Ellis v. La Val Enterprises , 2022 UT App 139 ( 2022 )

2022 UT App 139THE UTAH COURT OF APPEALS
DENNIS C. ELLIS AND MARIA ELLIS,
Appellants,
v.
LA VAL ENTERPRISES LTD., MIKLE VAL ELLIS, KELLY D. ELLIS,
SHELLY ROWLAN, AND STACEY ROWLAN,
Appellees.
Opinion
No. 20210546-CA
Filed December 8, 2022
Fourth District Court, Heber Department
The Honorable Jennifer A. Brown
No. 200500032
Troy L. Booher, Beth E. Kennedy, Caroline A. Olsen,
James L. Ahlstrom, Kara M. Houck, and Victoria
Rose Luman, Attorneys for Appellants
David R. Nielson and Nathan D. Anderson,
Attorneys for Appellees
JUDGE RYAN M. HARRIS authored this Opinion, in which
JUDGE DAVID N. MORTENSEN and SENIOR JUDGE RUSSELL W.
BENCH concurred. 1
HARRIS, Judge:
¶1 In 1996, the Ellis family created a limited partnership—
with the parents (Val and LaVern 2) as general partners and their
1. Senior Judge Russell W. Bench sat by special assignment as
authorized by law. See generally Utah R. Jud. Admin. 11-201(7).
2. As is our practice when multiple parties to an appeal share the
same last name, we refer herein to the members of the Ellis family
(continued…)
Ellis v. La Val Enterprises
five children as limited partners—and conveyed the family farm
into the partnership. In 2017, after Val’s death, LaVern—in her
capacity as the only remaining general partner—signed a contract
giving one of the children and his spouse an option to purchase
the farm at a set price. The narrow question presented in this
interlocutory appeal is whether LaVern, as the general partner,
had authority—under the partnership agreement and governing
law—to enter into the option contract on behalf of the partnership.
The district court determined that she had no such authority. We
disagree and therefore reverse.
BACKGROUND
¶2 Val and LaVern Ellis raised their five children on
approximately 174 acres of land (the Property) that included the
family home as well as over thirty acres of farmland. In 1996, Val
and LaVern created a limited partnership, which they named La
Val Enterprises Ltd. (the Partnership), and into which they
transferred ownership of the Property and associated farming
equipment. The Partnership was created with the assistance of an
attorney, and the partners entered into a twenty-nine-page
agreement (the Agreement) that governs the Partnership’s affairs.
Under the terms of the Agreement, Val and LaVern were installed
as the Partnership’s general partners, and their five children—
Mikle, Dennis, Kelly, Shelly, and Brad—were made limited
partners. The terms of the Agreement are crucial to this appeal, so
we take the time to set out the relevant provisions in some detail.
¶3 At the outset, the Agreement states that the Partnership
was formed “pursuant to the provisions of Utah Code Annotated,
Title 48, Chapter 2a (1953, as amended),” and that the “rights,
duties and liabilities” of the partners will be “determined under
that law except as otherwise expressly provided in this
Agreement.” In 1996, at the time the Agreement was executed,
by their first names, with no disrespect intended by the apparent
informality.
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that title and chapter of the Utah Code was entitled the “Utah
Revised Uniform Limited Partnership Act.” See Utah Code Title
48, Chapter 2a (Michie 1996). In three other places in the
Agreement, the partners specified that certain issues concerning
the scope of the general partners’ powers would be governed “by
the Uniform Revised Limited Partnership Act as in effect in the
State of Utah.”
¶4 The Agreement also contains a section (the Purposes
Section) setting forth the overarching purposes of the Partnership,
and stating that the Partnership had been “formed and shall be
maintained for” four general purposes:
• “To acquire, hold, and own real property, including,
but not limited to, [the Property], and, consistent
therewith, to use, develop, improve, manage, lease,
exchange, transfer, sell, or otherwise dispose of such
real property.”
• “To consolidate fractional interests in the real property,
to continue the ownership in the real property and to
restrict the right of third parties to acquire any interest
in the real property.”
• “To provide protection to the real property from future
creditor claims against the Partners, and to prevent a
Partner’s interest in the Partnership from being
transferred because of a failed marriage.”
• “To provide flexibility in business planning.”
¶5 The partners also agreed to specific provisions setting forth
the scope of the general partners’ authority. Section 7.1 states that
“[t]he business of the Partnership shall be under the full and
exclusive management of the General Partners,” and that “the
General Partners are charged with all operational responsibilities
of the Partnership.” And Section 7.3—entitled “Powers of General
Partners”—provides additional specificity, making clear that the
20210546-CA 3 2022 UT App 139Ellis v. La Val Enterprises
general partners are authorized to take significant action without
first obtaining the consent of any of the limited partners:
Except as otherwise provided in this Agreement, the
General Partners shall have the full and exclusive
powers to control the business and affairs of the
Partnership and shall, in their absolute discretion and
without the consent of the Limited Partners, have power
to make and carry out all decisions affecting
Partnership business and affairs, including, without
limitation, the power to:
(a) sell, transfer, lease, borrow, mortgage,
pledge, or otherwise dispose of all or part of the
Partnership assets and property upon such
terms and conditions and for such consideration
as the General Partners deem appropriate.
