Della Ratta v. Larkin

This dispute among the partners of the East Park Limited Partnership (“East Park”) arose in the aftermath of East Park’s sole general partner issuing a substantial capital call in March 2002. Some of the limited partners, who believed compliance with the capital call was financially unwise, wrote to the general partner to inform him of their intention to *557 withdraw from the partnership before the capital call became due. The general partner responded that the limited partners could not withdraw from the partnership and would be in default should they fail to comply with the capital call, the due date for which the general partner accelerated to a point in time prior to the announced effective date of the withdrawal of the pertinent limited partners.

The limited partners who wished to withdraw filed a complaint in the Circuit Court for Anne Arundel County seeking, among other things, a declaratory judgment that they had a statutory right to withdraw from East Park and an injunction barring enforcement of the capital call. The Circuit Court ultimately entered judgment in favor of the limited partners. This appeal followed in which we consider a number of issues of first impression concerning Maryland partnership law. Although we agree with the Circuit Court’s (1) application to the facts of this case of Maryland’s Uniform Partnership Act, instead of Maryland’s Revised Uniform Partnership Act; (2) conclusion that the limited partners possessed a statutory right to withdraw; and (3) declaration that the general partner, in accelerating the capital call and failing to investigate alternative financing, breached his fiduciary duty and acted in bad faith, we disagree with its determination that an assignment of a partnership interest in violation of an anti-assignment clause is valid and enforceable and, in this instance, caused East Park’s dissolution.

I.

In 1969, the Trinity Joint Venture Limited Partnership (“Trinity”) was formed in Maryland to develop commercially-zoned property on Crain Highway in Glen Burnie. In 1974, Trinity admitted Joseph M. Della Ratta (“Della Ratta”) as a general partner.

On 21 December 1981, an amended partnership agreement (the “Agreement”) was executed under which Della Ratta became Trinity’s sole general partner. Della Ratta also was one of the partnership’s thirteen limited partners. The *558 Agreement was amended on 4 May 1992 to change the name of the partnership to East Park. A further amendment was executed on 1 June 1992 substituting as limited partners the widows (Barbara A. Larkin, Rosemary Krupnik, and Valeree Sass) of three deceased limited partners.

East Park developed a shopping center on its Glen Burnie property that, over time, grew to include 205,000 square feet of retail space. In 1992, East Park obtained $9,000,000 in financing secured by a mortgage on the shopping center (the “Aegon Loan”). The Aegon Loan provided for interest at the rate of 9.875% per annum and had a due date of 1 January 2003.

In December 2001, Della Ratta, a legal resident of Florida, created the Della Ratta Intangible Asset Management Trust (the “Trust”) in order to avoid a Florida tax on intangible assets. When Della Ratta’s accountant prepared East Park’s 2001 tax returns, he showed no ownership interest for Joseph M. Della Ratta. Instead, the K-l Schedules reflected that all of Della Ratta’s ownership interest in East Park had been transferred to the Trust. After the tax returns were brought to his attention during the course of the present litigation, Della Ratta argued that this purported transfer was a mistake and filed amended returns correcting the alleged mistake.

By letter dated 1 March 2002, Della Ratta informed East Park’s limited partners that the Aegon Loan would be due on 3 February 2003. 1 The letter stated that the loan balance of $7,528,499 could not be repaid by East Park’s cash reserves and that a capital call would be due on 30 September 2002. Each limited partner would be required to contribute his or her pro-rata share of the Aegon Loan balance.

Some of the limited partners met with Della Ratta on 15 March 2002 to discuss the capital call. According to the meeting minutes, some limited partners were concerned about meeting the capital call. Refinancing the Aegon Loan was *559 suggested as an alternative. Della Ratta stated that he would contact lenders and try to get a commitment for a loan. By his own admission, Della Ratta thereafter failed to explore refinancing options.

After the 15 March meeting, Barbara Larkin, Valerie Sass, Rosemary Krupnick, and the Charles L. Helferstay Residuary Trust (the “Withdrawing Partners” or “Appellees”) each gave written notice to Della Ratta purporting to exercise their statutory right to withdraw from East Park, pursuant to Md.Code (1975, 1999 Repl.Vol.), § 10-603(b) of the Corporations and Associations Article. 2 , 3 Each Withdrawing Partner’s withdrawal would be effective on 29 September 2002, giving more than the six months notice required by § 10-603(b). The Withdrawing Partners’ attorney subsequently wrote to Della Ratta to inform him that, pursuant to Md.Code (1975, 1999 RepLVol.), § 10-604 of the Corporations and Associations Article, 4 each Withdrawing Partner asserted entitlement to the fair value of her or its interest in East Park.

