Court Opinion

ID: 68799
Source: CourtListenerOpinion
Date Created: 2010-04-26 06:37:37+00
Date Added: 2024-06-11T09:39:20.152496
License: Public Domain

[DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS
                                                                      FILED
                       FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
                         ________________________ ELEVENTH CIRCUIT
                                                               Sept. 29, 2009
                                No. 09-11019                 THOMAS K. KAHN
                            Non-Argument Calendar                 CLERK
                          ________________________

                  D. C. Docket No. 07-01502-CV-ORL-22-GJK

R. W. KIRK,
Trustee for the R. W. Kirk IRA,

                                                                  Plaintiff-Appellee,

                                     versus

NASA CORRIDOR LIMITED PARTNERSHIP,
a South Carolina Limited Partnership,
FRANK KROBOTH,

                                                          Defendants-Appellants.

                          ________________________

                   Appeal from the United States District Court
                       for the Middle District of Florida
                        _________________________

                              (September 29, 2009)

Before CARNES, PRYOR and ANDERSON, Circuit Judges.

PER CURIAM:
       NASA Corridor Limited Partnership appeals the district court’s grant of

summary judgment to R.W. Kirk.1 NASA contends that the district court erred in

concluding that Kirk had a valid interest in three units of the NASA partnership.

                                                I.

       A case involving parties named Kirk and NASA brings to mind images of

space exploration. But the dispute in this case involves a far less celestial

subject—real estate. NASA Corridor, a South Carolina Limited Partnership, was

formed in 1987 as a real estate venture to purchase a tract of land in Brevard

County, Florida. Kirk held a mortgage on that property. In 1994 and 1995, NASA

fell upon hard times and defaulted on the mortgage by failing to make timely

payments. Facing the prospect of foreclosure, Kirk and NASA’s general partner,

John Snipes, negotiated an alternative arrangement to pay off the mortgage. In

exchange for the satisfaction of the mortgage, Snipes agreed to grant Kirk, among

other things, a forty-percent “limited partnership ownership interest” in NASA.2

The contract between Kirk and NASA stated that Kirk’s interest would be “non-

contributing, non-assessable and non-reducible.”

       1
         R.W. Kirk has brought this suit on behalf R.W. Kirk IRA, for which Kirk is the trustee.
For the sake of convenience, we will refer to them collectively as “Kirk” unless context requires
otherwise.
       2
       NASA also agreed to deed back a portion of the property to Kirk and to grant his
company, Kirk Realty, Inc., a two-year exclusive right to sell the property that NASA held.

                                                2
      In March 1995 Snipes sent Kirk a fax stating that he was assigning Kirk

ownership of three units of limited partnership interest in NASA. Snipes included

two documents along with the fax. The first document, which Snipes stated he was

including “for [Kirk’s] information,” was entitled “Assignment of Limited

Partnership Interest” (Assignment Form). The Assignment Form provided that

NASA “irrevocably assigns” Kirk an interest in three limited partnership units of

NASA. The Assignment Form noted that the assignment “is made in consideration

of the assumption by the Assignee of all obligations and covenants” of the

partnership. Snipe also faxed Kirk a document entitled “Assumption of

Partnership Obligations” (Assumption Form), which Snipes described in the fax as

“our standard form for transfer.” The Assumption Form provided that the assignee

(Kirk) “assumes and agrees to perform and comply with . . . all of the covenants of

the Partnership Agreement.” Before signing the Assumption Form, Kirk modified

it by adding language stating that the three assigned units “are non-contributing,

are not required to pay any expense whatsoever and are non-reducible.”

      Kirk later discovered that his three-unit interest in NASA represented only

an 8.5714% interest in the partnership, instead of the 40% interest he had expected.

Through his lawyer, Kirk requested that NASA make up the difference by either

assigning him more shares in NASA or deeding him an interest in the property.

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NASA opted for the second option and deeded Kirk a 31.4286% undivided interest

in the property. An agreement accompanying the deed provided that Kirk’s

interest in the property was “non-contributing and non-reducible” and that Kirk

“will not be required to advance any portion of the annual taxes or other expenses

of the property.”

      In September 2006 Kirk and NASA sold the property to Home Depot. By

then, Frank Kroboth had replaced Snipes as NASA’s general partner. Although

Kroboth paid Kirk $646,775.01 of the sales proceeds based on his 31.4286%

ownership interest in the property under the deed, Kroboth refused to pay Kirk a

distribution based on his interest in three units of NASA. According to Kroboth,

Kirk did not have a valid interest in NASA because the purported assignment of

the three units was void for not complying with NASA’s partnership agreement.

      Kirk filed this lawsuit seeking a declaratory judgment that he owned a three-

unit interest in NASA and was owed a $127,120.25 distribution based on that

interest. Both parties filed motions for summary judgment. The district court

granted Kirk’s motion and denied NASA’s. This is NASA’s appeal.

                                         II.

