[email protected]
+1 (212) 754 9000

Tesser Ryan Blog

New York County Supreme Court Allows Breach-of-Fiduciary-Duty Claim where Former Partner Solicited Partnership Clients

30 Nov 2011
0

By Lewis Tesser, Partner, and Timothy Nolen, Associate

A decision out of the New York County Supreme Court demonstrates some of the difficulties which may arise when an individual partner leaves a partnership. The case involved issues of partnership law, breach of fiduciary duty, contract law, civil practice and torts.

The case, Phillips Gold & Company, LLP v. Speiser, 2011 N.Y. Misc. LEXIS 4668 (Sup. Ct. N.Y. County, September 28, 2011), concerned a partner at an accounting firm who left the firm upon reaching the age of retirement and started his own accounting practice. The remaining partners sued the partner who left, alleging that he failed to pay his “Withdrawal Obligation” and that he breached a fiduciary duty to the partnership by soliciting its clients. The Court declined to grant summary judgment or dismiss the claims, noting that there was a question of fact whether the partner had solicited business while he was with the partnership and whether the remaining partners had agreed to an offset of the Withdrawal Obligation for the exiting partner’s post-retirement payments.

Phillips Gold demonstrates how partners—upon leaving a partnership—can have conflicts with one another resulting in litigation. The attorneys at Tesser, Ryan & Rochman, LLP have represented numerous partners in order to resolve such disputes amicably.

, , , , , , , , , , , ,

About Post Author

mm

Lewis Tesser is a senior partner in the New York law firm of Tesser, Ryan & Rochman, LLP, concentrating his practice in litigation and mediation, representing licensed professionals and professional practices, administrative law and commercial law. Lew Tesser is Vice-President of the New York County Lawyers’ Association and Director of its Ethics Institute. Prior to private practice, Mr. Tesser was an Assistant United States Attorney in the Eastern District of New York. In that capacity, he represented various agencies of the United States government in litigation in the United States District Court and United States Court of Appeals. Mr. Tesser also served as a Judge Advocate in the United States Army where he prosecuted and defended criminal cases and was the chief legal advisor to the Commanding General of the U.S. Army War College, Carlisle, Pennsylvania. He also has served as an Arbitrator for the American Arbitration Association, New York City Civil Court, a Judge for the Environmental Control Board of the City of New York and a lecturer for various Bar Associations and New York area law schools. Mr. Tesser, who was admitted to practice in 1971, is a 1970 Honors graduate from the National Law Center, George Washington University, a Masters graduate from the Wharton Business School, University of Pennsylvania (l974) and a graduate of the Harvard Law School Program of Instruction for Lawyers. He is a past President of Congregation Sons of Israel, Nyack, NY. Publications and Speaking Engagements Editor-In-Chief, “The New York Rules of Professional Conduct Annotated”, Oxford University Press, New York, 2010. A complete list of Mr. Tesser’s speaking engagements and publications is available if you would like to learn more about Mr. Tesser’s work. Representative Cases In Re Zhang, 376 Fed. Appx. 104 (2d Cir. 2010) Continental Casualty Co. v. JBS Construct. Mgmt., 2010 U.S. Dist. LEXIS 85467 (S.D.N.Y. 2010)

Leave a Reply

Tesser, Ryan, & Rochman Blog

At Tesser, Ryan, & Rochman we are committed to keeping current, former, and future clients up to date. Here on our blog we will have news regarding our firm, as well as business analysis, various cases, case studies, and legal findings for the benefit of our clients.