Court Opinion

ID: 5840964
Source: CourtListenerOpinion
Date Created: 2022-01-12 23:07:11.905071+00
Date Added: 2024-06-11T08:43:46.165976
License: Public Domain

Tom, J.E, and Catterson, J., dissent in a memorandum by Catterson, J., as follows:
In my opinion, because the plaintiff does not allege that the parties’ oral partnership agreement had a definite term, it was an at-will partnership that the defendant had the right to terminate at any time. Therefore, I must respectfully dissent.
This action arises from a purported oral partnership agreement between the plaintiff and the defendant that was formed for the purpose of engaging in a business venture called a “search fund.” The plaintiff alleges that the parties would solicit investment capital from investors, and then use the money to locate a business with growth potential, acquire the business, expand it, and create a “liquidity event,” such as selling it for a profit, when the investors would receive their returns on their investments. The plaintiff further alleges that upon finding a target business, he and the defendant agreed to purchase it and *428“operate the business until the liquidity event could be achieved, or, if the liquidity event could not be achieved earlier, they would operate the business for a period of approximately 4 to 7 years.” If a profitable liquidity event could not be achieved, then they would “sell the business,” and if it could not be sold, they would attempt to “create some other liquidity event, such as an initial public offering.” In February 2008, after having found potential investors, but before receiving any investment money, the defendant withdrew from the partnership.
On August 11, 2009, the plaintiff filed an amended complaint asserting causes of action for breach of an oral partnership agreement and tortious interference with business relationships, and seeking $700,000 in damages. The defendant moved to dismiss the complaint pursuant to CPLR 3211 (a) (7), and the motion court granted the motion on March 16, 2010. For the reasons, set forth below, I would affirm the motion court and dismiss the complaint.
I disagree with the majority that the oral partnership agreement was for a definite term or particular undertaking. As the motion court noted, correctly in my opinion, the parties discussed various plans and business scenarios. Citing to Sanley Co. v Louis (197 AD2d 412 [1st Dept 1993]), the motion court found that the plaintiff failed to allege sufficient facts to support his contention that the partnership was for a definite term or a particular objective. In Sanley, this Court found that a partnership formed “for the purposes of acquiring, managing and reselling residential real estate,” with “[n]o term of duration . . . set by the partners” was a partnership at will. (197 AD2d at 413; see e.g. Harshman v Pantaleoni, 294 AD2d 687 [3d Dept 2002] [where agreement provided that partnership would continue until certain real property was sold, partnership had no definite term and was therefore at will].)
Similarly, in this case, a partnership formed for the purpose of acquiring, improving and reselling a business with no specified term of duration is a partnership at will. Absent a “definite term,” the purported partnership was at will and the defendant could dissolve it at any time. (See Partnership Law § 62 [1] [b]; Shandell v Katz, 95 AD2d 742, 743 [1983].)