Robert J. Congel, et al.,, Respondents,v.Marc A. Malfitano, Appellant.BriefN.Y.February 13, 2018APL-2017-0005 COURT OF APPEALS STATE OF NEW YORK ROBERT CONGEL, BRUCE A. KENAN and JAMES A. TUOZZOLO, as the Executive Committee of POUGHKEEPSIE GALLERIA COMPANY, a general partnership, on behalf of the POUGHKEEPSIE GALLERIA COMPANY, Plaintiffs-Respondents, -against- MARC A. MALFITANO, Defendant-Appellant. BRIEF OF AMICI CURIAE DANIEL KLEINBERGER, JUSTIN VIGDOR and HARRY HAYNSWORTH IN SUPPORT OF PLAINTIFFS-RESPONDENTS John R. Dunne, Esq. Whiteman Osterman & Hanna LLP One Commerce Plaza, Suite 1900 Albany, New York 12260 (518)487-7628 TABLE OF CONTENTS Page PRELIMINARY STATEMENT 1 PURPOSE OF THE PROPOSED AMICUS BRIEF 2 QUALIFICATIONS OF PROPOSED AMICUS CURIEA 3 ARGUMENT 6 a. Partnership as a Voluntary Association; Relations Inter Se Partners Contractual b. The Rightful/Wrongful Dissolution Issue in Light of the Voluntary, Contractual Nature of a General Partnership c. Appellant’s "Magic Words" Approach for Displacing UPA Default Rules Has No Support in the UPA and Does Violence to the Contractual Nature of a UPA Partnership . d. The Importance of Rightful/Wrongful Dissolution Issue For the Goal of Uniformity 6 8 10 14 CONCLUSION 20 i TABLE OF AUTHORITIES Page(s) Cases Adams v. Jarvis, 23 Wis. 2d 453, 127 N.W.2d 400 (Wis. 1964) BPR Group. Ltd. Partnership v. Bendetson, 453 Mass. 853, 906 N.E.2d 956 (Mass. 2009) . Burger, Kurzman, Kaplan & Stuchin v. Kurzman, 139 A.D.2d 422, 527 N.Y.S.2d 15 (1st Dept 1988) Cooper v. Isaacs, 448 F.2d 1202, 1206 (D.C. Cir. 1971) C.U. Annuity Service Corp. v. Young, 281 A.D.2d 292, 722 N.Y.S.2d 236 (1st Dept 2001) Century/ML Cable Venture, 294 B.R. 9 (Bankr. S.D.N.Y. 2003) Durso v. J.P. Morgan Chase & Co., 27 Misc. 3d 1212(A), 910 N.Y.S.2d 404 (N.Y. Civ. Ct. April 15, 2010) H.K. v. A.K., 35 Misc. 3d 1210(A), 950 N.Y.S.2d 723 (N.Y. Sup. Ct. February 22,2012) . Holiday Inns, Inc. v. Olsen, 692 S.W.2d 850 (Term. 1985) Lanier v. Bowdoin, 282 N.Y. 32, 24 N.E.2d 732 (1939) Levy v. Leavitt, 257 N.Y. 461, 178 N.E. 758 (1931) Martin v. Peyton, 246 N.Y. 213, 158 N.E. 77 (1927) 17 11, 16 13 13 12 13 20 20 14 8 7 6 ii Osborne v. Workman, 273 Ark. 538, 621 S.W.2d 478 (1981) Popkin & Stern, 340 F.3d 709 (8th Cir. 2003) Prudential Insurance Company of America v. Hilton Hotels Corp., No. 95 CIV. 5575 (KMW), 1996 U.S. Dist. Lexis 8499 (S.D.N.Y. June 19, 1996) . Schiffer v. Slomin’s, 39 Misc. 3d 414, 959 N.Y.S.2d 422 (Nassau Co. Dist. Ct. February 14, 2013) Schiffer v. Slomin’s, Inc., 40 Misc. 3d 884, 970 N.Y.S.2d 856 (Nassau Co. Dist. Ct. June 26, 2013) affd as modified, 48 Misc. 3d 15, 11 N.Y.S.3d 799 (N.Y. App. Term. March 30, 2015) Transport Workers Union of Greater New York v. Blanco, No. 652798/2013, 2014 WL 4311715 (N.Y. Sup. Ct. September 2, 2014) ... .. . Walters v. Fifth on the Park Condominium (The Condominium), No. 602565-09, 2010 WL 5782540 (N.Y. Sup. November 24, 2010) . Wood v. Lucy, Lady Duff-Gordon, 222 N.Y. 88, 118 N.E. 214, 214 (1917) Statutes 16 17 12 12 12 20 20 12 New York Partnership Law § 1 1 New York Partnership Law § 4(4) .. New York Partnership Law § 10(1) New York Partnership Law § 24 New York Partnership Law § 27 New York Partnership Law § 40(5) 2, 14 6 8 7 iii New York Partnership Law § 40(7) New York Partnership Law § 41 New York Partnership Law § 53 New York Partnership Law § 60 New York Partnership Law § 63(b) New York Partnership Law § 69 New York Partnership Law § 69(2) New York Uniform Commercial Code Law § 2-316(2) Uniform Commercial Code, Article 8 Other Authorities 7 11 7 8,9 7 1 8, 10 13 5 Allison Martin-Rhodes, Robert W. Hillman, and Peter Tran, Law Firms’ Entity Choices Reflect Appeal of New Business Forms, Business Entities (July/August 2014) at 19 Constitution of the National Conference of Commissioners on Uniform State Laws, Article 1.2 Goldy Gluzman & Susan Fortney, Understanding & Securing the LLP Shield in New York (Part 1) . Joseph Story, Commentaries on the Law of Partnerships (3rd ed. 1850 Boston) at § 1, at 2 . Kenner, Sumner [of the Huntington Circuit Court] (1926) Missouri Uniform Partnership Act New York Department of State Restatement (Second) of Contracts § 203(a) (1981) Uniform Partnership Act of 1914 Uniform Partnership Act of 1914, Prefatory Note 19 2 19 7 14 17 19 12 1 15 iv Uniform Partnership Act (1997) (Last Amended 2013) Prefatory Note to 2011 dnd 2013 Harmonization Amendments Uniform Partnership Act of 1914 § 6 Uniform Partnership Act of 1914 § 6, cmt Uniform Partnership Act of 1914 § 13 Uniform Partnership Act of 1914 §18 Uniform Partnership Act of 1914 § 18(e) Uniform Partnership Act of 1914 § 18(g) Uniform Partnership Act of 1914 § 19 Uniform Partnership Act of 1914 § 20 Uniform Partnership Act of 1914 § 29 Uniform Partnership Act of 1914 § 31, cmt Uniform Partnership Act of 1914 § 31(1) Uniform Partnership Act of 1914 § 31(l)(b) Uniform Partnership Act of 1914 §§ 32(b) Uniform Partnership Act of 1914 § 38(2) Uniform Partnership Act of 1914 §39 Uniform Partnership Act of 1914 § 70 . 