Breach of Contract and Judicial Dissolution of Partnerships

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Posted on: Nov 5 2025

Today, we examine familiar principles of contract interpretation, as well as the requirements for judicial dissolution of a partnership.

The Rules of Contract Interpretation

It is well-settled in New York that the “‘fundamental, neutral precept of contract interpretation is that agreements are construed in accord with the parties’ intent[,]’ and ‘[t]he best evidence of what parties to a written agreement intend is what they say in their writing.’”[1] “‘The construction and interpretation of an unambiguous written contract is an issue of law within the province of the court, as is the inquiry of whether the writing is ambiguous in the first instance. If the language is free from ambiguity, its meaning may be determined as a matter of law on the basis of the writing alone without resort to extrinsic evidence.’”[2] “A contract is unambiguous if the language it uses has a definite and precise meaning, unattended by danger of misconception in the purport of the agreement itself, and concerning which there is no reasonable basis for a difference of opinion.”[3] “Ambiguity in a contract arises when the contract, read as a whole, fails to disclose its purpose and the parties’ intent, or where its terms are subject to more than one reasonable interpretation.”[4] “‘[W]here a contract was negotiated between sophisticated, counseled business people negotiating at arm’s length, courts [are] … reluctant to interpret an agreement as impliedly stating something which the parties’ specifically did not include.”[5]

The Rules of Judicial Dissolution Involving a Partnership

Section 63 of the Partnership Law gives a partner the statutory right to seek court dissolution of a partnership, and provides that a court shall decree the dissolution, on a partner’s application, in various situations. Among the situations set forth in the statute are: the “partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business,” and the “partner wilfully or persistently commits a breach of the partnership agreement, or otherwise so conducts himself in matters relating to the partnership business that it is not reasonably practicable to carry on the business in partnership with him.”[6] “[J]udicial dissolution of a partnership [is a] rarely invoked remed[y].”[7] The party seeking judicial dissolution of a partnership bears the burden of presenting facts demonstrating that grounds exist under Section 63 of the Partnership Law and that such equitable relief is warranted.[8] If the statutory prerequisites are not met, a claim for judicial dissolution will be denied.[9]

With the foregoing rules in mind, we examine Waldorf Invs., L.P. v. Waldorf, 2025 N.Y. Slip Op. 06096 (2d Dept. Nov. 5, 2025).

Waldorf centered around an alleged breach of contract involving a life insurance policy.

The plaintiff Christopher V. Waldorf, Jr. (“Christopher”) and the defendants Kathleen Waldorf (“Kathleen”), William Waldorf (“William”), and Stephen Waldorf (“Stephen”) are partners in Waldorf Investments, L.P. (the “partnership”). The partnership owns a parcel of real property located in Huntington, New York (the “property”). In 2017, Christopher, in the name of the partnership, and Christopher, individually and derivatively on behalf of the partnership (together, the “plaintiffs”), commenced the action to, inter alia, recover damages for breach of contract and for judicial dissolution of the partnership.

Kathleen, William, Stephen, and defendant Waldorf Risk Solutions, LLC (collectively, the “defendants”), subsequently moved for summary judgment dismissing the sixteenth cause of action for breach of contract against William and Stephen and the twenty-first and twenty-second causes of action for judicial dissolution of the partnership.

In an order dated March 29, 2022, the Supreme Court granted the motion. Plaintiffs appealed.

The Appellate Division, Second Department, affirmed.

The Court held that “defendants demonstrated their prima facie entitlement to judgment as a matter of law dismissing the sixteenth cause of action, alleging breach of contract, insofar as asserted against William and Stephen.”[10] The breach of contract cause of action alleged, inter alia, that “William and Stephen breached the certificate of limited partnership by failing to distribute to Christopher his pro rata share of the partnership’s profits in the form of certain fire insurance proceeds and rent payments allegedly owed to the partnership.”[11] In support of their motion, defendants submitted evidence demonstrating, among other things, that the fire insurance proceeds were retained by the partnership to redevelop the property, as permitted under the terms of the certificate of limited partnership.[12] “Additionally,” said the Court, “defendants established, prima facie, that there were no rent payments owed to the partnership that William and Stephen failed to distribute.”[13]

The Court also held that defendants “demonstrated their prima facie entitlement to judgment as a matter of law dismissing the twenty-first cause of action, seeking judicial dissolution of the partnership.”[14] The Court found that plaintiffs failed to demonstrate that “it [was] not reasonably practicable to carry on the business [of the partnership] in conformity with the partnership agreement.”[15] The Court explained that the evidence submitted by defendants satisfied “their prima facie burden” of demonstrating that Kathleen, William, and Stephen ha[d] worked to, among other things, redevelop the property, thereby carrying on the partnership’s business.[16] “In opposition,” said the Court, “plaintiffs failed to raise a triable issue of fact.”[17]

Takeaway

Waldorf explores two foundational legal concepts in New York law: how courts interpret contracts and the circumstances under which a partnership may be judicially dissolved. As to the former, Walforf reaffirms the principle that courts prioritize the written intent of the parties when interpreting contracts, avoiding extrinsic evidence unless the language is ambiguous. Ambiguity arises only when a contract’s terms can reasonably be interpreted in more than one way.

As to the latter, Waldorf provides insight into judicial dissolution under Partnership Law § 63, which, among other things, allows a partner to seek dissolution if another partner’s conduct makes continuing the business impractical.

In Waldorf, plaintiff alleged breach of contract and sought dissolution. The Court affirmed the dismissal of both claims, finding that defendants acted within the partnership agreement and that the business was being carried out effectively. As discussed, plaintiff failed to present sufficient evidence to justify either claim, reinforcing the high bar for judicial dissolution and the importance of clear contractual language.

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Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice.

[1] Donohue v. Cuomo, 38 N.Y.3d 1, 12 (2022), quoting Greenfield v. Philles Records, 98 N.Y.2d 562, 569 (2002).

[2] Palombo Group v. Poughkeepsie City Sch. Dist., 125 A.D.3d 620, 621 (2d Dept. 2015), quoting Law Offs. of J. Stewart Moore, P.C. v. Trent, 124 A.D.3d 603, 603 (2d Dept. 2015).

[3] Greenfield, 98 N.Y.2d at 569 (alteration and internal quotation marks omitted); see also Donohue, 38 N.Y.3d at 13.

[4] Universal Am. Corp. v. National Union Fire Ins. Co. of Pittsburgh, Pa, 25 N.Y.3d 675, 680 (2015) (citation and internal quotation marks omitted).

[5] Donohue, 38 N.Y.3d at 12, quoting 2138747 Ontario, Inc. v. Samsung C&T Corp., 31 N.Y.3d 372, 381 (2018).

[6] Partnership Law §§ 63(c) and (d).

[7] Drucker v. Mige Associates II, 225 A.D.2d 427, 429 (1st Dept. 1996).

[8] See Jones v. Jones, 15 Misc. 2d 960, 962 (Sup. Ct., Kings County 1958).

[9] See Couch v. Langan, 63 N.Y.2d 987, 989 (1984).

[10] Slip Op. at *1.

[11] Id.

[12] Id. at *1-*2, citing Countrywide Home Loans, Inc. v. United Gen. Tit. Ins. Co., 109 A.D.3d 953, 954 (2d Dept. 2013).

[13] Id. at *2.

[14] Id.

[15] Id. (citations omitted).

[16] Id.

[17] Id.

Tagged with: Breach of Contract, Business Litigation, Contract Interpretation, Judicial Dissolution, Partnership, Partnership Law