*560 Della Ratta wrote to the Withdrawing Partners’ counsel on 3 April 2002 claiming that § 10-603(b) was inapplicable because the Agreement specified when the Withdrawing Partners’ capital could be removed from the partnership and the Withdrawing Partners were not so entitled under the circumstances. After further communications, on 10 May 2002, Della Ratta again wrote to the Withdrawing Partners’ counsel and extended a settlement offer good for ten days. He stated that if the settlement offer was not accepted, the capital call would be accelerated and due on 1 September 2002. Della Ratta claimed that a default by the Withdrawing Partners in meeting the call would result in forfeiture of their interests in East Park. 5

The Withdrawing Partners collectively owned a 20.797% interest in East Park. In order to meet the capital call, the Withdrawing Partners were obligated to contribute a total of approximately $1,126,000.

In addition, in his correspondence Della Ratta suggested that the East Park partners might face additional capital calls in the future. Although as the sole general partner Della Ratta exclusively controlled any cash distributions from East Park to the partners, he gave no indication that he planned to make distributions in the future. Indeed, for a number of years the limited partners realized no net income from their investment in East Park. Given these circumstances, the Withdrawing *561 Partners believed that further out-of-pocket investment in East Park was unwise. For some limited partners, satisfying the capital call also would have been a serious financial hardship.

On 24 May 2002, the Withdrawing Partners filed a complaint in the Circuit Court for Anne Arundel County seeking a declaratory judgement that they properly had withdrawn from East Park and were entitled to the fair value of their East Park partnership interests. They also sought an injunction barring enforcement of the capital call. East Park, Della Ratta, other limited partners, and purported assignees of East Park interests (collectively, the “Remaining Partners” or “Appellants”) were named as defendants. 6

The Withdrawing Partners amended their complaint approximately two months later to add a count seeking a declaratory judgment that East Park was dissolved in December 2001 when Della Ratta purportedly transferred his interest to the Trust. On the same day, the Withdrawing Partners filed an amended motion for summary judgment on the issues of East Park’s purported dissolution and the Withdrawing Partners’ purported statutory right of withdrawal, together with a motion for a preliminary injunction to stay enforcement of the capital call claimed due on 1 September 2002.

The Circuit Court, by an order of 30 August 2002, granted partial summary judgment to the Withdrawing Partners, ruling that the Withdrawing Partners had a statutory right to withdraw from East Park. The Circuit Court also issued a preliminary injunction enjoining the capital call pending a trial on the merits.

A bench trial on liability was held from 22 January through 24 January 2003. 7 On 28 March 2003, the Circuit Court issued *562 an opinion and order (1) declaring that Della Ratta’s assignment to the Trust effected his withdrawal as general partner and triggered East Park’s dissolution; (2) ordering East Park to wind up its business and distribute its assets to the partners; and (3) permanently enjoining enforcement of the capital call against the Withdrawing Partners.

On 21 May 2003, the Circuit Court stayed, pending final judgment and appeal, all aspects of its 28 March order, other than the permanent injunction barring enforcement of the capital call. Because the Circuit Court’s determination that East Park had been dissolved made moot its prior order that the Withdrawing Partners properly exercised a statutory right of withdrawal, there was no trial on the question of relief. On 28 July 2003, the Circuit Court issued its final judgment: (1) declaring that East Park was dissolved; (2) ordering East Park wound up and its assets distributed to its partners; and (3) continuing the permanent injunction barring enforcement of the capital call.

The Remaining Partners filed a timely appeal to the Court of Special Appeals. While the appeal was pending and before the intermediate appellate court could decide the case, the Withdrawing Partners filed a petition for writ of certiorari with this Court. On 11 February 2004, we issued the writ, Della Ratta v. Larkin, 379 Md. 225, 841 A.2d 339 (2004), to consider the following questions, which we have slightly rephrased:

I. Whether the Circuit Court erred in concluding that the Uniform' Partnership Act, not the Revised Uniform Partnership Act, as enacted in Maryland, governs the outcome of this case?