15 6 6 8 10 11 7 11 11 8,9 7 16 16 7 8, 10 7 7 v PRELIMINARY STATEMENT A major issue in this appeal concerns the Partnership Law, which is the New York enactment of the Uniform Partnership Act of 1914 ("UPA"). New York 1Partnership Law § 1 ("This chapter shall be known as the 'partnership law "). Proposed amici curiae, Daniel S. Kleinberger and Harry J. Haynsworth, have worked with uniform acts pertaining to business entities in general and general partnerships in particular for respectively 20 and 29 years. Proposed amicus curia Justin Vigdor has been a uniform law commissioner from the state of New York for more than 25 years and has had a leadership role in numerous projects pertaining to uniform business entity acts. Proposed amici urge affirmance of the appellate court's decision that, under the New York Partnership Law: (1) the dichotomy in Partnership Law § 69 1 The UPA was promulgated by the National Conference of Commissioners on Uniform State Law, now more commonly known as the Uniform Law Commission. According to the Commission's website: For more than a century, the Uniform Law Commission (ULC) has served the states and their citizens by drafting state laws on subjects on which uniformity across the states is desirable and practicable. It is a nonprofit unincorporated association comprised of state commissioners from each state, the District of Columbia, the Commonwealth of Puerto Rico, and the U.S. Virgin Islands. Now in its 122nd year, the ULC is the nation’s oldest state governmental association. A nonpartisan, volunteer organization, the ULC is the source of more than 300 acts that secure uniformity of state law when differing laws would undermine the interests of citizens throughout the United States. (available at http://uniformlaws.org/Narrative.aspx?title=Frequently%20Asked%20Questions; retrieved 8/5/17). 1 between an at will partnership and a partnership for a particular term or undertaking is merely a "default rule" -- i.e., subject to change by a partnership agreement; and (2) partners may agree to limit rightful dissolution without necessarily agreeing to a partnership that is to last for a specific length of time or until the completion of a specific task or project ("Rightful/Wrongful Dissolution Issue" or "Issue"). Proposed amici express no views on other issues in this matter. PURPOSE OF THE PROPOSED AMICUS BRIEF In the respectful opinion of proposed amici, putting the Rightful/Wrongful Dissolution Issue into the proper context presupposes a proper understanding of the character of a general partnership as a "voluntary association" and of how the UPA reflects that character. Moreover, given the importance of the Issue both practically and conceptually and New York's commercial and jurisprudential preeminence, the Court's decision could contribute materially to the goal of uniformity of interpretation of uniform acts, a goal that is expressly part of the New York Partnership Law: "This chapter shall be so interpreted and construed as 2 to effect its general purpose to make uniform the law of those states which enact it." NY Partnership Law § 4(4).2 Based on their extensive experience with uniform business entity acts and the law and practice of general partnerships, proposed amici seek to offer the Court a brief on the Rightful/Wrongful Dissolution Issue informed by their perspectives on the voluntary nature of a general partnership and the importance of the Issue for the goal of uniformity.3 QUALIFICATIONS OF PROPOSED AMICUS CURIEA Harry J. Haynsworth, IV is Dean Emeritus of Mitchell Hamline School of Law. He also served as Professor of Law and Dean of Southern Illinois College of Law and held various administrative and teaching positions at the University of South Carolina School of Law. Dean Haynsworth received both his AB and JD degrees from Duke University and a MAR degree from Lutheran Theological Southern Seminary. He is the author of numerous books and articles on small (closely held) businesses and legal ethics. Until 1992, he was the American Bar Association Advisor on the committee established by the Uniform Law 2 Of course, this goal is central to the organization that promulgates uniform acts. See Constitution of the National Conference of Commissioners on Uniform State Laws, Article 1.2 ("It is the purpose of the Conference to promote uniformity in the law among the several States on subjects as to which uniformity is desirable and practicable."). As noted in note 1, the Conference is now generally referred to as the Uniform Law Commission. 3 In light of this purpose, the proposed amicus brief does not reiterate the particularized analysis that Respondent provides on the Rightful/Wrongful Dissolution Issue. However, the proposed amicus brief is consistent with that analysis. 