Partnership Breakups

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Posted on: Dec 22 2025

In today’s article, we examine Epstein v. Cantor, 2025 N.Y. Slip Op. 06989 (2d Dept. Dec. 17, 2025) (Epstein I), and Epstein v. Cantor, 2025 N.Y. Slip Op. 06990 (Dec. 17, 2025) (Epstein II) (collectively, Epstein), related cases involving, among other things, New York’s partnership law.

Epstein centered on whether Cantor, Epstein & Mazzola, LLP (CEM) was a partnership and whether Epstein was a partner in the firm. Cantor argued that Epstein lacked partnership status, seeking dismissal of, inter alia, fiduciary-related claims. The Appellate Division, Second Department, held that a 1995 written agreement between Cantor and Epstein expressly formed a partnership and governed their relationship, confirming Epstein’s partner status. Consequently, Epstein’s claims for breach of fiduciary duty, violation of Partnership Law § 20(3), and an accounting against Cantor survived dismissal. In contrast, a 2013 agreement rendered Mazzola a W-2 employee with no equity interest, refuting allegations that he was a partner. Thus, the fiduciary claims against Mazzola and the related Boyd defendants were dismissed.

Epstein v. Cantor

Epstein arose from the dissolution of a law firm.

In 1995, plaintiff and defendant Robert I. Cantor (“Cantor”) entered into an agreement to form a partnership that would ultimately become Cantor, Epstein & Mazzola, LLP (“CEM”), upon the addition of defendant Bryan J. Mazzola (“Mazzola”). Pursuant to an agreement dated January 1, 2013, entered into by, among others, Epstein, Cantor, and Mazzola, as of that date, Mazzola became a W-2 salaried employee of CEM, with no equity interest in the firm.

In 2015, Cantor informed Epstein, Mazzola, and Gary Ehrlich (“Ehrlich”), a senior attorney working at CEM at the time, that he had decided to leave CEM. This led to negotiations between Cantor, Epstein, Mazzola, and Ehrlich about the future of CEM and the terms of a potential buyout of Cantor’s interest. Mazzola and Ehrlich proposed to purchase the equity in the firm in return for a payout to Cantor and Epstein. Epstein allegedly rejected the offer, and thereafter, Mazzola and Ehrlich determined that they would leave CEM.

In June 2016, letters purportedly from CEM were sent to certain clients stating that Mazzola, Ehrlich, and two other attorneys were leaving CEM to join a new firm and that CEM had no objection to those attorneys contacting the clients to solicit their continued representation of them.

In 2019, Epstein, individually and as a partner of CEM, commenced the action against Cantor and defendant Robert I. Cantor, PLLC (hereinafter, together, the “Cantor defendants”), and Mazzola and defendants W. Todd Boyd, Boyd Richards Parker Colonelli, P.L., and Boyd Richards NY, LLC (collectively, the “Boyd defendants”), alleging, inter alia, that Cantor, without Epstein’s consent, formed his own firm and transferred almost all of CEM’s clients, which were based in large part upon the client base and relationships that Epstein had accumulated over many years, to the law firms of Boyd Richards Parker Colonelli, P.L. and Boyd Richards NY, LLC (hereinafter, together, the “Boyd firms”), with the help of Boyd and Mazzola. Epstein asserted causes of action alleging breach of contract against Cantor (first cause of action), breach of fiduciary duty against Cantor and Mazzola (second cause of action), violation of Partnership Law § 20(3) against Cantor and Mazzola (third cause of action), an accounting against Cantor (fourth cause of action), conversion against Cantor (fifth cause of action), violation of the faithless servant doctrine against Mazzola (sixth cause of action), unjust enrichment against Mazzola (seventh cause of action), corporate raiding against the Boyd defendants (eighth cause of action), aiding and abetting Cantor’s breach of fiduciary duty against the Boyd defendants (ninth cause of action), unfair competition against the Boyd firms (tenth cause of action), and tortious interference with contract against the Boyd defendants (eleventh cause of action).

