Moreover, even if, contrary to fact, a fiduciary relationship existed at some point between RTSI and Medscan, it expired upon the termination of their collaboration. See Wynne v. Gruber, 237 A.D.2d 284, 284–85, 654 N.Y.S.2d 788 (2d Dep't 1997) (fiduciary relationship between partners terminated with dissolution of partnership, even if it was terminated by defendant's breach of the partnership agreement). Turning next to Oppenheimer, the Court notes that, under New York law, financial advisers are fiduciaries of their clients, whereas investment bankers are not.
Contrary to the plaintiff's contention, the court properly concluded that the counterclaims are not time-barred. A cause of action for breach of fiduciary duty is governed by a six-year statute of limitations where the relief sought is equitable in nature ( see CPLR 213), or by a three-year statute of limitations where the only relief sought is money damages ( see CPLR 214; Klein v Gutman, 12 AD3d 417; Kaufman v Cohen, 307 AD2d 113; Dignelli v Berman, 293 AD2d 565 ). However, a partner may not maintain an action at law for any claim arising out of the partnership until there has been a full accounting and a balance struck, or an express agreement to pay ( see Stark v Goldberg, 297 AD2d 203; Wynne v Gruber, 237 AD2d 284; Giblin v Anesthesiology Assoc., 171 AD2d 839; Goodwin v MAC Resources, 149 AD2d 666; St. James Plaza v Notey, 95 AD2d 804). Although exceptions to this general rule have been recognized where the wrong alleged involves a partnership transaction which can be determined without an examination of the partnership accounts ( see Simons v Doyle, 262 AD2d 236; 1056 Sherman Ave. Assoc., v Guyco Constr. Corp., 261 AD2d 519; St. James Plaza v Notey, supra), or where "no complex accounting is required or only one transaction is involved which is fully closed but unadjusted" ( Giblin v Anesthesiology Assoc., supra at 840; see Agrawal v Razgaitis, 149 AD2d 390), these exceptions do not apply here, where resolution of the counterclaims will involve examination of the partnership books and records covering a period of more than six years.
Assuming that a partnership was indeed created by verbal agreement, the decedent's death dissolved the partnership by operation of law prior to the commencement of this action ( see Partnership Law § 62). Moreover, the Gaentners may not maintain claims for the sale of partnership assets and the distribution of sale proceeds until an accounting has been completed ( see 1056 Sherman Ave. Assoc. v. Guyco Constr. Corp., 261 AD2d 519; Wynne v. Gruber, 237 AD2d 284; Goodwin v. MAC Resources, 149 AD2d 666). However, that portion of the fifth cause of action which seeks an accounting may be maintained ( see Partnership Law § 74).
In this action to collect defendants' share of sums due pursuant to the terms of a note and mortgage, defendants plead counterclaims which relate to the affairs of a partnership in which plaintiff Raymond Gold, defendants and others were partners in the ownership of an unrelated parcel of land. We affirm Supreme Court's dismissal of the counterclaims because they fall within the prohibition against partners suing each other for matters relating to the affairs of the partnership prior to an accounting of the partnership business (see Wynne v. Gruber, 237 A.D.2d 284, 284; 1056 Sherman Ave. Assoc. v. Guyco Constr. Corp., 261 A.D.2d 519, 520; Mannaberg v. Herbst, 45 N.Y.S.2d 197, 201, affd 267 A.D. 818, affd 293 N.Y. 657). Defendants do not dispute that no accounting has occurred.
We cannot agree. While it is clear that partners "are bound by a fiduciary duty requiring `the punctilio of an honor the most sensitive'" (Graubard Mollen Dannett Horowitz v. Moskovitz, 86 N.Y.2d 112, 118, quotingMeinhard v. Salmon, 249 N.Y. 458, 464), it is equally clear that the fiduciary relationship between partners terminates upon notice of dissolution (see Wynne v. Gruber, 237 A.D.2d 284, 284-285; White Light Prods. v. On The Scene Prods., 231 A.D.2d 90, 94; Dunay v. Ladenburg, Thalmann Co., 170 A.D.2d 335, 336, lv denied 78 N.Y.2d 851; Matter of Silverberg [Schwartz], 81 A.D.2d 640, 641). Hence, while the pretermination surreptitious solicitation of firm clients for a partner's personal gain indeed would be contrary to the partner's fiduciary duty (see Graubard Mollen Dannett Horowitz v. Moskovitz, supra at 120-121), the record before us completely fails to support any finding that defendant attempted to solicit Morris Associates' clients prior to May 15, 1992. Nor are we persuaded that defendant deflected profits properly belonging to plaintiffs prior to the dissolution date.
As to defendant's motion for summary judgment, defendant correctly notes that, as a general rule, "'partners cannot sue each other at law unless there is an accounting, prior settlement, or adjustment of the partnership affairs'" (Non-Linear Trading Co. v. Braddis Assocs., 243 A.D.2d 107, 115, quoting Agrawal v. Razgaitis, 149 A.D.2d 390, 390;see, Wynne v. Gruber, 237 A.D.2d 284). This general rule reflects "the judicial desire to avoid entering into the day-to-day management of the partnership and to avoid piecemeal adjustments of the amount due each partner" (St. James Plaza v. Notey, 95 A.D.2d 804, 805; see, Gramercy Equities Corp. v. Dumont, 72 N.Y.2d 560, 564-565).
The cases cited by Defendant in support of the argument that Plaintiff 's claims for a constructive trust and an accounting were extinguished because the requisite fiduciary relationship terminated upon Plaintiffs death are distinguishable from the situation here. The court in Wynne v. Gruber, (237 A.D.2d 284, [2d Dept 1997]), cited by Defendants, rejected a claim of a constructive trust against a Plaintiff's former partners for actions they took after the partnership had been dissolved, because at that point there was no longer a fiduciary relationship. In LMEG Wireless, LLC v. Farro, (190 A.D.3d 716 [2d Dept 2021]), while the Appellate Division stated that a claim for accounting requires the existence of a confidential or fiduciary relationship, it affirmed the denial of a motion to dismiss the claim for accounting because the Defendant had a fiduciary duty at the time the accounting was demanded. In the instant case the fiduciary relationship existed at the time Plaintiff's transferred property in reliance of the promise that he would be added as an owner of the corporations, as well as at the time that he commenced this action.
As plaintiff correctly observes, "exceptions to this general rule have been recognized where the wrong alleged involves a partnership transaction which can be determined without an examination of the partnership accounts, or where no complex accounting is required or only one transaction is involved which is fully closed but unadjusted" (Wiesenthal, 40 A.D.3d at 1079-1080 [internal quotation marks and citations omitted]; see Le Bel v Donovan, 96 A.D.3d 415, 416 [1st Dept 2012]). However, it is apparent from the Complaint that these exceptions are inapplicable here, and determination of plaintiff's claims for conversion, constructive trust, unjust enrichment and breach of fiduciary duty "necessarily require[s] inspection of the books, records and accounts of the partnership" (Kriegsman v Kraus, Ostreicher & Co., 126 A.D.2d 489, 490 [1st Dept 1987]; see 1056 Sherman Ave. Assoc, v Guyco Const. Corp., 261 A.D.2d 519, 520 [2d Dept 1999]; Wynne v Gruber, 237 A.D.2d 284,284 [2d Dept 1997]).