II. Whether the Circuit Court erred in finding that Della Ratta transferred his general partner interest in East Park to a trust and thereby caused the dissolution of the limited partnership?

III. Whether the Circuit Court erred in finding that the Withdrawing Partners had a statutory right to withdraw from East Park pursuant to § 10-603(b)?

*563 IV. Whether the Circuit Court properly enjoined enforcement of the capital call based on its findings that Della Ratta did not have the authority to unilaterally issue the capital call, and that Della Ratta breached his fiduciary duties as general partner when he issued, then advanced the due date of, the capital call?

II.

When reviewing a case tried without a jury, we review the case on both the law and the evidence. Md. Rule 8 — 131(c) (2004 Repl.Vol.). We will not set aside a Circuit Court’s findings of fact unless clearly erroneous, and we must give due regard to the opportunity of the trial court to assess the credibility of the witnesses. Id. “In addition, we must consider the evidence in the light most favorable to the prevailing party ... and decide not whether the trial judge’s conclusions of fact were correct, but only whether they were supported by a preponderance of the evidence.” Colandrea v. Wilde Lake Community Ass’n, Inc., 361 Md. 371, 394, 761 A.2d 899, 911 (2000) (quoting Urban Site Venture II Ltd. Partnership v. Levering Assocs. Ltd. Partnership, 340 Md. 223, 229-230, 665 A.2d 1062, 1065 (1995)) (citations omitted). The clearly erroneous standard does not apply to our review of a trial court’s legal conclusions, which we review de novo. See Ins. Co. of N. Am. v. Miller, 362 Md. 361, 372, 765 A.2d 587, 593 (2001).

When reviewing a grant of a motion for summary judgment, our task is to determine whether any genuine dispute of material fact was shown to exist and, if not, whether the Circuit Court was legally correct. See Beatty v. Trail-master Prods., Inc., 330 Md. 726, 737, 625 A.2d 1005, 1011 (1993). A trial judge’s grant of injunctive relief, however, unless infected by an erroneous legal conclusion, is reviewed for abuse of discretion. See Colandrea, 361 Md. at 394, 761 A.2d at 911.

*564 III.

Maryland enacted the Uniform Partnership Act (“UPA”) in 1916, Creel v. Lilly, 854 Md. 77, 87, 729 A.2d 385, 391 (1999), and it governed partnerships for more than eighty years. Effective 1 July 1998, Maryland enacted the Revised Uniform Partnership Act (“RUPA”), Md.Code (1975, 1999 Repl.Vol.), § 9A-101 et seq. of the Corporations and Associations Article. The Circuit Court in the present case concluded that UPA, not RUPA, applied to these facts. We agree, concluding that the Legislature did not intend RUPA to have a retrospective reach so as to apply to the present case.

The general rule is that the partnership agreement governs the relations among the partners and between the partners and the partnership. Creel, 354 Md. at 87, 729 A.2d at 391. Where applicable statutes are concerned, East Park, as a limited partnership, is governed in the first instance by Maryland’s Revised Uniform Limited Partnership Act (“RULPA”), Md.Code (1975, 1999 Repl.Vol.), § 10-101 et seq. of the Corporations and Associations Article, which took effect in 1982. Limited partnerships also were governed by UPA, Md.Code (1975, 1999 ReplVol.), § 9-101 et seq. of the Corporations and Associations Article, except where its provisions were modified by or inconsistent with RULPA. § 10-108.

In adopting RUPA, the Legislature clearly sought to eliminate some of UPA’s harsh provisions. Creel, 354 Md. at 91, 729 A.2d at 393. Finalized in 1994 by the National Conference of Commissioners on Uniform State Laws, RUPA represents a complete rewriting of UPA and effectuates changes in seven major areas. See generally Robert W. Hillman et al., The Revised Uniform Partnership Act, introductory cmt. (2003 ed.). Among several changes relevant to the present case, RUPA contains a completely new and controversial articulation of a partner’s fiduciary duties. Id. Unlike UPA, which coexisted with the common law, RUPA attempts to displace the common law and define the fiduciary duties of partners entirely by statute. Id. at § 404. Moreover, RUPA narrowly defines the fiduciary duties of partners and downgrades the *565 common-law fiduciary duty of good faith to the status of a non-fiduciary “obligation.” Id. Accordingly, determining which Act applies is important and may prove dispositive to the outcome of the present case.