The Cantor defendants moved pursuant to CPLR 3211(a) to dismiss the second, third, and fourth causes of action, arguing, inter alia, that the CEM agreement demonstrated that CEM was not a partnership and Epstein was never a partner in CEM, and thus, there was no fiduciary relationship and Epstein was not owed fiduciary duties. The Boyd defendants moved pursuant to CPLR 3211(a) to dismiss the amended complaint for the same reasons, among others, as argued by the Cantor defendants. In an order dated December 11, 2020, the Supreme Court, among other things, granted the motions of the Cantor defendants and the Boyd defendants. Epstein appealed.

Thereafter, plaintiff moved for leave to reargue and renew his opposition to defendants’ separate motions. In an order dated August 19, 2022, Supreme Court, among other things, denied the Cantor defendants’ motion pursuant to CPLR 3211(a) to dismiss the second, third, and fourth causes of action as against them and adhered to the determination granting the Boyd defendants’ motion pursuant to CPLR 3211(a) to dismiss the amended complaint insofar as against them. Supreme Court also denied Epstein’s motion for leave to renew his opposition to the Boyd defendants’ motion. Epstein appealed, and the Cantor defendants cross-appealed.

The Appellate Division, Second Department, affirmed.

“A partnership is an association of two or more persons to carry on as co-owners a business for profit.”[1] The governing law of partnerships in New York is the Partnership Law of 1919, which enacted into law the original Uniform Partnership Act.[2] It is well established, however, that “[t]he Partnership Law’s provisions are, for the most part, default requirements that come into play in the absence of an agreement.”[3] Thus, when there is an agreement “establishing a partnership, the partners can chart their own course.”[4] Stated differently, “where the agreement clearly sets forth the terms between the partners, it is the agreement that governs.”[5] “In the absence of prohibitory provisions of the statutes or of rules of the common law relating to partnerships, or considerations of public policy, the partners of either a general or limited partnership, as between themselves, may include in the partnership articles any agreement they wish concerning the sharing of profits and losses, priorities of distribution on winding up of the partnership affairs and other matters. If complete, as between the partners, the agreement so made controls.”[6] However, “[w]hen there is no written partnership agreement between the parties, the court must determine whether a partnership in fact existed from the conduct, intention, and relationship between the parties.”[7]

Based upon the foregoing principles, the Court held that CEM was a partnership and that Epstein was a partner thereof.[8] The Court noted that there was no dispute that there was a written agreement between Cantor and Epstein that was executed in 1995, “which provided that the agreement was entered into to ‘form the partnership’ that would become [CEM].”[9] The Court observed that the “agreement also provided the terms of that partnership and that the agreement was the complete agreement of the parties.”[10] “Thus,” concluded the Court, “pursuant to the plain language of the agreement between Cantor and Epstein, which ‘govern[ed]’ their relationship, CEM was a partnership and Epstein was a partner thereof.”[11] “As such,” said the Court, “the agreement did not utterly refute Epstein’s factual allegations [under CPLR 3211(a)(1)][12] that he was a partner of CEM or conclusively establish a defense as a matter of law to the second and third causes of action, alleging breach of fiduciary duty and a violation of Partnership Law § 20(3), respectively, insofar as asserted against Cantor, and the fourth cause of action, for an accounting.”[13] “Accordingly,” concluded the Court, “the Supreme Court, upon reargument, properly, in effect, denied the Cantor defendants’ motion pursuant to CPLR 3211(a) to dismiss the second, third, and fourth causes of action insofar as asserted against them.”[14]

The Court also held that “Supreme Court properly granted the Boyd defendants’ motion pursuant to CPLR 3211(a) to dismiss the amended complaint” as against them.[15] The Court found that the “Boyd defendants established their entitlement to dismissal of the second and third causes of action, alleging breach of fiduciary duty and a violation of Partnership Law § 20(3), respectively,” as against “Mazzola pursuant to CPLR 3211(a)(1).”[16] The Court noted that in support of the motion, “[t[he Boyd defendants submitted, inter alia, the agreement dated January 1, 2013, between, among others, Cantor, Epstein, and Mazzola, which rendered a 2007 partnership agreement between Cantor and Mazzola null and void and provided that Mazzola, as of January 1, 2013, was solely a W-2 salaried employee of CEM, with no equity interest in CEM.”[17] “Thus,” said the Court, “the January 1, 2013 agreement utterly refuted Epstein’s allegations that Mazzola was a partner of CEM.”[18] Accordingly, concluded the Court, “the Supreme Court properly granted dismissal of the second and third causes of action” “as asserted against Mazzola.”[19]

