Family Partnership Entitled to Damages from Managing Partner Who Entered Into Losing Grain Contracts Without Authority.

Members of a family farming partnership filed an action against one of its managing partners, alleging that the partner had entered into a series of grain contracts on behalf of the partnership without the authority to do so, resulting in significant losses to the partnership. The district court, in a bench trial, ruled in favor of the plaintiffs, and the defendant appealed. The partnership agreement required decisions to be made by a majority of the three managing partners. In 2008 and 2009, the defendant entered into a series of “focal point” contracts with a corn processor, “unlocking” the price of hedge contracts the partnership had previously entered into and allowing it to float with the market based upon the increase or decrease in the market between the opening and closing dates. The defendant entered into these contracts on behalf of the partnership, without consulting the others. After the partnership dissolved, the remaining partners alleged that they suffered $867,000 in damages as a result of the focal point contracts. In affirming the district court judgment in favor of the plaintiffs, the court found that because the defendant’s actions in entering into the contracts was not authorized or ratified by the partnership, he was liable for damages to the remaining partners. The limitation of liability clause in the partnership agreement did not shield the defendant from liability because that clause only protected activity that was authorized by the partnership. Elting v. Elting, No. S-13-551, 288 Neb. 404, 2014 Neb. LEXIS 98 (Neb. Sup. Ct. Jun. 27, 2014).