3 Commission ("ULC") to revise the UPA. He was then appointed a ULC commissioner and became a member of the committee. Dean Haynsworth is a life commissioner of the ULC and has served on the following ULC Drafting Committees: Revised Uniform Partnership Act (1997) (Member), which has been enacted in 44 jurisdictions, Revised Uniform Limited Partnership Act (2001) (Member), Uniform Limited Liability Company Act (1996 and 2006) (Member), Revised Uniform Unincorporated Nonprofit Associations Act (Reporter), the Harmonization of the Unincorporated Business Entity Acts Project (2013) (Chair), and the Model Business Entity Transactions Act (2007) (Chair). He currently serves as the Chair of the ULC Enactment Committee for Unincorporated Business Entity Acts. He is also a life member of the American Law Institute. Daniel S. Kleinberger is Professor of Law Emeritus at the Mitchell Hamline School of Law, where he taught the law of business organizations (including partnerships) for more than 25 years. He is a graduate of Harvard College and Yale Law School. His work with the ULC includes: Research Director, Joint Editorial Board on Uniform Unincorporated Organization Acts (2013-2017); Reporter, Uniform Law Conference Drafting Committee on the Uniform Protected Series Act (2012-); Co-Reporter, Drafting Committee to Harmonize the Unincorporated Business Entity Acts (2009 - 2014); Co-Reporter, Drafting 4 Committee on the Revised Uniform Limited Liability Company Act (2004-2006); Reporter, Drafting Committee on the 2001 Limited Partnership Act (1997-2001). He was the principal author of the most recent official comments to the uniform (general) partnership act, and his most recent writing includes a detailed analysis of the similarities and differences among the 1914, 1997, and 2013 versions of the uniform partnership act. Professor Kleinberger is a member of the American Law Institute and was active in the Members Consultative Groups for the Restatement of Agency Law and the Restatement of Employment Law. He has served as the Chair of the Section on Agency, Partnerships, Limited Liability Companies and Unincorporated Business Associations of the Association of American Law Schools. Justin L. Vigdor is Of Counsel to the firm of Bond Schoeneck & King PLLC. He has an L.L.B degree from St. John’s University School of Law and an L.L.M. degree from New York University. He was admitted to the New York bar in 1951 and the Florida bar in 1975. He is a Past President of the New York State Bar and has served as one of New York’s Uniform Law Commissioners since 1989. He has Chaired or Co-Chaired several Uniform Law drafting committees including Limited Liability Partnership Act, Securities Act, Omnibus Business Organization Code, and Statutory Trust Entity Act, and has participated as a member on several other business-related drafting committees, including 5 Harmonization of Business Entity Acts, Uniform Commercial Code Article 8, Investment Securities, and Unincorporated Non Profit Associations Act. Although proposed amici have worked extensively with the ULC, the proposed amicus brief states only their views and does not represent the view of the ULC. ARGUMENT Partnership as a Voluntary Association; Relations Inter Se Partnersa. Contractual A general partnership is fundamentally a voluntary association, with its internal affairs governed by a contract among the associated partners. The UPA defines a general partnership as "an association of two or more persons to carry on as co-owners a business for profit," New York Partnership Law § 10(1); UPA § 6, and "[i]n the domain of private law the term association necessarily involves the idea that the association is voluntary." UPA § 6, cmt. The voluntariness extends to the way the co-owners (partners) structure their relationship inter se. As long recognized by this Court, "Partnership results from contract, express or implied." Martin v. Peyton, 246 N.Y. 213, 217, 158 N.E. 77, 78 (1927). Indeed, the notion that a partnership depends on and is structured by a contract among the partners long predates the UPA. In the words of Justice Story (writing in 1841): "Partnership ... is usually defined as a voluntary contract 6 between two or more competent persons..,."4 Moreover, "In the first place, [a partnership] is founded in the voluntary contract of the parties...."5 The UPA implements the voluntary and contractual nature of a general partnership in several ways. For example, a person may not be compelled to remain a partner against the person's will.6 Likewise, the admission of a person into an existing partnership requires the consent of all current partners. UPA § 18(g); NY Partnership Law § 40(7). The rule is the same regardless of whether the would-be partner has purchased a current partner's entire economic interest in the partnership. Id. § 27; § 53. Most importantly for present purposes, under the UPA the partnership agreement is the primary source of rules governing the partners inter se relationships.7 4 Joseph Story, Commentaries on the Law of Partnerships (3rd ed. 1850 Boston) at § 1, at 2. Story cites other authorities to the same effect: “Pothier says that, partnership is a contract.... Domat says, that partnership is a contract ....” Id. Id., § 1, at 3. 