Guntle v. Barnett
| Decision Date | 21 April 1994 |
| Docket Number | No. 14880-3-II,14880-3-II |
| Citation | 871 P.2d 627,73 Wn.App. 825 |
| Parties | Robert L. GUNTLE, Appellant, v. Kimberly A. BARNETT and Tommy L. Guntle, wife and husband; Willapa Seafood, Inc., a corporation, Willapa Seafood, a partnership, Respondents/Cross-Appellants. |
| Court | Washington Court of Appeals |
Jon C. Parker, Parker, Johnson, Edwards & Parker, Hoquiam, for appellant.
Kimberly A. Barnett-Guntle, pro se.
Robert Guntle appeals a judgment distributing partnership property. Kimberly Barnett cross-appeals a finding that her husband, Tommy Guntle, was a partner. Hereafter, we will usually refer to Robert Guntle and Kimberly Barnett by their last names, and to Tommy Guntle by his first name as well as his last.
Tommy Guntle is Robert Guntle's son and Kimberly Barnett's husband. Thus, Robert Guntle is Kimberly Barnett's father-in-law.
The Robinson and Rounds Seafood Company was for sale in late 1986. It owned a building at Bay Center, Washington, in which it operated a fish processing business. It also leased and operated a boat launch facility at Chinook, Washington.
Barnett wanted to purchase Robinson and Rounds, but she lacked the necessary funds. Thus, she spoke with Guntle, and they orally agreed to purchase the business as 50-50 partners. 1 Barnett was to be the "managing partner" 2; she would "take care of the books and sell the fish". 3 Guntle was to assist with financing and "do whatever I can do to help". 4 There was no agreement concerning duration of the partnership.
On July 31, 1987, the partnership purchased Robinson and Rounds for $95,000. A written buy-sell agreement was signed by Guntle, Barnett, and Tommy Guntle as purchasers, and by Robinson and Rounds as sellers.
The purchase price was paid with borrowed funds. Guntle borrowed $55,000 from a friend, Emery Kiske; in exchange, he gave a promissory note secured by mortgages against his house and fishing boat. Barnett borrowed about $8,000 from a friend, Mickey Geehan, apparently without security. The sellers financed $25,000 in exchange for a promissory note secured by various encumbrances against property owned by the business. The sellers also credited $10,000 in exchange for Guntle, Barnett and Tommy Guntle assuming a $10,000 debt to a corporation called Lorton Enterprises, Inc.
Following July 31, 1987, the business continued to engage in the purchase, packing, transportation and sale of fish products at Bay Center, and to operate a boat launch facility at Chinook. However, the parties renamed it Willapa Seafoods.
Disagreements soon developed among the parties, and in July 1988, Guntle unilaterally took over operation of the boat launch facility at Chinook. Barnett continued to operate the fish plant in Bay Center.
On December 5, 1988, Guntle demanded access to the partnership's books and records. Barnett refused.
On April 17, 1989, Guntle sued Barnett and Tommy Guntle. He asked for an accounting and other equitable relief, including, if necessary, "distribution of [the partnership] assets remaining after payment of the creditors." Barnett and Tommy Guntle answered that a partnership existed, and that the partners were Guntle, Barnett and Tommy Guntle. 5 They also counterclaimed for an accounting of all partnership funds received by Guntle.
On May 17, 1989, Guntle moved for appointment of an accountant to audit the records of the business at Barnett's and Tommy Guntle's expense. 6 The court denied the motion but ordered that Guntle have access to all records of the business.
A bench trial was held August 15, 16, and September 5, 1990. At its conclusion, the trial judge found that "Willapa Seafood is a Washington general partnership consisting of Robert Guntle as 50% partner, and Kimberly Barnett and Tom Guntle as 50% partner...."; that the partnership assets had a total value of $112,615.84 7; that "[t]he only proven obligation of the partnership is the Kiske note with a balance due of $51,500 plus interest"; and that "[t]he current proven operating debts of the corporation total $47,448.85". The court did not require that the partnership's assets be applied to discharge the partnership's liabilities; rather, it distributed the partnerships assets and debts much as might be done in a marital dissolution case. It awarded Barnett and Tommy Guntle the partnership's interest in the Bay Center property. It awarded Guntle the partnership's interest in the Chinook boat launch facility. It required that Barnett and Tommy Guntle assume and pay all debts, including the Kiske note. It granted Guntle a money judgment in the amount of $8,602.04, 8 and it declined to award reasonable attorneys' fees to either party.
