Warnick v. Warnick
| Decision Date | 11 September 2003 |
| Docket Number | No. 02-131, No. 02-155. |
| Citation | 2003 WY 113,76 P.3d 316 |
| Parties | Wilbur K. WARNICK; Dee J. Warnick; and Warnick Ranches, Appellants (Defendants), v. Randall M. WARNICK, Appellee (Plaintiff). Randall M. Warnick, Appellant (Plaintiff), v. Wilbur K. Warnick, Dee J. Warnick, and Warnick Ranches, Appellees (Defendants). |
| Court | Wyoming Supreme Court |
Representing Appellant: Dennis M. Kirven of Kirven and Kirven, P.C., Buffalo, Wyoming.
Representing Appellee: Timothy C. Kingston of Graves, Miller & Kingston, P.C., Cheyenne, Wyoming; Charles E. Graves, Sheridan, Wyoming.
Before HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ.
[¶ 1] A general partner in a family ranch business sued the partnership and the other two partners on various contract, quasi-contract and partnership theories, seeking recovery of his partnership interest. On cross motions for summary judgment, the district court granted Plaintiff's motion, found that dissociation and buyout of the Plaintiff was the appropriate remedy and entered judgment in the amount of $230,819.14 for his share of the ranch's value. Defendants appealed; Plaintiff cross-appealed the calculation of his partnership share. Finding that the district court erred in its calculation of the buyout price of the dissociated partner's interest, we reverse in part and remand with instructions.
[¶ 2] Wilbur and Dee Warnick, along with Warnick Ranches, state the issues as follows:
Randall Warnick re-frames the issues:
1. Did cash payments made by the Appellants constitute interest-bearing loans?
2. Is there a genuine issue of material fact regarding the parties' respective ownership interests or financial stakes in the partnership?
3. Should several guaranteed payments to one of the partners be considered cash contributions or loans to the partnership?
4. Did the District Court incorrectly exercise its "equitable discretion" when it reduced the amount that the Appellee was entitled to from the total value of the partnership?
[¶ 3] In August 1978, Wilbur and Dee Warnick and their son Randall Warnick contracted to purchase a ranch in Sheridan County for an agreed price of $335,000, with $90,000 down plus $245,000 in installments over ten years at 8% interest. In April 1979, they formed Warnick Ranches general partnership to operate the ranch and complete the installment purchase agreement. The partnership agreement recited that the initial capital contributions of the partners totaled $60,000, paid 36% by Wilbur, 30% by Dee, and 34% by Randall.
[¶ 4] The partnership leased out the ranch property for the first two years. Wilbur and Dee Warnick then moved onto the ranch in 1981, living there and working the ranch up to the present time. Randall lived and worked on the ranch during the 1981 and 1982 summer haying seasons and again from 1991 to 1998.
[¶ 5] The partners over the years each contributed additional funds to the operation of the ranch and received cash distributions from the partnership. After 1983, Randall contributed very little new money and almost all of the additional funds to pay off the mortgage came from Wilbur and Dee Warnick. Wilbur also left in the partnership account two $12,000 cash distributions that were otherwise payable to him. The net cash contributions of the partners through 1999, considering the initial contributions, payments to or on behalf of the partnership, draws not taken and distributions from the partnership were:
Wilbur $ 170,112.60 (51%) Dee 138,834.63 (41%) Randall 25,406.28 ( 8%)
[¶ 6] In 1998, Randall Warnick began having discussions with his brother about the possibility of selling his interest in Warnick Ranches. When Randall mentioned this to his father, a dispute arose between them concerning the percentage of the partnership that Randall owned. Finally, on April 14, 1999, Randall's attorney sent a letter to Warnick Ranches which stated:
[¶ 7] On August 11, 1999, Warnick Ranches responded in writing, treating the letter from Randall's attorney as the expressed will of a partner to dissociate. The partnership's response included a tender offer for Randall's share, as provided under Wyo. Stat. Ann. § 17-21-701(e) and (g) in the case of a dissociating partner. Randall in turn exercised his right under § 17-21-701(j) to reject the tender and bring an action against the partnership to determine his interest in the partnership, including a buyout price if he is determined to be dissociated from the partnership.
