McCormick v. Brevig, 96 P.3d 697 (Mont. 2004)

Facts

Joan and Clark were the children of Charles and Helen.  Charles purchased the Brevig Ranch and Clark and his father owned the ranch in equal shares.  Charles died and each received half of the ranch, Thus Clark had 75% and Joan had 25%.  Joan later purchased the additional 25% share.  The relationship went sour and Joan brought suit against Clark.

Procedural History

The District Court found that Joan was a 50% holder and should be credited for excess contributions she made.  The Court also concluded the partnership should be dissolved and its business wound up.

Issue(s)

After ordering dissolution, did the District Court err by failing to order liquidation of the assets, and instead granting Clark the right to purchase Joan’s partnership?

Holding(s)

Yes.

Reasoning/Analysis

The Court found that the UPA requires liquidation of partnership assets and distribution of the net surplus in cash to the partners upon dissoulution.  UPA provides two separate tracks, one applying to dissociation and the other to dissolution.  The District Court dissolved the partnership but reasoned that liquidation had a variety of meanings.  The common meaning, however, is to reduce assets to cash, pay creditors, and distribute to partners.

Judgment/Outcome

The Court affirmed in part, reversed in part, and remanded.