Court Opinion

ID: 9797798
Source: CourtListenerOpinion
Date Created: 2023-08-31 04:29:31.102969+00
Date Added: 2024-06-11T08:57:41.561226
License: Public Domain

DURRANT, Associate Chief Justice,
concurring in part and dissenting in part:
¶ 21 I concur with the majority’s conclusion that the insurance policy unambiguously named Parduhn as the beneficiary of the insurance contract. I further agree with the majority’s conclusion that the partnership between Buchi and Parduhn was dissolved, although not terminated, at Buchi’s death. I disagree with the majority’s conclusion, however, that, as a matter of law, the buy-sell provision of the partnership agreement was inoperative when Buchi died.1 In my view, we cannot decide whether the buy-sell provision remained in effect because the intended purpose of the buy-sell provision is ambiguous. I would therefore remand for a determination of that factual question.
¶ 22 The majority concedes that “a buy-sell [provision] could relate to buying and selling the residual assets after dissolution of the partnership, and thus ... [might] not necessarily be inconsistent with the sale of the business and dissolution.” (Emphasis added.) The majority sidesteps this possibility, however, by concluding that the buy-sell provision at issue “contemplated buying and selling no other assets than the business itself.” Put differently, the majority concludes that the plain language of the buy-sell provision demonstrates that it was designed solely to fund transactions related to the service stations. Relying on this conclusion, the majority goes on to hold that because the *988service stations had been sold, the buy-sell provision had no existing purpose at the time Buchi died. I disagree.
¶ 23 The majority mistakenly decides as a matter of law what is in reality a question of fact. Specifically, it reaches a legal conclusion regarding the intended purpose of the buy-sell provision even though the provision’s purpose is ambiguous. Five factors support this view.
¶24 First, the buy-sell provision declares that after paying the insurance proceeds to the decedent’s survivors, “[t]he surviving partner will own the business and may do with the business as he see’s fit.” (Emphasis added.) The phrase “the business” is not defined anywhere in the partnership agreement, however, and is inherently vague. Indeed, the word business means, among other things, “economic dealings,” Webster’s Collegiate Dictionary 154 (10th ed.1998), or a “commercial enterprise carried on for profit,” Black’s Law Dictionary 192 (7th ed.1999). Thus, contrary to the majority’s view, the purpose of the buy-sell provision could extend to any asset of the partnership’s business, including residual assets remaining after dissolution. The buy-sell provision’s intended purpose is therefore capable of more than one reasonable interpretation. Accordingly, it is ambiguous. See Peterson v. Sunrider Corp., 2002 UT 43, ¶ 19, 48 P.3d 918 (explaining that a “contract provision is ambiguous if it is capable of more than one reasonable interpretation” (internal quotations omitted)).
¶ 25 Second, the majority’s narrow interpretation of the intended purpose of the buy-sell provision ignores the partners’ agreement regarding what assets the surviving partner could purchase upon the death of the other partner. Specifically, section 13 of the partnership agreement states that “[ujpon the death of either partner, the surviving partner shall have the right to purchase the interest of the decedent in the Partnership .... ” (Emphasis added.) Section 13 thus provides the surviving partner with the right to purchase any interest the decedent possessed in the partnership, including residual assets after dissolution. Given that the surviving partner maintains the right to purchase any interest the decedent partner possessed at the time of his death, I see no reason for this Court to assume that the buy-sell provision of the partnership agreement was intended to fund the purchase of the service stations alone. Rather, when viewed in its entirety, the partnership agreement suggests that the partners might have intended the buy-sell provision to extend to any asset of the partnership, including residual assets remaining after dissolution.
¶26 Third, the majority asserts that “[i]t would be highly unlikely that the partners ever intended the residual assets to be the subject of the buy-sell [provision]....” (Emphasis added). The standard for deciding, as a matter of law, whether the buy-sell provision had an existing purpose, however, is not whether something is “highly unlikely.” Rather, it must be clear that no reasonable trier of fact could find the provision was intended to purchase residual assets. See Johnson v. Morton Thiokol, Inc., 818 P.2d 997, 1001 (Utah 1991) (explaining that the intent of the parties is primarily a jury question and will only be decided as a matter of law if no reasonable jury could reach a contrary conclusion). This standard is required in the instant action because the district court never addressed the purpose of the buy-sell provision.
¶ 27 Fourth, although not required to uphold the contractual provision, a logical reason existed for the partners to extend the buy-sell provision to residual assets. Specifically, the partners might have drafted the buy-sell provision to establish a set value for the deceased partner’s interest in the partnership.
¶ 28 Finally, contrary to the majority’s assertion that any decision to sell the gas stations would result in “residual assets [that] would be liquid,” that result was not inevitable. For example, the gas stations could have been exchanged for another business or real property. Regardless, the partners were free to enter into a contract that mandated an exchange of liquid assets. See, e.g., Salt Lake County v. Western Dairymen Coop., 2002 UT 39, ¶ 18, 48 P.3d 910 (stating that “we have repeatedly held that compe*989tent parties are free to bargain for any term that does not require a violation of the law”).
¶ 29 Accordingly, a question of fact exists regarding the buy-sell provision’s purpose, and I would remand for a factual determination on that issue. See Plateau Mining Co. v. Utah Div. of State Lands & Forestry, 802 P.2d 720, 725 (Utah 1990) (noting that where ambiguity exists in a contract, the intent of the parties is a question of fact to be determined by the trier of fact).
¶ 30 Chief Justice DURHAM concurs in Associate Chief Justice DURRANT’s concurring and dissenting opinion.

. Although the majority refers to the buy-sell provision as an independent contract or agreement, it is actually an amendment to the partnership agreement, and I refer to it as such.