Glodek v. Rowinski

390 N.W.2d 477, 1986 Minn. App. LEXIS 4545
CourtCourt of Appeals of Minnesota
DecidedJuly 22, 1986
DocketC5-85-2006
StatusPublished
Cited by2 cases

This text of 390 N.W.2d 477 (Glodek v. Rowinski) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Glodek v. Rowinski, 390 N.W.2d 477, 1986 Minn. App. LEXIS 4545 (Mich. Ct. App. 1986).

Opinion

OPINION

CRIPPEN, Judge.

Joseph Kapala, deceased, and Thomas Glodek, appellant, owned stock in a funeral service corporation and owned real estate as partners. The two had signed agreements permitting the survivor the right to purchase the other party’s stock and his partnership interest. When Kapala died, Glodek attempted to exercise his purchase rights. The estate refused to sell, claiming that Glodek’s offer was too low and that Kapala’s signature on the corporate agreement had been forged. Glodek brought suit to enforce the stock sale agreement and the partnership buy-out agreement.

In an amended answer and countercom-plaint, the estate abandoned an earlier defense, sought to have appellant purchase the estate’s stock and partnership interests, and sought prejudgment interest for the sale. The trial court ordered the sale and ordered appellant to pay prejudgment interest. Glodek appeals, claiming the trial court improperly allowed the estate to amend its answer and countercomplaint and improperly ordered payment of prejudgment interest. We affirm in part, and reverse in part.

FACTS

Appellant Thomas Glodek and Joseph Kapala, deceased, were the sole stockholders of a funeral service corporation called Kapala-Glodek Funeral Services, Inc., and they owned property as partners. At the time of Kapala’s death, the partnership owned two mortuaries in the Twin Cities, two condominiums in Florida, some undeveloped real estate, and a store in Minneapolis.

In 1973, appellant and Kapala executed a corporate stock purchase and redemption agreement. The agreement provided that in the event of the death of a shareholder “all of the shares of the Company owned by the Decedent at the time of his death * * * shall be purchased by the Company and/or the surviving Shareholder * * *.” The parties agreed that, for the purpose of selling a deceased shareholder’s stock, the value of each share of stock would be $400 plus the decedent’s share of previously taxed income retained by the corporation divided by the number of shares owned by the decedent shareholder. The estate of the decedent was required under the agreement to sell all the decedent’s shares to the company at this rate; the funds for the purchase were to come first from the amount of any life insurance proceeds paid to the company for the death of decedent. The closing of the transaction would occur not less than 60 days nor more than 70 days “following the end of the Company’s fiscal year in which the decedent’s death occurred.” If the surviving shareholder was the purchaser, then the shareholder was to pay one-fourth of the purchase price in cash and the remainder in monthly installments over a period not to exceed three years. The agreement provided that if a selling shareholder or representative was dissatisfied with the purchase price, the seller and the purchaser would each appoint an individual appraiser, and the two appraisers would appoint a third appraiser. This team of three appraisers would then determine a value per share of the company’s stock.

In 1977, appellant and .Kapala undertook a reorganization of their business structure and executed an amended partnership agreement. Under this agreement, the deceased partner’s interest would be purchased in cash within twelve months from the date of death unless the surviving partner and the decedent’s estate agreed to an extension of this time period. The amend *480 ed agreement also provided that the purchase price would be paid in lieu of “all further rights to share in the Partnership capital * * *, including * * * furniture, equipment and supplies, accounts receivable, Partnership goodwill, going concern value and other assets, if any.”

When Kapala died in February 1982, neither the estate nor appellant immediately made any effort to have the corporate and partnership assets valued and sold. Appellant commenced making monthly maintenance payments to Kapala’s widow of $1500 to $2000. These payments totaled $66,000 at the time of trial.

During the summer of 1982, appellant attempted to assert his purchase rights. Respondents claimed that they rebuffed appellant’s attempts to buy Kapala’s interests in the corporation and the partnership because appellant did not make a reasonable offer and because they suspected Kapala’s signature on the corporation agreement was forged. When the parties could not reach an agreement regarding the sale, appellant brought suit seeking a declaratory judgment and enforcement of the provisions of the corporate and partnership agreements. In their answer and counter-complaint, the respondents claimed that Kapala’s signature on the corporate agreement was forged; they sought dissolution and liquidation of the partnership and corporation. Soon after trial began, respondents sought leave to amend their answer and countercomplaint, and the trial court granted the motion. In the amended pleading, respondents alleged that life insurance proceeds paid to Glodek upon the death of Kapala were corporate or partnership assets. Respondents again sought partition or liquidation of the assets. Fifteen months after the trial, and two months after the trial court received the report of an independent accounting firm, the respondents, deciding that there was insufficient evidence of any forgery, again sought leave, which was granted, to amend the answer and countercomplaint. In the second amended answer and countercomplaint, respondents admitted the validity of the corporate agreement and sought the estate’s share of Kapala’s corporate and partnership interests. Respondents also sought prejudgment interest.

The trial court ordered an appraisal of the corporate and partnership assets, determined the value of the disputed assets from the appraisal, and ordered appellant to purchase them. The court found that the corporation had assets worth $202,966 and that the decedent’s interest was worth $101,483. The trial court added $3577 to that amount, finding that decedent was entitled to some previously undistributed income.

The trial court found that appellant’s cost for decedent’s partnership interest was $395,143, including $159,688 for decedent’s partnership capital account and $235,455, one-half of the appraised value of various partnership assets in excess of original cost or valuation.

The trial court also granted respondents’ request for prejudgment interest from the dates for payments set forth in the corporate and partnership agreements, finding that the amounts in controversy were “easily ascertainable.” The trial court found that appellant had made no payments toward the purchase of the assets, finding that the $66,000 appellant paid to Kapala’s widow were maintenance payments. The court, however, ordered that the $66,000 paid should be credited against the total amount owed by appellant.

Glodek appeals, claiming the trial court erred in allowing respondents to amend their answer and countercomplaint and in allowing prejudgment interest.

ISSUES

1. Did the trial court err by awarding respondents prejudgment interest?

2. Did the trial court abuse its discretion by allowing respondents to amend their answer and countercomplaint?

3. Did the trial court err by finding that certain personal property belonged to the partnership?

*481 ANALYSIS

1.

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Related

Soderbeck v. Center for Diagnostic Imaging, Inc.
793 N.W.2d 437 (Court of Appeals of Minnesota, 2010)
In Re Estate of Kapala
402 N.W.2d 150 (Court of Appeals of Minnesota, 1987)

Cite This Page — Counsel Stack

Bluebook (online)
390 N.W.2d 477, 1986 Minn. App. LEXIS 4545, Counsel Stack Legal Research, https://law.counselstack.com/opinion/glodek-v-rowinski-minnctapp-1986.