....
(g) borrow money from banks, other lending
institutions, and other lenders for any
Partnership purpose (except as specifically
prohibited by this agreement), and in
connection therewith issue notes, debentures
and other debt securities and hypothecate the
assets and property of the Partnership to
secure repayment of borrowed funds.
....
The fact that a General Partner or member of his or
her family is directly or indirectly interested in or
connected with any person, firm or corporation . . .
to whom the Partnership may sell or lease assets or
property shall not prohibit the [P]artnership from
. . . dealing or doing business with such person, firm
20210546-CA 4 2022 UT App 139Ellis v. La Val Enterprises
or corporation . . . under reasonable terms and
conditions.
(Emphasis added.) And the Agreement gives the Partnership’s
general partners, as “additional rights and powers,” “all of the
rights and powers of a general partner as more particularly
provided by the Uniform Revised Limited Partnership Act as in
effect in the State of Utah, except to the extent any of such rights
may be limited or restricted by the express provisions of this
Agreement.”
¶6 The Agreement does, however, contain a section (Section
7.5) entitled “Limitation on Powers,” which sets forth some
limitations on the broad authority bestowed on the Partnership’s
general partners. These limitations make clear that the general
partners “shall not have any authority to” do the following:
• Take “any act in contravention of this Agreement.”
• Take “any act which would make it impossible to carry
on the ordinary business of the Partnership.”
• “[P]ossess Partnership assets or property or assign the
rights of the Partnership in specific assets or property
for other than a Partnership purpose, except as
otherwise specifically provided for herein.”
• Take “any act for which the Limited Partners’ consent
is required by the Uniform Revised Limited
Partnership Act as in effect in the State of Utah.”
• “[E]ngage in any business activity other than that
consistent with the purposes of the Partnership.”
• “[T]erminate, liquidate and wind-up the Partnership,
except as otherwise provided” in the Agreement.
20210546-CA 5 2022 UT App 139Ellis v. La Val Enterprises
¶7 All seven family members executed the Agreement in late
1996 or early 1997. And the Agreement was never amended; that
is, the version of the Agreement originally executed in 1996 is (and
has been at all times relevant to this appeal) the current version of
the Agreement.
¶8 Over the years, as the Ellis children grew into adulthood,
Dennis took more of an active role in the farm than his siblings
did, especially after Val suffered a stroke in the mid-1980s that
limited his ability to manage the farm. In the present litigation,
however, Dennis and his siblings take vastly different positions
about how helpful Dennis was in farm management, with Dennis
portraying himself as a helpful caretaker and his four siblings (the
Siblings) portraying him as something of a freeloader.
¶9 Val passed away in 2015, leaving then-eighty-year-old
LaVern as the Partnership’s only general partner. Over the next
few years, LaVern suffered various health problems, both mental
and physical. In 2017, Dennis and LaVern discussed the
possibility of Dennis and his wife Maria purchasing the Property
and, together, Dennis and LaVern sought the input of the attorney
(Attorney) who had drafted the Agreement in 1996. Attorney
offered his opinion that the Agreement gave LaVern, as the sole
remaining general partner, the authority to sell the Property
without first obtaining the consent of the limited partners, and he
provided Dennis a template for an option-to-purchase contract.
Thereafter, Attorney worked with Dennis to create a document
(the Option Contract) that would give Dennis and Maria an
option to purchase the Property. The purchase price set in the
Option Contract was $750,000, an amount Dennis came up with
by discounting a 2016 appraisal—which had valued the Property
at $1,075,000 3—due to his belief that LaVern desired “to account
3. The county valuation, for property tax purposes, for the same
period was initially $4,343,784, but Dennis later used the 2016
private appraisal to challenge the county’s valuation, and the
county eventually reduced its valuation to approximate the
privately appraised value.
20210546-CA 6 2022 UT App 139Ellis v. La Val Enterprises
for all the services provided and money invested by Dennis over
the years at the Property.” LaVern executed the Option Contract
in July 2017. Dennis was aware that LaVern had signed the Option
Contract, but neither he nor LaVern immediately told the Siblings
about it.
¶10 Two years later, LaVern passed away. Soon after LaVern’s
death, Dennis informed the Siblings of the existence of the Option
Contract, and notified the Partnership of his intention to exercise
the contractual option. The Partnership, however, refused to
honor the Option Contract, believing that LaVern had not
possessed authority, under the Agreement, to enter into it and, in
addition, taking the position that LaVern was under the undue
influence of Dennis when she did so. Dennis and Maria
responded by filing the instant lawsuit, and the Partnership and
the Siblings filed a counterclaim.
¶11 Some of the parties’ claims put at issue the question of
whether the Agreement gave LaVern, as sole remaining general
partner, the authority to enter into the Option Contract.
