## Facts

- A New York law firm operated a Palm Beach, Florida office and admitted James W. Beasley, Jr. as a lateral partner in 1989.
- The Palm Beach office experienced internal conflict and financial losses, leading firm management to decide in 1994 to close the office by year end.
- The firm notified partners of the closure and offered Beasley either relocation to another office or a severance package including return of capital and a payment tied to prior compensation.
- Beasley contended the partnership agreement did not authorize his expulsion and, after filing suit, was ordered to vacate the premises within 24 hours and was barred from holding himself out as affiliated with the firm.
- Following a bench trial, the court found Beasley was wrongfully expelled in breach of the partnership agreement and awarded return of capital plus interest, a share of assets, profits, punitive damages, and attorney’s fees and costs.
- Beasley sought, and was denied, a goodwill component; the firm appealed most monetary components and the fee award, and Beasley cross-appealed the goodwill ruling.

## Issues

1. Whether the firm had authority under the partnership agreement to expel Beasley or treat his refusal to relocate as voluntary withdrawal.
2. Whether the remedies awarded for wrongful expulsion properly included profits as calculated, punitive damages, attorney’s fees and costs, and any interest in firm goodwill.

## Decision

- The appellate court affirmed the determination that Beasley was wrongfully expelled and that the partnership agreement did not authorize expulsion on the terms imposed.
- The court affirmed return of capital and interest.
- The court affirmed punitive damages (on rehearing as to that issue).
- The court reversed the profits award and remanded for recalculation because the method improperly captured profits attributable to other partners’ efforts.
- The court reversed the award of attorney’s fees and costs.
- The court affirmed the denial of any recovery for firm goodwill.

## Legal Principles

- A partnership agreement controls partner expulsion; absent a general expulsion provision, a firm may not accomplish expulsion by imposing conditions inconsistent with the agreement.
- A partner’s refusal to accept a materially disruptive relocation offer does not necessarily constitute voluntary withdrawal when the firm’s conduct effectively removes the partner and restricts partnership status.
- In measuring recovery for wrongful expulsion, profits must be tied to the expelled partner’s interest and the partnership’s use of that interest, not to profits generated by other partners’ labor.
- Under New York law applying the American Rule, attorney’s fees and costs are not recoverable absent statutory or contractual authorization.
- A goodwill award requires proof of valuable goodwill on the record; without such proof, goodwill recovery may be denied.

## Conclusion

The appellate court largely upheld liability and core remedies for wrongful expulsion, including return of capital, interest, and punitive damages, but required a narrower profits calculation, disallowed attorney’s fees absent authorization under governing law, and rejected a goodwill recovery for lack of record support.


Cadwalader, Wickersham & Taft v. Beasley, 728 So. 2d 253 (Fla. Dist. Ct. App. 1998)