Roche Freedman LLP v. Jason Cyrulnik

Background

Roche Freedman LLP sued Jason Cyrulnik for declaratory judgment, breach of fiduciary duty, and intentional interference with contract. Cyrulnik, described in the opinion as a founding partner, asserted counterclaims against the Firm and four remaining individual counterclaim-defendants: Kyle Roche, Devin Freedman, Amos Friedland, and Edward Normand. Nathan Holcomb had settled and had been dismissed.

The dispute arose from Cyrulnik’s departure from Boies Schiller Flexner LLP and his joining the newly formed firm. The parties signed a December 2019 Memorandum of Understanding (MOU). The MOU allocated equity and compensation and stated that a founding partner could not be removed without cause and that removal required a two-thirds vote of the equity partners. It separately addressed voluntary withdrawal. A January 2020 Side Letter gave Cyrulnik a 25% interest in certain recoveries from the Kleiman litigation and provided for other payments, subject to specified conditions.

In February 2021, the other founding partners notified Cyrulnik that they had removed him for cause. The removal email cited alleged breaches of the MOU, failure to cooperate in good faith, abusive conduct, staffing decisions, and conduct that allegedly made it impracticable to continue the Firm with Cyrulnik’s involvement. Roche Freedman then brought this action. The parties later filed cross-motions for summary judgment, which ask whether the record presents any genuine dispute about important facts and whether a party is entitled to judgment as a matter of law without a trial.

Governing law and the MOU

The court applied New York law to claims involving the MOU and to the common-law counterclaims because the MOU had no choice-of-law provision and the parties identified no relevant conflict between New York and Florida law. The parties agreed that Florida’s Revised Uniform Partnership Act governed the dissolution, buyout, accounting, and fiduciary-duty counterclaims.

The court held that the MOU unambiguously created a binding partnership agreement. It rejected the Firm’s arguments that the MOU was unenforceable because a later formal partnership agreement had not been signed or because the MOU merely required the parties to negotiate in good faith. The court relied on the MOU’s detailed terms, the parties’ partial performance, their operation as a partnership for more than a year, and drafting history showing that proposed language stating the MOU was nonbinding had been removed.

Rulings on Cyrulnik’s removal

The court held that whether Cyrulnik was removed for “cause” could not be resolved on summary judgment. The MOU did not define cause, and the parties presented conflicting evidence about allegations that Cyrulnik had been abusive, disruptive, or had failed to perform his duties. The Firm’s motion for summary judgment on its request for a declaration that Cyrulnik was lawfully removed for cause was denied. Cyrulnik’s cross-motion for summary judgment on that issue was also denied.

The court also rejected the Firm’s argument that an involuntary removal should be treated as a voluntary “withdrawal” under the MOU, which would have subjected Cyrulnik to the withdrawal provision. The court stated that Cyrulnik had been ousted rather than having withdrawn. However, the cross-motions were denied because factual disputes remained about whether there was cause for the removal and what consequences, if any, followed from it.

Rulings on Cyrulnik’s counterclaims

The court denied summary judgment on Cyrulnik’s claims for dissolution, statutory buyout against the Firm, accounting, breach of the MOU and Side Letter, and breach of fiduciary duty. The court found factual disputes concerning whether the Firm could continue without Cyrulnik, whether the removal was justified, what value or consequences followed from the removal, whether Cyrulnik had received the records needed for an accounting, whether the Kleiman litigation had produced or might produce a covered recovery, and whether the individual counterclaim-defendants violated partnership duties.

The court granted summary judgment dismissing Cyrulnik’s claim for breach of the implied covenant of good faith and fair dealing because it relied on the same facts as his breach-of-contract claim and was therefore duplicative. It also granted summary judgment dismissing the conversion, unjust-enrichment, and promissory-estoppel claims because those claims sought relief governed by the alleged contract and could not proceed as separate claims on the same subject matter. The court dismissed the civil-conspiracy claim because New York and Florida do not recognize civil conspiracy as an independent tort and Cyrulnik had not alleged an independently actionable underlying tort.

Rulings on Roche Freedman’s claims and the fraudulent-inducement claim

The court denied Cyrulnik’s motion for summary judgment on Roche Freedman’s claims for breach of fiduciary duty and intentional interference with contract. The Firm presented evidence that Cyrulnik failed to provide time records, discouraged clients from paying invoices, and helped clients follow him to a new firm. The court concluded that a reasonable jury could credit that evidence and find for the Firm.

The court also denied Cyrulnik’s request for summary judgment dismissing Roche’s fraudulent-inducement claim. Roche alleged that Cyrulnik falsely represented that he had a $3 million offer from Patterson Belknap and that Roche relied on that representation when entering the MOU and Side Letter and paying Cyrulnik $850,000. The court found that the evidence could allow a reasonable jury to conclude that the alleged statements were material and intentionally made to influence Roche.

Disposition

The court’s conclusion states that summary judgment was denied on all claims for which it was sought, except that Cyrulnik’s counterclaims for conversion, unjust enrichment, promissory estoppel, and civil conspiracy were dismissed. The court closed the two summary-judgment motions and directed the parties to submit a joint pretrial order and related materials within the specified deadlines.