Upon its enaction in 1998, RUPA did not immediately replace UPA for all partnerships. RUPA contains a phase-in provision, § 9A-1204, which caused RUPA and UPA to coexist until 31 December 2002. Creel, 354 Md. at 81, 729 A.2d at 387. Section 9A-1204 determines the applicability of the respective Acts, providing in relevant part:

(a) Before January 1, 2003. — Before January 1, 2003, this title governs only a partnership formed:

(1) On or after July 1, 1998, unless that partnership is continuing the business of a dissolved partnership under § 9A-601 of this article; or

(2) Before July 1, 1998, that elects, as provided by subsection (c), to be governed by this title.

(b) After December 31, 2002. — After December 31, 2002, this title governs all partnerships.

(c) Election before January 1, 2003. — Before January 1, 2003, a partnership voluntarily may elect, in the manner provided in its partnership agreement or by law for amending the partnership agreement, to be governed by this title.

The Circuit Court applied UPA based on three determinations: (1) East Park came into existence prior to 1 July 1998; (2) East Park did not elect to be governed by RUPA as provided in § 9A-1204(c); and (3) all of the events which gave rise to this litigation occurred prior to 31 December 2002.

The Remaining Partners contend that UPA ceased to have any effect on 1 January 2003 and that RUPA should have been applied to reach an outcome in this case. They point to the fact that the Legislature added a termination provision to UPA, § 9-1001(b), which provides:

Termination. — [UPA] shall terminate and be of no effect after December 31, 2002.

*566 Although the Circuit Court in the present case conducted the trial and entered final judgment after 1 January 2003, the time period during which the East Park dispute arose determines which Act applies. “... [A] statute, though applied only in legal proceedings subsequent to its effective date and in that sense, at least, prospective, is, when applied so as to determine the legal significance of acts or events that occurred prior to its effective date, applied retroactively.” State Ethics Comm’n v. Evans, 382 Md. 370, 855 A.2d 364 (2004) (No. 125, September Term, 2003) (slip op. at 12-13, filed 30 July 2004) (quoting Allstate Ins. Co. v. Kim, 376 Md. 276, 289-90, 829 A.2d 611, 618-19 (2003)). Because the events at issue in the present case occurred prior to 1 January 2003, RUPA’s application to this dispute among East Park’s partners would be a retrospective one.

In determining whether a statute may be given retroactive effect, we engage in a two-part analysis. Evans, slip op. at 12. First, we must determine whether the Legislature intended the statute to have the kind of retroactive effect that is asserted. Id. Statutes are presumed to operate prospectively unless the Legislature “clearly expresses an intent that the statute apply retroactively.” Id. If we conclude that the Legislature intended for the statute to have retroactive effect, we must then examine whether such effect would contravene a constitutional right or prohibition, for example, impairing vested rights or violating the prohibition against ex post facto laws. See Evans, slip op. at 12.

In the present case, to determine the Legislature’s intent regarding retroactive application, we look to RUPA’s applicability provision, § 9A-1204, and UPA’s termination provision, § 9-1001. As we stated in Bank of America v. Stine, 379 Md. 76, 85-86, 839 A.2d 727, 732-33 (2003):

"... ‘[W]hen the statute to be interpreted is part of a statutory scheme, ... [we read it in context, together with the other statutes] on the same subject, harmonizing them to the extent possible.... ’ Mid-Atlantic Power Supply Ass’n v. Pub. Serv. Comm’n, 361 Md. 196, 204, 760 A.2d *567 1087, 1091 (2000).... [W]e will presume that ‘the Legislature’ intends its enactments to operate together as a consistent and harmonious body of law” Toler v. Motor Vehicle Admin., 373 Md. 214, 220, 817 A.2d 229, 234 (2003)....

