Western Group Nurseries, Inc. v. Estate of Adams

MEMORANDUM **

Western Group Nurseries (‘Western Group”), the debtor, appeals the district court’s grant of summary judgment dismissing its adversary actions seeking to recover from certain limited partners the amounts allegedly owed on a Limited Partnership Note. The district court dismissed on statute of limitations grounds. Western Group contends the court erred in applying New York rather than Arizona law.

The original partnership tax shelter was organized in Arizona in the early 1980s and purchased by World Nurseries. It simultaneously sold the operation to the Limited Partnership in return for a Limited Partnership Note. The Limited Partnership Note (the “Note”) set forth the maximum liability of each of the limited partners for the Limited Partnership’s purchase obligation. The Note contained no choice of law provision but effectively incorporated the provisions of the Limited Partnership Security Agreement that World Nurseries and the Limited Partnership executed at the same time as the Note. The Security Agreement contained a choice of law provision selecting New York law as the applicable law.

The agreement establishing the Limited Partnership, the Limited Partnership…