Dhc Resort, LLC v. Razorback Entertainment Corporation and Jake Prince

BYE, Circuit Judge,

concurring in part and dissenting in part.

DHC’s complaint asserts six claims for relief. The district court dismissed each with prejudice. This court affirms the dismissal of two of the claims as deficient on the face of the complaint, but otherwise reverses the decision below. I would affirm the district court in its entirety; I therefore respectfully dissent.

I agree with the district court: corporate law is not applicable. Razorback did not exist at the time Prince and Robinson purchased and began operating the Belve-dere as general business partners. There is no evidence Razorback ever acquired possession, ownership, control or management of the Belvedere. There is also no evidence of Razorback conducting an organizational meeting to elect directors or officers, adopt bylaws, or authorize the issuance of capital stock. Likewise, there is no evidence Prince and Robinson ever assigned their interests in Belvedere to Razorback. Therefore, while the majority is correct in concluding Prince and Robinson were able to acquire property the contemplated corporation, to be later formed, could obtain title to, there is no evidence title was ever transferred from either Prince and/or Robinson as general partners to Razorback, the contemplated, but unorganized, corporation. Consequently, Prince and Robinson always conducted the business of the Belvedere as general business partners by virtue of their written agreement with the prior owner, irrespective of the interests the two men may or may not have had in the yet to be organized corporation they were in the process of forming.

As a consequence, contract law, not corporate law, is determinative of the outcome of this dispute as the district court ruled. In the future, either partner could commence a partition action for an accounting and determination of how the remaining net assets, if any, of the partnership are to be divided should either partner be so inclined. Regardless, the decision of the district court in the present litigation is ripe for affirmance. Because the majority concludes otherwise, I respectfully dissent.