Burnham v. Bray, 13507
| Citation | 661 P.2d 335,104 Idaho 550 |
| Decision Date | 22 March 1983 |
| Docket Number | No. 13507,13507 |
| Parties | Robert BURNHAM and Elaine Burnham, husband and wife, Plaintiffs-Appellants-Cross-Respondents, v. Robert BRAY and Mini-Cassia Equipment Co., Inc., a corporation; Robert Bray, Steven Bray and Cecil Shaw, as trustees of Mini-Cassia Equipment Co., Inc., Profit Sharing Plan and Trust, and Mini-Cassia Equipment Co., Inc., Profit Sharing Plan and Trust, a profit sharing plan, Defendants-Respondents-Cross-Appellants. |
| Court | Idaho Court of Appeals |
Lloyd J. Webb of Webb, Burton, Carlson, Pedersen & Paine, Twin Falls, for plaintiffs-appellants-cross-respondents.
Larry R. Duff of Goodman, Duff & Chisholm, Rupert, for defendants-respondents-cross-appellants.
When two business partners elect to dissolve their longstanding association the process may resemble a bitterly contested divorce. Neither party ends up liking the result.
This appeal arises from a trial judge's attempt to end the controversy generated in a sale by Robert and Elaine Burnham of their interest in Mini-Cassia Equipment Company to Robert Bray, a co-owner of the business. The trial judge had to construe certain disputed provisions of the buy-sell agreement between the parties. He also had to adjudicate rights and liabilities of partners in the dissolution of a separate partnership between Robert Burnham and Robert Bray. The judgment entered by the trial court awarded the Burnhams their interests in a profit sharing plan set up by Mini-Cassia. The Burnhams accepted payment of these funds, but later appealed from other parts of the judgment favorable to Bray. The judge declined to award attorney fees to either side. Each party has appealed from the order denying an award of fees to that party.
We are faced with the following issues in this appeal. (1) Does a party who accepts payment of certain sums awarded to him in a judgment, have standing to appeal from other aspects of the judgment? (2) Should the trial court have awarded attorney fees to any party in this case? (3) Did the trial judge err in interpreting provisions of the buy-sell contract relating to the dissolution of a partnership? (4) Did the court correctly distribute the partnership assets?
For several years prior to this suit, Robert Burnham and Robert Bray together operated a farm equipment business in Heyburn, Idaho. This business, Mini-Cassia Equipment Co., was operated in a corporate form. The Burnhams owned 70% of the stock and Bray owned the remaining 30%. Burnham and Bray also had equal interests in a separate partnership called Burnham and Bray Rental Account. This partnership owned several assets including land and a building leased by Mini-Cassia for the site of its business.
On April 26, 1976, Robert and Elaine Burnham entered into a "Contract for Purchase" with Robert Bray, providing for the sale of the Burnhams' shares of stock of Mini-Cassia to Bray, the company's only other stockholder. The contract also provided for the dissolution of the partnership and for distribution of its assets. In addition, it specified how the Burnhams were to be paid for their interests in a profit sharing plan that had been created for Mini-Cassia employees in 1974.
The plan provided for a three-member committee to manage the day-to-day affairs of the plan. The committee was given power to determine eligibility questions and to disburse trust funds. The plan authorized the committee to act by majority vote. Its first three members were Robert Burnham, Robert Bray, and an accountant. The same persons also served as trustees of the plan, until the Burnhams sold their interest in Mini-Cassia to Bray in 1976.
The profit sharing plan contained a term providing that if more than 50% of the company's stock changed hands, all employees' interests in the profit sharing fund would automatically vest. In recognition of this term in the plan, the parties included the following provision in their buy-sell agreement.
Profit-Sharing Plan: The parties hereto do recognize that under the provisions of the Profit-Sharing Plan [sic] that all of the rights of Robert Burnham and Elaine Burnham shall become 100% vested and the Purchaser [Bray] and the Corporation do hereby agree that upon the request of the Seller [the Burnhams] the Purchaser and Mini-Cassia Equipment Company will take such steps as may be necessary to pay to the Seller their respective share of the Profit-Sharing Plan within sixty (60) days after the date of this agreement. PROVIDED, HOWEVER, the Seller does expressly acknowledge that in the event there is not sufficient cash to pay the same that they will accept note or lease agreements held by said Profit-Sharing Plan in lieu of cash.
In the late summer of 1976 the Burnhams first requested Bray to pay their share of the profit sharing funds. At that time, according to the testimony of the accountant, there was some $43,500 in the plan's trust account--more than enough to cover the Burnhams' interests. The Burnhams made a formal demand for payment in October, 1976. Bray refused to honor this request, contending that Robert Burnham, while he was still a trustee of the fund in late 1975 and early 1976, had made unauthorized and improper investments which jeopardized the solvency of the fund.
