Opinion
No. 09-3634.
Submitted Under Third Circuit L.A.R. 34.1(a), October 6, 2010.
Opinion Filed: October 28, 2010.
On Appeal from the United States District Court For the District of New Jersey (D.C. No. 04-cv-03093), District Judge: Honorable Katharine S. Hayden.
Matthew J. Fedor, Esq., Robert M. Leonard, Esq., Drinker, Biddle Reath, Florham Park, NJ, Louis M. Solomon, Esq., Cadwalader, Wickersham Taft, New York, NY, for Appellants.
Christopher H. Lowe, Esq., Richard I. Scharlat, Esq., Seyfarth Shaw, New York, NY, Albert J. Millus, Jr., Esq., Hinman, Howard Kattell, Binghamton, NY, for Defendants-Appellees.
BEFORE: FUENTES, JORDAN and ALDISERT, Circuit Judges.
OPINION OF THE COURT
In 1984 William Soroka ("Soroka") and several other investors gave William Huff money in return for an ownership stake in a limited partnership called W.R. Huff Asset Management ("Huff). The general and limited partners of Huff intended to create a closed arrangement limited to friends and family. Accordingly, the 1984 partnership agreement, amended when the partnership converted to a limited liability company in 1994, contains several provisions designed to limit members' ability to transfer their interests. The parties dispute the meaning and effect of these provisions.
After a three-day bench trial, the District Court entered judgment in favor of Appellees — the executor of Soroka's estate, and the trusts Soroka created and their trustees. Later, in a separate opinion and order, the District Court granted Appellees' Motion to Amend Judgment to Include Prejudgment Interest. Huff and its two general managers, Kato-San Corporation and DBC I Corporation, appeal from both decisions.
The District Court had jurisdiction pursuant to 28 U.S.C. § 1332 and we have appellate jurisdiction pursuant to 28 U.S.C. § 1291. On the appeal of a bench trial, we review a district court's findings of fact for clear error and its conclusions of law de novo. McCutcheon v. America's Servicing Co., 560 F.3d 143, 147 (3d Cir. 2009). We review the District Court's grant of equitable relief under an abuse of discretion standard. See James v. Richman, 547 F.3d 214, 217 (3d Cir. 2008); Commodity Futures Trading Comm'n v. Am. Metals Exch. Corp., 991 F.2d 71, 76 (3d Cir. 1993).
Huff asserts that the District Court erred in four primary respects: (1) it erroneously concluded that the only way to remedy the breach that occurred when Soroka attempted to transfer his interest was to void the attempted transfer; (2) its interpretation of the partnership agreement failed to acknowledge that Soroka's attempted transfer triggered Huffs right to redeem his interest; (3) it was wrong to conclude that the partnership agreement created a special post-mortem status in which Soroka's interest was not transferred upon his death, but instead controlled by his executor; and (4) it erroneously granted Appellees' Motion to Amend Judgment to Include Prejudgment Interest.
After a careful review of the record and the parties' arguments, we find no basis for disturbing either of the District Court's opinions. The District Court's decisions properly put the parties in exactly the position they would have been in had Soroka not unsuccessfully attempted to transfer his interest to a charitable trust. Therefore, we will affirm the amended judgment for the same reasons set forth in the record.
For ownership of Soroka's interest in Huff to have been transferred, the requirements of §§ 8.1(B), 8.2(A), and 8.3(D) must have been met. Those requirements clearly were not met at anytime — in 1999, upon Soroka's death, or after his death. So no valid transfer of Soroka's interest ever occurred.