No. 85-631 INTHE SUPREME COURT OF THE STATE OF MONTANA 1986

FELTON INVESTMENT GROUP, Plaintiff and Appellant,

-vsWAYNE E. TAURMAN, DERROLD 0. PAIGE, Defendants and Respondents.



## ............................ WAYNE E. TAURMAN and DERROLD 0. PAIGE, Plaintiffs and Respondents,

-vsFELTON INVESTMENT GROUP, Defendant and Appellant.

APPEAL FROM: District Court of theFourth Judicial District, In and forthe County of Missoula, The Honorable Jack L. Green, Judge presiding. COUNSEL OF RECORD: For Appellant: Boone, Karlberg & Haddon; Sam E. Haddon, Missoula, Montana For Respondent: Datsopoulos, MacDonald & Lind; William K. VanCanagan, Missoula, Montana

Filed: Submitted on Briefs: April 17, 1986 Decided: July 9, 1986



# k357,&# ClerkMr. Justice Frank B. Morrison, Jr. delivered the Opinion of theCourt.

Felton Investment Group (FIG) appeals the August 20, 1985, order of the Fourth JudicialDistrict 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 investmentstobemade. 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 pertinentpart: 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 48 simple interest; that the Group shall have a period of one year in which to purchase the stock of suchmember. Resolved that involuntary termination caused by disability, death, or retirement shall not affect suchmember's interest. Taurman was a charter member of FIG. Paige joined in 1970. They participated in FIG'S annual meetings and gavetheir 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 situationwith an attorney who advised thepartners 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 isdischarged for misconduct, his interest shall be returned in an amount equal to contributionspaid into the fund plus 4 48 annual interest. InDecember of 1977,Feltonpresented aproposed 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 1979meeting. 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 employedby FCCuntil July of 1980. Paigebelieved himself to still be amember of FIG because hewas stillemployed by FCC. Approximatelyoneyearafter 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, FCChad decided to go non-union and the job in Aberdeen was for non-union personnel. Union members would be fined $5,000by their union forworking a non-union project. After considering the choices overnight, Taurman told Felton he would not be quitting the union. Taurman's employmentwith FCC terminatedaweek or two later. Paige was presented with the same decision. He, too, decided to remain union and losthis jobwith 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, Taurmanwas offered a checkby FIG in an amount equal tohis 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 sumspreviously 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 liabilitiesand the remainder divided between the partners. Following a bench trial, judgmentwasentered forTaurman and Paige,awarding them apro rata share in thepartnership'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 unsupportedby 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 RelationsAct by a non-party to the litigation the subjectmatter ofwhich

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 provisionsof 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 dissolutionand the rights of the partnership and the former partnersupon such dissolution? The District Court did not adopt Taurman's and Paige's findings of fact and conclusions of law completelyverbatim. The judge's editing of the findings and his selectiveuse 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 ofWest (Mont. 1983), 661P.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

errorspinpointed by FIG affect the final result of the case.As a whole, the findings are supported by substantial credible evidence and will not be overturnedby this Court. Cameron v. Cameron (1978), 179Mont. 219, 229, 587 P.2d 939, 945. The trial judgedid not refer to the stipulationentered 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 Paigewas not a member of FIG between December 5,1978and July 31, 1980. Clearly, whether Paige remained a member during that time period is a factual dispute,resolution ofwhich is integral to Paige's case. It

wasproperly left for resolutionby the trial judge. The only specific requirement for membership in FIG was employment with FCC. "Pre-IncorporationMinutes" 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 employmentor any term or conditionof employment to encourageordiscourage membership in any labor organization. 29 U.S.C. S 158(a)(3).Such a discharge iswrongful 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 fromFCC absent allegationsofmisconduct? The trial judge answered this question in the affirmative. Again,we findno error as there is substantial credible evidence to support that determination. Both individualsworked for FCC for a substantial number ofyears. Numerous people associated with FCC testified that neither individual was aproblem employee. Their employment,or lack thereof, hinged completely on their willingness to disassociatewith theirunion. Finally,we find no error in the trial court's decision that pursuant to $ 35-10-401(1)

## ,MCA, Taurman and Paigemust 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 thepartners in relation to the partnership shallbe 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. Italso covers involuntary termination causedby disability,death or retirement. However, there is nothing in the partnership agreement concerning the effect of a partner's involuntary termination fromFCCabsentmisconduct. Numerous members of FIG, including its controller,testified that this contingency was not covered in FIG'S partnershipagreement. 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

# ..

# . Taurmanand Paige are entitled to receive their pro rata shares of the fair market value of the assets of FIG as of thedate their Affirmed. employmentwi

We Concur: 

### /

Chief Justice



### /Justices