relevant to this appeal, a proposal to separate the office of Morris Associates located in the City of Hudson, Columbia County, from the firm's primary office in the City of Poughkeepsie, Dutchess County, with defendant assuming responsibility for running the Hudson office. Negotiations between Morris and defendant subsequently broke down and, in May 1992, defendant began operating a firm known as Crawford & Associates out of the Hudson office.
Plaintiffs thereafter commenced this action alleging, inter alia, tortious interference with contracts and breach of fiduciary duty. Defendant answered and counterclaimed for, among other things, an accounting. Following an unsuccessful motion for summary judgment, the matter proceeded to a bench trial with the primary dispute centering upon the date of dissolution for the partnership. Ultimately, Supreme Court found that the partnership was dissolved on May 15, 1992 and dismissed plaintiffs' breach of contract and breach of fiduciary duty claims. As to damages, Supreme Court awarded plaintiffs $39,939, representing the value of the equipment, supplies and transition expenses incurred with regard to the Hudson office, together with the value of the services rendered to Crawford & Associates during the transition period. In so doing, Supreme Court held that plaintiffs had failed to adduce any credible evidence as to the value of the goodwill of the partnership as of the date of dissolution. Supreme Court further found that defendant was entitled to damages in the amount of $55,574, representing compensation for work performed by Crawford & Associates for a particular client after the dissolution of the partnership and during the transition period. Plaintiffs' award was deducted from defendant's award, leaving a balance due to defendant in the amount of $15,635. These funds were paid from an escrow account established by the parties prior to trial, and Supreme Court awarded 72% of the interest earned thereon to plaintiffs and 28% of the interest earned to defendant. These cross appeals ensued.
Plaintiffs initially contend that Supreme Court erred in fixing the date of dissolution as May 15, 1992. We cannot agree. The case law makes clear that where, as here, "a partnership has no definite term or particular objective to be achieved, it may be dissolved at any time by the express will of one or more of the partners" (Harshman v Pantaleoni, 294 AD2d 687, 687 [2002]; see Partnership Law § 62 [1] [b]), which requires an "unequivocal election to dissolve the partnership" (Alessi v Brozzetti, 228 AD2d 917, 918 [1996]).
The record reflects that defendant communicated his desire to dissolve the partnership as early as March 1992, at which time he authored the memorandum to Morris outlining three possible proposals for the future of Morris Associates and his departure therefrom. Morris testified that he and defendant thereafter entered into negotiations for defendant to take over the operation of the Hudson office and acknowledged that a transition period of May 15, 1992 to June 15, 1992 was established. During this time period, Morris conceded, clients would be notified of the change in ownership and he would continue to pay the expenses of the Hudson office. Morris argues, however, that he and defendant never reached a final agreement and, as such, the partnership between them did not dissolve until June 19, 1992, the date upon which Morris realized that defendant was not going to honor his request to suspend negotiations.
While there indeed is evidence in the record to support the dissolution date suggested by Morris, there also is ample evidence to support the dissolution date adopted by Supreme Court. Defendant testified that he and Morris agreed to a May 15, 1992 start date for the separation of the Hudson office, which testimony Supreme Court plainly was free to credit. The record further reflects that defendant filed a certificate on or about May 22, 1992 indicating that he was doing business as Crawford & Associates, as well as a certificate of withdrawal dated July 10, 1992, wherein defendant indicated that he withdrew from Morris Associates effective May 15, 1992. Additionally, a secretary in the Hudson office testified that between May 15, 1992 and June 15, 1992, she answered the telephone in the Hudson office as "Crawford & Associates." During this time period, various clients were notified of the change, and the manner in which client billings were handled was altered as well. Specifically, the record reveals that clients based out of the Hudson office received bills from Crawford & Associates for work performed during the transition period and, further, that defendant received invoices from Morris Associates for work performed by Morris Associates' employees on Crawford & Associates' projects during this same period. In light of such testimony, we cannot say that Supreme Court's conclusion that defendant made an unequivocal election to dissolve the partnership effective May 15, 1992 could not have been reached upon "any fair interpretation of the evidence" (New York Mut. Underwriters v Kaufman, 283 AD2d 850, 850 [2001]).
Plaintiffs next contend that Supreme Court erred in dismissing their cause of action for breach of fiduciary duty....
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