Felton Investment Group v. Taurman ( 1986 )

No. 85-631
I N THE SUPREME COURT O THE STATE O MONTANA
F F
1986
FELTON INVESTMENT GROUP,
P l a i n t i f f and A p p e l l a n t ,
-vs-
WAYNE E . TAURMAN, DERROLD 0 . PAIGE,
D e f e n d a n t s and Respondents.
............................
WAYNE E . TAURMAN and DERROLD 0 . PAIGE,
P l a i n t i f f s and Respondents,
-vs-
FELTON INVESTMENT GROUP,
Defendant and A p p e l l a n t .
APPEAL FROM: D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t ,
I n and f o r t h e County o f M i s s o u l a ,
The Honorable J a c k L. Green, Judge p r e s i d i n g .
COUNSEL O RECORD:
F
For Appellant:
Boone, K a r l b e r g & Haddon; Sam E. Haddon, M i s s o u l a ,
Montana
F o r Respondent:
D a t s o p o u l o s , MacDonald & Lind; W i l l i a m K . VanCanagan,
M i s s o u l a , Montana
S u b m i t t e d on B r i e f s : A p r i l 1 7 , 1986
Decided: July 9 , 1986
Filed:
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Clerk
Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of
the Court.
Felton Investment Group (FIG) appeals the August 20,
1985, order of the Fourth Judicial District Court, County of
Missoula, holding that Wayne Taurman (Taurman), and Derrold
Paige (Paige) are entitled to receive their pro rata shares
of the fair market value of the assets of FIG as of the date
their employment with Felton Construction Company (FCC)
ended. We affirm.
John Felton is the originator and president of FCC. In
1969 he formed FIG. The purpose of FIG is to provide
retirement benefits to certain deserving employees of FCC.
Each member of FIG makes weekly contributions which are
automatically deducted from the paycheck. The money is then
combined and invested. The partners must all agree on the
investments to be made.
Initially, FIG was operated as a general partnership,
with the only guidelines contained in oral agreements. The
October 28, 1969, "Pre-Incorporation Minutes'' was the first
written document reflecting the purpose behind and terms of
FIG. Those minutes state in pertinent part:
ADMITTANCE: Resolved that admittance is available
to anyone employed by Felton Construction Company
...
EMPLOYMENT: ...
Resolved that if a member ceases employment or is
discharged for misconduct, his interest shall be
returned in an amount equal to contributions paid
into the fund plus 4 8 simple interest; that the
Group shall have a period of one year in which to
purchase the stock of such member.
Resolved that involuntary termination caused by
disability, death, or retirement shall not affect
such member's interest.
Taurman was a charter member of FIG. Paige joined in
1970. They participated in FIG'S annual meetings and gave
their approval to all decisions until 1974. At that time
Felton proposed changing FIG into a limited partnership with
Felton as the general and controlling partner. Several of
the other partners expressed dissatisfaction with the
potential loss of control over their assets. At Felton's
suggestion, they discussed the situation with an attorney who
advised the partners not to enter into a limited partnership.
Taurman and Paige informed Felton that they did not approve
of his plan and would not agree to form a limited
partnership.
Felton continued developing his limited partnership
concept. FIG continued as a general partnership. Annual
meetings were held. Minutes were taken and copies sent to
each partner. A summary of resolutions adopted through 1974
included the following:
7. In the event of termination of employment,
except temporary layoff, for a period of 2 weeks,
the Group shall vote to eject such persons from
membership.
8. If a member ceases employment or is discharged
for misconduct, his interest shall be returned in
an amount equal to contributions paid into the fund
plus 4 4 8 annual interest.
In December of 1977, Felton presented a proposed limited
partnership agreement to the partners for their discussion
and comment. A proposed draft was accepted, as revised, and
was subsequently given to an attorney for preparation of a
preliminary draft. The attorney presented the preliminary
draft at the December 1979 meeting.
In the interim, on December 5, 1978, Paige determined
his investment in FIG to be in jeopardy due to the proposed
limited partnership agreement and ceased contributing to the
fund. However, he continued to be employed by FCC until July
of 1980. Paige believed himself to still be a member of FIG
because he was still employed by FCC. Approximately one year
after ceasing to contribute to FIG, Paige received a check
from FIG reflecting his contributions to date and interest,
$15,040.08. Not wishing to lose his rights in the
partnership, Paige refused to endorse and cash the check.
Taurman continued investing in FIG until July of 1980.
At that time, he was employed by FCC in Sunburst, Montana.
Taurman was told by Felton that once the Sunburst job was
completed, there would be a job for him in Aberdeen,
Washington. However, FCC had decided to go non-union and the
job in Aberdeen was for non-union personnel. Union members
would be fined $5,000 by their union for working a non-union
project. After considering the choices overnight, Taurman
told Felton he would not be quitting the union. Taurman's
employment with FCC terminated a week or two later.
Paige was presented with the same decision. He, too,
decided to remain union and lost his job with FCC.
Subsequent to Taurman's and Paige's terminations, a
meeting of FIG was held and its members voted to expel
Taurman from the group. Following his expulsion, Taurman was
offered a check by FIG in an amount equal to his contribution
plus interest, $21,448.98. Taurman refused to endorse and
cash the check.
