## Facts

- A New York law firm was founded and managed for decades by senior partners, including Irving Moskovitz, who had primary responsibility for international tax work.
- Moskovitz brought a major pharmaceutical client, Roche, to the firm in 1959; by the late 1980s, Roche generated over $1 million annually in billings.
- In 1982, the firm adopted a “Phasing Out and Retirement Program” for senior partners that contemplated phased retirement compensation and benefits and stated that retirees would not impair the firm’s relationships with existing clients and business.
- Moskovitz later became “of counsel,” explored joining another firm, and, while handling a significant Roche matter, allegedly sought and obtained assurances that Roche would transfer its work if he moved.
- Moskovitz and two tax partners resigned; the firm locked them out and sued, alleging they wrongfully diverted Roche to the new firm. Roche promptly transferred its files to the new firm.

## Issues

1. Whether allegations that departing partners secretly arranged for a major firm client to follow them to a new firm, while still affiliated with the old firm, stated claims for breach of fiduciary duty under New York law.
2. Whether the retirement program’s commitments not to impair existing client relationships could support a breach of contract claim based on alleged client diversion.
3. Whether alleged assurances about protecting and “institutionalizing” firm clients, made while allegedly planning to leave and take a key client, could support a fraud claim.
4. Whether these claims were legally sufficient to survive defendants’ motion for summary judgment.

## Decision

- The Court of Appeals of New York affirmed the order denying summary judgment to Moskovitz.
- The court held that the firm’s allegations of breach of fiduciary duty, breach of contract, and fraud were sufficient to withstand summary dismissal.
- The court emphasized the limited posture: it did not determine ultimate liability or ethical wrongdoing, only that triable issues existed on the alleged facts.

## Legal Principles

- Clients are not property; a client may choose to remain with a firm or follow a departing lawyer.
- Client choice does not eliminate fiduciary obligations among law partners; partners owe duties of loyalty and fair dealing to the firm up to the time of withdrawal.
- Communications incident to a departure may be permissible as notice, but covert pre-departure efforts to secure firm clients for a new affiliation can constitute actionable disloyalty depending on timing, manner, and content.
- Contractual provisions aimed at protecting firm-client relationships may support a claim when a departing partner’s conduct allegedly impairs those relationships.
- On summary judgment, courts credit the nonmovant’s allegations and reasonable inferences; detailed allegations of secret client diversion can support claims for fiduciary breach, contract breach, and fraud sufficient to proceed to fact-finding.

## Conclusion

The court allowed the firm’s fiduciary-duty, contract, and fraud claims to proceed because allegations of secret pre-departure efforts to move a major client, if proven, could violate partner duties and contractual commitments even though the client remained free to choose its counsel.


Graubard Mollen Dannett & Horowitz v. Moskovitz, 86 N.Y.2d 112 (N.Y. 1995)