Eventually, both sides filed competing motions for partial
summary judgment on that discrete question. Dennis and Maria
focused largely on Section 7.3 of the Agreement, the provision
stating that the Partnership’s general partners have broad powers
to sell Partnership property, in their discretion, without first
obtaining the approval of the limited partners. The Siblings
focused largely on Section 7.5, the part setting forth various
limitations on the general partners’ powers, and on provisions of
post-2013 Utah partnership law that, as a default rule, require
general partners to obtain the consent of limited partners before
selling “all, or substantially all, of” the partnership’s property, or
before undertaking acts not “in the ordinary course of the limited
partnership’s activities and affairs.” See Utah Code Ann. §§ 48-2e-
402(2), -406(2)(c) (LexisNexis 2015).
¶12 After full briefing and oral argument, the district court
issued an oral ruling siding with the Siblings. The court
determined, as an initial matter, that “the current version of the
20210546-CA 7 2022 UT App 139Ellis v. La Val Enterprises
Limited Partnership Act” applies to govern the parties’ dispute,
and not the 1996 statute referenced in the Agreement. In reaching
that determination, the court interpreted the Agreement’s
multiple references to the law “as in effect” as indicating the
partners’ willingness to be bound by current law rather than the
law in effect at the time the Agreement was signed. The court
noted that current law, enacted in 2013, provides that, unless the
parties agree otherwise, general partners require the consent of all
partners before selling “all, or substantially all, of” the
partnership’s property, or before entering into transactions that
are not “in the ordinary course of” the partnership’s “activities
and affairs.” See id. Observing that the Agreement had not been
amended since the 2013 statutory amendments, the court offered
its view that those relatively new statutory default provisions had
not “been overruled” by the partners. The court acknowledged
the broad language of Section 7.3 purportedly authorizing general
partners, within their “full and exclusive” discretion, to sell
Partnership property, but concluded that LaVern was “limited by
Section 7.5’s limitations” and did not have authority to enter into
the Option Contract. The court later memorialized its ruling in a
written order granting the Siblings’ motion for partial summary
judgment on the authority issue, denying the one filed by Dennis
and Maria, and dismissing with prejudice several of the causes of
action filed by Dennis and Maria.
ISSUE AND STANDARD OF REVIEW
¶13 We granted Dennis and Maria leave to take an
interlocutory appeal from the court’s summary judgment order.
“Summary judgment is only appropriate if the moving party
shows that there is no genuine dispute as to any material fact and
the moving party is entitled to judgment as a matter of law.”
Arlington Mgmt. Assocs. Inc. v. Urology Clinic of Utah Valley LLC,
2021 UT App 72, ¶ 10, 496 P.3d 719 (quotation simplified). We
review a district court’s summary judgment ruling “for
correctness, giving no deference to the [district] court’s decision.”
Bahr v. Imus, 2011 UT 19, ¶ 16, 250 P.3d 56.
20210546-CA 8 2022 UT App 139Ellis v. La Val Enterprises
ANALYSIS
¶14 The question presented by this appeal is whether LaVern
had authority, under the Agreement and applicable law, to enter
into the Option Contract without first obtaining the consent of the
limited partners, including the Siblings. We begin our analysis
with a general discussion of Utah partnership law as it has
developed since 1990, paying specific attention to the state of the
law as it existed in 1996 (when the Agreement was signed) and as
it existed in 2017 (when the Option Contract was signed). We then
examine the provisions of the Agreement against this legal
backdrop, and conclude that the Agreement unambiguously gave
LaVern authority to enter into the Option Contract, and that the
district court erred in determining otherwise.
I. Legal Background: Utah Partnership Law
¶15 In 1990, our legislature enacted a law entitled “Revised
Uniform Limited Partnership Act.” See Act of Mar. 12, 1990, ch.
233, §§ 1–71, 1990 Utah Laws 1126 (codified at Utah Code §§ 48-
2a-101 to -1107 (Michie 1996)). This law—as the word “Uniform”
in its title connotes—was based on a draft law released by the
Uniform Law Commission (the Commission), an entity created to
“promote uniformity in the law among the several States on
subjects as to which uniformity is desirable and practicable.” See
The Constitution, Uniform Law Commission, art. 1, § 1.02,
https://www.uniformlaws.org/aboutulc/constitution [https://per
ma.cc/73CT-4BUV]. Composed of lawyers, judges, law professors,
and legislators, the Commission has, to date, drafted over 250
proposed uniform laws in furtherance of its efforts to bring
“clarity and stability to critical areas of state statutory law.” About
Us, Uniform Law Commission, https://www.uniformlaws.org/ab
outulc/overview [https://perma.cc/KA7L-GXBJ]; see generally
Uniform Laws and Model Acts, Harvard Law School Library,
https://guides.library.harvard.edu/law/unifmodelacts#:~:text=Mo
del%20Acts%20and%20Model%20Codes,are%20rarely%20enacte
d%20in%20entirety [https://perma.cc/M9SM-5LGS] (“Uniform
Laws are carefully drafted model laws for potential enactment by
20210546-CA 9 2022 UT App 139Ellis v. La Val Enterprises
state legislatures.”). Individual state legislatures may adopt
proposed uniform laws without amendment, may adopt them
with state-specific modifications, or may reject (or ignore) them
entirely.