6 A partner always has the power to dissociate, even if lacking the right. UPA § 31, cmt. ("The relation of partners is one of agency. The agency is such a personal one that equity cannot enforce it even where the agreement provides that the partnership shall continue for a definite time. The power of any partner to terminate the relation, even though in doing so he breaks a contract, should, it is submitted, be recognized."). 7 See e.g., NY Partnership Law § 63(b), UPA §§ 32(b) (recognizing the "partnership contract" as fundamental by stating that "[o]n application by or for a partner the court shall decree a dissolution whenever: ... [b] partner becomes in any other way incapable of performing his [sic] part of the partnership contract."); § 70, § 39; (captioning the section as "Rights Where Partnership is Dissolved for Fraud or Misrepresentation" and delineating the section's scope as "[w]here a partnership contract is rescinded on the ground of the fraud or misrepresentation") (emphasis added). 5 7 With very few exceptions, the UPA provisions concerning those relationships are "default rules" or "gap fillers"- i.e., applicable only to the extent not displaced by the partners' own agreement. Levy v. Leavitt, 257 N.Y. 461, 466, 178 N.E. 758, 758 (1931) ("The rights and obligations of the partners as between themselves arise from and are fixed by their agreement."). Lanier v. Bowdoin, 282 N.Y. 32, 38, 24 N.E.2d 732, 735 (1939) ("In the absence of prohibitory provisions of the statutes, or of rules of the common law relating to partnerships, or considerations of public policy, the partners of either a general or limited partnership, as between themselves, may include in the partnership articles any agreement they wish concerning the sharing of profits and losses, priorities of distribution on winding up of the partnership affairs and other matters. If complete, 8as between the partners, the agreement so made controls."). b. The Rightful/Wrongful Dissolution Issue in Light of the Voluntary, Contractual Nature of a General Partnership Appellant apparently considers the Rightful/Wrongful Dissolution Issue to be an exception to the general rule that a general partnership is a voluntary business organization in which the relations inter se the partners are primarily governed by their partnership agreement. In Appellant's view, "dissolution [is] 8 In contrast, UPA rules pertaining to the relationship of a partnership or its partners to third parties are mandatory - i.e., not subject to change by the partnership agreement. See e.g. NY Partnership Law § 24, UPA § 13 (Partnership Bound by Partner’s Wrongful Act). For an example on one of the few mandatory inter se rules, see NY Partnership Law § 60; UPA § 29 (Dissolution Defined). 8 caused in contravention of the partnership agreement," NY Partnership Law § 69(2), UPA § 38(2), can occur only in a partnership for a specific term or undertaking; partners simply lack the power to establish other circumstances in which dissolution would be wrongful. Appellant's view is fundamentally at odds with the UPA's view of the voluntary, contractual association that is a general partnership. Under the UPA, a partner has the power to dissociate and cause dissolution at any time. NY Partnership Law § 60; UPA § 29 (Dissolution Defined). That nonwaivable power makes all-important the power of a partnership agreement to address the all- important question of business continuity in the event of dissolution. Not every ongoing business can be conceptualized as either for a specific length of time or the accomplishment of some specific project. In their experience as drafters of partnership statutes and practitioners and scholars of partnership law, proposed amici have come across countless examples of the business construct used by Respondent- i.e., partners agreeing that their business is to continue until a certain number or percentage of them decide to bring their business to an end. Nothing in the text or comments to the UPA supports Appellant's approach to the Rightful/Wrongful Dissolution Issue. By its terms the UPA does not limit the circumstances in which "dissolution [is] caused in contravention of the 9 partnership agreement." NY Partnership Law § 69(2); UPA § 38(2).9 Moreover, Appellant's procrustean approach to the Issue ignores the voluntary, contractual nature of a general partnership and disregards how the UPA reflects that essential nature. c. Appellant’s "Magic Words" Approach for Displacing UPA Default Rules Has No