## Facts

- Delores Gibson, Michael Gibson, and Greg Gibson formed the Gibson Family Limited Partnership (GFLP) in 2002 as an estate-planning vehicle.
- Delores was the sole general partner; Michael and Greg were limited partners. Delores held an 8.4% interest, and Michael and Greg each held 45.8%; neither son paid for his interest.
- The partnership’s principal asset was about 2,060 acres of land Delores conveyed to the partnership. Michael and Greg initially operated the land together.
- In April 2007, GFLP loaned Greg $350,000. Michael sued Delores, Greg, and GFLP in 2007 alleging, among other things, that Delores breached fiduciary duties.
- In September 2008, GFLP leased the land to Champaygn Ranch, Inc., a company owned by Greg and his wife. A jury later rejected Michael’s fiduciary-duty claims arising out of the 2007 loan and the 2008 lease.
- In December 2010, GFLP renewed the lease with Champaygn Ranch for a 20-year term.
- In March 2011, GFLP entered into a contract for deed to sell 830 acres of the leased land to Greg for $1.1 million, based on an appraisal Michael disputed; the lease was amended to remove those acres.
- Michael filed this 2011 action alleging Delores breached fiduciary duties in connection with the lease renewal and land sale and later sought “dissociation for value,” asking the court to order a buyout of his partnership interest.
- The partnership agreement did not permit limited partners to dissociate or withdraw.
- After a jury returned a defense verdict on the fiduciary-duty claim, the circuit court denied Michael’s request for dissociation for value and later refused to reconsider dissociation based on alleged newly discovered evidence.

## Issues

1. Whether a limited partner may obtain judicial dissociation for value when the partnership agreement bars dissociation and the limited partner does not satisfy any statutory dissociation ground.
2. Whether a court may order dissociation for value based on general equity when statutory dissociation grounds are not met.
3. Whether the circuit court committed reversible error by excluding certain evidence related to the prior $350,000 loan and by admitting expert testimony addressing the legality of the lease and contract-for-deed transactions.
4. Whether alleged newly discovered evidence required reconsideration of dissociation for value or other posttrial relief.

## Decision

- The Supreme Court of South Dakota affirmed the circuit court in full.
- Michael was not entitled to dissociation for value because he did not prove any statutory ground authorizing dissociation, and the partnership agreement did not allow limited-partner dissociation.
- The court declined to order dissociation based on general equitable doctrines where the statute supplied a defined list of dissociation grounds.
- The evidentiary rulings challenged on appeal did not warrant reversal because the circuit court did not abuse its discretion in a way that prejudiced Michael.
- The circuit court properly rejected Michael’s posttrial request to revisit dissociation based on newly discovered evidence because the proffered evidence was not material to the dissociation analysis.

## Legal Principles

- A partner seeking judicial dissociation must prove facts that fit within the dissociation grounds specified by the governing statute; courts do not add extra dissociation grounds outside the statutory list.
- A limited partner who has no significant duties under the partnership agreement cannot establish dissociation based on an asserted inability to perform partner duties.
- When a partnership agreement restricts or prohibits voluntary withdrawal, a court will not override that contractual allocation of rights by ordering a buyout absent statutory authorization.
- Trial-court evidentiary rulings are reviewed for abuse of discretion, and reversal requires a showing of prejudice.
- Expert testimony may address legal compliance or similar subsidiary matters connected to disputed transactions if it assists the jury and does not merely instruct the jury on the ultimate legal conclusion.
- Postjudgment relief based on newly discovered evidence requires a showing that the evidence is material and likely to change the outcome; evidence that does not affect the controlling legal standard does not justify reopening the judgment.

## Conclusion

In Gibson v. Gibson Family Ltd. Partnership, the South Dakota Supreme Court held that a limited partner could not force dissociation for value and a buyout where the partnership agreement barred dissociation and the partner failed to satisfy any statutory dissociation ground; the court also affirmed the circuit court’s evidentiary rulings and its refusal to grant posttrial relief based on newly discovered evidence.


Gibson v. Gibson Family Ltd. Partnership, 877 N.W.2d 597 (2016)