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October 27, 2011
Curtis Wins Appeal for H.G. Wellington Co., Inc.


Curtis recently won an appeal to the First Department of the New York Appellate Division on behalf of client H.G. Wellington Co., Inc. The First Department unanimously dismissed all claims against Wellington, reversing the trial court's denial of Wellington's motion to dismiss.

Plaintiff Diana Joy Ingham (a limited partner in a partnership) brought a derivative claim of breach of fiduciary duty against the general partner based on certain agreements the general partner reached with Wellington in 1995. Ingham claimed that Wellington aided and abetted this breach, and was unjustly enriched.

On appeal, the First Department agreed with Wellington that the aiding and abetting claim was barred by the statute of limitations, which could not be tolled under any doctrine. The First Department also held that Ingham failed to allege that Wellington knew of the general partner's alleged breach, and that Wellington owed no duty to the partners to conduct an investigation as to the "fairness" of the transaction, since the agreements between Wellington and the partnership expressly represented to Wellington that the contract accorded with the partnership agreement. This is significant case law for any entity contracting with a partnership -- absent actual knowledge of a partner's breach of duty, an entity may rely on a partner's representation that the contract accords with the partnership agreement.

Counsel Jason Gottlieb and associate Chelsea McLean represented Wellington in this matter.

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