Gwynne Barton, et al., v. Roy Gilleland, et al.

The limited partners ("the plaintiffs") of Henry Manor, Ltd., a Tennessee limited partnership ("the Partnership"), brought this declaratory judgment action against (1) Roy J. Gilleland and J. Cleve Smith, the Partnership's former administrative general partners, and (2) the trust created by the Partnership's former, and now-deceased, managing general partner, Glen R. Claiborne. The plaintiffs seek relief related to the Partnership's property, as well as an accounting and an order for distribution of proceeds. In 1992, Claiborne and his wife formed the G & P Claiborne Trust ("the Trust"), to which they transferred, among other assets, Claiborne's beneficial interest in the Partnership. Claiborne died in 1997. The apartment complex owned by the Partnership, which was its primary asset, was sold in 2000. Subsequently, Gilleland and Smith sought a percentage of the proceeds from the sale pursuant to the terms of the partnership agreement. The plaintiffs aver, among other things, (1) that Gilleland and Smith are not entitled to any of the proceeds from the 2000 sale, as they resigned from the partnership in 1982, and (2) that the Partnership was dissolved in 1992 when Claiborne transferred his interest to the Trust. The parties filed competing motions for summary judgment. The trial court held that Gilleland and Smith are entitled to share in the proceeds of the 2000 sale; that the Partnership did not dissolve until the death of Claiborne in 1997; and that the plaintiffs are not required to pay capital contributions that came due in 1983 and 1984. We agree with the trial court that Gilleland and Smith are entitled to share in the sale proceeds under the terms of the original partnership agreement. We further agree with the trial court that the Trust's claim against the plaintiffs for unpaid capital contributions is barred by the applicable statute of limitations. Although we disagree with the trial court's judgment that Claiborne did not violate the partnership agreement by transferring a part of his interest in the Partnership to the Trust in 1992, we hold that the transfer, while a violation of the agreement, does not constitute an event of dissolution. We affirm the trial court's judgment that the Partnership did not dissolve until 1997.