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Devlin v. Rockey

October 5, 1961

THOMAS C. DEVLIN, M. D. AND I. L. SCHWEITZER, M. D., PLAINTIFFS-APPELLANTS,
v.
LAWRENCE F. ROCKEY, M. D., LESTER P. BUNCHMAN, M. D., WILLIAM J. EAST, M. D., PHILIP L. WACHTEL, M. D., WARREN W. MILLS, M. D., GILBERT D. FISH, M. D., THOMAS A. HAYMOND, M. D., AND WILLIAM C. KATEL, M. D., DEFENDANTS-APPELLEES



Author: Hastings

Before HASTINGS, Chief Judge, and SCHNACKENBERG and CASTLE, Circuit Judges.

HASTINGS, Chief Judge.

This diversity action was commenced by the filing of a complaint for declaratory judgment. All of the parties are medical doctors.*fn1 By their complaint plaintiffs sought a decree declaring that they had effected a dissolution of a partnership which had existed between the plaintiffs and defendants who had practiced medicine as partners under the trade name of Freeport Clinic in Freeport, Illinois. They alleged that the partnership was a partnership at will and that they had caused a notice of dissolution to be served upon the partners. They prayed for the entry of a decree declaring the rights of the parties in the partnership assets, winding up the partnership business and distributing the assets among the partners.

Subsequently, an amended complaint was filed and answered. Interrogatories served on defendants were answered. The parties took and filed depositions of plaintiffs, two of defendants and the clinic business manager. Finally, the trial court found that there was no genuine issue on the facts and granted defendants' motion for summary judgment and entered judgment for defendants against plaintiffs construing the contract favorably to defendants. This appeal followed.

The following facts appear to be undisputed. In 1955 plaintiff became associated with defendants in the Freeport Clinic. By letter dated March 31, 1959, plaintiff Devlin notified the members of the partnership that he intended to resign effective June 1, 1959. Plaintiff Schweitzer gave notice of his resignation by letter dated May 1, 1959 to be effective June 30, 1959. Before the effective date of either resignation, each plaintiff notified defendants by letter of his intent to terminate and dissolve the partnership.

The relevant portions of the partnership agreement provide:

"Article III

"Duration

"3.01 The partnership hereby created shall commence on the 1st day of January, 1956 and the duration of the partnership shall be indefinite, provided, however, that the same may be terminated and the business liquidated and discontinued upon a two-thirds majority vote of all the partners or upon the unanimous consent of all the partners.

"Article XI

"Withdrawal of Partners and Division of Earnings

"11.01 In the event of the death or the voluntary or involuntary withdrawal of any partner, the remaining partners agree to and shall continue as partners in accordance with the provisions of the Agreement. Upon the withdrawal or death of any partner, his rights or the rights of his estate, heirs, legatees, devisees, assigns, or personal representatives in and to the partnership property and assets and claims against the partnership shall be only as set forth in this article, and no other, and no more, which each partner for himself, his heirs, executors, administrators and assigns, hereby covenants and agrees shall be in full settlement payment and satisfaction of all rights, title, interest, and claims of such partner and his estate in, to or against the partnership property and assets or the partnership or the remaining partners. The other partners will continue in the exclusive use of the name Freeport Clinic together with any other person or persons that they may select and such event shall not work a dissolution of the partnership nor shall it cause any interruption in the conduct of the business.

"11.04 Any partner may voluntarily withdraw from the partnership upon sixty days notice in writing to the partnership, ...


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