B-158
ALTERNATE CASE PROBLEM ANSWERS
CHAPTER 37
PARTNERSHIPS AND
LIMITED LIABILITY PARTNERSHIPS
37-1A. Partnership property
(Chapter 37—Page 723)
The trial court held that the bar was partnership property. Citing Montana’s equivalent of UPA 203, the
37-2A. Partners as fiduciaries
(Chapter 37—Pages 723–725)
The court found nothing tortious in the actions of Weisglass and Koenig in dissolving the at-will
APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 37 B-159
The trial court found that Newsome Carpets was a partnership and not a corporation, and on Allen’s
37-4A. Limited liability partnerships
(Chapter 37—Page 730)
The court granted the motion and dismissed the suit. The court pointed out that the federal jurisdiction
statute states only that a corporation is a citizen of the state in which it is incorporated and in which it
37-5A. Indications of partnership
(Chapter 37—Page 720)
Indications of partnership in this case include the sharing of profits among the parties and their apparent
intent to enter into a partnership, as shown by their “Master Partnership Agreement” and that they
37-6A. Fiduciary duties
(Chapter 37—Pages 723–725 & 728–729)
B-160 APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 37
The court issued a summary judgment in Burdett’s favor, and Chaney appealed to a state intermediate
appellate court, which affirmed the judgment. Chaney appealed to the Georgia Supreme Court, which
reversed the lower court’s decision. The state supreme court recognized that the partnership was
37-7A. Limited partnership dissolution
(Chapter 37—Pages 734–735)
37-8A. Limited partnerships
(Chapter 37—Pages 732–733)
The appellate court held that Meadow had breached a fiduciary duty to the other partners. The court
37-9A. Liability of limited partners
(Chapter 37—Page 731)
The trial court found that Pitman had participated in the control of the business by securing credit for
the partnership, that Flanagan had reasonably relied on that participation in extending credit, and that
1. The court determined that Ghaffarian and Mardanlou had formed a partnership. On
Ghaffarian’s appeal, a state intermediate appellate court affirmed the lower court’s judgment.
A partnership is an association of two or more persons to carry on a business for profit. The
appellate court identified certain elements that establish the existence of a partnership: “The parties
must combine their property, money, effects, skill, labor and knowledge. As a general rule, there must
returns only in his name.
The court noted that “Mardanlou’s lack of knowledge regarding the financial aspects of the
business does not defeat his partnership claim given that partners can divide labor and responsibilities in
any way they see fit, including giving one partner sole responsibility and control over the financial
aspects of the business.”
2. The court found that Ghaffarian had breached the partnership agreement when he
appropriated the partnership’s real property by titling it solely in his name. The court awarded
B-162 APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 37
Mardanlou a one-half interest in the real property and ordered Ghaffarian to pay Mardanlou one-half of
the $83,500 its annual rental value, plus interest. Ghaffarian appealed to a state intermediate appellate
court, which affirmed the lower court’s judgment.
3. The court held that Mardanlou was entitled to a share of Access Auto’s profits. On the
dissolution of a partnership, each partner can obtain a share of the firm’s profits, including those
attributable to the use of the partner’s right in the firm’s property. The court awarded Mardanlou a one–
half interest in the real property that Ghaffarian had bought with Access Auto’s money, plus one-half the