¶16 Partnership law is one area in which the Commission has
been active and, in 1985, it released a new version of its proposed
uniform law in this arena, this time entitled “Revised Uniform
Limited Partnership Act (RULPA).” See Limited Partnership Act,
Revised, Uniform Law Commission, https://www.uniformlaws.o
rg/committees/community-home?CommunityKey=d9036976-6c9
0-4951-ba81-1046c90da035 [https://perma.cc/582W-SZ2J] (stating
that the 1985 “version of the act became known as Revised
Uniform Limited Partnership Act (RULPA)”). Five years later, in
its 1990 session, our legislature adopted a version of RULPA, but
only after making a number of Utah-specific changes to the
proposed uniform law. See Act of Mar. 12, 1990, ch. 233, §§ 1–71,
1990 Utah Laws 1126, 1126–40. Our legislature specifically
entitled this law “Revised Uniform Limited Partnership Act” and,
as already noted, this law was codified in Title 48, Chapter 2a of
the Utah Code. See id.; Utah Code §§ 48-2a-101 to -1107 (Michie
1996).
¶17 The relevant portions of this law, passed in 1990, remained
in effect in 1996, when the Agreement was created and executed.
The 1996 version of that law established—as a default setting, in
the absence of provisions to the contrary in partnership
agreements—that general partners had broad powers to manage
partnership affairs, without having to first seek the consent or
approval of the partnership’s limited partners. See Utah Code
§§ 48-2a-302, 403(1) (Michie 1996). No provision of RULPA, as
enacted by our legislature, required that general partners seek or
obtain the consent of limited partners for any specific action other
than voluntary dissolution. See id. § 48-2a-801 (listing five ways a
partnership could be dissolved, including by the “written consent
of all partners”). Thus, under the law as it existed in 1996, nothing
in Utah partnership law—setting aside, for the moment, the terms
of the Agreement itself—would have required Val and LaVern, as
20210546-CA 10 2022 UT App 139Ellis v. La Val Enterprises
general partners, to seek the consent of the Partnership’s limited
partners about anything other than voluntary dissolution.
¶18 In the late 1990s, “[c]hanges in modern business practices
made it necessary” for the Commission “to update and
modernize” its proposed uniform partnership law. See Limited
Partnership Act, Revised, Uniform Law Commission, https://www
.uniformlaws.org/committees/community-home?CommunityKe
y=d9036976-6c90-4951-ba81-1046c90da035 [https://perma.cc/582
W-SZ2J]. In 2001, the Commission “adopted a new, more flexible
version” of the law. Id. This version “was colloquially called Re-
RULPA during the drafting process but then was officially named
the Uniform Limited Partnership Act (2001) or ULPA (2001).” See
Uniform Limited Partnership Act, Wikipedia, https://en.wikipedia.
org/wiki/Uniform_Limited_Partnership_Act [https://perma.cc/TJ
C9-EBDQ]. Among other changes from RULPA, the 2001 version
of the uniform partnership law contained provisions—designed
as default rules that would apply in the absence of contrary
provisions in individual partnership agreements—limiting the
power of general partners and, in particular, requiring general
partners to obtain the consent of all partners, including limited
partners, before taking certain actions. See Unif. Ltd. P’ship Act
§§ 105, 402(b), 406(b) (Unif. L. Comm’n 2001).
¶19 In 2013, our legislature passed a law patterned after the
Commission’s 2001 ULPA. See Act of Apr. 1, 2013, ch. 412, §§ 148–
276, 2013 Utah Laws 2245–88. The new law provided for the
graduated repeal of Title 48, Chapter 2a, the chapter which
contained Utah’s version of RULPA. See Utah Code § 48-2a-100
(2013); see also Utah Code Ann. § 48-2e-1205(1) (LexisNexis 2015).
Effective January 1, 2016, RULPA was to be completely repealed.
See Utah Code § 48-2a-100 (2013). In the meantime, RULPA would
continue to apply to partnerships formed before January 1, 2014,
unless those partnerships elected to be governed by the new
version of Utah partnership law. See Utah Code Ann. § 48-2e-
1205(1) (LexisNexis 2015).
20210546-CA 11 2022 UT App 139Ellis v. La Val Enterprises
¶20 The new law, enacted in place of RULPA, is entitled the
“Utah Uniform Limited Partnership Act,” see id. § 48-2e-101, and
is codified in Title 48, Chapter 2e (as opposed to Chapter 2a) of
the Utah Code, see id. §§ 48-2e-101 to -1205. As relevant here, the
new law states that, “[t]o the extent the partnership agreement
does not provide” otherwise, see id. § 48-2e-112(2), all partners—
including limited partners—must consent to both (a) any
transaction involving the sale or other disposition of “all, or
substantially all, of the limited partnership’s property,” and (b)
any transaction that is “not apparently for carrying on in the
ordinary course the limited partnership’s activities and affairs.”
