Opinion ID: 2622577
Heading Depth: 3
Heading Rank: 3

Heading: The Joint Venture Breached Its Fiduciary Duty to Disclose the Status of the Exxon Claim During the Partitioning.

Text: The Corporations assert that the Joint Venture owed them a fiduciary duty of disclosure regarding the Exxon oil spill claim and that the Joint Venture's duty survived the Corporations' withdrawal from the Joint Venture. The Corporations' argument is persuasive. Joint venturers owe each other a fiduciary duty during the existence of the venture. [13] We have previously held that a joint venturer may breach a duty it owed during the term of the venture even after the venture has expired. [14] In Ahtna, Inc. v. Ebasco Constructors, Inc ., Ebasco argued that its fiduciary duty to file a timely claim for compensation on Ahtna's behalf was extinguished at the end of the business venture. [15] We called that argument misplaced, holding that if the  obligation ... arose during the term of the [joint venture], it matters not that Ebasco's breach occurred after the [joint venture] expired. [16] We have not previously decided whether members of a dissolving joint venture continue to owe each other a fiduciary's duty of disclosure from the moment of dissolution through the time when the venture finally winds up its affairs. [17] We hold now that they do. The process of ending a joint venture relationship only begins with dissolution. At that point, the parties no longer pursue business interests as one entity. But withdrawal of a member or some other dissolution-triggering event does not end the relationship among the joint venturers because the process of winding up includes the accounting and division of the venture's assets and debts. During the winding up, joint venturers continue to owe a fiduciary duty to each other until the process is complete. [18] This duty is especially relevant with respect to the disposition or management of joint venture assets. [19] Here then, the Joint Venture owed the Corporations a duty of disclosure during the period from the Corporations' withdrawal in April 1989 until the settlement agreement and release were executed in July 1991. During that time, while the Joint Venture and the Corporations were negotiating over the partitioning of land to the Corporations, the Joint Venture stood in the position of a trustee with respect to the venture's assets because the Corporations were no longer members of the joint venture but were joint owners of the assets. The Corporations were entitled to an accounting under the agreement, as the Joint Venture acknowledges; but the Corporations were also entitled to disclosure of significant events and management decisions affecting the unpartitioned assets. The facts of this case illustrate the need to hold joint venturers to a fiduciary's duty of disclosure during the entire dissolution process: here the process of accounting and partitioning the land took over two years to complete. To end the Joint Venture's fiduciary obligation at the moment of dissolution would invite complacency and sharp dealing during the process of partitioning and accounting. [20] In sum, the Joint Venture owed the Corporations a fiduciary's duty of disclosure regarding the status of Joint Venture assets  including the Exxon claim  during the period following the Corporations' withdrawal but prior to the completion of the partitioning process. Accordingly, unless the record conclusively establishes that the Joint Venture discharged its fiduciary duty, the Joint Venture was not entitled to summary judgment on the Corporations' causes of action for misrepresentation and unjust enrichment. The Corporations claim that the Joint Venture's silence in the face of its affirmative duty to disclose the status of the Exxon claim amounts to misrepresentation. The superior court held that there was no evidence that the Corporations justifiably relied on the Joint Venture's alleged representations (or silence). But the superior court's decision applied the wrong standard. Where, as here, one party has an affirmative duty to disclose information material to a transaction, that party's silence will generally not support summary judgment. [21] The Corporations also claim that the Joint Venture was unjustly enriched by its retention of the entire Exxon claim. The superior court held that because unjust enrichment is not in and of itself a theory of recovery and the Corporations had no viable cause of action, their unjust enrichment claim failed. The Corporations' challenge of this ruling has merit. We recently stated: The general principle of the doctrine of unjust enrichment is that one person should not be permitted unjustly to enrich himself at [the] expense of another, but should be required to make restitution of or for property or benefits received, retained or appropriated. As its definition indicates, the doctrine of unjust enrichment is predicated on the theory of restitution: When a party unjustly receives, retains, or appropriates property or a benefit, the party should repay the source of the property or benefit.[ [22] ] And we have also made it clear that we will generally treat actions brought upon the theories of unjust enrichment, quasi-contract, contracts implied in law and quantum meruit as essentially the same. [23] Here, the Corporations claimed that they had superior rights to their proportionate interests in the Exxon claim. And by presenting evidence that the Joint Venture received and retained the Corporations' proportionate interests in the Exxon claim, that the Joint Venture was aware of these interests, and that the Joint Venture's retention of the interests could be considered unjust, the Corporations raised a material issue of fact as to whether the Joint Venture was unjustly enriched. [24] Given this factual dispute, summary judgment should not have been granted to the Joint Venture on the cause of action for unjust enrichment. [25]