Friday, November 22, 2013

Bohatch v. Butler & Binion case brief

Bohatch v. Butler & Binion case brief summary
977 S.W.2d 543 (1998)

Plaintiff attorney appealed a decision from the Court of Appeals for the Fourteenth District (Texas) that reversed the trial court's judgment entered in plaintiff's favor on plaintiff's breach of fiduciary claim against defendant law firm. The claim arose after defendant terminated plaintiff.

Plaintiff, who was a partner in defendant law firm, was expelled from the firm after she reported that another partner was overbilling one of defendant's clients. The trial court found that defendant was liable for expelling plaintiff, but the appellate court reversed the decision.


  • On subsequent appeal, the court affirmed the appellate court's reversal of the trial court judgment. 
  • Neither statutory nor contract law principles answered the question of whether defendant had a duty not to expel plaintiff, and recent amendments to the law on partnerships did not have retroactive effect and therefore did not apply. 
  • The partnership agreement did not specify or limit the grounds for expulsion of partners. 
  • Although the relationship between partners was fiduciary in character, it did not give rise to a duty not to expel partners who reported suspected overbilling. 
  • Permitting law firms to retaliate against partners who in good faith reported might discourage compliance with the rules of professional conduct, but it would be impossible for partnerships to maintain the trust relationship necessary for their existence after such serious accusations.

The court affirmed the appellate court's reversal of the trial court judgment for plaintiff attorney because partnerships could expel partners for purely business reasons, and it would be impossible to maintain trust relationships if partners could not be expelled for making serious accusations against other partners.

Recommended Supplements for Corporations and Business Associations Law

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