Knudson v. Kyllo
819 N.W.2d 511
| N.D. | 2012Background
- Tri-K Farms was formed as an equal partnership in 1994 by Kyllo and Knudson, with no written partnership agreement.
- Knudson managed Tri-K Farms’ finances, Farm Service Agency programs, cash rents, and records; Kyllo contributed land and other assets.
- By the mid-1990s, they farmed about 4,000 acres; Knudson owned more land (four quarters) than Kyllo (three quarters).
- The Fougner land was purchased by Knudson (2005) with partnership funds; bin site improvements were made on Kyllo’s land (2004–2005).
- In 2004–2006, a land/equipment lease for the bin site stated equal ownership of bins and equipment and allowed shared use; an unsigned dissolution agreement was prepared in 2006 but not signed.
- In 2008 Knudson sued Kyllo seeking dissolution, accounting, and other relief, while Kyllo counterclaimed for usurpation of a partnership opportunity related to the Fougner land.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of the unsigned dissolution agreement | Knudson contends the unsigned agreement is valid and binding. | Kyllo argues the unsigned writing cannot form a binding contract under the statute of frauds. | Unsigned agreement not a valid contract; not enforceable. |
| Forcible ejectment from bin site | Knudson asserts Kyllo forcibly ejected him from the bin site. | Kyllo asserts there was no forcible exclusion; at most an arm’s-length transaction. | No forcible ejection; Knudson had no enforceable possessory interest in the bin site. |
| Usurpation of a partnership opportunity (Fougner land) | Kyllo claims Knudson usurped a partnership opportunity by purchasing Fougner land for himself. | Knudson did not breach fiduciary duties; purchase was outside partnership scope. | Usurpation issue not fully addressed below; reversed and remanded for fiduciary-duty analysis. |
| Valuation of partnership property and related assets | Knudson challenges the values assigned to items including the bin site and equipment. | Kyllo defends the district court’s valuations as supported by the record. | valuations not clearly erroneous; affirmed. |
Key Cases Cited
- Livingood v. Balsdon, 722 N.W.2d 716 (ND 2006) (forcible ejectment standard—threats or presence of force suffice)
- Sandvick v. LaCrosse, 747 N.W.2d 519 (ND 2008) (scope of fiduciary duties depends on partnership agreement language)
- Curtis Constr. Co., Inc. v. American Steel Span, Inc., 707 N.W.2d 68 (ND 2005) (contract formation and statute of frauds; performance considerations)
- Felco, Inc. v. Doug’s North Hill Bottle Shop, Inc., 579 N.W.2d 576 (ND 1998) (part performance may remove a contract from the statute of frauds)
- Hogan v. Hogan, 665 N.W.2d 672 (ND 2003) (clear error standard for district court factual findings)
- Estate of Clemetson, 812 N.W.2d 888 (ND 2012) (credibility of testimony—uncontradicted but not credible is not undisputed)