Gail M. Benson Living Trust v. Physicians Office Building, Inc.

Summary

The South Dakota Supreme Court reviewed a dispute over the allocation of profits and losses under a limited partnership agreement for a medical office building. The court held that the agreement was ambiguous because its allocation provisions could produce different results when only 15 of 32 authorized partnership units had been sold. It reversed the circuit court’s summary judgment for the general partners and remanded for evidence concerning the parties’ intent.

Holdings

1. Article I, § 1.06(b) of the Partnership Agreement was ambiguous because, under the undisputed fact that only 15 of 32 units were sold, its second and third sentences were capable of different meanings and did not operate consistently together.
2. Summary judgment for the general partners was improper because the circuit court incorrectly decided the legal question of whether the Partnership Agreement was ambiguous.
3. Remand was appropriate to permit the introduction of evidence concerning the parties' intentions regarding the allocation provision.

Questions Presented

1. Whether the partnership agreement's profit-and-loss allocation provision was ambiguous when only 15 of 32 authorized partnership units had been sold.
2. Whether the circuit court erred in granting summary judgment to the general partners based on its conclusion that the allocation provision was unambiguous.
3. Whether the Supreme Court could resolve the contractual ambiguity as a matter of law without remanding for evidence concerning the parties' intent.

Disposition

reversed_and_remanded