In the UPA-RUPA coexistence scheme adopted by the Legislature we find no clear legislative intent to have RUPA retroactively apply to the circumstances of the present case. Read together, § 9A-1204 and § 9-1001 merely make clear the date on which the UPA-RUPA coexistence scheme ceased to exist. Had the Legislature intended RUPA to govern events such as evolved regarding East Park during 2002, it could have provided so in a number of ways. Instead, the Legislature chose, as codified at § 9A-1204(c), to give East Park the option to bring itself under RUPA for activities occurring during the transition period. East Park did not exercise that option.

Moreover, but of lesser significance, we agree with the Circuit Court and the Withdrawing Partners that the phrase “shall govern,” found several times in § 9A-1204, intimates prospective application and refers to future partner conduct. The conduct at issue here occurred during 2002. Section 9A-1204(a) makes clear that RUPA would not govern East Park’s partners’ conduct during 2002 unless they so elected.

An extensive search for cases in other jurisdictions which may have addressed this question did not yield much; however, the scant authority discovered supports our conclusion that RUPA generally was not intended to have retrospective reach. 8 In BT-I v. Equitable Life Assurance Soc’y of the *568 United States, 75 Cal.App.4th 1406, 89 Cal.Rptr.2d 811 (1999), the California Court of Appeal applied California’s then-repealed UPA in a decision filed nearly a year after California’s RUPA took effect as to all partnerships. 89 Cal.Rptr.2d at 815 n. 4. Although the California Court of Appeal did not employ retrospectivity analysis or explicitly discuss California’s UPA-RUPA coexistence scheme, it nevertheless applied UPA because the partnership at issue was formed before RUPA took full effect and had not elected to be governed by the Revised Act. Id.

In a subsequent case, the U.S. Circuit Court of Appeals for the Ninth Circuit’s Bankruptcy Appellate Panel, applying California partnership law, also determined that California’s UPA should be applied subsequent to its repeal. See In re Tsurukawa, 287 B.R. 515, 521 n. 6 (9th Cir.BAP 2002). Because the partnership completed its business and the appellee filed its complaint before RUPA took full effect, and the partnership had not elected to be governed by RUPA, the court concluded that UPA applied. Id.

The coexistence scheme and the specific language employed by the Maryland Legislature support, rather than rebut, RUPA’s prospective application only. Accordingly, because the Legislature did not express clearly its intention to effect retroactive application, RUPA does not apply and UPA, where applicable, applies to this case. 9

IV.

The Circuit Court ordered East Park to wind up its affairs and distribute its assets to the partners pursuant to a conclu *569 sion that Della Ratta caused East Park’s dissolution in December 2001. The trial judge based this conclusion on his finding that Della Ratta assigned his interest in East Park to the Trust, which had the effect of his withdrawal as East Park’s sole general partner. In light of the Agreement’s anti-assignment clause, and the specific, limited remedy sought by the Withdrawing Partners, we hold that any assignment or attempted assignment of the general partner’s interest was void at its inception and could not have resulted in Della Ratta’s withdrawal or East Park’s dissolution.

Under RULPA, a partnership interest in a limited partnership is assignable unless otherwise provided by the partnership agreement. § 10-702. Article 11(a) of the Agreement provides in relevant part: “[T]he General Partner shall not assign, mortgage, or sell his share in the Partnership.... ” The parties and the Circuit Court agree that Della Ratta’s purported assignment to the Trust was therefore improper. The dispute is over a specific legal effect of that improper assignment.

RULPA is silent regarding the legal ramifications of an assignment in contravention of a limited partnership agreement’s anti-assignment clause. Because § 10-702 is a “default rule” and subject to modification by the partnership agreement, the Agreement’s anti-assignment provision should be given effect. See § 10-702. A partnership is a contractual relationship to which the principles of contract law are fully applicable. Klein v. Weiss, 284 Md. 36, 63, 395 A.2d 126, 141 (1978). In determining the meaning of contractual language, we objectively interpret the language and, where the language is unambiguous, give effect to its plain meaning. Wells v. Chevy Chase Bank, 363 Md. 232, 250-51, 768 A.2d 620, 630 (2001).

In their amended complaint, the Withdrawing Partners essentially sought a declaration that the Agreement allows an assignment to destroy the partnership. The Agreement, however, is unambiguous in stating that the assignment, mortgage, or sale of a general partner’s interest is prohibited. The *570 objective meaning and purpose of this prohibition is to prevent the general partner from unilaterally altering East Park’s partnership structure.

