Hilco Property Services, Inc. v. United States

Elizabeth Boyer, who owned and operated a summer camp, was terminally ill. Boyer’s three children, Tom, William, and Paula (defendants) hoped to persuade their mother to convey the camp to them rather than let the camp pass into Boyer’s estate. The siblings planned on forming a partnership called Campfire Point Associates (CPA) to own the camp and convert it into a lucrative residential subdivision. By the time Boyer was in the last throes of her illness, hospitalized, heavily sedated, and disoriented, the partnership discussions had broken down due to the siblings’ mutual hostility and mistrust. Nevertheless, on August 14, 1986, Tom procured his mother’s signature on a deed conveying the camp to CPA. Boyer died 10 days later, at which time a federal tax lien attached to Boyer’s estate. Thereafter, the siblings, in the name of CPA, recorded the August 14 deed with New Hampshire’s secretary of state and commenced municipal subdivision proceedings. For the 1986 and 1987 tax years, each sibling reported losses from CPA’s operation to the Internal Revenue Service (IRS). In May 1987, Tom bought out William’s and Paula’s shares in CPA. Tom later mortgaged CPA’s property to Hilco Property Services, Inc. (Hilco) (plaintiff). Hilco sued Boyer’s children and the United States government (defendant) in federal district court to quiet the property’s title, which Hilco contended had validly passed to CPA. The siblings ceased representing themselves as partners and joined the government in arguing that CPA was never a valid partnership to which Boyer could convey title. The court applied New Hampshire’s version of the Uniform Partnership Act (UPA).