KAPLAN v. Richard Stone, defendant-appellant. (1999)

In an action, inter alia, for an accounting, the plaintiff Lawrence J. Kaplan and the defendant Richard Stone separately appeal, as limited by their briefs, from stated portions of an order of the Supreme Court, Nassau County (O'Brien, J.H.O.), dated April 9, 1998, which, after a hearing, inter alia, determined that good will was not a distributable asset of the subject partnership.

ORDERED that the order is affirmed insofar as appealed from, with one bill of costs.

“[E]ven if a given partnership might be said to possess good will, the courts will honor an agreement among partners-whether express or implied-that good will not be considered an asset of the firm” (Dawson v. White & Case, 88 N.Y.2d 666, 671, 649 N.Y.S.2d 364, 672 N.E.2d 589;  Matter of Brown, 242 N.Y. 1, 6-7, 150 N.E. 581).   Here, the partnership agreement did not specify that good will was a firm asset.   Furthermore, insofar as no consideration was paid for good will on the admission of partners, no amounts had been paid or given on account of good will, and the firm's financial statements did not reflect any good will, it is clear that the partners did not otherwise view good will as a firm asset.   Accordingly, the court properly concluded that good will was not a distributable asset herein.

Insofar as the order merely indicated that it was dismissing the application made by the defendant Richard Stone on his cross claim, and not the cross claim itself, he may proceed on the cross claim.

MEMORANDUM BY THE COURT.