O’Rourke, et al. v. Lunde and The Housing Group Limited Partnership

This issue before the Supreme Court in this case arose from a dispute between a general partner and limited partners over the proceeds from the dissolution of their partnership. Appellant Alfred Lunde sought to reverse an arbitration award and a trial court order that assessed attorney’s fees and receivership fees and costs against his share of the partnership assets. The partnership agreement was for a thirty-year term that expired on December 31, 2009. At that time, the general partner was to liquidate the partnership’s assets “as promptly as is consistent with obtaining the fair value thereof.” The agreement called for fifty percent of the net proceeds to be distributed to the general partner and the remainder to be distributed to the limited partners. The partnership agreement included an arbitration clause that required arbitration of “[a]ny dispute or controversy arising in connection with this Agreement or in connection with the dissolution of the Partnership.” Lunde did not promptly liquidate the partnership’s assets after the agreement expired, and in February 2011 the limited partners filed suit in superior court seeking to have a receiver appointed to wind up the partnership, liquidate the assets, and distribute the proceeds. In March 2011 the trial court appointed a receiver who proceeded to wind down the business and sell the assets. A few months later the court removed Lunde as general partner after he failed to cooperate with the receiver, jeopardizing both the reauthorization of the apartment complex as Section 8 housing and the sale of the asset. Lunde filed a pro se demand for arbitration with the American Arbitration Association (AAA). Plaintiffs filed a motion to stay the arbitration. The court denied the motion, holding that the arbitration clause governed the parties’ dispute. The court’s order denying the motion to stay created two exceptions for issues that it reserved for its own decision: plaintiffs’ claim of fraudulent conveyance concerning the transfer of certain funds by Lunde, and plaintiffs’ claim for attorney’s fees “incurred in connection with all proceedings [in the trial court] with respect to the application to appoint a Receiver, through to conclusion of the Receiver’s duties pursuant to court order(s) . . . .” After its review of the matter, the Supreme Court affirmed on the legal issues, but remanded for a further hearing on a narrow issue regarding the amount of attorney’s fees assessed against Lunde. View "O'Rourke, et al. v. Lunde and The Housing Group Limited Partnership" on Justia Law