Appeal from the Superior Court of the District of Columbia, Hon. Henry F. Greene, Trial Judge. [725 A2d Page 446]
Before Steadman, Ruiz, Associate Judges, and King, Senior
[fn*] Judge King was an Associate Judge of the court at the
time of argument. His status changed to Senior Judge, on November
The opinion of the court was delivered by: Ruiz, Associate Judge:
Appellant, Sarah Landise, sued appellee, Thomas Mauro, alleging partnership in a law firm, and seeking damages for breach of an oral partnership agreement, conversion of partnership funds, breach of fiduciary duty and an accounting. Mauro's principal defense was that Landise's unauthorized practice of law barred her claim. The jury found that Landise and Mauro had not entered into an oral partnership agreement and that Landise had engaged in the unauthorized practice of law in the District of Columbia.
We hold that a partner's claim of partnership against a purported partner, if otherwise sustained by application of partnership law, is not precluded by the claimant's unauthorized practice. We also conclude that the trial court abused its discretion in excluding Mauro's statement admitting that Landise was entitled to share in the law firm's fees. This error, when viewed in the context of the weight of the evidence tending to show the existence of a partnership and possible jury confusion about the impact of Landise's unauthorized practice on her claim of [725 A2d Page 447]
partnership, may have seriously prejudiced Landise's claims. Thus, we reverse and remand for a new trial. *fn1
In June 1986, after Landise completed law school, Thomas Mauro, then employed with the law firm of Malley, Scott, Koffman & Heston ("Malley, Scott") hired her to work for the firm as a law clerk. When Landise was admitted to the Virginia Bar, she was hired by Malley, Scott as an attorney in the firm's District of Columbia office. *fn2 In early 1987, Mauro was terminated by the firm. Although Malley, Scott offered to continue to employ Landise, she chose to leave with Mauro. Landise was receiving a salary of $25,000 per year, had two children and owed a large student debt at the time she left Malley, Scott.
It is undisputed that Landise and Mauro started a firm sometime in 1987 named "Mauro and Landise." Letterhead stationery and a sign on the door identified the firm by that name. *fn3 Both Mauro and Landise signed the lease for the firm's sole office, which was located in the District of Columbia. Beyond these basic facts, the parties offered differing accounts of their relationship.
According to Landise, in January 1987, Mauro induced her to leave Malley, Scott by telling her that he did not think Malley, Scott would be around for long. She claims that Mauro proposed that she join him as a partner to share equally in all profits and losses of the cases that were handled by either her or Mauro. Landise testified that after agreeing to become Mauro's partner, she would periodically bring up the issue of creating a written partnership agreement, but that Mauro would always dismiss the issue. She dropped the issue once the first tax return was filed, as a partnership. In any event, their understanding was never reduced to writing.
Landise testified that about half of the law firm's practice was personal injury work, including several cases in Virginia. She also testified that fees from the Virginia cases constituted approximately half of the firm's revenue received through March 15, 1989. Income from all cases was deposited into the firm's operating account and the parties paid themselves "draws." Landise also testified that while Mauro was chiefly responsible for attracting clients to the firm, she performed 65% to 70% of the firm's written pre-trial work.
Prior to judgment in the Tuerr case, the law firm's cash flow had not been good, and [725 A2d Page 448]
in late 1988, Landise accepted an offer of employment with the federal government. *fn4 Before she left the firm, however, Landise devoted a substantial amount of her time to the Tuerr personal injury case. Landise testified that she made the initial contact with the client, drafted the complaint and did virtually all of the pre-trial preparation work. She estimated that she spent more than 2,000 hours working on the case. Landise left the firm to begin working for the government one week after the jury returned a verdict for $800,000 in favor of the firm's client. She testified that even after she had left the firm, she agreed to draft Tuerr's brief in opposition to post-judgment motions. According to Landise, 85% to 90% of the post-trial brief filed with the court by Mauro was identical to her draft and much of Mauro's appellate brief was word for word the same as her post-trial brief. *fn4 Landise's uncontradicted testimony was corroborated by two persons who had shared space in the same office, Bernard Simbole and Jeffrey Fanger. *fn4
In addition to her testimony, Landise presented substantial documentary evidence of the existence of a partnership in the form of tax returns and insurance and bank documents. The 1987 federal and District of Columbia tax returns for the law firm were signed by both Landise and Mauro, and included a K-1 distribution of partnership income form which listed both parties as equal partners. The 1988 federal and 1988 and 1989 District of Columbia tax returns for the firm were for the period of 1988 through March 15, 1989; they were signed solely by Mauro and filed after Landise had left the law firm to join the federal government. The 1988 K-1 form still listed Landise as a partner, but Landise's share of the partnership had been reduced from 50% to 34%; Mauro's share correspondingly had increased from 50% to 66%. Applications for malpractice insurance and a November 16, 1988, check for the insurance premium for the law firm of Mauro and Landise were signed by Mauro as partner and listed Landise as a partner. A bank signature card for the law firm also listed both parties as partners. The record demonstrates that documents filed on behalf of the law firm "Mauro and Landise" reflect that Landise was a partner and, in most cases, an equal partner, with Mauro. Mauro testified that after Landise left the firm, he acquired a new tax identification number for his business, and began using a new name, "Mauro & Associates."
Mauro's testimony painted a different picture of the terms of his understanding with Landise. According to Mauro, there was no partnership. Rather, he offered Landise only office space, and to pay her a salary, while she established her own practice. He also testified, however, that he informed her that if she were willing to share expenses, he would add her name to the letterhead. Mauro testified that he made most of the decisions at the firm, did all the planning in the Tuerr case and performed all of the substantive in-court work for both the Virginia and District of Columbia cases handled by the firm. Mauro stated that, as an experienced lawyer, he had no need to go into partnership with a fledgling lawyer such as Landise. He conceded, however, that a firm with more than one attorney would likely attract clients better than a sole practitioner. Mauro also testified that he advanced all of the money needed ...