Goodkin v. 8182 Maryland Associates Ltd.

• Decision Date: 09 July 2002
• Docket Number: No. ED 80616.,ED 80616.
• Parties: Stanley J. GOODKIN and Jacob W. Reby, Appellants, v. 8182 MARYLAND ASSOCIATES LIMITED PARTNERSHIP and Apex Clayton, Inc., Respondents.
• Court: Missouri Court of Appeals

80 S.W.3d 484

Stanley J. GOODKIN and Jacob W. Reby, Appellants, v. 8182 MARYLAND ASSOCIATES LIMITED PARTNERSHIP and Apex Clayton, Inc., Respondents.

No. ED 80616.

Missouri Court of Appeals, Eastern District, Division Five.

July 9, 2002.

COPYRIGHT MATERIAL OMITTED

Robert C. Jones, Jones, Korum, Waltrip & Jones, Clayton, for appellants.

Neil H. Miller, Law Office of Neil H. Miller, P.C., Clayton, for respondents.

GLENN A. NORTON, Judge.

Stanley Goodkin and Jacob Reby ("Appellants") appeal the granting of summary judgment dismissing their petition for declaratory relief. They sought a declaration that they were entitled to limited partnership interests in 8182 Maryland Associates Limited Partnership ("Maryland"). Only Maryland was named in the original petition. Later, Appellants amended the petition, adding Maryland's general partner, Apex Clayton, Inc. ("Apex"), as a defendant. Apex and Maryland jointly filed a motion to dismiss and for summary judgment. Apex argued that the statute of limitations had run on the claims against it. Maryland argued that Apex was a necessary and indispensable party — without which, Appellants could not proceed against Maryland — because Apex, not Maryland, owns the interests Appellants seek. The trial court granted the motion. We affirm.

I. BACKGROUND

The facts, construed where necessary most favorably to the Appellants, are as follows. ITT Commercial Finance Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). Maryland is a Missouri Limited Partnership, entered into by Apex, PS Maryland Avenue Associates ("PS-I") and others. Apex is the general partner in Maryland. PS-I owned a limited partner interest in Maryland. Appellants were general partners in PS-I.

Section 8.2 of Maryland's Limited Partnership Agreement requires that limited partners make capital contributions to Maryland upon written demand from the general partner, Apex. If a limited partner fails to pay all or any portion of a contribution when due, then it is considered in default. Apex has the option, under section 8.3.A of the Agreement, to purchase the interest of the defaulting limited partner upon written notification and to pay to the partnership the defaulting partner's outstanding contribution. "Upon the purchase of the Interest of a Defaulting Limited Partner, his interest in the Partnership shall terminate and he shall have no further rights in or obligations to the Partnership." Agreement Section 8.3.C.

The Agreement also imposes limitations on the assignment and transfer of a limited partner's interest in Maryland. Section 14.2 provides that "kilo Limited Partner's interest or any fractional part thereof may be sold, assigned or transferred without the written consent of the General Partner and the Limited Partners having at least fifty-one percent (51%) or more [sic] of the interests in the Partnership."

In 1993, PS-I notified Maryland, through Apex, that it intended to assign portions of its limited partner interest in Maryland to Appellants. Apex notified the partners that it was issuing a capital call for contributions to the partnership. Appellants attempted to pay their pro rata share of the call based on the percentage of interest they would own under PSI's proposed transfer. PS-I tendered only 80% of its pro rata share of the capital call. On July 19, 1993, Apex sent Appellants identical letters. The letter notified Appellants (1) that Apex and "a majority in interest of the limited partners" of Maryland declined to consent to PS-I's proposed transfer to Appellants and (2) that PS-I was in default under the Agreement and therefore "Noday, [Apex] exercised its option under [s]ection 8.3A of the Partnership Agreement to purchase the interest of PS[-]I, as Defaulting Limited Partner." Apex still owns the interests at issue.

On June 1, 1998, Appellants filed their petition for declaratory relief naming Maryland. Appellants alleged that Maryland withheld consent for PS-I's transfer to Appellants in bad faith. They also alleged that Apex purported to purchase PS-I's interest as a defaulting limited partner in an attempt to eliminate PS-I's and Appellants' participation in Maryland. Appellants sought a declaration that they owned the interests in Maryland. In the alternative, Appellants asked to be awarded the fair market value of their claimed interests.

After Maryland answered, Appellants sought leave to file an amended petition on November 11, 1998. The amended petition added Apex as a defendant and alleged that the "Defendants" unreasonably withheld consent for PS-I's proposed transfer, that Apex purported to exercise its buyout rights and that "Defendants" declared PS-I in default in order to eliminate PS-I and Appellants from Maryland. Maryland and Apex opposed the amendment, but the trial court granted leave on December 11, 1998.