See id. §§ 48-2e-402(2), -406(2)(c). Thus, under the law as it existed
in 2017, Utah partnership law—unless varied by the terms of the
Agreement—would have required LaVern, as general partner, to
seek the consent of the limited partners before selling “all, or
substantially all, of” the Partnership’s property, or before taking
any action not “in the ordinary course of” the Partnership’s
“activities and affairs.”
II. The Agreement
¶21 With this legal background in mind, we turn to an
examination of the terms of the Agreement. The ultimate question
before us is whether LaVern had authority, under that document
and applicable law, to execute the Option Contract. In addressing
that question, we find it helpful to break our analysis into two
parts. First, we assess whether Val and LaVern would have had
authority to enter into the Option Contract in 1996, when the
Agreement was signed but before Utah’s repeal of RULPA and
passage of ULPA. Second, we assess whether those 2013
legislative changes altered the situation. For the reasons
discussed, we conclude that the Partnership’s general partners
did have authority, under the Agreement, to enter into
transactions like the Option Contract, and that the 2013 legislative
amendments did not change the relevant landscape.
20210546-CA 12 2022 UT App 139Ellis v. La Val Enterprises
A. Pre-2013: The General Partners Had Authority
¶22 We begin our analysis of the terms of the Agreement with
an examination of the specific provisions governing the authority
of the Partnership’s general partners: Sections 7.1 and 7.3. Those
provisions are entitled “Management” and “Powers of General
Partners,” respectively, and they contain language conferring
broad discretionary management powers on the Partnership’s
general partners. Section 7.1 states broadly that “[t]he business of
the Partnership shall be under the full and exclusive management
of the General Partners.” And Section 7.3—quoted more
extensively, supra ¶ 5—bestows upon the general partners “full
and exclusive powers to control the business and affairs of the
Partnership . . . in their absolute discretion and without the
consent of the Limited Partners.”
¶23 In addition to this broad general language, Section 7.3 also
includes an illustrative list of some of the specific “decisions” that
the general partners are empowered to make “without the
consent of the Limited Partners.” As particularly relevant here,
the general partners are specifically authorized to “sell . . . or
otherwise dispose of all or part of the Partnership assets and
property upon such terms and conditions and for such
consideration as the General Partners deem appropriate.” Dennis
and Maria assert that this provision is more or less dispositive: on
its face, it specifically authorizes LaVern to sell the Property to
Dennis and Maria without first seeking the consent or approval of
the Partnership’s limited partners.
¶24 In response, the Siblings acknowledge that the language of
Section 7.3 provides support for the arguments lodged by Dennis
and Maria, but they respond by pointing to the first seven words
of that section: “Except as otherwise provided in this Agreement.”
They assert that other provisions of the Agreement limit the
general partners’ authority to sell the Property, and they center
their arguments around Section 7.5, the one entitled “Limitation
on Powers.” That section contains eight specific limits on the
general partners’ authority, six of which the Siblings contend
20210546-CA 13 2022 UT App 139Ellis v. La Val Enterprises
apply here. We address the applicability of each of the six claimed
limitations, in turn, and conclude that—at least prior to the 2013
legislative amendments—none of them operated to prevent the
Partnership’s general partners from selling the Property.
¶25 Section 7.5(a): The Siblings point to the first subsection in
Section 7.5, which bars the general partners from undertaking
“any act in contravention of” the Agreement. The Siblings assert
that LaVern acted in contravention of the Agreement when she
entered into the Option Contract. We find the Siblings’ argument
on this point wholly unpersuasive, given the specific language of
Section 7.3 that clearly authorizes the general partners to sell the
Property without first seeking the consent of the limited partners.
¶26 Sections 7.5(b) and (h): Next, the Siblings point to
subsections (b) and (h), one of which prevents the general
partners from undertaking “any act which would make it
impossible to carry on the ordinary business of the Partnership,”
and the other of which prevents the general partners from
“terminat[ing], liquidat[ing] and wind[ing]-up the Partnership”
except as authorized by the Agreement’s dissolution provision.
They assert that selling the Property was an act that made it
impossible to carry on the Partnership’s ordinary business—
which they characterize as operating a farm—and they assert that
it effectively dissolved the Partnership. We find these arguments
likewise unpersuasive. The Partnership was formed to (among
other things) buy, hold, and sell real property, “including, but not
limited to,” the Property. If the Property were sold, the
Partnership would receive value in return, and it could decide to
use the proceeds from the sale to (among other things) buy
different parcels of real property or other assets, or it could simply
distribute the proceeds to the partners according to their
respective interests. Thus, selling any part of the Partnership’s
property, including the Property, is not an act that would “make
it impossible to carry on the ordinary business of the
Partnership,” and it is certainly not an act that effectively
dissolves or liquidates the Partnership.
