Bernstein v. Nemeyer
Connecticut Supreme Court
570 A.2d 164 (1990)
Bernstein (plaintiff) entered as a limited partner into a partnership with Nemeyer (defendant) formed to purchase and renovate two apartment complexes. As part of the partnership agreement, Nemeyer agreed to lend the partnership any difference in the cost of its operating and financing expenses and the amount which its profits could cover. Nemeyer would recover the amount of loans made to the partnership from income or the proceeds of any sale of the complex. Despite good faith efforts and loans by Nemeyer to the partnership of $3,000,000, Nemeyer defaulted. No further loans to the partnership were made. The mortgages on the apartment complexes were foreclosed and Bernstein and Nemeyer lost their entire investment. Bernstein brought suit against Nemeyer in Connecticut state court seeking rescission of the contract and restitution of their original investment. The trial court found that Nemeyer’s breach of the agreement to provide loans to the partnership was not material, and denied recovery to Bernstein. Bernstein appealed. The appellate court found that Nemeyer’s breach of the agreement was material, and then considered Bernstein’s claim for recovery.
Rule of Law
Holding and Reasoning (Peters, C.J.)