Vigneau v. Storch Engineers, No. Cv89-0700122s (Dec. 4, 1995)

Rule of Law:

A partner who breaches fiduciary duties through self-dealing does not forfeit their right to recover their vested partnership interest unless the partnership agreement expressly conditions such payment on faithful performance; however, the disloyal partner is liable for damages, disgorgement of secret profits, and statutory penalties if the conduct constitutes an unfair trade practice.

Facts:

• Plaintiff was hired as an architect by Storch Engineers and eventually became a partner, signing an agreement that required him to be 'just and faithful' and provide 'full information' to other partners.
• Plaintiff accumulated a vested partnership interest valued at approximately $167,794 through capital contributions and promissory notes.
• While a partner, Plaintiff secretly invested in two outside real estate development projects, HCA and Grandford.
• Plaintiff acted as Storch's representative in negotiating fees and services with HCA and Grandford while simultaneously holding a hidden ownership interest in those client entities.
• Plaintiff realized a secret profit of $28,059 from the HCA project but lost money on the Grandford project.
• Plaintiff resigned from Storch Engineers citing poor health and dissatisfaction, unrelated to the secret dealings.
• Storch Engineers discovered the plaintiff's secret involvement in the projects after his resignation.
• Storch Engineers refused to pay the plaintiff the value of his partnership interest, citing his breach of fiduciary duty.

Procedural Posture:

• Plaintiff filed a lawsuit in the Superior Court of Connecticut against Storch Engineers to recover the value of his partnership interest.
• Defendant Storch Engineers filed an answer and counterclaims alleging breach of fiduciary duty, breach of contract, fraud, violation of CUTPA, and negligence.
• Plaintiff filed a reply to the counterclaims asserting a special defense based on the statute of limitations.