Monin v. Monin

Charles and Joseph “Sonny” Monin were brothers who formed a partnership in 1967 to haul and deliver milk. The partnership bought its milk from Dairymen Incorporated, a group of milk producers. In 1984 Sonny notified Charles of his intention to dissolve the partnership. Sonny also contacted Dairymen Incorporated, informing it of the dissolution and announcing his intention to apply to haul milk for Dairymen Incorporated after the partnership’s contract ended. As part of the dissolution, Charles and Sonny agreed to hold a private auction between themselves for the partnership’s assets, including its equipment and milk-hauling contract. The agreement also explained that Dairymen Incorporated would have final approval of any sale. Charles won the auction, bidding $86,000. Dairymen Incorporated rejected Charles’s offer. In rejecting Charles’s offer, the milk producers indicated that their decision was based on their dislike of Charles rather than a preference for Sonny. After rejecting Charles, Dairymen Incorporated voted to offer the contract to Sonny. Sonny accepted the offer, essentially receiving the partnership’s main asset, its milk-hauling contract, for free. Without the milk-hauling contract, the partnership’s assets were valued at $22,000. Charles sued Sonny in state court for breaching his fiduciary duty to the partnership and tortiously interfering with the partnership’s contractual relationships, arguing that Sonny benefited himself at the expense of the partnership by maintaining his application for the milk-hauling contract despite agreeing to compete for the contract with Charles at the auction. The trial court held that Sonny did not breach his fiduciary duty to the partnership. The trial court reasoned that after Dairymen Incorporated rejected Charles’s offer, the partnership no longer had an interest in the milk routes. Therefore, Sonny was entitled to accept the milk-hauling contract. Charles appealed.