Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-88-01793/USCOURTS-ca10-88-01793-0/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 

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UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

WILLIAM F. COLLINS, JR.: ) 

H. MAX HEDGES: and TERRANCE ) 

W. MANGAN, all individuals, ) 

suing on behalf of themselves ) 

and all other limited partners ) 

of GRAND PARK DEVELOPMENT CO., ) 

LTD.: GRAND PARK HOLDING ) 

COMPANY, LTD.: and THREE GRAND) 

PARK LIMITED PARTNERSHIP, all ) 

Oklahoma limited partnerships: ) 

GRAND PARK DEVELOPMENT CO., ) 

LTD.: GRAND PARK HOLDING ) 

COMPANY, LTD.: and THREE GRAND) 

PARK LIMITED PARTNERSHIP, ) 

Plaintiffs-Appellants, 

v. 

WALTER A. NASHERT, JR., an 

individual: WALTER NASHERT 

& SONS, INC., an Oklahoma 

corporation: and NASHERT 

DEVELOPMENT, INC., an 

Oklahoma corporation, 

Defendants-Appellees. 

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AUa B fSi. 

ROBER'l L, HOECKER 

CJerk 

No. 88-1793 

(D.C. No. CIV-87-688-P) 

(W.D. Okla.) 

ORDER AND JUDGMENT* 

Before McKAY, TACHA, and EBEL, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 88-1793 Document: 01019974408 Date Filed: 08/08/1989 Page: 1 
34(a}; 10th Cir. R. 34.1.9. The cause is therefore ordered 

submitted without oral argument. 

This appeal is from an order of the district court granting 

the defendants' motion for summary judgment on federal securities 

claims and dismissing pendent state claims for lack of 

jurisdiction. The plaintiffs argue on appeal that the limited 

partnership interests involved in this case are securities for the 

purposes of the federal securities laws and that therefore the 

district erred in granting summary judgment. We affirm. 

The plaintiffs are limited partners in three Oklahoma limited 

partnerships that were formed for the purpose of developing for 

commercial use land located in Oklahoma City, Oklahoma. The 

defendants are real estate developers who entered into these 

ventures as general partners for the purpose of developing the 

property involved. Each of the partnership agreements empowered 

the general partners unilaterally to manage the affairs of the 

partnerships and to exclude the limited partners from interfering 

with the conduct or control of the business. Although the 

language of the partnership agreements does not give the limited 

partners a say in the operation or management of the partnerships, 

the district court found that the limited partners nevertheless 

were significantly involved in both the formation and subsequent 

legal and business activities of the partnerships. 

Given the plaintiffs' activities in the partnerships' 

business, coupled with the fact that the plaintiffs participated 

in negotiating the terms of the partnership agreements and did not 

purchase their interests as a result of a public offering, we 

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Appellate Case: 88-1793 Document: 01019974408 Date Filed: 08/08/1989 Page: 2 
agree with the district court's determination that the limited 

partnership interests were not securities within the meaning of 

the federal securities laws. Although limited partnership 

interests in which the limited partners exercise no managerial 

role in the partnership affairs are generally held to be 

securities because they "involve[] investment 'in a common 

enterprise with profits to come solely from the efforts of 

others, 111 Mayer~ Oil Field Systems Corp., 721 F.2d 59, 65 (2d 

Cir. 1983) (quoting SEC~ W.J. Howey Co., 328 U.S. 293, 301 

(1986)), the plaintiffs' activities here clearly take this case 

out of the general rule. We therefore AFFIRM for substantially 

the reasons given by the district court. The mandate shall issue 

forthwith. 

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ENTERED FOR THE COURT 

Deanell Reece Tacha 

Circuit Judge 

Appellate Case: 88-1793 Document: 01019974408 Date Filed: 08/08/1989 Page: 3