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Graubard Mollen Dannett & Horowitz v. Moskovitz

86 N.Y.2d 112, 653 N.E.2d 1179 (1995)

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Graubard Mollen Dannett & Horowitz v. Moskovitz

New York Court of Appeals

86 N.Y.2d 112, 653 N.E.2d 1179 (1995)

Facts

The law firm Graubard Mollen Dannett & Horowitz (Graubard) (plaintiff) sued former senior partner Irving Moskovitz and his two tax partners (defendants) for taking a client when they left the firm. Moskovitz brought in worldwide pharmaceutical giant F. Hoffman LaRoche (LaRoche) as a client in 1959. Graubard provided LaRoche mostly provided legal services in international taxation, Moskovitz’s specialty, but also handled some corporate and litigation work. LaRoche billings exceeded $1 million annually. In 1982 the firm adopted a plan for senior partners to retire and transition management to junior partners. The retirement agreement said retirees would avoid impairing Graubard’s relationship with existing clients and business and integrate relationships between Graubard clients and other partners. Moskovitz allegedly verbally assured that the retirees would do all they could to secure the firm’s future and institutionalize clients, especially key clients, shortly before approaching another senior partner about starting a new partnership. After Moskovitz became “of counsel” to Graubard, a legal-search consultant referred him to the law firm LeBoeuf, Lamb, Leiby & MacCrae (LeBoeuf). Moskovitz had represented LaRoche for over 30 years and was handling a serious La Roche tax matter. Moskovitz requested and received assurances that LaRoche would transfer its business to LeBoeuf if Moskovitz moved there. When Moskovitz and the two tax partners announced their resignations, Graubard locked them out of their offices and sued for fraud, breach of contract and fiduciary duty, and unjust enrichment. LaRoche promptly transferred its files to LeBoeuf. Moskovitz requested summary judgment, arguing he had a duty to inform LaRoche he was changing firms. The trial court denied summary judgment, and Moskovitz appealed. The appellate court affirmed but granted leave to appeal on a certified question. Moskovitz appealed asking three questions, with the key question whether departing partners can solicit firm clients.

Rule of Law

Issue

Holding and Reasoning (Kaye, C.J.)

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