By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Partnership Attorney

Have a real estate partner in a real estate deal? In Sebring Associates v. Coyle, a contractor and a developer were partners in a business that built and sold apartment complexes.  They formed a partnership with a wealthy doctor.  Their goal in forming this partnership was to construct, partially sell, and partially rent out high-rise apartment units.  In this case, the physician was expelled as a partner.  The physicians admission into this partnership was intended at the beginning to attract “favorable financing” but he never attracted “favorable financing” which was the primary reason he was expelled as a partner.  Additionally, he never responded to cash calls, so the contractor and developer (the continuing partners) had to keep the partnership going until the investment eventually paid off and turned a profit.

The wealthy doctor brought suit claiming that he was entitled to the profits of the investment.  The court found that the expelled partner constantly and consistently breached the partnership agreement.  In short, the doctor made it really hard to continue the purpose of the partnership.  He didn’t really do much to help the partnership and failed to fulfill the purpose(s) for which he was recruited. As a consequence the court believed he was reasonably and justifiably expelled as a partner.  In this case, the continuing partners – the contractor and the developer – eventually received a judgment in their favor in their cross-claim argument against the doctor.  The court awarded them damages for the amounts of extra money they had to put into the business to keep it afloat while they were waiting for it to turn a profit.  This refers to the times when the partners asked the doctor to put up cash for the business and he did not, so that they were forced to put up more of their own money.

To discuss your NJ Partnership matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at  Please ask us about our video conferencing consultations if you are unable to come to our office.