Bunch v. Quinn-L Baton Rouge Partnership

424 So. 2d 1210, 1982 La. App. LEXIS 8640
CourtLouisiana Court of Appeal
DecidedDecember 21, 1982
DocketNo. 82 CA 0346
StatusPublished
Cited by3 cases

This text of 424 So. 2d 1210 (Bunch v. Quinn-L Baton Rouge Partnership) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bunch v. Quinn-L Baton Rouge Partnership, 424 So. 2d 1210, 1982 La. App. LEXIS 8640 (La. Ct. App. 1982).

Opinion

WATKINS, Judge.

This matter is before the court on an exception of no cause of action. The plaintiff, one of two general partners in Quinn-L Baton Rouge Partnership, a Louisiana in commendam partnership, is suing the partnership and all of the individual partners for dissolution, liquidation of the partnership assets and judgment in favor of the plaintiff in the amount owed him. By amended petition the plaintiff asks in the alternative that he be allowed to withdraw from the partnership and obtain a judgment in the amount owed plus an additional amount equal to the value of his partnership share at the time of his withdrawal, together with court costs. The trial court sustained the defendants’ exception of no cause of action. From this judgment, the plaintiff appeals. We reverse.

The plaintiff alleges the following facts in his petition. On December 30, 1975, the plaintiff and the defendants executed written Articles of Partnership, forming a Louisiana partnership in commendam, “Quinn-L Baton Rouge Partnership”. The partner[1212]*1212ship was entered into for the purpose of acquiring, constructing, owning and managing an apartment complex located in East Baton Rouge Parish. Pursuant to the partnership contract, the plaintiff was to fulfill certain obligations for which he would receive approximately $120,000. in payment from the defendants. Plaintiff alleges that, although the plaintiff complied fully with the terms imposed upon him, the defendants have refused to pay him.

Prior to this action for dissolution, the plaintiff filed suit to recover the fees allegedly owed him under the partnership agreement. That suit was dismissed upon an exception of no cause of action. The dismissal was based on the legal principle that a partner cannot be required to account to his other partners for a debt arising out of their relationship as partners until the partnership has been liquidated and there has been a final accounting for all partnership assets and liabilities and a final settlement of all partnership affairs. On appeal, this court affirmed the judgment of the trial court. Bunch v. Quinn-L Baton Rouge Partnership, (unpublished reports, docket nos. 12,524 and 12,617, May 1979), writ denied 375 So.2d 952 (La.1979).

The plaintiff then filed this action for dissolution, liquidation and accounting of the partnership, asking in the alternative that he be allowed to withdraw from the partnership.

Basically, the defendants contend in their exception of no cause of action that the partnership contract is the law between the parties and as such provides the exclusive grounds for termination, dissolution and liquidation of the partnership, and for withdrawal of the partners. The portion of the partnership contract pertinent to dissolution and liquidation is set forth in the defendants’ exception of no cause of action as follows:

“18.01. The Partnership shall be terminated upon the first to occur of the following:
(a)Upon thirty (30) days notice in writing to the Partnership by Partners then owing (sic) seventy-five (75%) per cent or more of the Partnership stock; or
(b) The sale of all or substantially all of the property of the Partnership; or
(c) The expiration of the term of the Partnership; or
(d) One year after payoff of the mortgage covering the property of Jefferson Oaks Apartments Partnership located in Baton Rouge, Louisiana, described here-inabove unless the General Partners refinance such mortgage and place another mortgage thereon within said one year period in which case termination shall occur one year after any subsequent mortgage shall be paid in full or can-celled; or
(e) The Partners in Commendam shall vote to terminate the Partnership as set out in Paragraph 16.02 hereinabove.”

Withdrawal of the partners is provided for as follows:

16.02—
“A General Partner may resign upon obtaining the unanimous written consent of all of the Partners in Commendam with the exception of Wayne P. Bunch who may withdraw as a General Partner without the consent of any Partner only in the event that, that one certain option dated December 31, 1975 in favor of Quinn-L Corporation to purchase all of the right, title and interest in the Partnership belonging to Wayne P. Bunch is exercised. Upon the removal, resignation, death, bankruptcy or legal incapacity of Quinn-L Corporation, or its successor Managing General General Partner, the Partnership shall terminate, unless owners of Seventy-five (75%) per cent of the Partnership stock, agree within ninety (90) days thereafter to continue the Partnership.... ”

The plaintiff does not contend that any of these requirements have been fulfilled. Rather, he asserts that the articles of the Louisiana Civil Code pertaining to dissolution or alternatively to withdrawal apply to his case. The trial court sustained the defendants’ exception of no cause of action, although we were not favored with written reasons.

[1213]*1213At the time the defendant partnership was created, the existing law gave the plaintiff a legal right to dissolve the partnership. Former LSA-C.C. art. 2887 provided:

“Although the partnership may have been entered into for a limited time, one of the partners may, provided he has a just cause for the same, dissolve the partnership before the time, even where inconveniences might result for the partners, and although it might have been stipulated that the partners could not desist from the partnership before the stipulated time.”

Therefore, under the law prior to 1981, the plaintiff was entitled to a dissolution upon a showing of “just cause.” Clearly, this right, based on just cause, could not be waived in the partnership contract. The law in effect at the time the partnership was created gave the plaintiff a legal right to dissolve the partnership and by the language of the code article this right existed irrespective of its absence from the articles of partnership.

By Acts 1980, No. 150, effective January 1,1981, the legislature replaced article 2887 with article 2821, which now reads:

“If a partnership has been constituted for a term, a partner may withdraw without the consent of his partners prior to the expiration of the term provided he has just cause arising out of the failure of another partner to perform an obligation.”

LSA-C.C. art. 2821 no longer provides for dissolution upon a showing of just cause, but rather for withdrawal of one of the partners upon such a showing. We are of the opinion that this right to withdraw, also based on just cause, exists irrespective of its absence from the articles of partnership, just as did the right to dissolve the partnership.

The plaintiff has alleged in his petition that pursuant to the partnership contract, he was to fulfill certain obligations for which he would receive approximately $120,000. in payment from the defendants. The plaintiff alleges he complied fully with the terms imposed upon him and that the defendants have refused to pay him. This is a sufficient allegation of just cause to establish a cause of action.

The plaintiff has therefore stated a cause of action under either article, although only one may be applied.

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Related

Producers Oil & Gas Co. v. Nix
488 So. 2d 1099 (Louisiana Court of Appeal, 1986)
Bunch v. Quinn-L Baton Rouge Partnership
429 So. 2d 131 (Supreme Court of Louisiana, 1983)
Palmisano v. Lake Forest Boulevard Medical Development
425 So. 2d 905 (Louisiana Court of Appeal, 1983)

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Bluebook (online)
424 So. 2d 1210, 1982 La. App. LEXIS 8640, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bunch-v-quinn-l-baton-rouge-partnership-lactapp-1982.