Heileson v. Cook
| Decision Date | 29 March 1985 |
| Docket Number | No. 15548,15548 |
| Citation | 697 P.2d 1250,108 Idaho 236 |
| Parties | Marvin C. HEILESON, Plaintiff-Appellant, v. George M. COOK and Betty D. Cook, husband and wife, Defendants-Respondents. |
| Court | Idaho Court of Appeals |
Spencer E. Daw, Idaho Falls, for plaintiff-appellant.
Curt Thomsen, Michael Crapo, Idaho Falls, for defendants-respondents.
Marvin C. Heileson brought this action for an accounting against George and Betty Cook. Heileson and George Cook in 1976 entered into an oral partnership agreement for the construction of several homes on property owned by Heileson. Partnership dissolution occurred in September 1977, when the partners agreed that Cook should leave the partnership. At least two of the homes were still under construction when the partnership was dissolved. Heileson assumed the responsibility of finishing and selling the homes, and the last house sold in December 1979.
Heileson filed this action on September 1, 1983, seeking an accounting and a money judgment for an amount Heileson alleged Cook owed on partnership liabilities. Upon a motion for summary judgment, the claim against Cook was dismissed by the district court. When a motion for reconsideration resulted in the same disposition of his claim, Heileson appealed. Heileson contends the district court erred by determining the cause of action was barred by a statute of limitation. We reverse and remand.
The statute limiting a partner's ability to file suit for an accounting is either I.C. § 5-217 for actions on oral contracts or I.C. § 5-224 for actions for relief not covered by any specific statute. Ramseyer v. Ramseyer, 98 Idaho 47, 558 P.2d 76 (1976). Both statutes limit the period of filing, once a cause of action has accrued, to four years. The crucial determination is the time at which the cause of action accrued. The district court believed Heileson's cause of action accrued at the partnership dissolution, rather than after winding-up occurred. The partnership was dissolved in 1977, some six years before suit was filed. Thus the court held Heileson's claim was barred by the statute of limitations. Because the district court's memorandum decision provides no guidance, we assume from the parties arguments presented in the lower court and on appeal that the court's holding was based on I.C. § 53-343 and Ramseyer. We believe the district court erred by concluding Heileson's cause of action was barred by I.C. § 53-343 and Ramseyer. I.C. § 53-343 provides:
The right to an account of his interest shall accrue to any partner, or his legal representative, as against the winding-up partners or the surviving partners or the person or partnership continuing the business, at the date of dissolution, in the absence of any agreement to the contrary.
The Ramseyer court determined section 53-343 was applicable, under the facts and the pleadings present in that case, to bar a partner's suit for an accounting as against a winding-up partner. However, section 53-343 is not the only provision in the Uniform Partnership Law creating a right to an accounting. I.C. §§ 53-321 and 53-322 also specify accounting rights. 1
All partners are jointly liable for partnership debts and obligations. I.C. § 53-315. On dissolution, the partnership is not terminated, but continues until the winding-up of partnership affairs is completed. I.C. § 53-330. Dissolution terminates the authority of a partner to act for the partnership, except so far as maybe necessary to wind-up partnership affairs or to complete transactions begun but not yet finished. I.C. § 53-333. Thus, dissolution of the partnership does not itself discharge the existing liability of any partner. I.C. § 53-336. During the winding-up process or after it is completed, the winding-up partner may have a right to an accounting as against the non-winding partner because the circumstances render it just or reasonable, I.C. § 53-322, or because the non winding-up partner has received benefit from a transaction connected with the liquidation of the partnership, I.C. § 53-321. Of course, dissolution and winding-up may occur at the same time pursuant to an agreement between the parties which settles the partnership accounts. Thus, application of the proper accounting statute turns on factual determinations.
The facts in this case are unresolved. Heileson asserts in his affidavit that after dissolution of the partnership in September 1977, he was the partner who was left to wind up the partnership affairs, a process he states was not completed until December 1979. Cook, on the other hand, asserts that the partnership was dissolved, wound up and "terminated" in September 1977 by an agreement of the parties under which Heileson was to receive certain partnership assets and was to assume all partnership liabilities. Because of this factual dispute, we are unable to say Heileson is not entitled to an accounting under either section 53-321 or section 53-322. Genuine...
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Arnold v. Burgess
...business. The partnership continues until the winding up of partnership affairs is completed. I.C. § 53-330; Heileson v. Cook, 108 Idaho 236, 697 P.2d 1250 (Ct.App.1985). Winding up is the process of settling partnership affairs after dissolution. Uniform Partnership Act § 29, 6 U.L.A. 365,......
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