Support in the UPA and Does Violence to the Contractual Nature of a UPA Partnership In his reply brief, Appellant suggests a "magic words" approach for displacing the default rules of the UPA: "The failure to expressly revoke or displace a specific provision of the Partnership Law results in the statutory provision controlling should a dispute over the agreement's terms arise. " Defendant-Appellant’s Reply Brief (May 25, 2007) at 7. Nothing in the UPA supports this assertion. Nowhere does the act require any particular language to vary a default rule. Nowhere does the act require that a partnership agreement cite or name a default rule being varied. For instance, UPA §18 states "Rules Determining Rights and Duties of Partners", which are "subject 9 It is immaterial that the UPA does not expressly defer to the partnership agreement on this point. Such is also the situation with several other important UPA provisions. Consider, for example, UPA § 20 ("Duty of Partners to Render Information"): "Partners shall render on demand true and full information of all things affecting the partnership to any partner or the legal representative of any deceased partner or partner under legal disability." The section makes no reference to variation by the partnership agreement. However, unless variation is possible, no partnership could control a partner's access to partnership information-even, for example, information about the partner's own alleged sexual harassment. Nor could any partnership management committee keep confidential any information used in determining partner bonuses. To anyone well-versed in partnership law or familiar the actual practices of general partnerships, such outcomes would be shocking. 10 to any agreement between [the partners]." NY Partnership Law § 40 (emphasis added). Likewise, UPA § 19 states where "[t]he partnership books shall be kept, " and the stated rule is "subject to any agreement between the partners." NY Partnership Law § 41(emphasis added). A single example may suffice to show the absurdity of Appellant’s magic word requirement. Suppose persons forming a New York general partnership desire to have an elected management committee, and accordingly the partnership states the role of the management committee, how its members are selected, and myriad other details. However, the agreement does not refer to UPA § 18(e), which provides that “All partners have equal rights in the management and conduct of the partnership business.” NY Partnership Law § 40(5). Does the partnership have a management committee despite the omission? Of course. “Where an agreement addresses a particular issue, the terms of the agreement control, and the rights and obligations of the parties are determined by reference to principles of contract law.” BPR Group. Ltd. Partnership v. Bendetson, 453 Mass. 853, 863, 906 N.E.2d 956, 964 (2009). According to those principles (as expressed in the Restatement (Second) of Contracts): “In the interpretation of a promise or agreement or a term thereof ...an interpretation which gives a reasonable, lawful, and effective meaning to all the terms is 11 preferred to an interpretation which leaves a part unreasonable, unlawful, or of no effect.” Restatement (Second) of Contracts § 203(a) (1981) (emphasis added). Those principles do not require “talismanic language or magic words.” C.U. Annuity Service Corp. v. Young, 281 A.D.2d 292, 293, 722 N.Y.S.2d 236, 237 (1st Dept 2001) (interpreting an assignment of contractual rights). See also Schiffer v. Slomin's, 39 Misc. 3d 414, 418, 959 N.Y.S.2d 422, 424 (Nassau Co. Dist. Ct. February 14, 2013), adhered to on reargument sub nom. Schiffer v. Slomin's, Inc., 40 Misc. 3d 884, 970 N.Y.S.2d 856 (Nassau Co. Dist. Ct. June 26, 2013), affd as modified, 48 Misc. 3d 15, 11 N.Y.S.3d 799 (N.Y. App. Term. March 30, 2015) (stating that “[t]he fact that the [arbitration] clause omits the magic words that ‘the arbitration is binding and not subject to court review’ does not then make a possible arbitration proceeding nonbinding”). To the contrary, “[t]he law [of contracts] has outgrown its primitive stage of formalism when the precise word was the sovereign talisman, and every slip was fatal. It takes a broader view today.” Woodv. Lucy, Lady Duff-Gordon, 222 N.Y. 88, 91, 118N.E. 214, 214 (1917). In support of his position, Appellant cites inter alia Prudential Insurance Company of America v. Hilton Hotels Corp., No. 95 CIV. 5575 (KMW), 1996 U.S. Dist. Lexis 8499 (S.D.N.Y. June 19, 1996). But the decision is inapposite. The 12 case involved the claimed preclusion of judicial dissolution, and the court emphasized the significance of that fact: A partnership agreement can presumably [preclude dissolution by court order], but the terms of the agreement must be quite specific to effect such a change. This is so because the provisions of the Act regarding dissolution by decree