SRIRAMAN v. Patel
761 F. Supp. 2d 7
E.D.N.Y2011Background
- Dr. Rajesh Sriraman sues his former partner Dr. Shashikant Patel in a diversity action for an accounting and related claims.
- From 2003 to 2008 the doctors operated in two partnerships without a written agreement; their terms are disputed.
- In 2003 Patel entered three contracts: a Chief of Medicine contract with Forest Hills Hospital, an FH-ICU critical care services contract, and a Q-LI Medical Group critical care contract.
- Plaintiff contends the 2003 contracts (FH-ICU and Q-LI) were partnership assets and that revenues should be shared 50/50; defendant contends they were not partnership assets and revenues were allocated personally.
- The PS LLP became Patel Sriraman LLP in 2004; Sriraman left the partnership on June 30, 2008, prompting an accounting suit filed December 17, 2009.
- The court awarded plaintiff $222,300 after considering what revenues from the contracts belonged to the partnership and applying NY partnership-law accounting principles.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the FH-ICU and Q-LI contracts were partnership property. | Sriraman asserts the FH-ICU and Q-LI contracts were partnership assets. | Patel argues those contracts were not partnership property. | FH-ICU and Q-LI contracts were partnership assets. |
| Whether the Chief of Medicine contract was partnership property. | Sriraman contends the Chief of Medicine contract was partnership income. | Patel contends it was personal employment income, not partnership property. | Chief of Medicine contract not considered partnership property. |
| When the accounting claim accrues and whether it is time-barred. | Accrual occurred upon dissolution; no timely bar. | Accounting accrues earlier, potentially time-barred. | Accrual occurred at dissolution (June 30, 2008); claim timely. |
| What is the proper relief and amount due under the accounting? | Sriraman seeks half of partnership distributions plus adjustments. | Patel disputes some allocations and classification of income. | Plaintiff awarded $222,300 after true-up. |
Key Cases Cited
- Meinhard v. Salmon, 249 N.Y.458 (N.Y. 1928) (fiduciary duty and loyalty among partners)
- Koppel v. Wien, Lane & Malkin, 125 A.D.2d 230 (1st Dep't 1986) (absolute right to an accounting when fiduciary relationship exists)
- Scholastic, Inc. v. Harris, 259 F.3d 73 (2d Cir. 2001) (accounting accrues upon dissolution; right to accounting independent of legal remedies)
- In re The John E. Enright, 40 F.2d 588 (2d Cir. 1930) (intent governs ownership of partnership property)
- R.C. Gluck & Co. v. Tankel, 12 A.D.2d 339 (1st Dep't 1961) (duty not to appropriate partnership opportunities; property determined by intent)