Christopher Deans v. Kathy McColumn

184 So. 3d 972, 2015 Miss. App. LEXIS 345, 2015 WL 3863422
CourtCourt of Appeals of Mississippi
DecidedJune 23, 2015
Docket2013-CA-01773-COA
StatusPublished
Cited by2 cases

This text of 184 So. 3d 972 (Christopher Deans v. Kathy McColumn) is published on Counsel Stack Legal Research, covering Court of Appeals of Mississippi primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Christopher Deans v. Kathy McColumn, 184 So. 3d 972, 2015 Miss. App. LEXIS 345, 2015 WL 3863422 (Mich. Ct. App. 2015).

Opinion

LEE, C.J.,

for the Court:

¶ 1. In this case, we must determine whether the chancellor properly dissolved a partnership. We find no error by the chancellor and affirm.

PROCEDURAL HISTORY

¶ 2. In 1998, Christopher Deans and Kathy McColumn, both physical therapists, formed Therapy First Outpatient Rehabilitation LLC (Therapy First). According to the operating agreement, Deans and McColumn each had a fifty-percent interest in Therapy First. • The parties,' through Therapy First, purchased a commercial building in Jackson, Mississippi, for their physical-therapy businéss.

¶ 3. In December 2011, McColumn filed a petition for dissolution in the Hinds County Chancery Court. Deans subsequently filed a counterclaim alleging fraud, breach of contract, breach of fiduciary duties, and conversion. McColumn filed a motion to strike Deans’s counterclaim. The chancellor granted the motion to strike the counterclaim. A special master, Oran C. Page, was appointed to'review all applicable information to assist the chancellor in dissolving Therapy First.

¶ 4. After a trial, the chancellor adopted the findings of the special master and ordered Therapy First to be dissolved.

¶ 5. Deans now appeals, arguing several issues, which we have condensed as follows: (1) the chancellor erred by dismissing his counterclaim, and (2) the chancellor’s findings were unsupported by the record. McColumn filed a motion to dismiss this appeal, which we will address as issue three.

FACTS

¶ 6,. Therapy First was formed in 1998. At first. Deans and McColumn remained working for their previous employer, Mid-Delta Home Healthcare. Deans worked at Therapy First in the morning and Mid-Delta in the afternoon. McColumn worked at Mid-Delta .in the morning and Therapy First in the afternoon. Approximately one year later, Deans and McCo-lumn were able to leave Mid-Delta and work full-time for Therapy First. While both Deans and McColumn worked as physical therapists, McColumn also.acted as the business manager.

¶ 7. In 2002, Therapy First acquired a yearly contract to service patients at Jefferson County Nursing Home in Fayette,’ Mississippi. Deans was primarily respon *974 sible for fulfilling the services under this contract, driving to Fayette five. days a week. In. 2007, Deans and McColumn opened another Therapy First in McComb, Mississippi. Deans began to split his time between the McComb location and the nursing home. Deans and McColumn also opened a medical supplies company, which ceased operations after a few years. The McComb location of Therapy First was unsuccessful and closed in 2008.

¶ 8. McColumn testified .that in 2008, she received a phone call from the administrator of the nursing home in Fayette. McColumn was informed that Deans was no longer providing services to the residents. The administrator told McColumn that Deans was working for another nursing home. McColumn testified shé had to coax Deans into working at the nursing home for the remainder of their contract in order to avoid breaching the contract. Deans testified that he did start working for another nursing home located in Port Gibson, Mississippi, in June 2008.

¶ 9. Although Deans was still a partner in Therapy First, he did not see patients there after June 2008. In December 2009, Deans withdrew $9,000 from the Therapy First account for what he termed “profit sharing.” McColumn became aware of this after the bank informed her that the account' did not have sufficient funds to cover other payments. McColumn continued to provide services to the patients at Therapy First until' 2011, when she started a new company named Physical Therapy First LLC. McColumn apparently failed to inform Deans that she had opened a new physical therapy business in the same building as Therapy First. At some point McColumn, with Deans’s permission, also formed, Deans and Mac LLC* as a vehicle to hold title to the real property owned by her and Deans. Her new company and another tenant renting part of the Therapy First building paid rent to Deans and Mac LLC.

¶ 10. McColumn testified that Deans entered the Therapy First building in late 2011 and removed everything, including equipment, computers, therapy machines, patient files, and some of her personal items. Shortly thereafter, McColumn filed a temporary restraining order as well as her request for a judicial dissolution of Therapy First.

¶ 11. In his report, the special master examined the books and records of Therapy First and documented the income, expenses, and distributions for 2008 through 2011. In 2008, the special master noted Deans received a distribution of $7,794 and McColumn received $9,894, The special master noted McColumn suffered a $7,654 loss to her capital account in 2009, and Therapy First operated at a net loss, so there was no distribution. That same year, Deans withdrew $9,000 from the Therapy First account. In 2010, Deans and McColumn each received a distribution of $20,559. In 2011, McColumn received a $44,577 distribution. The special master recommended the Therapy First building be sold and the proceeds be used to pay the mortgage indebtedness. Any remaining proceeds were to, be deposited in the court registry to pay off other creditors. The special master also .recommended that the personal property of Therapy First, valued at $25,130, be sold and any proceeds also be placed in the court registry. The special master determined that McColumn was a creditor of Therapy First and was entitled to any assets remaining following payments to creditors. The special master further determined McColumn • formed Physical Therapy First without using any of the capital or equipment from Therapy First.

*975 ¶ 12. After a trial, the chancellor adopted the special master’s findings and made further findings as follows:

In consideration of the evidence that Deans contributed nothing to the partnership businesses ... after June[ ] 2008, the Court finds that he was entitled to not more than approximately one-quarter of the total of $17,688 in distributions made to partners for that year, or $4,422.. Since he received a distribution of $7,794 in- 2008, he is considered and found by the Court to be a debtor of the partnership businesses for said item in the, sum of $3,372. For calendar year 2009[,] Deans is also found by the Court to be a,debtor of the partnership businesses in the amount of the $9,000 he withdrew from corporate operating account in that year, as mentioned above, and in the sum of $3,827 representing his fifty percent (50%) portion of the loss from the businesses reflected in the partners’ capital accounts. Finally, in calendar year 2010[,] Deans is considered and found by the Court to be a debtor of the partnership businesses in the sum of $20,559, the amount of the distribution to each of the partners during a year in which he had no involvement with [or] contribution to the businesses. Deans is, therefore, found by the Court to be a debtor of the partnership businesses in a total sum of not less than $36,758.

The chancellor also agreed that McColumn was a creditor because she paid all overhead and expenses of the business, including mortgage payments of $1,250 per month, for the three years Deans ceased working at Therapy First.

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Bluebook (online)
184 So. 3d 972, 2015 Miss. App. LEXIS 345, 2015 WL 3863422, Counsel Stack Legal Research, https://law.counselstack.com/opinion/christopher-deans-v-kathy-mccolumn-missctapp-2015.