MICHAEL A. GIBSON, Plaintiff and Appellant,
GIBSON FAMILY LIMITED PARTNERSHIP and DELORES GIBSON, Defendants and Appellees
February 16, 2016
FROM THE CIRCUIT COURT OF THE THIRD JUDICIAL CIRCUIT DEUEL
COUNTY, SOUTH DAKOTA. THE HONORABLE ROBERT L. TIMM, Retired
HAGEN, SHAWN M. NICHOLS of Cadwell, Sanford, Deibert &
Garry, LLP, Sioux Falls, South Dakota. Attorneys for
plaintiff, and appellant.
E. EVANS of Evans, Haigh & Hinton, LLP, Sioux Falls,
South Dakota, Attorneys for defendants, and appellees.
Justice. GILBERTSON, Chief Justice, and SEVERSON, WILBUR, and
KERN, Justices, concur.
[¶1] A limited partner sued the limited
partnership and general partner claiming
tat the general partner breached her fiduciary duty. The
limited partner also sought dissociation from the partnership
for value. A jury rendered a defense verdict on the fiduciary
claim, and the circuit court denied the limited partner's
request for dissociation. The limited partner appeals the
court's refusal to enter an order of dissociation. In the
alternative, the limited partner requests a new trial on the
breach of fiduciary duty claiming evidentiary errors. We
and Procedural History
[¶2] In 2002, Delores Gibson and her two
sons, Michael and Greg Gibson, created the Gibson Family
Limited Partnership (GFLP) as an estate-planning tool for
Delores's estate. Michael and Greg each own a 45.8%
interest, and Delores owns the remaining 8.4% interest.
Neither Michael nor Greg paid for their interests in the
partnership. Delores serves as the general partner, and
Michael and Greg are limited partners. As the sole general
partner, Delores is responsible for management of the
partnership. Under the partnership agreement, Delores has
sole authority to decide with whom the partnership conducts
business and whether to distribute income. As limited
partners, Michael and Greg have no significant duties.
[¶3] GFLP property includes 2,060 acres of
land that Delores deeded to the partnership. Michael and Greg
jointly farmed and ranched on the 2,060 acres until 2006. In
2006, the brothers split and each started his own cattle and
farming operation. In April 2007, GFLP loaned Greg $350,000.
That same month Michael filed suit against GFLP, Delores, and
Greg, asserting various claims, including a claim that
Delores breached her fiduciary duty as GFLP's general
partner. In September 2008, GFLP leased the
2,060 acres to Champaygn Ranch, Inc., a business owned by
Greg and his wife. In December 2009, the 2007 suit went to
trial. The jury rejected Michael's claims that Delores
breached her fiduciary duty by making the loan and leasing
the property to Greg.
[¶4] In December 2010, GFLP renewed the
lease with Champaygn Ranch for a twenty-year term. In March
2011, GFLP entered into a contract for deed to sell 830 acres
of the leased property to Greg for $1,100,000, a price based
on an appraisal that Michael disputed at trial. GFLP and Greg
also amended the twenty-year lease to remove the 830 acres
purchased under the contract for deed. Greg continued to
lease the remaining 1,230 acres of partnership property.
[¶5] In June 2011, Michael commenced this
action asserting six claims against GFLP and Delores in her
capacity as general partner. Michael again claimed
that Delores breached her fiduciary duty to GFLP based in
part on the partnership's land transactions with Greg.