Summary 2006 WY 58

Summary of Decision issued May 12, 2006

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Case Name: Warnick, Warnick & Warnick Ranches v. Warnick.

Citation: 2006 WY 58

Docket Number: 04-244

Appeal from the District Court of Sheridan County, the Honorable John C. Brackley, Judge.

Representing Appellants: Dennis M. Kirven, of Kirven & Kirven, PC, Buffalo, Wyoming.

Representing Appellee: Charles E. Graves, of Graves, Miller & Kingston, PC, Sheridan, Wyoming; Timothy C. Kingston, of Graves, Miller & Kingston, PC, Cheyenne, Wyoming.

Date of Decision: May 12, 2006

Issue: Whether the District Court abused its discretion in excluding evidence offered by Warnick Ranches regarding the costs of liquidating partnership assets in determining the buy-out price of a dissociated partner under W.S. §17-21-701(b).

Holding: The Court has reviewed this matter previously in Warnick v. Warnick (Warnick I). Generally, this case involves the dissociation of Randall Warnick as a partner of Warnick Ranches as of April 14, 1999 and the amount he should receive for his interest in the partnership.
Evidentiary rulings are left to the sound discretion of the trial court and will not be overturned where the record reveals a legitimate basis for the ruling. This case also involves the application of Wyo. Stat. Ann. § 17-21-701(b) as part of the Wyoming Revised Uniform Partnership Act.
Calculation of the Buyout Price: In Warnick I, the district court was charged with calculating the buyout price for Appellee’s interest in the partnership following a settlement of partnership accounts upon the winding up of the partnership. The buyout price is the net of all known liabilities. The purpose of the remand was for the district court to consider liabilities – partner advances, which had been previously omitted from calculation. Appellant’s argument focused upon the valuation of the partnership’s assets under Wyo. Stat. Ann §17-21-701(b) stating that the district court should have deducted estimated sale expenses of $50,000.
The assets were in fact, not liquidated. Liquidation value is not the amount of the seller’s residual cash following a sale. Considering the language of RUPA § 701(b) as a whole, the Court concluded that “liquidation value” did not have the meaning that Appellant desired. The Court held that under Wyo. Stat. Ann. § 17-21-701(b), purely hypothetical costs of sale are not a required deduction in valuing partnership assets.
Evidentiary ruling: The Court found no abuse of discretion in the district court’s decision to exclude testimony from Appellant’s expert concerning the hypothetical costs of sale having determined that any possible costs of sale associated with selling the assets of the partnership were too speculative and inadmissible. The proffered testimony was not pertinent to the district court’s task of calculating the buyout price of Appellee’s partnership interest.

The Court affirmed the district court’s decision.

J. Burke delivered the opinion for the court.

Link to the case: http://tinyurl.com/jvd8j .