Opinion ID: 2099317
Heading Depth: 3
Heading Rank: 2

Heading: Dissociation

Text: Della Ratta also takes issue with the trial court's decision to dissociate him from Spa GP. He does not challenge the trial court's factual findings, but claims that the trial court erred by ordering his dissociation from the partnership based on his management of Bay View. He contends that the court inappropriately pierce[d] the corporate veil because it was obvious that the trial judge was extremely upset about Mr. Della Ratta's diversion of Bay View cash to DR Palm Beach,[ [15] ] CMC, DRI and himself in repayment for advances they made to cover cost overruns on the construction of the Maresol condominiums ... [as well as] Mr. Della Ratta's refusal to put Maresol's top floor units on the market. As this is conduct associated with Bay View, Della Ratta asserts that it cannot serve as the basis for the trial court's decision and must be disregarded. The third ground for dissolution, according to Della Ratta, was his sloppy bookkeeping, which he insists is cancelled out by Dyas's neglect of his own duties. Della Ratta concludes that the nullification of these three reasons removes any grounds that could support the order of dissolution. The trial court ordered Della Ratta's dissociation from Spa GP pursuant to CA Section 9A-601(5)(iii) [16] because it determined that Della Ratta's actions made it not reasonably practicable to carry on the business in partnership with him. Della Ratta's wholly owned company, CMC, managed both the Sea Bay and the New Hotel, and CMC's vice president testified that the management company loaned $520,262 from the Sea Bay Operating Account to the New Hotel construction, in contravention of the management agreement between CMC and Spa GP. An additional violation of the agreement came in the form of numerous checks issued by CMC to Spa GP that bore no notation of purpose, or merely noted `loan' or `advance.' Della Ratta, 183 Md.App. at 365, 961 A.2d at 641. Finally, the parties stipulated that CMC violated its management contract when it improperly paid itself $580,000 for executive office expenses. Even if the aforementioned incidents constituted nothing more than negligence, Della Ratta's capital calls of December 10, 2004 were, in fact, malicious. The CSA succinctly summarized the substance of the capital calls as follows: Writing to Spa as President of CMC, Della Ratta claimed $1,485,650.04 in cash advances to Spa, including interest, for operating losses and CMC claimed $640,920, including interest, to be due on lease financing for furniture, fixtures, and equipment for [Sea Bay]. Writing to Spa as president of DRI, Della Ratta claimed $1,439,110, including interest, for cash advances. Writing to Spa for his own account, Della Ratta claimed $1,967,030.97, including interest, for cash advances. Each claim demanded payment on or before January 14, 2005. Then, writing as general partner of Spa, Della Ratta called for capital by January 14, 2005, of $5,532,711, of which Dyas's share would be $ 2,766,355.50.... In addition, Della Ratta claimed on behalf of Spa, payment by Dyas, by January 14, 2005, of $798,047.50, representing fifty percent of $1,596,095, the projected cost overrun on the New Hotel. Dyas was also requested to pay a total of $225,146.50 in monthly payments from December 2004 through April 2005 for projected cash requirements of the two hotels. [One of these New Hotel capital calls was issued when the hotel was still under construction and had a stop work order due to DRI's failure to cure various defects found by the inspectors.] Della Ratta, 183 Md.App. at 365-66, 961 A.2d at 641-42. The trial court found that the issuance of these capital calls occurred after Della Ratta had taken steps to deprive Bay View, and thus Dyas, of funds that would have been necessary to meet those obligations. Thus, the trial court concluded, the call letters were issued in bad faith. While Della Ratta surreptitiously emptied Bay View's accounts, it was to Spa GP that he issued the call letters at a time when he knew they could not be satisfied, in an attempt to squeeze out Dyas without following the proper legal procedures. [17] In sum, the trial court's evidentiary support for dissociation related to Della Ratta's activities while a partner in Spa GP. The record contains sufficient evidence of Della Ratta's inappropriate conduct to support the trial court's conclusion that it was not reasonably practicable for Spa GP to continue with Della Ratta as a partner. Thus, the trial court did not err in ordering Della Ratta's dissociation from Spa GP.