In general, we have adopted the rule that an assignment in violation of an anti-assignment clause is invalid and unenforceable. Pub. Serv. Comm’n of Maryland v. Panda-Brandywine, L.P., 375 Md. 185, 203, 825 A.2d 462, 472 (2003). We now apply that rule in the context of a limited partnership agreement and, in light of the specific and limited remedy sought by the Withdrawing Partners, hold that Della Ratta’s purported assignment was invalid and unenforceable from its inception. Because there was no effective assignment, Della Ratta did not withdraw and East Park was not dissolved. 10 We reverse the Circuit Court’s declarations that Della Ratta’s assignment implicitly was enforceable, that he withdrew as general partner, and that East Park was dissolved.

V.

The Circuit Court concluded that the Withdrawing Partners had a statutory right to withdraw from East Park. We agree.

RULPA specifically addresses whether a limited partner may withdraw from a limited partnership. § 10-603 provides:

(a) When specified by agreement. — A limited partner may withdraw from a limited partnership at the time or on the happening of events specified in the partnership agreement. If the partnership agreement does not specify the time or the events on the occurrence of which a limited partner may *571 withdraw, a limited partner may not withdraw before the dissolution and winding up of the limited partnership.

(b) When not specified by agreement. — A limited partner may withdraw on not less than 6 months’ prior written notice to each general partner at the general partner’s address on the books of the limited partnership if the following conditions are met:

(1) The limited partnership was formed before October 1, 1998;

(2) On October 1, 1998, the partnership agreement of the limited partnership did not specify in writing the time or the events on the occurrence of which a limited partner may withdraw or a definite time for the dissolution and the winding up of the limited partnership; and

(3) The limited partnership did not amend its partnership agreement on or after October 1, 1998 to specify in writing the time or the events on the occurrence of which a limited partner may withdraw or a definite time for the dissolution and winding up of the limited partnership.

Section 10-603(b) sets forth conditions which must be satisfied in order for a limited partner to exercise a statutory right to withdraw. We first examine the words of the statute and if, giving them their plain and ordinary meaning, the statute is clear and unambiguous, our inquiry ends. Stine, 379 Md. at 85, 839 A.2d at 733.

The Withdrawing Partners gave Della Ratta more than six months written notice of their withdrawal and thus satisfied § 10-603(b). In addition, East Park was formed before 1 October 1998, and the Agreement was not amended on or after that date to specify the time or events on the occurrence of which a limited partner may withdraw, satisfying §§ 10-603(b)(l) & (3), respectively. Of critical importance to the Withdrawing Partners’ position, § 10-603(b)(2) also must be shown to be satisfied. If the Agreement specified the time or the events on the occurrence of which a limited partner may withdraw, then the Circuit Court was incorrect that the Withdrawing Partners had a statutory right to withdraw. In that event, § 10-603(a) controls and the Withdraw *572 ing Partners only may withdraw in accordance with the terms of the Agreement.

To determine whether § 10-603(b)(2) was satisfied requires interpretation of the partnership agreement. The Remaining Partners point to four Agreement provisions which they contend specify the time or events on the occurrence of which a limited partner may withdraw, thus satisfying § 10-603(b)(2). Article 11(d) allows a limited partner to transfer his or her interest to limited categories of relatives, subject to the other partners’ right of first refusal. 11 Article 11(f) provides a mechanism to handle a partner’s incompetency or bankruptcy and grants the other partners the right to buy-out the incompetent or bankrupt partner’s interest. 12 Article ll(k) allows a *573 partner to pledge his or her partnership interest as security for a loan. 13 Should that partner incur a lien on his interest, the other partners may act against that partnership interest pursuant to Article 11(d). Article 13 concerns a limited partner’s failure to satisfy a capital call or comply with an Agreement covenant. 14 In the event of such failure, the limited *574 partner is deemed in default and his or her partnership interest sold to the other partners or a third-party selected by the general partner.

These Agreement provisions primarily preserve certain rights for the partnership vis-á-vis consanguinity limits on the transferability of a partner’s interest, and for the remaining partners as regards a partner who declares bankruptcy, suffers a lien, or falls into default. The word “withdrawal,” as used in § 10-603, connotes more, we think.