20210546-CA 14 2022 UT App 139Ellis v. La Val Enterprises
¶27 Sections 7.5(d) and (g): Next, the Siblings point to two
more of the Section 7.5 limitations, each of which references the
Partnership’s “purposes.” One such provision forbids general
partners from “assign[ing] the rights of the Partnership in specific
assets or property for other than a Partnership purpose, except as
otherwise specifically provided herein.” The other bars general
partners from “engag[ing] in any business activity other than that
consistent with the purposes of the Partnership.” As noted, supra
¶ 4, the Purposes Section of the Agreement recites the
Partnership’s purposes, which include buying, holding, and
selling real property, as well as “restrict[ing] the right of third
parties to acquire any interest in the real property.” The Siblings
assert that these limitations that refer to the Partnership’s general
purposes operate to override the more specific authorization in
Section 7.3 that permits general partners to sell Partnership
property. We disagree.
¶28 As an initial matter, one of the expressly listed purposes of
the Partnership—set forth in the Purposes Section—is to “sell, or
otherwise dispose of,” the Partnership’s property, including its
real property. This stated purpose is entirely consistent with
Section 7.3’s grant of authority allowing general partners to “sell
. . . or otherwise dispose of all or part of the Partnership assets or
property upon such terms and conditions” as the general partners
“deem appropriate.” The Siblings point out, in response, that the
Purposes Section states that any sale of the Partnership’s real
property must be “consistent” with the Partnership’s goal of
“acquir[ing], hold[ing] and own[ing] real property.” But as noted
already, a sale of one parcel of real property will, almost by
definition, result in assets (most likely money) returning to the
Partnership as consideration for the sale, which assets the
Partnership could then use to acquire a different parcel of real
property. Stated another way, the sale of any one parcel of real
property is not at all inconsistent with a general partnership goal
of acquiring, owning, and holding real property. After all, the
Purposes Section does not state that the Partnership’s purpose is
to “hold and own” the Property specifically; to the contrary, it
says that the Partnership’s purpose is to “acquire, hold and own
20210546-CA 15 2022 UT App 139Ellis v. La Val Enterprises
real property, including, but not limited to, [the Property].” The
Agreement, including the Purposes Section, unambiguously
provides that the Partnership was formed to (among other things)
sell real property, and therefore selling this Property is not
inconsistent with the overall purposes of the Partnership. 4
¶29 The Siblings also point out that another of the purposes set
forth in the Purposes Section is “to restrict the right of third parties
to acquire any interest in the real property,” and they assert that
Maria should be considered a third party. Even assuming that to
be the case, however, the Agreement does not forbid third parties
from acquiring interests in Partnership property, including real
property. Section 7.3 gives general partners “absolute discretion”
over the “terms and conditions” of any sale of Partnership
property; moreover, the final paragraph in that section specifies
that such sales may be to family members (e.g., a son and
daughter-in-law) of general partners. In addition, Section 7.3 also
makes clear that third-party lending institutions may acquire
security interests in Partnership real property. It is simply not a
reasonable reading of the Agreement to interpret it to completely
4. Indeed, the Siblings concede that “the Partnership could,”
consistent with its purposes, “sell its property for market value to
purchase another comparable piece of real property.” However,
they assert that the purchase price listed in the Option Contract
($750,000) is far below market value and insufficient to allow the
Partnership to purchase equivalent property in exchange, and
therefore contrary to the stated purposes of the Partnership.
Dennis and Maria contest these assertions; they claim that
$750,000 is only somewhat lower than actual fair market value
and assert that any difference is due to LaVern’s desire to reward
Dennis for his efforts on the farm. We need not resolve this factual
dispute—which may very well be inappropriate for resolution on
summary judgment in any event—in this appeal because the
Agreement specifically states that general partners have “absolute
discretion” over the “terms and conditions” of any sale of
Partnership property, including the price. Nothing in the
Purposes Section is to the contrary.
20210546-CA 16 2022 UT App 139Ellis v. La Val Enterprises
forbid—rather than merely to “restrict,” in certain ways not
relevant here—the sale of Partnership property to third parties.5
¶30 In addition, we are mindful that, in interpreting
documents, “specific provisions ordinarily will be regarded as
qualifying the meaning of broad general terms in relation to a
particular subject.” See Smith v. Smith, 2017 UT App 40, ¶ 16, 392
P.3d 985 (quotation simplified); see also Antonin Scalia & Bryan A.
Garner, Reading Law: The Interpretation of Legal Texts 183 (2012)
(“Under this canon, the specific provision is treated as an
exception to the general rule.”). Section 7.3 is a very specific
provision which describes in detail the power and authority of
general partners in managing the Partnership, and its specific
terms will override—to the extent there is any inconsistency—the
very general description of the Partnership’s overall purposes set
out in the Purposes Section. Indeed, the specifics of Section 7.3
help illuminate what sort of actions the partners believed were
consistent with the purposes of the Partnership; in our view,
Section 7.3’s clear provisions unambiguously indicate that it is not
contrary to the stated purposes of the Partnership for the general
partners to sell all or part of the Partnership’s property, even
without first obtaining the consent of the limited partners.
¶31 In sum, nothing in the Purposes Section of the Agreement
overrides the clear authorization in Section 7.3 permitting LaVern,
as the general partner, to sell or otherwise dispose of the Property.
