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Winston & Strawn v. Nosal - 279 Ill. App. 3d 231, 215 Ill. Dec. 842, 664 N.E.2d 239 (1996)

Rule:

A fiduciary relationship exists between partners, and each partner is bound to exercise the utmost good faith and honesty in all matters relating to the partnership business. This duty prohibits all forms of secret dealings and self-preference in any matter relating to and connected with a partnership and requires each partner to fully disclose partnership business to other partners.

Facts:

This case involved the expulsion of attorney Chester W. Nosal from the partnership of the law firm, Winston and Strawn. The firm filed suit seeking a declaration that Nosal's expulsion was effectuated validly under the partnership agreement and that it did not result in a dissolution of the partnership. Nosal counterclaimed for a declaration that his expulsion was invalid under the partnership agreement and that it operated to dissolve the partnership. The trial court granted summary judgment in favor of the firm on both its complaint and count I of Nosal's counterclaim. Nosal thereafter appealed under Ill. Sup. Ct. Ru. 304 (a), contending that his expulsion was effectuated under an invalidly-enacted partnership agreement, and therefore was void as a breach of the partners' fiduciary duties to one another.

Issue:

Was attorney Nosal’s expulsion from the law firm effectuated under an invalidly-enacted partnership agreement?

Answer:

Yes.

Conclusion:

The appellate court reversed and remanded because it found that the trial court improperly made factual determinations concerning evidence presented by the law firm which was inappropriate at summary judgment. The Court concluded that Nosal had sufficiently raised a triable issue that his expulsion occurred in breach of the fiduciary duty owed to him by the firm. According to the Court, the outplacement of Nosal followed his ongoing requests for sensitive firm information, and this raised an inference that he was expelled solely because he persisted in invoking his rights under the partnership agreement.

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