THOMAS BRENNAN v. BRENNAN ASSOCIATES et al., SC 17812/17813

Judicial District of Waterbury

Partnerships; Uniform Partnership Act; Whether General Statutes § 34-337 Gives Partner Right to Unfettered Access to Partnership's Books and Records; Whether Partner was Properly Dissociated from Partnership Under General Statutes § 34-355 (5) (C); Whether Trial Court had Authority to Conduct Valuation Process for Buyout of Partner's Interest After Dissociation. The plaintiff, a partner of Brennan Associates since its establishment in 1984, brought this action under the Uniform Partnership Act, General Statutes § 34-300 et seq., against the partnership, its individual partners and the co-administrators of the estate of a deceased partner, seeking to enforce his rights under the partnership agreement. The plaintiff sought, among other things, an order requiring the defendants to allow him full access to the partnership's books and records. The defendants filed a counterclaim seeking to dissociate the plaintiff from the partnership.  Section 34-337 requires a partnership to "provide partners and their agents and attorneys access to its books and records" so that they may "inspect and copy [them] during ordinary business hours."  The trial court denied the plaintiff's request for access, noting that no partner had ever been permitted such access and that it was the partnership's practice for its bookkeeper to pull the file containing the information sought by the partner and give it to the partner to review or copy.  The court found that providing a partner with a right to unfettered access to the books and records would require unanimous consensus or an affirmative vote by the partnership because it would constitute a change in the practice and custom of the partnership's manner of operation.  The court then found that the plaintiff should be dissociated from the partnership under § 34-355 (5) (C), which provides for dissociation when a "partner engaged in conduct relating to the partnership business which makes it not reasonably practicable to carry on the business in partnership."  The court noted that the plaintiff's failure to be fully open and honest about his 1989 federal tax fraud conviction caused his partners to distrust him and that the plaintiff's animosity and distrust of his partners and his baseless claims of fraud against one of them made it impractical for him to carry on business with them.  The court further noted that the partnership was at an impasse regarding important business decisions due to the plaintiff's veto power and that the plaintiff was attempting to control the partnership in a manner that was contrary to the terms of the partnership agreement.  The plaintiff now challenges the trial court's decision.  The defendants cross appeal, claiming that the trial court improperly found that (1) a partner may transfer only an economic interest in the partnership and not management and voting rights; (2) assignment of management rights requires unqualified, unanimous consent of the partners; and (3) it did not have the authority to conduct the valuation process for the buyout of the plaintiff's interest in the partnership following his dissociation.