¶32 Section 7.5(f): Finally, the Siblings invoke the limitation
that prevents the general partners from undertaking “any act for
which the Limited Partners’ consent is required by the Uniform
Revised Limited Partnership Act as in effect in the State of Utah.”
As noted, from 1996 through 2013, no provision in Utah’s version
5. Indeed, the Siblings eventually concede, in their brief, that “[i]f
LaVern wanted to sell the Partnership’s property to a third party
like Maria she could do so, so long as it was for a Partnership
purpose and didn’t violate the [A]greement or” applicable Utah
partnership law.
20210546-CA 17 2022 UT App 139Ellis v. La Val Enterprises
of RULPA required general partners to seek the consent of limited
partners before selling partnership property. Thus, when the Ellis
family entered into the Agreement in 1996, and for at least the next
seventeen years, Utah partnership law placed no restrictions on
the general partners’ ability to sell or otherwise dispose of all or
part of the Partnership’s property, even without first obtaining
the approval of the limited partners.
¶33 Thus, at least as concerns the time frame from 1996 through
2013, the Agreement unambiguously gave Val and LaVern, as
general partners, the authority to sell or otherwise dispose of the
Property, even to third parties, without first seeking the consent
of their children. Under the interpretation of the Agreement
offered by Dennis and Maria, all of the Agreement’s provisions
have meaning, and can be read together harmoniously. See
generally Thatcher v. Lang, 2020 UT App 38, ¶ 31, 462 P.3d 397(“When interpreting the plain language, we look for a reading that
harmonizes the provisions and avoids rendering any provision
meaningless.” (quotation simplified)). The Siblings’ contrary
interpretation is strained and unreasonable, and requires us to
effectively read Section 7.3 out of the Agreement. See generally
Brady v. Park, 2019 UT 16, ¶ 54, 445 P.3d 395 (“[A] contractual term
or provision is ambiguous if it is capable of more than one
reasonable interpretation because of uncertain meanings of terms,
missing terms, or other facial deficiencies.” (quotation simplified,
emphasis in original)); see also Saleh v. Farmers Ins. Exch., 2006 UT
20, ¶ 17, 133 P.3d 428 (stating that, “to merit consideration” as a
reasonable interpretation, a litigant’s interpretation “must be
based upon the usual and natural meaning of the language used
and may not be the result of a forced or strained construction”
(quotation simplified)); Equine Holdings LLC v. Auburn Woods LLC,
2021 UT App 14, ¶ 26, 482 P.3d 880 (“If only one side, and not the
other, advances an interpretation that can be considered
reasonable, then the language at issue is not ambiguous, because
it is subject to only one reasonable interpretation.”). When the
Agreement was executed in 1996, the general partners had
authority to sell Partnership property, including the Property, in
20210546-CA 18 2022 UT App 139Ellis v. La Val Enterprises
their “absolute discretion” and without the approval of the
limited partners.
B. The 2013 Legislative Changes Did Not Change the
Landscape
¶34 The remaining question, then, is whether our legislature’s
2013 amendments to Utah partnership law altered the situation.
The Siblings assert that they did, because in their view the drafters
of the Agreement intended to incorporate later changes to Utah
partnership law into the contract. Dennis and Maria argue to the
contrary, asserting that 1996 partnership law applies to govern
this dispute, and that the drafters of the Agreement did not intend
to give “the Legislature the right to change their agreement” over
time. Dennis and Maria have the better of this argument.
¶35 As an initial matter, we must keep in mind the general
principle that a contract “contains, implicitly, the laws existing at
the time it is completed.” See Beehive Med. Elecs., Inc. v. Industrial
Comm’n, 583 P.2d 53, 60 (Utah 1978); see also Edwards v. Kearzey, 96
U.S. 595, 601 (1877) (“[T]he laws which subsist at the time and
place of making a contract enter into and form a part of it, as if
they were expressly referred to or incorporated in its terms.”). In
this situation, this principle dictates that the rights and duties of
the parties in connection with the Agreement were established in
1996, under the laws then in effect.
¶36 But in this case, we have more than just this general
principle to guide us. The drafters of the Agreement specified—
quite clearly in our view—that their rights and duties under the
Agreement were to be governed by RULPA, the version of Utah
partnership law in effect at the time the Agreement was signed.
In the Agreement’s first substantive section, it recites that “the
rights, duties and liabilities of each of the General and Limited
Partners” should be “determined under” “the provisions of Utah
Code Annotated, Title 48, Chapter 2a (1953, as amended).” And
as previously noted, Title 48, Chapter 2a of the Utah Code
contained, at that time, Utah’s version of RULPA. We interpret
20210546-CA 19 2022 UT App 139Ellis v. La Val Enterprises
this reference as a specific indication that the drafters of the
Agreement intended their rights and obligations to be determined
by reference to RULPA, the law on Utah’s books in 1996.
