AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• The case involves a dispute between two former business partners, Richard P. Cook and Rex P. Wilson, concerning the Cook/Wilson Entities, a series of LLCs formed for real-estate development. Cook sued Wilson for breach of a personal guaranty, while Wilson counterclaimed for breach of the operating agreements, alleging unequal profit distributions that were not rebalanced as allegedly agreed. The core of the dispute revolves around the interpretation of the operating agreements and whether the actions taken (or not taken) by the parties constituted breaches of those agreements (paras 3-10).

Procedural History

• District Court of Bernalillo County: Both Cook's claim and Wilson's counterclaim were dismissed as time-barred by the statute of limitations for actions on written contracts (para 1).

Parties' Submissions

• Plaintiff/Counterdefendant-Appellee (Cook): Argued that Wilson's counterclaim was time-barred, asserting that the cause of action accrued when the unequal distributions were made or when Wilson had knowledge of sufficient facts to constitute a cause of action, which was no later than November 16, 2007 (paras 12-13).
• Defendant/Counterclaimant-Appellant (Wilson): Contended that the operating agreements allowed for unequal distributions at the members' discretion, requiring only that profits be divided equally before the final wrap-up of the Cook/Wilson Entities. Wilson argued that there was no breach until the entities wrapped up without rebalancing in 2009, making his counterclaim timely (paras 13-14).

Legal Issues

• Whether Wilson's counterclaim for breach of the operating agreements was time-barred (para 12).
• Whether the operating agreements' terms regarding profit distribution are ambiguous and allow for Wilson's interpretation that profits were to be equalized by the time the entities concluded their business (para 17).
• Whether Cook's claim on Wilson's alleged breach of his personal guaranty was time-barred or revived by a written acknowledgment of the debt (para 27).

Disposition

• The district court's grant of summary judgment on Cook’s breach of guaranty claim was affirmed, dismissing it as time-barred.
• The grant of summary judgment on Wilson’s counterclaim for breach of the operating agreements was reversed, and the case was remanded for trial (para 39).

Reasons

• The Court of Appeals found that the operating agreements' terms governing the distribution of profits are ambiguous, necessitating a trial to determine their meaning and the date of breach. It was concluded that the agreements are susceptible to more than one construction, and extrinsic evidence in the summary judgment record further complicates the intended meaning of the relevant provisions (paras 20-26). Regarding Cook's cross-appeal, the court held that the April 30, 2008, letter from the Cook/Wilson Entities’ tax accountant did not constitute an unqualified and unconditional acknowledgment of a debt by Wilson sufficient to meet the requirements of Section 37-1-16 to revive Cook’s otherwise time-barred contract claim. The letter and accompanying spreadsheet were determined to be an offer of compromise, not an acknowledgment of debt (paras 27-38).