Fiduciary Duties. Charles Chaney and Lawrence Burdett were equal ...

[LaDunn]

Fiduciary Duties. Charles Chaney and Lawrence Burdett were equal partners in a partnership in Georgia known as BMW Partners. Their agreement was silent as to the effect of a partner's death on the firm. The partnership's sole asset was real property, which the firm leased in 1987 to a corporation that the partners co-owned. Under the lease, the corporation was to pay the partnership 8,000 per month, but after a few years, the corporation began paying 9,000 per month. Chaney died on April 15, 1998. Burdett wanted to continue the partnership business and offered to buy Chaney's estate's interest in it. Meanwhile, claiming that the real property's fair rental value was 4,500 (not 9,000) and that the corporation had overpaid the rent by 80,000, Burdett adjusted the rental payments to recoup this amount. Bonnie Chaney, Charles's widow and his estate's legal representative, filed a suit in a Georgia state court against Burdett, alleging in part that he had breached his fiduciary duty by adjusting the amount of the rent. Did Burdett's fiduciary duty expire on Chaney's death? Explain.

Question 2

In her relations with her principal, an agent must meet the ordinary standard of conduct imposed on people engaged in business dealings.
 a. True
  b. False
  Indicate whether the statement is true or false

[kardosa007]

Answer to Question 1

Fiduciary duties
The court issued a summary judgment in Burdett's favor, and Chaney appealed to a state intermediate appellate court, which affirmed the judgment. Chaney appealed to the Georgia Supreme Court, which reversed the lower court's decision. The state supreme court recognized that the partnership was dissolved on Chaney's death and if a partnership is dissolved because of the death of a partner, the remaining partner or partners must wind up the partnership affairs. During that period, . . . the surviving partner is entitled to possession of the partnership assets only for the purpose of winding up its affairs. On the question of Burdett's fiduciary duty, the court stated that the law is clear that partners owe a duty to act in the utmost good faith with regard to each other. This duty does not come to an end upon the dissolution of the partnership. On the contrary, it continues until the affairs of the partnership are wound up. It follows that the Court of Appeals erred in holding that Burdett did not owe a fiduciary duty to the legal representative of his deceased partner's estate during the winding up of the partnership business. The court also held that Chaney was entitled to a liquidation of the partnership property.

Answer to Question 2

FALSE

[LaDunn]

Correct answers!

[kardosa007]

Great! Please up vote