¶37 In three other places in the Agreement, the partners specify
that the powers of the Partnership’s general partners will be
governed and potentially limited “by the Uniform Revised
Limited Partnership Act as in effect in the State of Utah.” We
likewise interpret these provisions as a clear reference to RULPA,
and as an indication that the partners intended their rights to be
determined under RULPA in the form enacted by our legislature
and in effect in 1996.
¶38 The Siblings resist this interpretation on two textual
grounds. First, they point to the “(1953, as amended)”
parenthetical in the Agreement’s first substantive section, and
assert that this reference indicated the partners’ preference to be
governed by developing Utah partnership law, “as amended” in
the future. We consider this a strained interpretation of the
contractual text. The entire Utah Code was re-codified in 1953. See
Utah Legal Resources: Utah Statutes, University of Utah Law
Library, https://campusguides.lib.utah.edu/c.php?g=160666&p=1
051078 [https://perma.cc/ERY8-NBZQ] (stating that “the last time
the Utah Code was re-codified was in 1953,” and that, “[a]s a
result, the current Utah Code is referred to as the ‘1953 Code’”);
see also Mari Cheney, Utah Legislative History Research Tips, 21 Utah
B.J. 31, 31 (2008) (stating that “[t]he Utah Code Annotated was
completely recodified in 1953”); cf., e.g., Utah Code Ann. § 48-2a-
102 (Michie 1996) (noting that the provisions of Title 48, Chapter
2a were first enacted, in that codification, in 1953). In our view,
the parenthetical identified by the Siblings does nothing more
than specify that the statute governing the parties’ rights under
the Agreement is Title 48, Chapter 2a, as found in the 1953 Code
and as amended between 1953 and 1996.
¶39 Second, the Siblings point to the “as in effect” language in
the other three statutory references, and argue that this language
indicates a preference by the parties to be bound by Utah
20210546-CA 20 2022 UT App 139Ellis v. La Val Enterprises
partnership law, however it was “in effect” in the future. But this
is also a strained interpretation. It ignores key words in the
statutory references, such as the words “Uniform” and “Revised,”
as well as the words “in the State of Utah” that follow “as in
effect.” And the entire reference, viewed holistically, seems to us
to have a rather apparent meaning: the parties wanted their rights
and duties governed by RULPA, a uniform law, as that law had
been passed by the Utah legislature (as opposed to the raw
uniform law proposed by the Commission, and as opposed to a
version of the uniform law that may have been enacted in some
other state). In our view, this language is not at all indicative of an
intention to have the parties’ rights and obligations under the
Agreement float indeterminately with unknown and
unforeseeable future legislative changes. 6
¶40 Thus, the Agreement quite clearly sets forth the parties’
intention to have their rights and obligations under the
Agreement set by a specific law—RULPA, codified at Title 48,
Chapter 2a of the Utah Code—that was in effect at the time the
Agreement was executed. And as discussed, that law did not
require general partners to seek the input of limited partners
about anything other than voluntary dissolution. Accordingly,
the passage of ULPA in 2013, and the associated gradual repeal of
RULPA, had no effect on LaVern’s established right, as the sole
6. It is worth noting that these parties, in drafting the Agreement,
knew how to specify that their rights would be governed by
changing law in the future. In Section 9.5 of the Agreement, the
parties agreed that their partnership allocations, for tax purposes,
would be made “in accordance with Section 706(c)(2) of the
Internal Revenue Code of 1986, as amended, or the corresponding
provisions of any future United States Internal Revenue law.”
(Emphasis added.) The parties did not use similar language in
describing their view of Utah partnership law.
20210546-CA 21 2022 UT App 139Ellis v. La Val Enterprises
remaining general partner, to take the actions authorized by
Section 7.3 of the Agreement. 7
CONCLUSION
¶41 There are several aspects to this multifaceted family
dispute, and we resolve only one of those in this interlocutory
appeal. We conclude that LaVern had the authority, pursuant to
the Agreement, to enter into the Option Contract without first
seeking the consent or approval of the limited partners, and that
the district court erred in concluding otherwise. We therefore
reverse the court’s grant of the Siblings’ motion for partial
summary judgment, and we remand this case with instructions
for entry of an order granting partial summary judgment in favor
of Dennis and Maria on the authority issue, and for other
additional proceedings consistent with this opinion.
7. Moreover, even if post-2013 partnership law were somehow
applicable here, the relevant provisions of that law only set
default rules that parties could vary in their partnership
agreements. See Utah Code Ann. § 48-2e-112(2) (LexisNexis 2015).
These parties did that here, at least with regard to the power of
general partners to take certain actions without first obtaining the
consent of limited partners, by agreeing to the specific terms of
Section 7.3. And in any event, the 2013 law contains a “savings
clause” that makes clear that it “does not affect” any “right
accrued before” the new law took effect. See id. § 48-2e-1204 (2013).
The general partners’ rights under this Agreement, including
their authority to take action without first seeking the approval of
the other partners, accrued in 1996 when the Agreement was
signed. For these additional reasons, the 2013 legislative changes
do not alter these parties’ rights and duties under the Agreement,
as established in 1996.
20210546-CA 22 2022 UT App 139