Our construction of the word “withdrawal” comes from our review of §§ 10-402, 10-602, & 10-604. Section 10-402 defines the “events of withdrawal” of a general partner and provides in relevant part:

*575 A person ceases to be a general partner of a limited partnership upon the happening of any of the following events:

(1) The person’s withdrawal from the limited partnership as provided in § 10-602 of this title;

(2) The person’s removal as a general partner in accordance with the partnership agreement;

(3) Unless otherwise provided in the partnership agreement or with the consent of all partners, the person’s:

(i) Making an assignment for the benefit of creditors;

(ii) Filing a voluntary petition in bankruptcy;

(in) Being adjudged bankrupt or insolvent or having entered against him an order or relief in any bankruptcy or insolvency proceeding;

§ 10-602 relates to a general partner’s withdrawal and provides:

A general partner may withdraw from a limited partnership at any time by giving written notice to the other partners, but if the withdrawal notice violates the partnership agreement, the limited partnership may recover from the "withdrawing general partner damages for breach of the partnership agreement and offset the damages against the amount otherwise distributable to the withdrawing general partner.

§ 10-604 concerns distributions upon the withdrawal of a partner and provides:

Except as otherwise provided in this subtitle, on "withdrawal any withdrawing partner is entitled to receive any distribution to which the partner is entitled under the partnership agreement and, if not other provided in the partnership agreement, the partner is entitled to receive, within a reasonable time after withdrawal, the fair value of the partner’s partnership interest in the limited partnership as of the date of withdrawal, based on the partner’s right to share in distributions from the limited partnership.

Because these provisions are part of RULPA’s statutory scheme, we presume that the Legislature intended them to *576 operate together as a consistent and harmonious body of law. Stine, 379 Md. at 85-86, 839 A.2d at 732-33. Accordingly, the term “withdrawal” must have a consistent meaning in all three sections. In addition, that meaning should not render another part of the statute meaningless or nugatory. Id. at 86, 839 A.2d at 733.

Section 10-602 is the general-partner counterpart to § 10-603. In defining the events of withdrawal of a general partner, § 10^02 lists not only § 10-602, but also a general partner’s removal, bankruptcy, or insolvency. If the word “withdrawal” as used in §§ 10-602 and 10-603 were to encompass the Agreement’s removal, bankruptcy, and insolvency provisions, §§ 10-402(2) & (3) would be rendered redundant and meaningless. “Withdrawal” cannot be as broad as the Remaining Partners urge.

Moreover, “withdrawal” must have a consistent meaning in §§ 10-603 & 10-604. The distribution upon withdrawal referred to in § 10-604 would be paid by the partnership, not by a third-party purchaser or individual partners. This must be the same type of withdrawal contemplated by the Legislature in § 10-603. Harmonized, §§ 10-603 & 10-604 essentially allow a partner to “cash out” his or her equity before the partnership terminates. That is a different scenario than the events provided for in Agreement sections 11(d), 11(f), ll(k), and 13 where a partner would receive payment from a third-party or other partners. We conclude that the Agreement, within the meaning of § 10-603(a), does not undertake to specify the time or the events on the occurrence of which a limited partner may withdraw from East Park. We hold that the Withdrawing Partners had a statutory right to withdraw from East Park and affirm the Circuit Court’s grant of summary judgment on that issue.

VI.

The Circuit Court determined that Della Ratta did not have the authority to issue the capital call in controversy here and that, even if he were imbued with such authority, advancing *577 the due date, under these circumstances, was a breach of his fiduciary duty as general partner and in bad faith. Because we agree with the Circuit Court that Della Ratta breached his fiduciary duty and acted in bad faith, we shall assume, without deciding, he had the authority to issue the capital call.

To determine whether Della Ratta’s actions constituted a breach of fiduciary duty and bad faith we undertake a two-stage review. First, we review for clear error the Circuit Court’s underlying findings of fact, leaving them undisturbed if supported by a preponderance of the evidence. Colandrea, 361 Md. at 394, 761 A.2d at 911. Second, applying a de novo standard, we must determine whether the trial judge correctly concluded that the facts, as he found them to be, legally constituted a breach of fiduciary duty and bad faith. See Miller, 362 Md. at 372, 765 A.2d at 593.

The Circuit Court found that “a significant motivation for Della Ratta issuing the capital call was to squeeze out some of the limited partners.” The