Court Opinion

ID: 9715645
Source: CourtListenerOpinion
Date Created: 2023-08-26 06:10:43.652362+00
Date Added: 2024-06-11T18:23:36.530949
License: Public Domain

CHIEF JUSTICE MILLER, concurring in part and dissenting in part: I do not agree with that portion of the majority opinion that approves the formula employed by the plaintiff’s expert in determining the appropriate amount of post-dissolution overhead to be credited to the partners in winding up partnership files. As the majority opinion explains, the plaintiff’s expert, Burke, devised a mathematical formula to use in determining the partners’ post-dissolution overhead. Burke’s formula is as follows: Fee x 62.64% xA/Bx 50% = C In the formula, the figure 62.64% represents the percentage of revenue historically incurred by the partnership as overhead expense. The ratio A/B represents the number of months a file has been pending after dissolution (A) in relation to the total number of months, before and after dissolution, the file has been pending (B). The product C represents the amount to be paid as post-dissolution overhead to the partner who winds up the particular file; after the fee is reduced by C, the difference may then be divided equally between the two partners as profit. Of concern here is the 50% multiplier — in effect a divisor — used in the formula. The plaintiff explains that the multiplier is necessary to ensure that the partner who winds up a particular file is properly reimbursed by the other partner for overhead expenses incurred in the post-dissolution period. The plaintiff explains that if the partnership had had three partners, the multiplier would be 33 1/3%, if four, 25%, and so on. During the post-dissolution period, the partners pay from their own pockets the overhead expenses they incur in winding up the affairs of the partnership. Accordingly, with respect to fee-generating files concluded during that time, the partners are entitled to full reimbursement from the partnership for overhead expenses attributable to the partnership matters they have handled. See Ellerby v. Spiezer (1985), 138 Ill. App. 3d 77, 83; Ill. Rev. Stat. 1989, ch. 106½, par. 40. The multiplier fails to accomplish what the plaintiff claims it does. It is clear that the formula actually computes only one partner’s share of the post-dissolution overhead for a particular file, not the total amount of post-dissolution overhead incurred in connection with a file. Accordingly, it is illogical to credit the winding-up partner with only the amount calculated by the formula and to divide the remaining sum between the partners as profit. As the defendant points out, the plaintiff’s formula effectively reimburses the winding-up partner for only one half of the overhead incurred on a particular file, leaving the other half to be split as profit. An appropriate answer to this problem is simply to eliminate the 50% multiplier from the plaintiff’s formula. The winding-up partner will then receive full reimbursement for post-dissolution overhead incurred with respect to a particular matter, and the amount remaining may then be divided evenly by the partners as profit. JUSTICE FREEMAN joins in this partial concurrence and partial dissent.