Fox v. I-10 Ltd.

I-10 Ltd. was a Colorado limited partnership with MSP Investment Co. (MSP) as its general partner and multiple limited partners (LPs), including William Fox (plaintiff). The limited-partnership agreement executed by MSP and the LPs identified the partnership’s purpose as purchasing and developing 305 acres in Arizona. Under article 4.09, if MSP determined that additional capital contributions were necessary, then it could require each LP to pay a pro rata share. The total additional capital contribution required from an LP could not exceed 400 percent of the LP’s initial capital contribution. Article 7.02 stated the agreement could be amended with MSP’s approval and a majority vote of the LPs, except that no amendment could deprive MSP of its partnership interest, compensation, or reimbursement for expenses. Fox originally contributed $85,000, meaning that his maximum potential additional investment under the 400 percent cap was $340,000. On MSP’s recommendation, Fox and the other LPs voted to increase article 4.09’s cap to 600 percent. MSP then proposed to increase the cap to 800 percent. Fox objected, but the other LPs approved. When MSP called for additional contributions meeting the 800 percent cap, Fox paid $510,000, which was 600 percent. He sued I-10, seeking a declaratory judgment that he was not obligated to pay the additional 200 percent, which totaled $170,000. Fox argued that the cap on an LP’s capital contribution was so fundamental to the limited-partnership structure that it could not be amended by majority vote even if the partnership agreement allowed it. He also argued that because the Colorado Uniform Limited Partnership Act (CULPA) required certificates of limited partnership to identify LPs’ capital contributions, a limited partnership could not contractually require additional contributions. The trial court held in Fox’s favor, but the state appeals court reversed. Fox appealed.