Opinion ID: 2284361
Heading Depth: 4
Heading Rank: 3

Heading: Kirstein: Statutory Preemption

Text: Kirstein, relying on a related preemption theory, contends that adoption of the Partnership Actspecifically the right to an account under § 41-121abrogated any common law right to seek damages in tort for breach of a partner's duty to wind up unfinished business and render an account. However, he points to nothing in the Act or its history demonstrating that the drafters intended a formal accounting under § 41-121 to be the exclusive remedy for a breach of the duties imposed by § 41-120. Not only is the Act silent on the issue of exclusivity of remedies, but the history of the Uniform Partnership Act, which our statute replicates, suggests that the provision for an accounting was meant to expand, not restrict, remedies available to a partner aggrieved by a fiduciary breach. Before the Act recognized a partner's right to demand a formal accounting when a co-partner breached the duty to account, it was necessary to formally dissolve the partnership, with the consequence of liquidation and destruction of the business. See Commissioner's note to UNIFORM PARTNERSHIP ACT § 22, 6 U.L.A. 284 (1969) (ordinarily, a partner is not entitled to a formal account, except on dissolution). To relieve the dilemma of the partner who seeks a predissolution account, the drafters of the U.P.A. broadened the grounds for an accounting so that it is not contingent on dissolution. A. BROMBERG & L. RIBSTEIN, supra, § 6.08, at 6:97. Provision for a pre-dissolution accounting is weak evidence of an intent to subsume and replace a common law right of action for failure to wind up and account in good faith. Moreover, anticipating situations where its language is silent, our statute declares: in any case not provided for in this chapter the rules of law and equity, including the law merchant, shall govern. D.C. Code § 41-104. As discussed earlier, our decisions suggest that a determination of the partners' respective rights in an equitable action for accounting is (subject to exceptions) a prerequisite but not a bar to an action at law. Wright, supra, 107 A.2d at 703-04; Boyle, supra, 64 A.2d at 429-30. Accord, Weil v. Markowitz, 264 U.S. App.D.C. 381, 388 & n. 13, 829 F.2d 166, 173 & n. 13 (1987) (accounting condition precedent to action at law between partners; construing District of Columbia and New York law). This rule is particularly sound where, as in the present case, legal disputes affecting the partners' entitlements established in the accounting remained unresolved after that proceeding. Kirstein cites authority from other jurisdictions construing their Partnership Acts as having abolished common law remedies. E.g., Jennison v. Bierer, 601 F.Supp. 1167, 1178 (D.Vt.1984) (Vermont Partnership Act establishes the right and provides the remedy for breach of fiduciary duty). But since our statute is silent on the issue of exclusivity and implies that matters unaddressed therein are controlled by common law rules, we see no reason to interpret the statute in a manner inconsistent with Boyle and Wright.