FIG filed a complaint December 2, 1981, requesting that
Taurman, Paige, and a third individual, Thomas Wackler, be
ordered to accept the sums previously offered in satisfaction
of their entire claims in the partnership. Also on December
2, 1981, Taurman and Paige filed a complaint against FIG
seeking the judicial dissolution of FIG; a formal accounting
of FIG; and an order that the assets of FIG be sold, applied
in full to partnership liabilities and the remainder divided
between the partners. Following a bench trial, judgment was
entered for Taurman and Paige, awarding them a pro rata share
in the partnership's assets.
FIG appeals, raising the following issues:
1. Did the District Court err in adopting verbatim
findings of fact and conclusions of law proposed by Taurman
and Paige which were unsupported by the record, inconsistent
with the evidence and contrary to stipulations of the
parties?
2. Did the District Court err in basing its decision
upon an alleged violation of the National Labor Relations Act
by a non-party to the litigation the subject matter of which
was beyond the jurisdiction of the court to pass upon and
further was barred by the applicable federal statute of
limitations?
3. Did the District Court err in holding that the
provisions of the Uniform Partnership Act applicable to intra
se relationships of partners in an ongoing partnership,
§ 35-10-401, MCA, controlled a case which involved
partnership dissolution and the rights of the partnership and
the former partners upon such dissolution?
The District Court did not adopt Taurman's and Paige's
findings of fact and conclusions of law completely verbatim.
The judge's editing of the findings and his selective use of
the conclusions, as well as his reliance on his own
conclusions, evidence "the thoughtful consideration of the
judge deciding the case. . ." In re Marriage of West (Mont.
1983), 661 P.2d 1289, 1290, 40 St.Rep. 573, 575.
There are errors. Specifically, Paige was not employed
at Sunburst, Montana, at the time he decided not to quit the
union. However, neither this error nor other insignificant
errors pinpointed by FIG affect the final result of the case.
As a whole, the findings are supported by substantial
credible evidence and will not be overturned by this Court.
Cameron v. Cameron (1978), 179 Mont. 219, 229, 587 P.2d 939,
945.
The trial judge did not refer to the stipulation entered
into by the partners on December 3, 1984. That stipulation
states that Paige was a member of FIG from 1970 through
December 5, 1978. However, as Paige contends on appeal, the
stipulation does not state that Paige was not a member of FIG
between December 5, 1978 and July 31, 1980. Clearly, whether
Paige remained a member during that time period is a factual
dispute, resolution of which is integral to Paige's case. It
was properly left for resolution by the trial judge.
The only specific requirement for membership in FIG was
employment with FCC. "Pre-Incorporation Minutes" of October
9, 1969. Paige remained employed by FCC until July 1980.
Therefore, we find no error in the trial judge's
determination that Paige remained a member of FIG until that
time .
FIG also objects to the trial judge's reliance on the
National Labor Relations Act (Act) in deciding this case.
The Act was referred to solely to help determine a primary
issue of the case, whether Taurman and Paige were
involuntarily terminated from FCC without allegations of
misconduct. The Act provides that a wrongful discharge from
employment occurs when one is discharged for supporting a
union.
It shall be an unfair labor practice for an
employer - (3) by discrimination in regard to hire
or tenure of employment or any term or condition of
employment to encourage or discourage membership in
any labor organization.
29 U.S.C. S 158(a) (3).
Such a discharge is wrongful regardless the employer or
location of employment. FCC did not have to be a party for
this determination to be made as no adjudication or
enforcement of a claim against FCC pursuant to the Act
occurred. Rule 19(a), M.R.Civ.P. The Act was relied on
solely to answer a question of state law pertinent to the
issue raised - whether Taurman and Paige were involuntarily
terminated from FCC absent allegations of misconduct?
The trial judge answered this question in the
affirmative. Again, we find no error as there is substantial
credible evidence to support that determination. Both
individuals worked for FCC for a substantial number of years.
Numerous people associated with FCC testified that neither
individual was a problem employee. Their employment, or lack
thereof, hinged completely on their willingness to
disassociate with their union.
Finally, we find no error in the trial court's decision
that pursuant to $ 35-10-401 (1), MCA, Taurman and Paige must
be repaid their contributions into the partnership and
receive their pro rata share of the assets of the
partnership. Section 35-10-401, MCA, states at the outset
that "[tlhe rights and duties of the partners in relation to
the partnership shall be determined, subject to any agreement
between them, by the following rules. " The agreement
between the partners covers the voluntary termination of a
partner's employment with FCC as well as his discharge for
misconduct. It also covers involuntary termination caused by
disability, death or retirement. However, there is nothing
in the partnership agreement concerning the effect of a
partner's involuntary termination from FCC absent misconduct.
Numerous members of FIG, including its controller, testified
that this contingency was not covered in FIG'S partnership
agreement. Since the rights of partners of FIG who were
involuntarily terminated from FCC without cause were not
expressed in the agreement, S 35-10-401(1), MCA, controls.
(1) Each partner shall be repaid his contributions
whether by way of capital or advances to the
partnership property and share equally in the
profits and surplus remaining after all
liabilities, including those to partners, are
satisfied ...
Taurman and Paige are entitled to receive their pro rata
shares of the fair market value of the assets of FIG as of
the date their employment wi
Affirmed.
We Concur:
/
Chief Justice
/ Justices