IN COURT OF APPEALS
Robert W. Hagen, Jr. Estate,
Filed August 30, 2005
Robert H. Schumacher, Judge
Joseph P. Bluth, Manahan, Bluth & Kohlmeyer Law Office, Chartered, 110 South Broad Street, Post Office Box 287, Mankato, MN 56002-0287 (for appellant)
S Y L L A B U S
Where a partnership is not at-will and the partnership agreement does not authorize an individual partner to unilaterally force an immediate dissolution, the partnership is not susceptible to unilateral dissolution by operation of Minn. Stat. § 323A.0801 (2004).
O P I N I O N
ROBERT H. SCHUMACHER, Judge
Appellant Robert W. Hagen, Jr. Estate challenges the district court’s adverse grant of summary judgment, arguing the court erred by concluding that a partnership between Robert W. Hagen, Jr. and respondent Nancy A. Fleming was not dissolved by operation of the estate’s pleadings and Fleming’s pleadings requesting enforcement of the right to dissolve the partnership. We affirm.
In April 1989, Hagen and Fleming, who are siblings, executed a written agreement concerning a property-management partnership – Wesley Properties – that they had operated together since 1967. As to the partnership’s duration, the written agreement provided that the “partnership shall continue until terminated as such term is defined herein.”
One event triggering termination is “the purchase by either partner of the other partner’s interests,” which must occur “[u]pon the death of either partner [,at which time] the surviving partner shall purchase the deceased partner’s interest in the partnership and the estate of the deceased partner shall sell such interest to the surviving partner.” (Emphasis added.) The agreement specifies the terms of the sale: “The purchase price of a deceased partner’s interest in the partnership shall be: 1/2 interest of loans and contract [for] deeds due [plus] $25,000.”
The agreement lists three other events that trigger termination: “the bankruptcy, receivership, or dissolution of the partnership”; “the sale or transfer of all or substantially all of the assets of the partnership”; or “the mutual agreement of both partners.” The agreement does not provide that the partnership may be dissolved or terminated unilaterally by either partner.
August 2002, Fleming filed a claim against
on application by a partner, a judicial determination that:
(i) the economic purpose of the partnership is likely to be unreasonably frustrated;
(ii) another partner has engaged in conduct relating to the partnership business which makes it not reasonably practicable to carry on the business in partnership with that partner; or
(iii) it is not otherwise reasonably practicable to carry on the partnership business in conformity with the partnership agreement[.]
1, 2002, the Uniform Partnership Act of 1994 (1994 UPA), Minn. Stat. §§
323A.1-01-.12-03 (2002), replaced the Minnesota Uniform Partnership Act, Minn. Stat.
§§ 323.01-.47 (2000) (MUPA). 1997
In April 2003,
In October 2003, Fleming
brought a motion for summary judgment, arguing that the agreement controlled
the parties’ rights and obligations, that
In March 2004, the district court granted Fleming’s motion, reasoning that (1) Maus was inapposite to the extent that its holding concerning dissolution upon cross-pleadings was based upon the repealed MUPA, which gave partners broader dissolution powers than does the 1994 UPA in effect here, and (2) Fleming specifically requested relief under Minn. Stat. § 323A.0801 (5), which allows dissolution only following a judicial determination that specific circumstances exist and which is not a request for immediate dissolution of the partnership. The court concluded the agreement controls the disposition of the partnership assets and appointed a special master to determine the partnership’s property, assets, and liabilities.
The court denied the estate’s motion for amended findings of fact. In November 2004, the parties entered into a stipulation of partial settlement whereby Fleming paid the estate approximately $250,000 to settle various outstanding claims concerning the distribution of partnership assets and liabilities. The settlement specifically reserved the estate’s right to appeal the earlier grant of partial summary judgment to Fleming.
Did the estate’s answer and counterclaim operate to dissolve the partnership pursuant to Minn. Stat. § 323A.0801(1) (2004)?
On appeal from
summary judgment, this court determines whether any genuine issues of material
fact exist and whether the district court erred in applying the law. State
by Cooper v. French, 460 N.W.2d 2, 4 (
construction and the interpretation of contract language are legal issues also
subject to de novo review. Vue v. State Farm Ins. Cos., 582 N.W.2d
264, 265 (
The estate argues the district court erred by granting Fleming summary judgment without considering Minn. Stat. § 323A.0801(1) (2004), which provides that “a partnership at will [is dissolved upon] the partnership’s having notice from a partner . . . of that partner’s express will to withdraw as a partner, or on a later date specified by the partner.” The estate maintains that the agreement was at-will and therefore susceptible to unilateral termination and that Hagen’s counterclaim constituted notice of his express will to withdraw from the partnership under section 323A.0801(1).
As a threshold matter, Fleming
argues that the estate has waived the right to now raise an argument
based upon section 323A.0801(1) by failing to properly raise the issue before
the district court. See Thiele v. Stich, 425 N.W.2d 580, 582 (
address the estate’s assertion that the district court erred by not concluding
and Fleming’s agreement simply does not contemplate a scenario whereby one
partner can intentionally and unilaterally dissolve the partnership. In this respect, the estate’s continued
reliance on Maus is
misplaced insofar as there, “the termination provision in [the parties’]
agreement allowed for either partner to terminate the partnership by leaving ‘for
any reason.’” 669 N.W.2d 38, 39 (
Even if the
partnership were at will and governed by section 323A.0801(1), we disagree with
the estate’s contention that Hagen’s counterclaim requesting an order “[e]nforcing
[his] rights to dissolve and wind up the partnership” constituted “notice” of
his “express will to withdraw as a partner,”
as required by the statute. “A person
notifies or gives a notification to another by taking steps reasonably required
to inform the other person . . . .”
The record before us does not support the estate’s argument that Hagen’s counterclaim constituted notice of his express will to withdraw from the partnership and that the partnership and partnership agreement were therefore terminated at the time of Hagen’s death. The district court properly granted Fleming’s motion for summary judgment.