## Facts

- Mt. Hood Meadows Oreg., Ltd. was a limited partnership formed to develop and operate a winter sports business; Mt. Hood Meadows Development Corp. served as the general partner.
- Plaintiffs were three of eighteen limited partners.
- Beginning after 1974, the general partner’s board voted to distribute only 50% of limited partners’ taxable profits and to retain the remainder for reinvestment.
- Plaintiffs claimed the partnership agreement required cash distributions equal to all profits allocated to them.
- Plaintiffs sued the partnership and general partner for money had and received and for conversion.
- The trial court dismissed the conversion claim on the pleadings, tried the money-had-and-received claim, and entered judgment ordering annual cash distributions to limited partners equal to all allocated profits.
- Defendants appealed, arguing the complaint failed as a matter of law because the agreement permitted retention of profits.

## Issues

1. Whether the limited partnership agreement required the general partner to distribute to limited partners all profits allocated to them.
2. Whether, if the agreement allowed retention and reinvestment of profits, limited partners could state a claim for money had and received based on non-distribution.

## Decision

- The Court of Appeals reversed.
- The court held the general partner had authority under the partnership agreement to retain and reinvest profits and was not required to distribute all allocated profits.
- Because plaintiffs lacked a contractual right to immediate distribution of all allocated profits, they failed to state a claim for money had and received based on defendants’ retention of those funds.

## Legal Principles

- Allocation of profits for accounting and tax purposes is distinct from a contractual right to current cash distributions.
- Where a limited partnership agreement vests “exclusive” management and control in the general partner (except as otherwise provided), retention of earnings for business purposes falls within the general partner’s managerial discretion absent explicit limits.
- A quasi-contract claim for money had and received requires that the defendant be wrongfully holding money that, in equity and good conscience, belongs to the plaintiff; no such wrongful holding exists when the governing agreement does not require payment.

## Conclusion

The court concluded that the partnership agreement did not mandate full cash distributions of allocated profits and that the general partner’s broad management authority permitted retaining and reinvesting earnings; accordingly, the limited partners could not recover under a money-had-and-received theory premised on an alleged entitlement to immediate distribution.


Brooke v. Mt. Hood Meadows Oreg., Ltd., 81 Or. App. 387, 725 P.2d 925 (1986)