Thornwood, Inc. v. Jenner & Block

Thomas Thornton (plaintiff) and James Follensbee formed a partnership to develop a residential community and golf course (the golf course). Follensbee discussed with PGA Tour Golf Course Properties, Inc. (the PGA), and Potomac Sports Properties, Inc. (Potomac), the possibility of developing the golf course as a PGA Tournament Players Course. The PGA told Follensbee it was not interested unless the developer started over. Follensbee told Thornton it was not feasible to get the PGA and Potomac involved but continued to negotiate and plan with the PGA and Potomac. Thornton, who had contributed land and was funding the partnership, saw no indication that the partnership would be successful and told Follensbee he wanted to liquidate the partnership or sell his interest. Follensbee responded he would sue before allowing liquidation but would be interested in purchasing Thornton’s interest. Follensbee did not tell Thornton about the agreement he was negotiating with the PGA and Potomac, which would make Thornton’s interest significantly more valuable. Follensbee retained the law firm Jenner & Block (Jenner) (defendant) to assist him in buying Thornton’s interest and negotiating with the PGA and Potomac. Jenner communicated to parties other than Thornton the competitive advantages of the PGA plan and advised Follensbee regarding the production of offering memoranda, financial projections, and marketing literature, none of which identified Thornton as a partner. Follensbee and Thornton entered into an agreement that liquidated the partnership, provided for the sale of Thornton’s interest to Follensbee, and contained mutual releases. Thornton also executed a release releasing Jenner. Jenner drafted, negotiated, reviewed, and executed the documents, including the releases. When Thornton learned about the negotiations and agreement with the PGA and Potomac, Thornton sued Jenner for, among other causes of action, aiding and abetting Follensbee in the breach of his fiduciary duty to Thornton. The trial court held that the releases barred Thornton’s claims and dismissed the complaint. Thornton appealed.