## Facts

- Giles Land Company, L.P. (the partnership) was a family-owned farming and ranching operation; all partners were members of the same family.
- Kelly K. Giles was one of the partners in the family enterprise.
- The partnership held a meeting to consider converting the partnership into a limited liability company (LLC).
- Kelly could not attend the meeting, but he later received notice that the partnership had decided to convert to an LLC.
- After learning of the conversion decision, Kelly formally requested access to the partnership’s books and records.
- The partnership provided books and records, but Kelly was dissatisfied with what was produced and claimed he was improperly denied access.
- Kelly sued the partnership and the other partners, asserting violations of his rights to inspect partnership records.
- The partnership and the other partners counterclaimed, seeking an order dissociating Kelly from the partnership under the Kansas Uniform Partnership Act.
- At trial, the defendants presented evidence that Kelly had used threatening language toward family members involved in the partnership and that the family relationship among the partners had broken down.
- The defendants also presented evidence of mutual distrust between Kelly and the other partners, and that the conflict prevented effective joint decisionmaking for the business.
- The district court ruled for the defendants on all claims, including ordering Kelly’s dissociation based on the determination that it was not reasonably practicable to continue the partnership with him as a partner.
- Kelly appealed only the dissociation order to the Kansas Court of Appeals, arguing that any misconduct was personal or familial and not conduct “relating to the partnership.”

## Issues

1. Whether the district court properly ordered judicial dissociation of Kelly under K.S.A. 56a-601(e)(3) on the ground that it was not reasonably practicable to carry on the partnership business with him as a partner.
2. Whether the record supported dissociation on the alternative ground in K.S.A. 56a-601(e)(1), based on wrongful conduct that adversely and materially affected the partnership business.
3. Whether the court could consider threats, animosity, and distrust arising from a family dispute as conduct that, in context, affected the partnership’s ability to operate.

## Decision

- The Kansas Court of Appeals affirmed the judgment ordering Kelly’s dissociation from the partnership.
- The court applied de novo review to statutory interpretation questions and reviewed the trial court’s fact findings for substantial competent evidence.
- The court held that the evidence supported the finding that relations among the partners had deteriorated to the point that continued operation with Kelly as a partner was not reasonably practicable under K.S.A. 56a-601(e)(3).
- The court rejected Kelly’s argument that the dispute was merely personal, concluding that the hostility, threats, and mutual distrust had direct consequences for partnership governance and business decisions.
- The court indicated that the same evidence also supported dissociation under K.S.A. 56a-601(e)(1) because the conduct at issue adversely and materially affected the partnership’s business.

## Legal Principles

- To the extent an appeal requires interpretation of a statute, appellate review is unlimited; fact findings are reviewed for substantial competent evidence, and legal conclusions are reviewed without deference.
- Under K.S.A. 56a-601(e)(3), a court may order a partner’s dissociation when it is not reasonably practicable to carry on the partnership business with that partner.
- Under K.S.A. 56a-601(e)(1), a court may order dissociation when a partner has engaged in wrongful conduct that adversely and materially affected the partnership business.
- In a closely held, family-run partnership, proof of severe animosity, mutual distrust, threats, and a resulting impasse in management can satisfy the “not reasonably practicable” standard because the partnership cannot function through ordinary collective decisionmaking.
- A partner’s conduct does not have to be limited to financial wrongdoing to justify dissociation; conduct that obstructs cooperation, damages working relationships necessary for management, or interferes with business decisionmaking may materially affect the business.
- A court may treat “personal” family conflict as partnership-relevant when the conflict prevents partners from carrying out partnership governance and operations.

## Conclusion

The Kansas Court of Appeals affirmed judicial dissociation of a partner in a family farming partnership where the trial court found, based on substantial competent evidence, that threats, deep animosity, mutual distrust, and a management impasse made it not reasonably practicable to continue operating the partnership with that partner, supporting dissociation under K.S.A. 56a-601(e)(3) and also fitting the alternative wrongful-conduct ground in K.S.A. 56a-601(e)(1).


Giles v. Giles Land Company, 279 P.3d 139 (2012)