Haymond v. Lundy

John Haymond (plaintiff), Robert Hochberg, and Marvin Lundy (defendant) formed the law firm partnership Haymond & Lundy, whose partnership agreement required majority approval before any partner could dispose of a material asset worth more than $10,000. A client, John Kelly, switched from another attorney, Emmett Fitzpatrick, to Lundy's firm for a personal injury case. Without asking the other partners, Lundy promised Fitzpatrick a referral fee out of any settlement. The case settled for about $2.5 million, generating roughly $996,500 in attorney's fees, and Lundy paid Fitzpatrick a $150,000 referral fee. After the firm dissolved, Haymond and Hochberg argued the referral fee wasn't a partnership liability because Lundy lacked authority to pay it without majority approval; Lundy argued the fee wasn't a "material asset" requiring that approval in the first place.