## Facts

- Stephen Langhoff (defendant), Michael Marr, and Richard Bennett incorporated their law-firm partnership as a professional-services corporation named Marr, Langhoff & Bennett (ML&B).
- Langhoff decided to leave ML&B. After ML&B’s dissolution, the former colleagues agreed to separate, with Marr and Bennett continuing their practice as Michael E. Marr, P.C. (Marr P.C.) (plaintiff).
- One of ML&B’s existing clients, Marguerite Cook, had major litigation that was still in progress when Langhoff departed.
- When Langhoff left Marr P.C.’s office, he took the Cook file without permission.
- Cook later retained Langhoff to take her case to trial. Langhoff tried the case successfully and earned a substantial fee.
- Marr P.C. sued to recover its claimed share of the Cook fee, alleging that Langhoff breached fiduciary duties owed to ML&B and, through the continuation of the practice, to Marr P.C.
- The trial court analyzed the dispute under partnership law and entered judgment for Marr P.C.
- The intermediate appellate court reversed and remanded, instructing the trial court to redetermine the dispute under corporate law because ML&B was a corporation.
- Marr P.C. sought review in the Maryland Court of Appeals.

## Issues

1. When lawyers practice through a professional-services corporation, should disputes over a departing lawyer’s alleged misappropriation of an ongoing client matter and resulting fee be analyzed under partnership law or under corporate law and corporate fiduciary-duty principles?

## Decision

- The Maryland Court of Appeals agreed that, because the firm was organized as a professional-services corporation, corporate law supplies the governing framework rather than partnership law.
- The court upheld the intermediate appellate court’s direction that the case be reconsidered under corporate-law principles, including fiduciary obligations associated with corporate roles.
- The case was returned to the trial court for further proceedings consistent with applying corporation law rather than partnership law to determine liability and any recovery.

## Legal Principles

- A professional-services corporation is treated as a corporation for internal-governance and fiduciary-duty questions unless a statute or controlling agreement provides otherwise.
- Selecting the corporate form affects how courts analyze disputes among the firm’s owners; courts generally do not default to partnership doctrines simply because the owners previously practiced as partners.
- Corporate fiduciary-duty concepts—such as duties owed by those who control or manage the corporation—can provide the analytical basis for claims that a departing lawyer improperly took firm property or diverted a firm matter.
- In fee disputes tied to a departing lawyer’s handling of a matter associated with the prior firm, the governing legal framework (corporate vs. partnership) can affect both the theory of liability and the remedial path (for example, whether relief proceeds through corporate-duty claims and related accounting concepts).

## Conclusion

Michael E. Marr, P.C. v. Langhoff addresses a law-firm breakup in which a departing lawyer took an ongoing client file and later earned a large fee, prompting the continuing firm to sue for a share; Maryland’s Court of Appeals held that, because the firm was a professional-services corporation, the dispute must be analyzed under corporate law rather than partnership law and sent the matter back for reconsideration under that corporate framework.


Michael E. Marr, P.C. v. Langhoff, 589 A.2d 470 (1991)