Palmer v. Mellen
74 N.E.3d 1034
| Ill. App. Ct. | 2017Background
- Family land trust/partnership created in 1977 holding 450 acres; 26 partners (plaintiffs hold 83.33% of shares; defendants hold 16.67%).
- Partnership agreement governs farming; trustee and five-member management committee administer partnership; agreement generally requires unanimous consent for major actions.
- By 2012-2014, relations deteriorated: defendants allegedly refused to participate, harassed other partners, rejected offers and refused correspondence/meetings; majority sought sale to fund buyouts.
- Multiple appraisals valued the property roughly $2.6–3.25 million; majority voted to sell at public auction; defendants opposed and proposed appraisal-based offers.
- Plaintiffs sued for judicial dissolution under section 801(5) of the Uniform Partnership Act and requested supervised winding up and sale; trial court granted summary judgment dissolving the partnership and ordered sale at public auction by a named auctioneer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether summary judgment dissolution under 805 ILCS 206/801(5) was proper | Majority: partners’ conduct and irreparable relationship breakdown made continuation impracticable; economic purpose frustrated | Defendants: partnership still profitable; factual disputes preclude summary judgment | Court: affirmed — evidence showed conduct making partnership not reasonably practicable to continue; summary judgment appropriate |
| Whether the partnership agreement barred judicial dissolution/sale | Plaintiffs: Act permits judicial dissolution despite agreement; some agreement provisions don’t permit a forced buyout | Defendants: agreement requires unanimous consent for sale and provides buyout procedures, so court order circumvents agreement | Court: affirmed — statutory nonwaivable provisions (including §801(5) winding up) override contrary agreement terms |
| Whether trial court erred denying motion to strike plaintiffs’ affidavits (Ill. S. Ct. R.191) | Plaintiffs: affidavits show personal knowledge, specific facts of harassment, nonparticipation, meeting failures | Defendants: affidavits lack required particularity and admissible-fact detail | Court: affirmed — affidavits contained specific, material facts supporting dissolution; striking not required |
| Whether court abused discretion naming specific auctioneer | Plaintiffs: needed experienced auctioneer; prior contract/marketing work justified naming | Defendants: court should not appoint auctioneer sua sponte | Court: affirmed — appointment was supported by auctioneer’s experience and prior engagement; trustee could alternatively select another approved auctioneer |
Key Cases Cited
- Tembrina v. Simos, 208 Ill. App. 3d 652 (appellate court) (deteriorated partner relations can justify dissolution)
- Susman v. Cypress Venture, 114 Ill. App. 3d 668 (appellate court) (impracticability of beneficial business operation supports dissolution)
- Kirksey v. Grohmann, 754 N.W.2d 825 (S.D. 2008) (defining "reasonably practicable" and upholding dissolution where partner impasse prevented reasonable operation)
- Brennan v. Brennan Associates, 977 A.2d 107 (Conn. 2009) (irreparable partner relationship deterioration can justify dissociation/dissolution)
- Elementary School District 159 v. Schiller, 221 Ill. 2d 130 (Ill. 2006) (statutory interpretation: disjunctive "or" means alternatives)