Appletree Square I Limited Partnership v. Investmark, Inc.

494 N.W.2d 889 (1993)

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Nature of the Case

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Facts

P was formed on September 21, 1981, to purchase and operate One Appletree Square, a 15-story office building. P was organized under the 1976 Uniform Limited Partnership Act, Minn. Stat. §§ 322A.01-.87 (1980). The building sale occurred in 1981. D, who designed and built the office building, also held an interest in P when the sale occurred. In 1985, a further acquisition was made by the sale of a 25 percent interest in the Appletree partnership. An affiliate of P, CRI, represented P and D in both transactions; CRI is a real estate syndication firm. During negotiations, CRI wrote a letter D requesting 'any information that you have not already sent to us which would be material to our investors' participation in this development.' CRI was told to inspect the building and the records because the sellers 'had no way of knowing what information would be material to your investors' participation.' In 1986, P learned that the structural steel in the building had been coated with asbestos-based fireproofing, which was deteriorating and releasing fibers. P alleged that D was liable for failing to disclose the presence and danger of asbestos. P sued for breach of contract; violation of the Limited Partnership Act, Minn. Stat. § 322A.17 (1990); violation of the Deceptive Trade Practices Act, Minn. Stat. § 325D.44 (1990); fraud and misrepresentation; and negligent misrepresentation. D's motion for summary judgment, Ps failed to plead fraud with particularity and because the other claims were time-barred. Ps moved to amend the judgment and their complaint, adding claims of breach of fiduciary duty and violation of the Minnesota Environmental Response and Liability Act, Minn. Stat. § 115B.16 (1990). The motion was denied. The court stated that under Minn. Stat. § 322A.28 and the partnership agreement, the partners' fiduciary duties were only to render, on-demand, true and full information. Ps had not demanded information about asbestos and thus D had not breached its fiduciary duty of disclosure. Ps appealed.