Brief Fact Summary. Plaintiff, Gerald Lawlis, was a partner of Defendant firm, Kightlinger &Gray. Plaintiff was expelled from the firm after a long battle with alcoholism.
Synopsis of Rule of Law. The remaining partners must act in good faith, which would prohibit the wrongful withholding of money or property, when expelling a partner,
Issue. The issue is whether Defendant firm acted in good faith when they expelled Plaintiff from the firm.
Held. Defendant firm did act in good faith during the expulsion of Plaintiff. Defendant followed the procedures of the agreed-upon partnership agreement when they voted to expel Plaintiff from the firm. There was no proof that Defendants were acting fraudulently or with a deceitful intent in expelling Plaintiff. The facts indicated that there was sufficient reason for expelling Plaintiff, namely to protect Defendant’s good will. Further, motivation for Plaintiff’s expulsion is not at issue when there is a no cause expulsion clause in the partnership agreement and there was no wrongful withholding of any money or property of Plaintiff’s.
Discussion. The court will uphold clause of a partnership agreement as long as they are consistent with statutory protections. There is a benefit to provisions such as the no cause expulsion clause, and the parties were in a position to understand what they agreed to.