Court Opinion

ID: 9581771
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:18:36.092041+00
Date Added: 2024-06-11T13:37:14.454023
License: Public Domain

ORME, Judge
(concurring):
I concur fully in Judge Jackson’s opinion, but wish to make two observations.
First, while the partnership agreement unambiguously provides that amounts paid by Crowther beyond his initial partnership contribution would entitle him to additional increments of ownership, I question that the parties ultimately intended that the amount advanced by Crowther to pay off the First Security obligation would be treated in this way. On the contrary, a secured note for this amount was given by Carter to Crowther, suggesting quite clearly that the parties intended that this transaction be treated outside the regular partnership arrangement. Instead of acquiring additional equity in the partnership, Crowther became Carter’s creditor. Upon default in payment of the note, Crowther was entitled to foreclose. Indeed, foreclosure was his primary claim in this action, with partnership dissolution the fallback.
While I think error was committed in not decreeing foreclosure, I see no error in the main opinion’s silence on this issue. Carter does not contend on appeal that foreclosure should have been granted instead of dissolution of the partnership. Indeed, he fared much better under the trial court’s approach because of the provisions in the partnership agreement permitting Carter’s reacquisition of Crowther’s interest. Nor has Crowther cross-appealed the denial of foreclosure, having correctly decided that by the time this appeal could be resolved, the reacquisition rights would have expired anyway.
Since no one is challenging the trial court’s decision to disregard the secured note from Carter to Crowther and to analyze the sums paid by Crowther to First Security with reference only to the partnership agreement, I am able to join the main opinion since the opinion correctly describes the treatment these sums were unambiguously to be accorded under the partnership agreement.
This brings me to my second point. Carter’s best theory of ambiguity is really this: While the agreement is perhaps clear and unambiguous on its face in a narrow sense, the result is so absurd that the parties cannot possibly have meant what they seem to have said, making the agreement ambiguous as a practical matter.
While there may be situations where such an argument would be compelling, this is not one of them. The partnership arrangement, while not exactly a coup for Carter, makes sense. It was worth his parting with a minority interest in the business to attract a partner with financial wherewithal. In addition to a partner with cash, transfer of a twenty percent interest to Crowther bought $17,000 plus a commitment to do some things helpful to Carter, most importantly an effort to get the bank to let Carter’s other partnership off the note to First Security in exchange for Crowther’s becoming liable. But actually paying the note was another matter entirely. If partnership earnings proved insufficient and Crowther were required to pay it off personally, he was to receive one percent in the partnership for each $1,000 paid above and beyond his initial investment. Carter’s protection against Crowther’s acquiring full ownership of the partnership for a song, comparatively speaking, was Carter’s right to reacquire that ownership interest, as provided in the agreement, by repaying Crowther what he had advanced plus interest.
*134In short, I think the agreement is not only unambiguous as a matter of language usage — it is also perfectly sensible in its business context.