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May 6, 2008

after Ederer v. Gursky...

posted by Gary Rosin

The first reported New York opinion to rely on Ederer v. Gursky is out:  Kuslansky v. Kuslansky, Robbins, Stechel and Cunningham, LLP, 2008 NY Slip Op. 04061 (NY App. Div. April 29, 2008).  Oddly enough, Kuslansky involves the break-up of another law partnership.  Kuslansky sued the partnership and the other partners for breach of contract by failing to pay him the value of his interest in the partnership, as required by the partnership agreement.  The trial court granted the individual partners' motion to dismiss on the grounds that the obligation was solely that of the LLP.  In a very brief opinion, the appellate court reversed, relying on Ederer:

The Court of Appeals recently made clear that the "liability shield" created by Partnership Law § 26(b) for general partners of a registered limited liability partnership only applies to "a partner's liability to third parties, and, in fact, is part of article 3 of the Partnership Law ( Relations of Partners to Persons Dealing with the Partnership'), not article 4 ( Relations of Partners to One Another')" (Ederer v. Gursky, 9 NY3d 514, 524). Thus, Partnership Law § 26(b) "does not shield a general partner in a registered limited liability partnership from personal liability for breaches of the partnership's or partners' obligations to each other" (Ederer v Gursky, 9 NY3d at 516).

2008 NY Slip Op. 04061, at *2.

As discussed earlier (Ederer v. Gursky  The Rest of the Story), the language used in the Ederer opinion was broader than necessary under the facts, which involved alleged wrongful acts by the partners.  The Kuslansky opinion is singularly unhelpful.  The court characterizes the complaint as a breach of the partnership agreement claim, but does not describe the agreement.

Prof. Alan Bromberg once attributed the pre-UPA confusion of Texas partnership law to "the garrulity of the courts in pronouncing needless dicta."  If anything, courts have become even more garrulous--except in providing facts!

Hat tip to Mike Frisch of the Legal Profession Blog.

May 6, 2008 in Partnership Cases | Permalink

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