Court Opinion

ID: 178240
Source: CourtListenerOpinion
Date Created: 2010-10-28 16:46:15+00
Date Added: 2024-06-11T17:25:44.349771
License: Public Domain

NOT PRECEDENTIAL

                    UNITED STATES COURT OF APPEALS
                         FOR THE THIRD CIRCUIT
                              _____________

                                   No. 09-3634
                                  _____________

                W.R. HUFF ASSET MANAGEMENT CO, L.L.C.;
                      KATO-SAN CORP.; DBC 1 CORP.,
                                               Appellants

                                         v.

                 THE WILLIAM SOROKA 1989 TRUST; KAYE
                WOLTMAN, as Successor Trustee to the William
                   Soroka 1989 Trust and Executor of the Estate
                  of William Soroka; THE WILLIAM SOROKA
                CHARITABLE TRUST; JOHN DOE TRUSTEES
              OF THE WILLIAM SOROKA CHARITABLE TRUST;
             THE WILLIAM SOROKA ADMINISTRATIVE TRUST;
              JOHN DOE TRUSTEES OF THE WILLIAM SOROKA
                           ADMINISTRATIVE TRUST,
                                _____________

                  On Appeal from the United States District Court
                            For the District of New Jersey
                               (D.C. No. 04-cv-03093)
                  District Judge: Honorable Katharine S. Hayden
                                   _____________

                  Submitted Under Third Circuit L.A.R. 34.1(a),
                               October 6, 2010

          BEFORE: FUENTES, JORDAN and ALDISERT, Circuit Judges

                          (Opinion Filed: October 28, 2010)
                                  _____________

                            OPINION OF THE COURT
                                _____________
FUENTES, Circuit Judge:

                                         1
       In 1984 William Soroka ("Soroka") and several other investors gave William Huff

money in return for an ownership stake in a limited partnership called W.R. Huff Asset

Management ("Huff"). The general and limited partners of Huff intended to create a

closed arrangement limited to friends and family. Accordingly, the 1984 partnership

agreement, amended when the partnership converted to a limited liability company in

1994, contains several provisions designed to limit members' ability to transfer their

interests. The parties dispute the meaning and effect of these provisions.

       After a three-day bench trial, the District Court entered judgment in favor of

Appellees—the executor of Soroka's estate, and the trusts Soroka created and their

trustees. Later, in a separate opinion and order, the District Court granted Appellees'

Motion to Amend Judgment to Include Prejudgment Interest. Huff and its two general

managers, Kato-San Corporation and DBC I Corporation, appeal from both decisions.

       The District Court had jurisdiction pursuant to 28 U.S.C. § 1332 and we have

appellate jurisdiction pursuant to 28 U.S.C. § 1291. On the appeal of a bench trial, we

review a district court's findings of fact for clear error and its conclusions of law de novo.

McCutcheon v. America's Servicing Co., 560 F.3d 143, 147 (3d Cir. 2009). We review

the District Court's grant of equitable relief under an abuse of discretion standard. See

James v. Richman, 547 F.3d 214, 217 (3d Cir. 2008); Commodity Futures Trading

Comm'n v. Am. Metals Exch. Corp., 991 F.2d 71, 76 (3d Cir. 1993).

       Huff asserts that the District Court erred in four primary respects: (1) it

erroneously concluded that the only way to remedy the breach that occurred when Soroka

attempted to transfer his interest was to void the attempted transfer; (2) its interpretation

                                              2
of the partnership agreement failed to acknowledge that Soroka's attempted transfer

triggered Huff's right to redeem his interest; (3) it was wrong to conclude that the

partnership agreement created a special post-mortem status in which Soroka's interest

was not transferred upon his death, but instead controlled by his executor; and (4) it

erroneously granted Appellees' Motion to Amend Judgment to Include Prejudgment

Interest.

        After a careful review of the record and the parties' arguments, we find no basis

for disturbing either of the District Court's opinions. The District Court's decisions

properly put the parties in exactly the position they would have been in had Soroka not

unsuccessfully attempted to transfer his interest to a charitable trust.1 Therefore, we will

affirm the amended judgment for the same reasons set forth in the record.

1
   For ownership of Soroka's interest in Huff to have been transferred, the requirements of §§ 8.1(B), 8.2(A), and
8.3(D) must have been met. Those requirements clearly were not met at anytime—in 1999, upon Soroka's death, or
after his death. So no valid transfer of Soroka's interest ever occurred.

                                                        3