Maryland and Apex jointly filed a motion to dismiss the amended petition and for summary judgment. The trial court granted summary judgment in favor of Maryland and Apex and against Appellants and dismissed the amended petition. The trial court did not articulate the reasons for its decision.

In the motion and on this appeal, Apex argues that the five-year statute of limitations began to run on the claims against it on July 19, 1993 — the date of the letter notifying Appellants of the buyout — and barred the claims filed in November of 1998. It also contends that the amended pleading cannot relate back to the original filing. Maryland asserts that Apex was a necessary and indispensable party, without which, the claims against Maryland cannot proceed.

II. DISCUSSION

The propriety of summary judgment is a question of law, and therefore, our review is do nave. ITT, 854 S.W.2d at 376. The criteria for determining the propriety of summary judgment on appeal are no different than that used at the trial level. Id. Although we view the record and construe all inferences favorably to the non-movant, facts set forth in support of the summary judgment motion are taken as true unless contradicted by the non-movant's response. Id. at 376, 382-83.

Maryland and Apex, as defendants, may establish a right to judgment by showing (1) facts that negate any one of the elements of Appellants' claims, (2) that Appellants cannot produce evidence sufficient to allow the trier of fact to find the existence of any one of their elements, or (3) "that there is no genuine dispute as to the existence of each of the facts necessary to support [Appellants'] properly-pleaded affirmative defense." Id. at 381 (emphasis in original). Once Maryland and Apex have met this burden, Appellants must show by reference to the record that "one or more of the material facts shown by the movant to be above any genuine dispute is, in fact, genuinely disputed." Id. A "genuine issue" exists where the record contains competent materials that demonstrate "two plausible, but contradictory, accounts of the essential facts." Id. at 382.

A. Statute of Limitations

Everyone agrees that the five-year statute of limitations applies to this action. See 516.120 RSMo 2000.¹ A cause of action accrues and the statute of limitations begins to run "when the damage resulting therefrom is sustained and is capable of ascertainment." Section 516.100. Damages are "capable of ascertainment" when a plaintiff with a recognized legal theory of recovery sustains compensable damages. See generally Wallace v. Helbig, 963 S.W.2d 360 (Mo.App. E.D.1998).

Apex argues that Appellants' cause of action against it accrued on July 19, 1993 when Apex notified them of the buyout. Appellants contend that the July 19, 1993 letter did not start the limitations period because the buyout could not be completed until Apex obtained written consent of at least 51% of the ownership interest in Maryland under section 14.2 of the Agreement. Because that never happened, Appellants argue that they did not have a claim as of July 19, 1993.

The record demonstrates that Apex's action to acquire the interest of PS-I on July 19, 1993 was taken under section 8.3 of the Agreement, not under section 14.2 as Appellants' contend. As the general partner, Apex had the right under section 8.3 to purchase the interest of a defaulting limited partner. There were no conditions attending that action; once Apex notified the Appellants, the acquisition was complete. The written consent required under section 14.2 for the transfer of a limited partner's interest simply did not apply to Apex's exercise of its rights as a general partner under section 8.3. There is no other plausible reading of the record. See ITT, 854 S.W.2d at 382.²

Any injury Appellants sustained as a result of Apex's buyout arose on July 19, 1993. Likewise, any claims Appellants have against Apex as a result of its refusal to consent to PS-I's proposed transfer also arose, at the latest, on July 19, 1993. By then, if not before, Appellants were aware of both Apex's buyout and the refusal to approve the transfer. The filing of Appellants' amended petition after July 19, 1998 is time-barred.

Point I is denied.

B. Relation-back

Appellants contend that the relation-back rule should spare them from the statute of limitations. Apex argues that relation-back does not apply here, where Appellants attempted to add, not change, a party. We agree with Apex.

Rule 55.33(c) allows amended pleadings filed out of time to relate back to the original pleading in certain situations. Although this Rule may be used for more than merely correcting a misnomer, the failure to timely plead must have been caused by a mistake in selecting the proper party to sue. Windscheffel v. Benoit, 646 S.W.2d 354, 357 (Mo. banc 1983). That is, the plaintiff must have sued the wrong party. Windscheffel, 646 S.W.2d at 357; see also Hoey v. St. Luke's Episcopal Presbyterian Hosp., 713 S.W.2d 636, 638 (Mo.App. E.D.1986). "Rule 55.33(c) is a remedy for mistakes in identity, and the remedy is a change in party."...