Steeby vs Fial
STEEBY VS FIAL
Tort Liability Charles Fial and Roger J. Steeby entered into a partnership called Audit Consultants to perform auditing services. Pursuant to the agreement, they shared equally the equity, income, and profits of the partnership. Originally, they performed the auditing services themselves, but as business increased, they engaged independent contractors to do some of the audit work. Fial’s activities generated approximately 80 percent of the partnership’s revenues. Unhappy with their agreement to divide the profits equally, Fial wrote a letter to Steeby 7 years later, dissolving the partnership.
Fial asserted that the clients should be assigned based on who brought them into the business. Fial formed a new business called Audit Consultants of Colorado, Inc. He then terminated the original partnership’s contracts with many clients and put them under contract with his new firm. Fial also terminated the partnership’s contracts with the independent-contractor auditors and signed many of these auditors with his new firm. The partnership terminated about 11 months after Fial wrote the letter to Steeby. Steeby brought an action against Fial, alleging breach of fiduciary duty and seeking a final accounting. Who wins? Steeby v. Fial, 765 P.2d 1081, Web 1988 Colo.App. Lexis 409 (Court of Appeals of Colorado)
PARTIES
In the Steeby vs. Fial case Roger Steeby is the plaintiff and Charles Fial is the defendant. Steeby and Fial formed a partnership at will to perform auditing services.
CASE SUMMARY (FACTS)
Pursuant to the agreement, equity, income, and profits of the partnership were shared equally. In the infancy stage of the partnership they conducted audit services themselves. As business success started to trend upwards they decided to employ independent contractors (auditors) to assist in performing audit service. Eventually the auditors were carrying out the audits while the partners focus shifted to supervision and prospecting new clients.
Fial’s
Tort Liability Charles Fial and Roger J. Steeby entered into a partnership called Audit Consultants to perform auditing services. Pursuant to the agreement, they shared equally the equity, income, and profits of the partnership. Originally, they performed the auditing services themselves, but as business increased, they engaged independent contractors to do some of the audit work. Fial’s activities generated approximately 80 percent of the partnership’s revenues. Unhappy with their agreement to divide the profits equally, Fial wrote a letter to Steeby 7 years later, dissolving the partnership.
Fial asserted that the clients should be assigned based on who brought them into the business. Fial formed a new business called Audit Consultants of Colorado, Inc. He then terminated the original partnership’s contracts with many clients and put them under contract with his new firm. Fial also terminated the partnership’s contracts with the independent-contractor auditors and signed many of these auditors with his new firm. The partnership terminated about 11 months after Fial wrote the letter to Steeby. Steeby brought an action against Fial, alleging breach of fiduciary duty and seeking a final accounting. Who wins? Steeby v. Fial, 765 P.2d 1081, Web 1988 Colo.App. Lexis 409 (Court of Appeals of Colorado)
PARTIES
In the Steeby vs. Fial case Roger Steeby is the plaintiff and Charles Fial is the defendant. Steeby and Fial formed a partnership at will to perform auditing services.
CASE SUMMARY (FACTS)
Pursuant to the agreement, equity, income, and profits of the partnership were shared equally. In the infancy stage of the partnership they conducted audit services themselves. As business success started to trend upwards they decided to employ independent contractors (auditors) to assist in performing audit service. Eventually the auditors were carrying out the audits while the partners focus shifted to supervision and prospecting new clients.
Fial’s
Cited: Delaney, P. R., Baker, R. E., Borke, J. C., McDougald, J., Simon, J. R., & Smith, S. (2000). Wiley CPA Examination Review: Financial Accounting and Reporting, Business Enterprises. Wiley http://www.leagle.com http://business-law.lawyers.com/small-business-law/General-Partnership-and-Fiduciary-Duties.html