Summary
The Wyoming Supreme Court affirmed summary judgment dismissing claims by partnership general partners against a liquidating trustee, the trustee's accounting firm, and other partnership participants. The court held that the appellants expressly consented to the liquidation and distribution plan with full knowledge of its material details, thereby precluding later challenges based on alleged deviations from the partnership agreement.
Topics
Practice areas
Questions Presented
- Whether genuine issues of material fact existed as to whether Schmidt and Melcher consented to and ratified the trustee's liquidation and distribution plan.
- Whether the plaintiffs' consent or ratification was effective despite their contention that the liquidation plan deviated from the Partnership Agreement.
- Whether the defendants were entitled to summary judgment based on the plaintiffs' consent and ratification.
Holdings
- A trust beneficiary's express or implied consent to a trustee's act, combined with full knowledge of all material particulars and circumstances, may operate through waiver or estoppel to preclude a later challenge to the act.
- The plaintiffs expressly consented to the liquidation and distribution plan by signing documents accepting the proposed distributions.
- The plaintiffs had full knowledge of the material details of the liquidation and distribution plan when they consented, so they could not later challenge the plan merely because it differed from the Partnership Agreement.
- Summary judgment for the defendants was proper because there was no genuine dispute of material fact concerning the plaintiffs' consent and ratification, and the defendants were entitled to judgment as a matter of law.
Key quotations
“In sum, consent or ratification by a trust beneficiary requires proof of: 1) express or implied consent to the trustee's action, and 2) full knowledge of all the material particulars and circumstances.” (¶ 11)
“Having considered all of the admissible evidence and argument submitted by the parties in the summary judgment proceedings, we find no disputed questions of material fact as to the appellants' consent to Killmer's actions, and conclude, as a matter of law, that the appellees were entitled to judgment. Affirmed.” (¶ 18)
Factual background
Triple B Limited Partnership 1998B was formed to own, manage, develop, and exploit oil and gas interests. After disputes arose among the partners, they unanimously voted to dissolve and liquidate the partnership and appointed Karl Killmer as liquidating trustee. Killmer circulated a detailed liquidation and distribution proposal; Schmidt signed a ballot approving it, and Melcher later agreed in a settlement to accept distributions according to the same plan. After the partnership was liquidated and its assets distributed, the plaintiffs claimed that the distributions deviated from the Partnership Agreement and sued the defendants.
Procedural history
The plaintiffs filed suit on July 8, 2003. The district court initially denied a motion for summary judgment in September 2004 because the record did not establish whether the distributions conformed to the trustee's representations. After further discovery, the court granted a renewed summary judgment motion on December 22, 2005, finding that the plaintiffs had received the distributions represented to them and had ratified and consented to any deviations from the Partnership Agreement. Judgment was entered on January 12, 2006, and the Wyoming Supreme Court affirmed.