Sunday, November 24, 2013

Covalt v. High case brief

Covalt v. High case brief summary
675 P.2d 999 (1983)

Appellant partner sought review of an order of the District Court, Bernalillo County (New Mexico), which granted judgment for appellee co-partner in a suit against appellant for breach of fiduciary duty in connection with partnership business.

Two men were corporate officers and shareholders in a corporation. They formed a partnership which bought real estate and constructed an office and warehouse building on the land. The building was then leased to the corporation. Appellee resigned his corporate position and was employed by another company but remained a partner in the ownership of the land and building. Appellee wrote to appellant demanding that the monthly rent be increased, but appellant took no action on his request. Appellee then filed suit against appellant, alleging breach of fiduciary duty and seeking the sale of the real property in lieu of partition, an accounting, and actual and punitive damages. Appellee also filed suit against the corporation, but the trial court ordered that the partnership action be tried separately. Appellee was awarded judgment.


  • On appeal, the court reversed and held that, in the absence of an agreement of a majority of the partners, an act involving a partnership business could not be compelled by a co-partner. 
  • There was no breach of fiduciary duty by appellant, and the proper remedy for the impasse was dissolution.

The court reversed the order of the trial court awarding judgment for appellee in his suit against appellant for breach of fiduciary duty involving a partnership.

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