of court were clearly designed to allow partners to extricate themselves from business relationships which they felt had become intolerable without exposing themselves to liability in the process, and this sound policy should apply unless expressly negated, and perhaps even then. Id. at *12 (quoting Cooper v. Isaacs, 448 F.2d 1202, 1206 (D.C. Cir. 1971). This matter has nothing to do with dissolution by court order. Moreover, the joint venture agreements in Prudential expressly characterized the agreements’ dissolution provisions as non-exclusive. “Article 12.2 of the Joint Venture Agreements clearly states that the Article 12 provisions for dissolution in the event of default do not preempt the parties' other rights.” Id. at 5. The partnership agreement at issue in this matter contains no such statement. Appellant also cites In re Century/ML Cable Venture, 294 B.R. 9 (Bankr. S.D.N.Y. 2003), but that case is entirely antagonistic to Appellant’s assertion: [U]nder New York law, partners may include in the partnership articles practically any agreement they wish, and, accordingly, may contract, in their partnership or joint venture agreement, with respect to the right to dissolution, even if the effect of such would be to trump the entitlement to dissolution that otherwise would exist by statute. 13 Id. at 25-26 (Internal quotation marks omitted).10 Both the Uniform Law Commission and the New York legislature know how to require “magic words” when desired. See e.g., Uniform Commercial Code, Section 2-316(2), N.Y. U.C.C. Law § 2-316(2), providing that “to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability.” No such requirement exists in the Partnership Law. d. The Importance of Rightful/Wrongful Dissolution Issue For the Goal of Uniformity As noted above, the Partnership Law expressly includes the goal of uniformity: "This chapter shall be so interpreted and construed as to effect its general purpose to make uniform the law of those states which enact it." NY Partnership Law § 4(4). This goal is essential to the functioning of any uniform act. As an Indiana Circuit Court judge wrote more than 90 years ago: Uniformity of legislation by our various states and uniformity of interpretation by judicial construction, go hand in hand and thus tend to relieve the busy lawyer, as well as the litigant, of the mass of conflicting decisions upon the same subject matter in different states.11 10 Appellant also cites Burger, Kurzman, Kaplan & Stuchin v. Kurzman, 139 A.D.2d 422, 527 N.Y.S.2d 15 (1st Dept 1988), but that case too is inapposite. In that case, a party sought to impose the terms of superseded agreement, and the court quite properly rejected the attempt. Id. at 424, 527 N.Y.S.2d at 15 (“There is no basis upon which to enforce the terms of the agreement governing the original 1973 partnership, which is dissolved, either with respect to the accounting which [the party] seeks under that agreement or implementation of the restrictive covenant contained therein.”). 11 Available at: http://www.repository.law.indiana.edU/ilj/voll/iss3/l; retrieved 8/5/17. 14 Kenner, Sumner [of the Huntington Circuit Court] (1926) "The Function of Uniform State Laws," Indiana Law Journal: Vol 1: Iss. 3, Article 1, 127, 130. See also, e.g., Holiday Inns, Inc. v. Olsen, 692 S.W.2d 850, 853 (Tenn. 1985) ("It is axiomatic that a purpose in enacting uniform laws is to achieve conformity, not uniqueness. While opinions by courts of sister states construing a uniform act are not binding upon this court, we are mindful that the objective of uniformity cannot be achieved by ignoring utterances of other jurisdictions. This court should strive to maintain the standardization of construction of uniform acts to carry out the legislative intent of uniformity."). Uniformity is especially important with regard to business entity acts. The Uniform Law Commission noted more than 100 years ago that "Uniformity of the law of partnerships is constantly becoming more important, as the number of firms increases which not only carry on business in more than one state, but have among the members residents of different states." UPA (1914), Prefatory Note. The importance is even greater today, given the increasing complexity of partnership arrangements and witness a recent, four-year-long project of the Uniform Law Commission to harmonize all nine of its uniform business entity acts. See e.g. Uniform Partnership Act (1997) (Last Amended 2013), Prefatory Note to 2011 and 2013 Harmonization Amendments ("From 2009 to 2013, the Uniform Law 15 Conference undertook an intensive effort to harmonize, to the extent possible, all uniform acts pertaining to unincorporated organizations. "). For at least two reasons, the Rightful/Wrong Dissolution Issue presents New York an important opportunity to advance the UPA's goal of uniformity. First, precedent from other states, though not