## Facts

- J. Edward Day, a senior partner heading a Washington, D.C. office, was a partner in a Chicago-based law partnership governed by written partnership agreements.
- The partnership agreement allocated profit shares and voting rights and vested day-to-day management authority in an executive committee on which Day did not serve.
- The executive committee negotiated a merger with another law firm and later presented the proposed merger to partners at meetings; Day received notice but did not attend all meetings.
- The merger and a new partnership agreement were executed by all partners, including Day.
- After the merger, the Washington office was consolidated with the merged firm’s Washington operation, and the executive committee required Day to share the Washington office chairmanship with another partner.
- Day alleged leaders failed to disclose before the merger vote that his exclusive chairmanship would end and that other changes (including relocation) would occur, causing him reputational harm, reduced income, and conditions that led to his resignation.
- Day sued the firm and executive committee members asserting breach of fiduciary duty, breach of the partnership agreement, fraud/misrepresentation and conspiracy, and wrongful ouster/constructive dissolution.

## Issues

1. Whether the executive committee breached fiduciary duties by negotiating and implementing a merger and post-merger reorganization without disclosing that Day would lose exclusive chairmanship.
2. Whether the partnership agreements gave Day an enforceable right to remain sole chair of the Washington office or to block the committee’s leadership decisions.
3. Whether alleged nondisclosure or assurances that no partner would be “worse off” could support fraud-based liability, including reliance and causation.
4. Whether summary judgment was improper because Day sought additional discovery.

## Decision

- The court granted summary judgment for defendants on all claims.
- The court held the executive committee’s merger and reorganization decisions fell within authority granted by the partnership agreement and were undertaken for partnership business purposes, not personal gain at the partnership’s expense.
- The court found no contractual provision guaranteeing Day continued sole chairmanship or a fixed internal status.
- The court rejected fraud and related theories because the alleged assurances were too indefinite and, in any event, Day could not show legally sufficient causation or reliance.
- The court concluded additional discovery would not change the outcome because the dispositive questions were largely contractual and legal.

## Legal Principles

- Partnership fiduciary duty principally restrains self-dealing—profiting at the partnership’s expense—and does not, without an express agreement, secure a partner’s preferred title, prestige, or internal position.
- Courts enforce governance allocations in a written partnership agreement; where the agreement vests managerial discretion in an executive committee, internal leadership assignments generally fall within that discretion.
- A partner asserting misrepresentation must show actionable statements and a causal link between nondisclosure and the alleged injury; where the transaction’s approval did not depend on the plaintiff’s vote, claims of reliance on nondisclosure may fail for lack of causation.
- Changes in internal management roles, absent deprivation of specified contractual rights, do not constitute wrongful ouster or dissolution.

## Conclusion

The court ruled that the firm’s leaders acted within the management authority and voting rules established by the partnership agreements and that Day lacked an enforceable right to retain exclusive office leadership; because alleged nondisclosure did not amount to a breach of fiduciary duty, contract violation, or actionable fraud with causation, summary judgment for defendants was warranted.


Day v. Sidley & Austin, 394 F. Supp. 986 (D.D.C. 1975)