Holman v. Coie

Washington Court of Appeals · 1974 · Corporations

522 P.2d 515 (Wash. Ct. App. 1974)

Updated August 22, 2026

CorporationsPartnership expulsionTortious interferenceConspiracypartnership agreementexpulsion clauseexecutive committeecontract interpretation

Facts

Plaintiffs Francis and William Holman were partners in a law firm governed by a 1968 partnership agreement providing that any member could be expelled by majority vote of the executive committee; the agreement mentioned expulsion repeatedly but did not require cause, notice, reasons, or a hearing. After tensions developed within the executive committee over firm matters and after Boeing complained about Francis Holman's conduct and requested that he do no further legal work for Boeing, seven executive committee members met informally on May 7, 1969, without notifying plaintiffs, and later on May 13 formally voted 7-2 to expel them. At the May 13 meeting, a resolution expelling plaintiffs was read aloud without stating reasons, and plaintiffs were expelled. Plaintiffs claimed the expulsion breached the partnership agreement and fiduciary duties, and that Boeing had tortiously interfered and conspired in bringing it about.

Issue

Did the law partners breach the partnership agreement or fiduciary duties by expelling plaintiffs without prior notice, stated reasons, cause, or a hearing under an expulsion clause allowing expulsion by majority vote of the executive committee? Did Boeing tortiously interfere with plaintiffs' partnership relationship or conspire with the partners based on its complaints and contacts with the firm?

Rule

When a partnership agreement unambiguously provides that a partner may be expelled by vote of a designated management body and does not require cause, notice, reasons, or a hearing, courts will enforce the agreement as written and will not imply those procedural protections. Bona fide and good-faith obligations among partners concern honesty and the absence of deceit or fraud, particularly as to partnership business or property, and do not justify rewriting an unambiguous expulsion provision absent evidence that remaining partners sought an improper business or property advantage. Tortious interference requires a valid relationship, knowledge, intentional interference inducing or causing breach or termination, and resulting damage; speculation is insufficient, and a complaint made to protect one's own business interest may be justified.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

A consulting partnership in Seattle has a written agreement stating that "any partner may be expelled by majority vote of the management committee." The agreement carefully specifies the financial consequences of expulsion but says nothing about advance notice, cause, reasons, or a hearing. The committee votes 4-1 to expel Nora Patel after summoning her to a same-day evening meeting and immediately reads a resolution removing her.

If Nora sues for breach of the partnership agreement based solely on the lack of advance notice, stated reasons, and an opportunity to be heard, what is the strongest result?

Explanation. Where a partnership agreement unambiguously authorizes expulsion by vote of the designated body and omits notice, cause, reasons, and hearing requirements, the agreement is enforced as written. The court will not rewrite the contract by adding procedural protections the parties did not include, especially where the agreement also details expulsion consequences.