Specifically, Bray claimed that Burnham--without consulting the other trustees of the fund--invested nearly all of the liquid assets of the fund by purchasing certain equipment leasing contracts from Deseret Thrift Corporation at a discount. At that time Burnham was not only a stockholder in Deseret, but was also its president. By August of 1976, cash had begun to flow back into the trust account from the Deseret investments. Nonetheless, by November of 1976 all but one of the Deseret leases were delinquent. Thus, in response to the Burnhams' demand for cash, Bray offered that the Burnhams take Deseret leases in payment.
The Burnhams commenced this suit in 1977, claiming that Bray had breached the contract by failing to pay them the funds due under the profit sharing plan. The complaint demanded payment of the funds, damages, and attorney fees. Bray answered the complaint and counterclaimed, seeking dissolution of the partnership in accordance with the contract's provisions. The profit sharing trust and its trustees were brought in as additional parties to the suit.
When the case came to trial, Bray tendered payment of the Burnhams' share of the profit sharing funds to the court, which awarded the Burnhams these funds in its judgment. However the court refused to award damages or attorney fees to the Burnhams. The court held that Bray and the other trustees had acted reasonably in withholding payment. Moreover, the court generally resolved the issues pertaining to the termination of the partnership favorably to Bray. After trial, the Burnhams requested the court to deliver the funds tendered by Bray, and the money was paid. The Burnhams then appealed from the judgment and from the court's order denying their various post-trial motions. Bray cross-appealed, claiming that the trial court erred in failing to award attorney fees to him. Bray later moved to dismiss the Burnhams' appeal on the theory that the Burnhams, having availed themselves of a portion of the judgment, forfeited their right to appeal it.
The first issue we examine is whether to dismiss the Burnhams' appeal on the theory that they waived their right to appeal by accepting the benefits of part of the judgment and then appealing the remainder. The general rule is that a party cannot accept the benefits of a judgment and yet seek reversal of it on appeal. Arizona Downs v. Superior Court, 128 Ariz. 73, 623 P.2d 1229 (Ariz.1981); In re Marriage of Jones, 627 P.2d 248 (Colo.1981); Brown v. Combined Insurance Co. of America, 226 Kan. 223, 597 P.2d 1080 (Kan.1979); Tara Oil Co. v. Kennedy & Mitchell, Inc., 622 P.2d 1076 (Okl.1981); Graf v. Don Rasmussen Co., 39 Or.App. 311, 592 P.2d 250 (Or.App.1979). This rule, however, is riddled with exceptions. One of these is that acceptance of benefits of a part of a judgment does not bar relief--by way of appeal--from another disconnected portion. See Henderson v. Nixon, 66 Idaho 780, 786, 168 P.2d 594, 596 (1946). See also Farmers Elevator Co. v. First National Bank, 181 Colo. 231, 508 P.2d 1261, 1263 (Colo.1973). Compare Hatfield v. Max Rouse & Sons Northwest, 100 Idaho 840, 606 P.2d 944 (1980) () We believe that this exception governs here.
Neither Bray nor the other respondents ever disputed that Elaine and Robert Burnham each had a vested interest in the profit sharing fund. The amounts of the Burnhams' interests were not disputed, only the manner of payment. Bray resisted the Burnhams' request for payment in cash while several leases were delinquent. He believed that a full cash payment at that time might deplete the trust fund, threatening the interests of the other beneficiaries. At trial Bray tendered two checks to the court, one for $38,925.84, representing Robert Burnham's interest, and another for $2,872.97, representing Elaine's interest. All the parties agreed that these were the proper amounts, and these were the amounts entered in the judgment and paid to the Burnhams.
The Burnhams' right to collect their interests in the profit sharing funds is not in dispute on appeal. The issues in dispute are the Burnhams' claim to attorney fees and various questions pertaining to the dissolution of the partnership. Whatever outcome the court reaches on these issues will not affect the Burnhams' right to retain the sums they have already received. Accordingly, we hold that by accepting the sums awarded as their interests in the profit sharing fund, the Burnhams did not waive their right to appeal from the remainder of the judgment. Henderson v. Nixon, supra.
The next issue is whether the trial court erred in denying the claims of both parties...
To continue reading
Request your trial
- State v. Coffin
-
Smith v. Mitton
...successful, it is within the court's discretion to decline an award of attorney fees to either side. Burnham v. Bray, 104 Idaho 550, 554-55, 661 P.2d 335, 339-40 (Ct.App.1983). In Burnham, this Court noted, "Although the [district] judge acknowledged [Burnham] `technically won the lawsuit,'......
-
Griffiths v. Griffiths
...the doctrine does not apply where the benefits accepted are separate and distinct from the benefits disputed on appeal. Burnham v. Bray, 104 Idaho 550, 553, 661 P.2d 335, 338 (Ct. App. 1983). In other words, an exception applies where the appealing party would be entitled to the benefits re......
-
Griffiths v. Griffiths
...does not apply where the benefits accepted are separate and distinct from the benefits disputed on appeal. Burnham v. Bray, 104 Idaho 550, 553, 661 P.2d 335, 338 (Ct. App. 1983). In other words, an exception applies where the appealing party would be entitled to the benefits regardless of t......