bountiful, is clear, squarely on point, and unequivocal. To date, two state supreme courts have addressed the Issue squarely, and each court has ruled consistently with the views expressed in this brief and has rejected the procrustean approach advanced by Appellant. From Arkansas in 1981: Certainly any partner can withdraw at will [under UPA (1914)] and to the extent that withdrawal is a dissolution [appellant] is correct. But appellant seeks dissolution in its fullest sense, i. e., the termination of the partnership by liquidation, and we cannot agree these partners intended such a result. We think the clear intent was that dissolution by termination would occur only by mutual agreement and not by the unilateral act of a single partner. ... It is inconceivable that six doctors would form a partnership, enter into an elaborate agreement intended to promote longevity, set up a common practice, pool their equipment, records and resources, and intend that any one of them could end it at any time by demanding dissolution and liquidation. Osborne v. Workman, 273 Ark. 538, 542, 621 S.W.2d 478, 480 (1981).12 12 As noted in the quoted passage, the partnership at issue in Osborne involved a partnership founded by six doctors, but the case contains no language limiting its holding to professional relationships. Moreover, as amply shown in the two proposed amici brief described below, stability is equally important in the type of real estate partnership at issue in this matter. 16 From Massachusetts, in 2009: We conclude that the joint venture agreements [at issue in the case] were not at will. In its brief, BPR focuses on whether the joint venture agreements specify “definite terms” or “particular undertakings.” [UPA] § 31(1). However, analysis under [UPA] § 31(l)(b), is inapposite. The UPA applies only when there is either no partnership agreement governing the partnership's affairs, the agreement is silent on a particular point, or the agreement contains provisions contrary to law. Where an agreement addresses a particular issue, the terms of the agreement control, and the rights and obligations of the parties are determined by reference to principles of contract law. Thus, an agreement specifying the circumstances under which a partnership may be dissolved is not at will. BPR Group. Ltd. Partnership Supra, 453 Mass. 853 at 863-64, 906 N.E.2d 956 at 964 (Mass. 2009) (citations and internal quotation marks omitted).13 The Eight Circuit has taken the same position in interpreting the Missouri version of the UPA: "To start, it is important to note that although the Missouri Uniform Partnership Act indicates that certain events, such as the withdrawal of a single partner, lead to dissolution of a partnership, these are merely default rules 13 See also Adams v. Jarvis, 23 Wis. 2d 453, 458-59, 127 N.W.2d 400, 403 (Wis. 1964): The practice of continuing the operation of [a] partnership business, even though there are some changes in partnership personnel, is ... common partnership agreement provides for continuation, sets forth a method of paying the withdrawing partner his agreed share, does not jeopardize the rights of creditors, the agreement is enforceable. The statute does not specifically regulate this type of withdrawal with a continuation of the business. The statute should not be construed to invalidate an otherwise enforceable contract entered into for a legitimate purpose. If the 17 that can be supplanted by a partnership agreement." In re Popkin & Stern, 340 F.3d 709, 714 (8th Cir. 2003). Second, the importance of uniform interpretation increases in proportion to the practical import of the matter. As noted above and in the proposed amicus briefs of respectively The Real Estate Roundtable, Building Owners and Managers Association, Cre Finance Council, International Council of Shopping Centers, National Association of Home Builders, National Association of Real Estate Investment Trusts, National Multifamily Housing Council, New York State Association of Realtors and The Real Estate Board of New York ("Proposed Roundtable Brief') at 1-2, 19-21 and the American College of Real Estate Lawyers ("Proposed ACREL brief') at 2-3, the Rightful/Wrong Dissolution Issue is of great practical import. Given the reputation of this Court, the commercial importance of the state of New York, and the existing precedent, a decision affirming the lower court’s holding on this point may well put the issue to rest across the country. In contrast, adopting Appellant's view will encourage litigation in every UPA state except Wisconsin, Arkansas, and Massachusetts.14 14 Although RUPA has replaced the UPA in many states, the UPA remains in effect in approximately 10 states, of which New York is the most commercially and jurisprudentially prominent. 