Dawson v. White & Case

672 N.E.2d 589 (1996)

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Dawson v. White & Case

New York Court of Appeals
672 N.E.2d 589 (1996)

RW

Facts

New partners entering the White & Case law firm (firm) (defendant) paid nothing to share in the firm’s preexisting goodwill. Departing partners received no payment for their shares in that goodwill. The firm’s financial statements did not list goodwill as an asset. The firm’s partnership agreement provided that, upon a partner’s withdrawal from the firm, goodwill would be excluded from any amounts charged against or credited to the former partner’s account. Evan Dawson (plaintiff), one of the firm’s lawyers, fell out with his partners. The partners expelled Dawson by dissolving the firm and immediately reconstituting it without Dawson’s participation. Dawson successfully sued the firm for wrongful termination. In awarding damages, the trial court included an allocation for Dawson’s share of the firm’s goodwill. After an intermediate appellate court affirmed the trial court’s judgment, the firm appealed to the New York Court of Appeals.

Rule of Law

Issue

Holding and Reasoning (Ciparick, J.)

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