Four problems comprise the core of this appeal. The first is whether the trial court could properly conduct an accounting without the assistance of an accountant. The second is whether the trial court could properly distribute the partnership assets and debts in kind, as opposed to selling the assets, liquidating the debts, and distributing any surplus in cash. The third is whether the trial court properly included in its money judgment all of the damages to which Guntle was entitled. The fourth is reasonable attorney's fees at trial and on appeal.
It is undisputed that Guntle had the right to an accounting. See RCW 25.04.430; see also RCW 25.04.210-.220. 9 He contends, however, that the trial court could not properly implement that right without the assistance of an accountant, and that it erred by denying his motion to appoint an accountant at Barnett's expense.
In an action for an accounting, "the court (or more commonly, an auditor, master, or referee subject to court review) conducts a comprehensive investigation of the transactions of the partnership and the partners, adjudicates their relative rights, and enters a money judgment for or against each partner according to the balance struck". 2 Alan R. Bromberg and Larry E. Ribstein, Partnership, § 6.08(a) (1994); see also Holman v. Cape, 45 Wash.2d 205, 206, 273 P.2d 664 (1954) (quoting Yarwood v. Billings, 31 Wash. 542, 72 P. 104 (1903)) (in action for accounting, trial court has power "not only to state the account between the parties but to enter a judgment in favor of one and against another, as the state of the account may require."). When an action for an accounting is being used to wind up the partnership's affairs, the court is obligated to provide "for a full accounting of the partnership assets and obligations and distribution of any remaining assets or liabilities to the partners in accordance with their interests in the partnership." Box v. Crowther, 3 Wash.App. 67, 77-78, 473 P.2d 417 (1970).
Other jurisdictions have held that whether to appoint an accountant is a matter addressed to the sound discretion of the trial court. Stotsenburg v. Frost, 465 Pa. 187, 348 A.2d 418, 421 (1975); John v. Terry, 260 Or. 478, 490 P.2d 506 (1971); 59A Am.Jur.2d, Partnership § 1066 (1987); see Brandenburg v. Brandenburg, 234 Ark. 1117, 356 S.W.2d 625 (1962) (). Washington cases seem in accord, or at least consistent. Gauthier v. Dickerson, 41 Wash.2d 419, 422, 249 P.2d 370 (1952) (); In Re Tembreull's Estate, 37 Wash.2d 93, 103-104, 221 P.2d 821 (1950) (); Fincham v. Pinkham & Co., 133 Wash. 517, 521-22, 233 P. 913 (1925) (). The question, then, is whether the trial court abused its discretion when it denied Guntle's motion for an accountant.
It did not. Long before trial, the court ordered that each party have access to the records of the business, 10 and this gave each party ample opportunity to prepare its own accounting. Additionally, the court held a 3-day bench trial, which gave each party ample opportunity to present its own accounting and comment on its opponent's. See Fincham, 133 Wash. at 521-22, 233 P. 913. These procedures were fair and adequate under the circumstances, and the trial court was not required to employ an accountant.
Guntle next contends that the trial court was not permitted to distribute the partnership's assets and debts in kind. In his view, the court was required to sell the assets, liquidate the debts, and distribute any surplus in cash. 11
According to Barnett, this contention should not be reviewed for several reasons. First, she says that Guntle has failed to properly assign error in his brief. In our view, however, his assignments are specific enough for us to discern and decide the issues at hand.
Second, Barnett says Guntle failed to raise the present issue below. In our view, however, he did. Throughout the trial, both he and Barnett were asking the trial court to distribute the partnership's assets and debts according to the Uniform Partnership Act, RCW 25.04.
Third, Barnett says Guntle invited error when he proposed in final argument that all of the assets and the Kiske debt be distributed to him, and that the remaining debts be distributed to Barnett. Although this contention might have merit if the trial court had adopted Guntle's proposal, it did not do that; rather, it devised and ordered its own. In so doing, it was "governed by the applicable law". See Maynard Inv. Co. v. McCann, 77 Wash.2d 616, 623, 465 P.2d 657 (1970).
Fourth and last, Barnett says "that because [Guntle] invoked the equitable powers of the court, [the court] had authority to liquidate in kind the partnership assets." 12 If the premise is that Guntle's conduct empowered the court to distribute in kind, the argument is a variation of the invited error contention, and it...
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