BT-I, Plaintiff and Appellant, v. EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, Defendant and Respondent., 75 Cal. App. 4th 1406

Summary

Plaintiff limited partner was squeezed out of the partnership when the defendant general partner purchased and foreclosed a deed of trust on the partnership's sole asset. It brought an action alleging, inter alia, breach of fiduciary duty. The trial court sustained defendant's demurrer, finding that the partnership agreement authorized defendant's conduct and relieved it of any duty to plaintiff, so it was free to foreclose after it offered the loans to the partnership at its own cost and the partnership declined. On appeal, plaintiff argued that the agreement could not abrogate defendant's fiduciary duty not to engage in self-dealing. The court agreed and reversed. Although under the California Revised Limited Partnership Act, Cal. Corp. Code, §15611 et seq., the partners could determine by agreement many aspects of their relationship, the agreement could not relieve defendant of its fiduciary duties, particularly where the purchase of partnership debt was involved.