Church v. United States

• Court: Court of Appeals for the Fifth Circuit
• Decided: July 19, 2001
• Docket: 00-50386
• Status: Unpublished

Opinion

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 00-50386

ELSIE J. CHURCH, Deceased; MARSHALL B. MILLER, JR., Independent Co-Executor; MARY ELISE NEWTON, Independent Co-Executor,

Plaintiffs-Appellees,

versus

UNITED STATES OF AMERICA,

Defendant-Appellant.

Appeal from the United States District Court for the Western District of Texas (USDC No. SA-97-CV-774) _______________________________________________________ July 18, 2001

Before KING, Chief Judge, REAVLEY and JONES, Circuit Judges.

PER CURIAM:*

The judgment of the district court is affirmed for the following reasons.

* Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. The only issue of the estate’s valuation is whether the transfer of the assets was

restricted at the time of Church’s death. Different legal theories have been argued during

the course of this proceeding, but that has always been the dispositive question – as it was

the basis for the different valuations given the assets by the appraiser (not now

questioned). Regardless of the status of the limited partnership due to the certificate not

being filed on that date, the documents that Church had signed imposed restrictions on the

assets that necessarily caused their value to be discounted even if no limited partnership

was then formed.

We reject the government’s argument that the 1999 revision of the Texas statute

made the filing of the certificate an absolute prerequisite to the creation of a limited

partnership and rendered an agreement between the parties unenforceable until the time of

filing. A Texas court has held that a written partnership agreement constitutes an

enforceable contract and governs the rights of the parties. Hoagland v. Finholt, 773

S.W.2d 740, 742-43 (Tex. App.–Dallas 1989, no writ). Further, the Bar Committee’s

commentary to the 1999 revision of section 2.01 states that the revision was not meant to

overturn Garrett v. Koepke, 569 S.W.2d 568 (Tex. App.–Dallas 1978, writ ref’d n.r.e.),

which held that an entity could operate as a limited partnership before filing a certificate.

TEX. REV. CIV. STAT. ANN. art. 6132a-1 § 2.01, Source and Comment–Bar Committee

(Vernon Supp. 2001).

The estate stated in its pleadings that the discounts for lack of control applied

without the formation of a limited partnership, and in its refund claim it stated that it was

2 entitled to a “discount for lack of control and marketability.” The IRS was apprised of the

nature of the refund claim.

AFFIRMED.