Urbain v. Beierling
301 Mich. App. 114
| Mich. Ct. App. | 2013Background
- Partnership lasted ~4 months (Nov 2009–Feb 2010) without a written agreement.
- Beierling conceived an educational software business; Urbain and Clinesmith joined as partners.
- Initial equity based on time/work, later settled as equal partners with a $10,000 loan from Clinesmith.
- Website fiveeducation.com developed; venture delayed; partnership dissolved after Beierling/ousting Urbain.
- Beierling and Clinesmith formed a successor partnership; the original partnership realized a single sale of $69.99.
- Plaintiff filed multiple counts including breach of partnership, fiduciary duty, information duty, accounting, dissolution, conspiracy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can dissolution by any partner breach the partnership agreement? | Urbain contends dissolution violated MCL 449.18 and 449.9(3)(c). | UPA permits dissolution by express will of any partner when no term exists. | Dissolution by express will of a partner allowed; no breach. |
| Does dissolution give rise to fiduciary-duty damages? | Dissolution and ouster breached fiduciary duties. | Fiduciary duties arise from the partnership contract; dissolution cannot ground tort-based breach. | No fiduciary-duty breach; dissolution framed as contract-based. |
| Did defendants owe and render information about the partnership? | Defendants hid their intent and failed to provide data. | No concealment; information disclosed or provided upon request; duties satisfied. | No violation; duty to render information not shown. |
| Is an accounting/dissolution wind-up warranted where profits/assets are zero? | Formal accounting due; assets/profits should be partitioned. | Partnership had no assets or profits to distribute; accounting moot. | No damages; accounting/wind-up proper but no distribution. |
| Can civil conspiracy/concert of action stand without underlying tort? | Agreement among defendants to terminate partnership constitutes tortuous conduct. | Conspiracy requires underlying tort; none established here. | Claims fail; no underlying tort established. |
Key Cases Cited
- Band v. Livonia Assoc, 176 Mich App 95 (Mich. App. 1989) (fiduciary duties include full disclosure among partners)
- Gilroy v. Conway, 151 Mich App 628 (Mich. App. 1986) (upholds economic remedy for aggrieved partners; profits/ownership from contract)
- Rinke v. Rinke, 330 Mich 615 (Mich. 1951) (dissolution power when no term; express will clause)
- Holliday v. McKeiver, 156 Mich App 214 (Mich. App. 1986) (requires underlying tort for conspiracy/concert claims)
- Abel v. Eli Lilly & Co., 418 Mich 311 (Mich. 1984) (tort-based conspiracy requires underlying tort)
- Wanderski v. Nowakowski, 331 Mich 202 (Mich. 1951) (wind-up rules and asset distribution priorities)