61 A.D.2d 935 | N.Y. App. Div. | 1978
In this submission of a controversy upon an agreed statement of facts pursuant to CPLR 3222, it is directed that judgment be entered in the Supreme Court, New York County, declaring that the first sentence of paragraph 2 of the agreement between Emile Z. Berman and Berman & Frost, dated November 29, 1972, entitles Emile Z. Berman to a pro rata share of the three groups of partnership assets described in paragraph numbered 4 of the submission herein, without costs or disbursements. The parties submit a controversy upon an agreed statement of facts by which they seek to resolve a dispute as to the interpretation of the first sentence of paragraph 2 of the agreement entered into between Berman and the law partnership of Berman & Frost under which Emile Z. Berman withdrew as a partner. Paragraph 2 reads: "As soon as possible after January 1, 1973 the firm will pay Berman his share of capital and of the firm’s net tangible assets, as determined by an audited statement.” Berman contends that the term "net tangible assets” entitles him to a pro rata share of accounts receivable for services billable as of December 31, 1972, regardless of whether payment for such services was received prior or subsequent to December 31, 1972 and that he is entitled to a pro rata share of those moneys advanced by the partnership to clients prior to and as of December 31, 1972 and repaid upon the conclusion of respective cases subsequent to December 31,1972. The partnership argues that the term "net tangible assets” refers only to the net value of tangible fixed assets and does not embrace accounts receivable or repaid moneys previously loaned by the partnership. Under the agreement, Berman was to receive $50,000 per year for five years, $15,000 per year for an additional five years, and his share of capital and net tangible assets. Berman received $1,569 for his share of capital and only $7,500 for "fixed assets.” If Berman were to die during the initial five-year period, his estate would receive only one half of the amounts provided for. Berman possessed a 21% interest in the partnership worth, at his retirement, some $700,000. Assuming Berman did not die, under the partnership’s reasoning he bargained his interest away for payments totaling some $334,000. This amount was tied in with a death gamble, i.e., if Berman died, the sum would be halved. Mr. Frost died in the interim. We assume that these knowledgeable attorneys intended a just arrangement. The business of a law firm is the practice of law, i.e., the performance of legal services. When the partnership was ongoing, their