GOLDWASSER v. J. Winston Fowlkes, et al., Defendants-Appellants. (1999)

Judgment, Supreme Court, New York County (Ira Gammerman, J.), entered July 28, 1998, inter alia, awarding plaintiff damages on the basis of a stock valuation of $49 per share, unanimously modified, on the law and the facts, to vacate the award of such damages, and to remand to the trial court for a recalculation of damages on the basis of a stock valuation of $37.50 per share, and otherwise affirmed, without costs.   Appeal from the order, same court and Justice, entered October 31, 1997, unanimously dismissed, without costs, as subsumed within the appeal from the judgment.

Defendants-appellants, all limited partners in the partnership in which the nonappealing defendants were the general partners, assumed a fiduciary duty to plaintiff, also a limited partner aggrieved by the general partners' nonfeasance, when they took over managerial control of the partnership.   They breached this duty when, knowledgeable of plaintiff's whereabouts, they chose not to contact him, and settled with the general partners in a manner that breached section 23(a) of the partnership agreement.   As damages for such breach, plaintiff is entitled to the amount he would have received had he been a party to the settlement agreement, which was properly computed by the trial court on the basis of the formulas in section 3(a) of the settlement agreement and paragraph 14 of the partnership agreement.   However, the underlying stock should have been valued as of the date of its distribution to defendants, and we modify accordingly.   We have considered defendants' other arguments and find them unpersuasive.

MEMORANDUM DECISION.