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Law School Case Brief

Giles v. Giles Land Co., L.P. - 47 Kan. App. 2d 744, 279 P.3d 139 (2012)

Rule:

An irreparable deterioration of a relationship between partners is a valid basis to order dissolution, and, therefore, is a valid basis for the alternative remedy of dissociation.

Facts:

Kelly Giles (Kelly), a general partner in a family farming partnership, Giles Land Company, L.P., filed suit against the partnership and his partners, arguing that he had not been provided access to partnership books and records. The partnership had held a meeting to discuss converting the partnership into a limited liability company. Kelly was unable to attend the meeting, but he later received a letter explaining the family's interest in converting the partnership to a limited liability company. Kelly did not sign the articles of organization for the proposed conversion, and instead, had his attorney request production of all of the partnership's books and records for his review. Kelly was not satisfied with the records that the partnership had provided, which was why he filed suit asking the court to force the partnership to turn over all of the documents he was requesting. In response, the defendants filed an answer and a counterclaim seeking to dissociate Kelly from the partnership. The trial court held that Kelly was not denied access to the partnership books and records. Kelly did not appeal from this decision. However, the trial court also held that Kelly should be dissociated from the partnership. Kelly, however, contended that the trial court's ruling regarding his dissociation from the partnership was improper. 

Issue:

Was disassociation from the partnership proper?

Answer:

Yes

Conclusion:

The Court affirmed the decision of the trial court. It held that dissociation of a partner was proper under Kan. Stat. Ann. § 56a-601(e)(3) based on an irreparable deterioration of the relationship between the partners in a family business, there was a lack of communication between the partners due to distrust, and the dissociated partner's statements showed a naked ambition to control the partnership. The partner could have also been dissociated under Kan. Stat. Ann. § 56a-601(e)(1) because of wrongful conduct based on threats and berating statements.

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