McCormick v. Brevig

Supreme Court of Montana · 2004 · Corporations

96 P.3d 697 (Mont. 2004)

Updated August 22, 2026

CorporationsPartnershipsDissolutionAccountingPartnership PropertyRUPAjudicial dissolutionwinding up

Facts

Joan and Clark were siblings and equal partners in a ranching partnership. Their relationship deteriorated, and Joan sued for an accounting, expulsion of Clark, or alternatively dissolution and winding up. The district court dissolved the partnership under § 35-10-624(5), MCA, but instead of ordering liquidation, it ordered Clark to buy Joan's interest at an appraised value. A special master also treated certain Charolais cattle as partnership assets because they appeared on partnership tax returns and sale proceeds had gone into partnership accounts.

Issue

When a partnership is judicially dissolved under § 35-10-624(5), MCA, may a court order one partner to buy out the other instead of liquidating partnership assets and distributing the surplus in cash? Relatedly, whether the accounting and special master procedures were sufficient, whether Clark had dissociated, whether the Charolais cattle were partnership assets, and whether the excluded tape recording was admissible.

Rule

When a partnership is dissolved by judicial decree under § 35-10-624(5), MCA, § 35-10-629, MCA, requires that partnership assets be reduced to cash, partnership obligations be paid, and any net surplus be distributed in cash to the partners according to their rights. In addition, property acquired in the name of a partner without indication of partnership capacity and without use of partnership assets is presumed separate property even if used for partnership purposes under § 35-10-203(5), MCA.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Nina Ortiz and Caleb Frost are equal partners in a vineyard operation near Walla Walla, Washington. After years of deadlock, a court finds it is no longer reasonably practicable for them to carry on the business together and enters a judicial decree dissolving the partnership, but the judge orders Caleb to buy Nina's interest at a court-set appraised value to preserve the family land.

If the governing partnership statute matches the majority rule in this case, which is the strongest argument on appeal?

Explanation. Under the majority rule, once a partnership is judicially dissolved under the provision for impracticability, the winding-up statute controls. That statute requires partnership assets to be applied to creditors and any surplus paid in cash, with profits and losses resulting from liquidation credited to the partners' accounts. A court may not create an alternative buyout remedy simply because it seems more equitable or preserves the business.