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Business Organizations Keyed to Ragazzo
Enea v. Superior Court
Citation:
132 Cal. App. 4th 1559Facts
Defendant, William Daniel created a partnership with the sole asset being an office space and the sole purpose being to rent the space to himself at a below market value rate. There were no provisions in the partnership agreement for leasing or for anything relating to profits. Plaintiff, Enea later bought a 1/3 interest in the partnership and began asking about Defendants rental payments to figure out whether he was paying market rate. Defendant was resistant to sharing this information and soon began blocking Plaintiff from reviewing records and then totally excluded Plaintiff from partnership activities. Plaintiff sued claiming that the Defendant had breached his duty of loyalty to the partnership by not paying market rate for his law firm rent. Defendant argued that because the partnership agreement was silent on leasing and profits, this was not a violation of the duty he owed to the partnership. Plaintiff sued for a declaratory judgement. Defendant filed for Summary judgement and the trial court granted the Defendants motion. Plaintiff appealed to California court of appeals.
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