Levy v. Nassau Queens Medical Group
Facts
Dr. Sidney Levy practiced medicine as a partner in the defendant Nassau Queens Medical Group. Under the partnership agreement, a partner could be terminated by majority vote if he had reached age 70, and Levy was expelled by majority vote of the partnership executive committee because he was over 70. Plaintiffs alleged the termination was made in bad faith because other persons over 70 were not expelled and because the real reason was Levy's criticisms of partnership decisions. Plaintiffs sought damages for breach of the partnership agreement and prima facie tort.
Issue
Whether plaintiffs stated a cause of action for breach of contract or prima facie tort by alleging that a partnership invoked a contractual age-based termination clause in bad faith because it selectively enforced the clause and actually sought to remove a partner for criticizing partnership decisions.
Rule
Where a partnership agreement provides a simple, practical, and speedy method of separating a partner from the partnership, a court may not frustrate that purpose in the absence of undue penalty or unjust forfeiture. Although bad faith may be actionable, there must be some showing that the partnership acted from a desire to gain a business or property advantage for the remaining partners; mere policy disagreements do not constitute bad faith because partners may choose with whom they wish to be associated.
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