18 Departing from a uniform interpretation would also have negative consequences within the state of New York. If adopted, Appellant's approach would render New York general partnerships unfit for many businesses and would disrupt countless businesses already organized as general partnerships.15 Doubtlessly, many of these general partnerships have wrongful dissolution provisions akin to Respondent's. The Proposed Roundtable Brief at 19-21 highlights how adopting Appellant's view would disrupt the New York market in commercial real estate. The Proposed ACREL Brief highlights the dangers nationwide. And, while this case involves commercial real estate, the dangers transcend that market. To take just one example, adopting the Appellant’s view would destabilize numerous New York law firms. According to one survey, in 2011, 1869 firms were organized as New York limited liability [general] partnerships;16 15 In this context, "countless" is apt literally as well as figuratively. An ordinary general partnership is established without the filing of any document with any public authority. 16 Allison Martin-Rhodes, Robert W. Hillman, and Peter Tran, Law Firms’ Entity Choices Reflect Appeal of New Business Forms, Business Entities (July/August 2014) at 19 (Exhibit 3), available at https://www.hklaw.eom/files/Publication/86409a03-f28a-43dl-9929- e9a413c859ce/Presentation/PublicationAttachment/d7c8f69e-ee28-4829-8dbl- f8accaf0b285/0908LawFirms.pdf, last visited 11/15/17. See also Goldy Gluzman & Susan Fortney, Understanding & Securing the LLP Shield in New York (Part l)(stating that "New York lawyers have embraced the LLP form"), available at http://www.newyorklegalethics.com/understanding-securing-the-llp-shield-in-new-york-part-l/, last visited 1/15/17. 19 and the partnership agreements of many of these firms contain continuity and exit 17provisions comparable to Respondent’s agreement. CONCLUSION According to Respondents and the lower courts, (i) Appellant agreed with fellow partners to limit each partner’s exit rights; and (ii) Appellant, a sophisticated business person, should be held to the deal. Unable to colorably deny the terms of the agreement, Appellant instead attempts to condemn the agreement as unlawful. Appellant asserts in effect that the "the partnership law of the state of New York does not allow anyone to make such a deal." To gratify his buyer’s remorse, Appellant seeks to negate the essential nature of a general partnership under the UPA and the Partnership Law of the state of 17 Other professions face comparable disruption. According to the New York Department of State: "The number of active domestic limited liability partnerships as of close of business on 12/31/2015 was 4,980."; email from dos.sm.Corp.InetCorp [mailto:dosInetCorp@dos.ny.gov], to Professor Kleinberger; Sent: Saturday, November 18, 2017 4:10 AM. No static citation exists for the data. Rather, one "go[es] to New York's Open Data Portal at www.data.ny.gov. From the home page, [one] click[s] on Economic Development and then "Active Corporations Beginning 1800." The dataset contains information on corporations, limited liability companies, limited partnerships and registered limited liability partnerships on file with the Department of State's Division of Corporations. The dataset is searchable by county, dates, names, [entity type] etc." Id. 20 New York.18 For the reasons stated in this brief, proposed amici respectfully urge the court to reject Appellant’s position on the Rightful/Wrongful Dissolution Issue. December , 2017 Albany, New York Dated: UBy: John R. Dunne, Esq. Whiteman Osterman & Hanna LLP One Commerce Plaza, Suite 1900 Albany, New York 12260 (518) 487-7628 idunnefSlwoh.com 18 The law of New York does not favor buyer’s remorse-whether the remorseful party is a consumer who used a credit card, Durso v. J.P. Morgan Chase & Co., 27 Misc. 3d 1212(A), 910 N.Y.S.2d 404 (N.Y. Civ. Ct. April 15, 2010), a divorce litigant who agreed to the disposition of a particular item of property, H.K. v. A.K., 35 Misc. 3d 1210(A), 950 N.Y.S.2d 723 (N.Y. Sup. Ct. February 22, 2012), a union that agreed to a particular disciplinary process, Transport Workers Union of Greater New Yorkv. Blanco, No. 652798/2013, 2014 WL 4311715 (N.Y. Sup. Ct. September 2, 2014), or a purchaser of a condominium seeking to escape a collapse of the real estate market Walters v. Fifth on the Park Condominium (The Condominium), No. 602565-09, 2010 WL 5782540 (N.Y. Sup. November 24, 2010). 21 PRINTING CERTIFICATION Pursuant to 22 NYCRR § 500.13 (c) (1) The foregoing brief was prepared on a computer. A proportionately spaced typeface was used, as follows: Name of Typeface: Times New Roman Point Size: Line Spacing: Double 14 The total number of words in the brief, inclusive of point headings and footnotes and exclusive of pages containing the table of contents, table of citations, printing certification, or any authorized addendum containing statutes, rules, regulations, etc. is 5185. 1293814.1 12/11/2017