Opinion ID: 212383
Heading Depth: 2
Heading Rank: 5

Heading: Wrongful Dissociation

Text: Defendants also appeal the jury's finding of wrongful dissociation, arguing they did not wrongfully dissociate from the joint venture because they were free to dissociate at will. This issue was first raised in Defendants' post-trial Rule 50(b) motions and reasserted in their Rule 59 motions for a new trial. We accordingly review the district court's denial of a new trial as to this issue for abuse of discretion. See M.D. Mark, Inc. v. Kerr-McGee Corp., 565 F.3d 753, 762 (10th Cir.2009). Under Kansas law, a partner or joint venturer may disassociate at will from the partnership or joint venture agreement without liability for damages caused by the disassociation unless (1) the dissociation is in breach of an express provision of the partnership agreement; or (2) in the case of a partnership for a definite term or particular undertaking, [the dissociation occurs] before the expiration of the term or the completion of the undertaking. Kan. Stat. Ann. 56a-602(b). Defendants argue that neither of these provisions is applicable in the instant case, as the partnership agreement included no definite terms regarding dissociation and an agreement to pursue a residential development is by its nature too speculative and uncertain to constitute an agreement for a definite term or particular undertaking. We hold that the district court did not abuse its discretion in denying Defendants' motion for a new trial as to this issue. The jury was presented with sufficient evidence to support a finding that the joint venture agreement was one for a particular undertaking and that Defendants dissociated from the joint venture before this undertaking was completed. The jury heard evidence that the parties agreed to develop a single residential development project on a particular piece of property and intended to sell this project within a conceivable time frame after completion. The fact the parties had not fully determined feasibility or finalized all details of the project does not mean, as Defendants argue, that they necessarily could not have formed a joint venture to pursue this particular development project. Nor do the authorities cited by Defendants mostly relating to agreements involving the continued management and operation of projects after developmentpersuade us that the agreement in this case was not one for a particular undertaking. Compare Miami Subs Corp. v. Murray Family Trust, 142 N.H. 501, 703 A.2d 1366, 1371 (1997) (holding that a joint venture to develop, finance, and operate an unknown number of restaurant franchises was not one for a particular undertaking), with Fischer v. Fischer, 197 S.W.3d 98, 105-06 (Ky.2006) (concluding that a partnership to buy, lease, and sell a designated tract of land was an agreement for a particular undertaking even though the parties had not agreed upon an exact date for accomplishment of the undertaking). We conclude the jury could reasonably have found this to be a joint venture for a particular undertaking, which had not been completed prior to Defendants' dissociation. We thus affirm the entry of judgment in favor of Plaintiffs on their wrongful dissociation claim. Defendants also contend they did not breach any fiduciary duties to Plaintiffs because they did not breach any of the limited fiduciary duties that remain following lawful dissociation from a joint venture. Because we uphold the jury's finding that the dissociation was wrongful, we likewise reject this argument and affirm the jury's finding of breach of fiduciary duty. See Goben, 676 P.2d at 97 (affirming a finding of breach of fiduciary duty where one party to a joint venture wrongfully ousted his partner and refused to account for joint venture profits and assets).