[¶ 8] The case was submitted to the district court on cross motions for summary judgment. The parties stipulated to facts regarding the cash flows into and out of the partnership accounts, as well as the partnership tax returns for each year from 1979 through 1999. They also submitted affidavits, depositions, interrogatories and requests for admission in support of their respective motions.
[¶ 9] The district court, in granting Randall Warnick's motion for summary judgment, found that dissociation of Randall as a partner was the appropriate remedy and that the schedule of ownership recited in the partnership agreement, absent evidence of any other written agreement, controls the partners' percentage upon dissolution or dissociation. The court awarded judgment to Randall Warnick for the amount of his cash contributions, plus 34% of the partnership assets' increase in value above all partners' cash contributions. As a result of that calculation, $230,819.14, or 25.24%, of the undisputed value of the partnership was awarded to Randall, without provision of interest for any partner in the calculation.
[¶ 10] We recently reiterated our "well-settled" standard of review for considering the grant of a summary judgment.
When a motion for summary judgment is before the supreme court, we have exactly the same duty as the district judge; and, if there is a complete record before us, we have exactly the same material as did he. We must follow the same standards. The propriety of granting a motion for summary judgment depends upon the correctness of a court's dual findings that there is no genuine issue as to any material fact and that the prevailing party is entitled to judgment as a matter of law. This court looks at the record from the viewpoint most favorable to the party opposing the motion, giving to him all favorable inferences to be drawn from the facts contained in affidavits, depositions and other proper material appearing in the record. We separate the formal and pretended from the genuine and substantial so only the latter may be considered in eliminating the burden of a formal trial if only questions of law are left to decide; there must be no issue of material fact to decide. Weaver v. Blue Cross-Blue Shield, Wyo., 609 P.2d 984, 986-987 (1980). A material fact, expressed in various ways, is one having legal significance which would in a given case control the legal relations of the parties; one upon which the outcome of the litigation depends in whole or in part; one on which the controversy may be determined; one which will affect the result or outcome of the case depending upon its resolution; or one which constitutes a part of the plaintiff's cause of action or the defendant's defense. Johnson v. Soulis, Wyo., 542 P.2d 867 (1975). Summary judgment affords an opportunity for prompt disposition of a lawsuit in its early stages, permitting an end to unfounded claims and avoiding the expense of a full-fledged trial to both litigants and the state's judicial machinery. Bluejacket v. Carney, Wyo., 550 P.2d 494 (1976).
McLean v. Hyland Enterprises, Inc., 2001 WY 111, ¶ 14, 34 P.3d 1262, ¶ 14 (Wyo.2001) (quoting Reno Livestock Corp. v. Sun Oil Co. (Delaware), 638 P.2d 147, 150-51 (Wyo. 1981)).
[¶ 11] We also discussed in McLean the general rule that the denial of a summary judgment motion is not an appealable final order. However, "when the district court grants one party's motion for a summary judgment and denies the opposing party's motion for a summary judgment and the district court's decision completely resolves the case, both the grant and the denial of the motions for a summary judgment are subject to appeal." McLean, ¶ 17 (quoting Lieberman v. Wyoming.com LLC, 11 P.3d 353, 356 (Wyo.2000)). We will therefore review the entire case, including the denial of the defendants' summary judgment motion.
[¶ 12] Resolution of this matter relies almost entirely on application of the Wyoming Revised Uniform Partnership Act ("RUPA"), Wyo. Stat. Ann. §§ 17-21-101 et seq. (LexisNexis 2003), which the Wyoming legislature adopted in 1994 as a replacement for the Uniform Partnership Act.1993 Wyo. Sess. Laws ch. 194. RUPA is applicable in this case because by its terms it applies "to all partnerships in existence on January 1, 1994, that were formed under the Wyoming Partnership Act or...
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