Ballou v. Walker
2017 MT 197
| Mont. | 2017Background
- Bonnie Ballou and William Walker (twins) were general and limited partners in L O Ranch Limited Partnership, owning ~53.25% (Walker) and ~46.70% (Ballou) respectively; partnership held ~14,800 acres.
- Pinnacle Bank loan financed buyouts of other siblings; Ballou and Walker personally named as borrowers; L O maintained a bank account accessible to both.
- Walker withdrew $22,891.38 from the partnership account (matching his percentage interest) without notifying Ballou or making a corresponding distribution; the district court found this constituted self-dealing and a “Withdrawal Event.”
- Ballou used written consents to remove Walker as general partner and attempted to expel him as a limited partner and pay $1.00 for his 53.25% interest; the court held removal as general partner converted him to a limited partner but the $1.00 buyout was invalid.
- The district court ordered dissolution of the partnership due to irreconcilable dysfunction but later judge awarded Ballou attorneys’ fees after a new judge heard post-judgment motions; appellate review addresses (1) whether the buyout provisions apply mandatorily after a Withdrawal Event and (2) whether the court lost jurisdiction to award fees by failing to rule within 60 days.
Issues
| Issue | Plaintiff's Argument (Ballou) | Defendant's Argument (Walker) | Held |
|---|---|---|---|
| Whether buyout provisions apply mandatorily after a Withdrawal Event | Ballou argued that removal converted Walker to a limited partner but she could expel/buy him out under the Agreement (including §16 buyout mechanics) | Walker argued he could remain a limited partner and that buyout under §16 requires the withdrawing partner to request it in writing | Court held §15.2 and §16 require the withdrawing partner’s interest to be valued and sold (mandatory buyout mechanism), reversing dissolution and remanding for valuation and buyout proceedings |
| Whether Ballou’s $1.00 tender was valid | Ballou relied on a contractual provision to fix liquidated damages at nominal sum | Walker argued the tender and provision were unconscionable and invalid | Court held the $1.00 buyout provision was unconscionable/void under Montana law and not enforceable |
| Whether judicial dissolution was necessary | Ballou argued partnership was dysfunctional and dissolution was warranted | Walker argued buyout procedures could remove him and cure the dysfunction without dissolution | Court held dissolution was unnecessary once buyout provisions apply; reversed dissolution order and allowed partnership to continue pending buyout valuation |
| Whether district court lost jurisdiction to award post-judgment attorneys’ fees by not ruling within 60 days | Ballou sought fees under Rule 54(d); court later awarded them | Walker argued Rule 59(e)/Rule 59(f) deems motions filed after judgment denied if not ruled within 60 days, divesting jurisdiction | Court held Rule 59 timing applied, the court lacked jurisdiction to award fees after the 60-day period (stay order did not extend the time), and reversed the attorneys’ fees award |
Key Cases Cited
- Total Indus. Plant Servs. v. Turner Indus. Grp., Ltd. Liab. Co., 368 Mont. 189 (2013) (standard of review for trial-court factual findings and law-of-the-case principles)
- Chase v. Bearpaw Ranch Ass’n., 331 Mont. 421 (2006) (post-judgment fee motions treated as motions to alter or amend; court must rule on whether to amend within 60 days)
- Associated Press v. Crofts, 321 Mont. 193 (2004) (Rule 59(e) deadlines are jurisdictional; motion deemed denied if not decided within 60 days)
- In re Estate of Bolinger, 292 Mont. 97 (1998) (partnership agreements governed by contract law)
- Whary v. Plum Creek Timberlands, L.P., 374 Mont. 266 (2014) (contract interpretation principles — plain language governs)
- Green v. Gerber, 369 Mont. 20 (2013) (distinction between jurisdictional limits and excess of authority)