      We review de novo the district court’s grant of summary judgment. Brinson

v. Raytheon Co., 571 F.3d 1348, 1350 (11th Cir. 2009).

                                         4
      NASA contends that Kirk does not have a valid interest in the three units of

the partnership because the purported assignment by Snipes to Kirk violated the

terms of NASA’s partnership agreement. NASA raises three contentions, none of

which is convincing.

      We begin with NASA’s primary contention that the assignment was invalid

because Kirk altered the Assumption Form by inserting language stating that the

three assigned units “are non-contributing, are not required to pay any expense

whatsoever and are non-reducible.” NASA argues that inserting the language

violated NASA’s partnership agreement because it does authorize any units that

“would not be responsible for their share of the expenses of the Partnership.”

NASA also argues that the alteration violated several other provisions of the

partnership agreement regarding the rights and duties of limited partners.

      Those arguments rely on the faulty premise that the parties intended for Kirk

to become a limited partner. They did not. Instead, as the district court properly

recognized, “[t]he agreement between Kirk and Snipes effected a transfer of a

limited partnership interest, not the right of Kirk to become a limited partner.”

That distinction is made clear in the South Carolina Code, which provides:

      An assignment of a partnership interest does not dissolve a limited
      partnership or entitle the assignee to become or to exercise any rights
      of a partner. An assignment entitles the assignee to receive, to the
      extent assigned, only the distribution to which the assignor would be

                                           5
      entitled.

S.C. Code § 33-42-1220. The South Carolina Code also provides that unless a

partnership agreement states otherwise, “a partnership interest is assignable in

whole or part.” Id.

      Not only does NASA’s partnership agreement not prohibit assignment of

interests, it specifically authorizes them. We agree with the district court that the

parties never intended for Kirk to become a limited partner in NASA. Instead, they

intended to assign Kirk an interest in three limited-partnership units. That interest

would entitle Kirk to a share of the distribution when NASA sold the property.

That was what Kirk wanted, and that is what Snipes intended to transfer to him.

      NASA also argues that Kirk “changed the consideration” contemplated in

the Assignment Form when he altered the Assumption Form. We are unconvinced.

The agreement between the parties was that NASA would grant Kirk a forty-

percent interest in the partnership if Kirk would release the mortgage he held on

NASA’s property. The parties never intended for Kirk to give anything other than

that release. In fact, the agreement explicitly provided that Kirk’s interest would

be “non-contributing, non-assessable and non-reducible.” When Snipes sent Kirk

the Assumption Form, he described it as “our standard form for transfer.” Kirk

simply modified that standard form to reflect the specifics of their agreement. That

                                           6
was proper and did not alter the “consideration” Kirk was providing in exchange

for NASA’s assignment.

      NASA further argues that the assignment was invalid because it failed to

satisfy § 5.01 of the partnership agreement, but that provision applies only to

transactions by limited partners. Snipes was a general partner in NASA when he

assigned the three-unit interest to Kirk. Therefore, the restrictions in § 5.01 do not

apply. In a related argument, NASA asserts that Snipes never signed the

Assumption Form or returned a copy of his consent to the assignment to Kirk. As

the district court noted, however, NASA’s partnership agreement does not require

execution of a consent form in order to transfer a limited partnership interest.

Additionally, it is undisputed that after Kirk notified NASA that three units of the

partnership represented only a 8.5714% interest, NASA deeded Kirk a 31.4286%

interest in the property to make up the difference. That conduct demonstrates an

inference that NASA acknowledged Kirk’s ownership of a three-unit interest in the

partnership. See Consol. Res. Healthcare Fund I, Ltd. v. Fenelus, 853 So.2d 500,

503 (Fla. 4th DCA 2003) (“A contract may be binding on a party despite the

absence of a party’s signature. The object of a signature is to show mutuality or

assent, but these facts may be shown in other ways, for example, by the acts or

conduct of the parties.” (internal citation and quotation marks omitted)); Sosa v.

                                           7
Shearform Mfg., 784 So.2d 609 (Fla. 5th DCA 2001) (“Even if parties do not sign

a contract, they may be bound by the provisions of the contract, if the evidence

supports that they acted as if the provisions of the contract were in force.”).

      NASA closes with the last-ditch contention that Kirk’s claim is barred by the

statute of limitations. NASA concedes that it breached its agreement to assign

Kirk a three-unit interest in the partnership, but argues that breach occurred in

1995 (and therefore outside the statute of limitations). It argues that the breach

occurred in 1995 because that is when it purported to assign Kirk a three-unit

interest in the partnership, but that assignment allegedly failed because it was

prohibited by the partnership agreement. That argument is unconvincing. The

assignment could be, and was, made in 1995. As the district court properly

concluded, NASA breached the contract when it refused to pay Kirk his share of

the distribution based on his three-unit interest after the property was sold to Home

Depot. The breach therefore occurred on December 12, 2007.

      We agree with the district court that Kirk had a valid interest in three units of

NASA and that he was entitled to a distribution based on that interest.

      AFFIRMED.

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