The Court affirmed the dismissal of the claims asserted against the Boyd defendants for violation of the faithless servant doctrine and unjust enrichment against Mazzola, corporate raiding, aiding and abetting Cantor’s breach of fiduciary duty, and tortious interference with contract against the Boyd defendants, and unfair competition against the Boyd firms because the claims “either failed to plead the requisite elements for such causes of action or were based on bare allegations that were merely conclusory and lacked factual specificity, which rendered them insufficient to survive a motion to dismiss.”[20]

Takeaway

While New York’s Partnership Law provides certain default provisions where there is no partnership agreement or the agreement is silent, a partnership agreement that clearly sets forth the terms between the partners will govern the partnership and the partners’ relationship. Thus, as in Epstein, courts will enforce the terms of a partnership agreement over default statutory provisions when the agreement is clear and unambiguous.

Epstein also highlights the principle that partners owe duties of loyalty and care. Actions like diverting clients or assets without consent can trigger claims for breach of fiduciary duty and violations of Partnership Law § 20(3). Section 20(3) of the Partnership Law outlines specific actions a partner cannot take without the other partners’ authorization, preventing them from binding the partnership to major decisions that would stop the ordinary business, such as assigning all property for creditors, selling goodwill, confessing judgments, or submitting claims to arbitration, protecting the partnership from unilateral, business-ending moves.

___________________________

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] Partnership Law § 10(1).

[2] Congel v. Malfitano, 31 N.Y.3d 272, 287 (2018).

[3] Ederer v. Gursky, 9 N.Y.3d 514, 526 (2007).

[4] Congel, 31 N.Y.3d at 287-288.

[5] Zohar v. LaRock, 185 A.D.3d 987, 991 (2d Dept. 2020); see Congel, 31 N.Y.3d at 279.

[6] Lanier v. Bowdoin, 282 N.Y. 32, 38 (1939); see Congel, 31 N.Y.3d at 287-288.

[7] Saibou v. Alidu, 187 A.D.3d 810, 811(2d Dept. 2020); see Delidimitropoulos v. Karantinidis, 186 A.D.3d 1489, 1490 (2d Dept. 2020).

[8] Cantor II, at *2-*3.

[9] Id. at *2.

[10] Id.

[11] Id. at *2-*3 (citations omitted).

[12] Under CPLR § 3211(a)(1), dismissal is warranted where “the documentary evidence utterly refutes plaintiff’s factual allegations, conclusively establishing a defense as a matter of law.” Goshen v. Mut. Life Ins. Co. of New York, 98 N.Y.2d 314, 326 (2002); Leon v. Martinez, 84 N.Y.2d 83, 88 (1994). “To constitute documentary evidence, the evidence must be ‘unambiguous, authentic, and undeniable” (Phillips v. Taco Bell Corp., 152 A.D.3d 806, 807 (2d Dept. 2017) (quoting Granada Condo. III Ass’n v. Palomino, 78 A.D.3d 996, 997 (2d Dept. 2010)), “such as judicial records and documents reflecting out-of-court transactions such as mortgages, deeds, contracts, and any other papers, the contents of which are essentially undeniable.” Id. See also Yan Ping Xu v. Van Zwienen, 212 A.D.3d 872, 874 (2d Dept. 2023).

[13] Cantor II at *3 (citations omitted

[14] Id.

[15] Id.

[16] Id.

[17] Id.

[18] Id.

[19] Id. (citing Cassese v. SVJ Joralemon LLC, 168 A.D.3d 667, 669 (2d Dept. 2019)).

[20] Id. (citation omitted).

Tagged with: Business Entity Dissolution, Dissolution, Partnership, Partnership Law