Shoemaker v. Shoemaker

112 	275 Nebraska reports
result of the search precipitated by the canine alert and indica-
tion. both the dog and bauer as its handler were trained and
certified for drug detection. We agree with the determination of
the district court that the extended detention was reasonable.
V. CoNCLUsIoN
the law enforcement officer had a reasonable, articulable
suspicion that Louthan was involved in unlawful drug activ-
ity which was sufficient to justify prolonging the traffic stop
in order to deploy the drug detection dog which was present
on the scene. the prolonged detention was reasonable in the
context of a traffic stop, as to both its duration and the investi-
gative methods used. the canine alert and indication provided
probable cause for the warrantless search of Louthan’s vehicle,
a point he does not contest. the district court did not err in
denying Louthan’s motion to suppress, receiving the evidence
obtained in that search, and convicting Louthan of the offense
of possession of a controlled substance.
A ffirmed .
H eAvicAn, C.J., not participating.
dAvid G. SHoemAker , T ruSTee of THe mArion P. SHoemAker
revocAble T ruST, And HArley G. SHoemAker , T ruSTee of
THe HArley G. SHoemAker revocAble T ruST, APPellAnTS,
v . don SHoemAker And yvonne SHoemAker , APPelleeS.
745 N.W.2d 299
Filed February 22, 2008. 	No. s-06-319.
1. Partnerships: Accounting: Appeal and Error. an action for a partnership dis-
solution and accounting between partners is one in equity and is reviewed de novo
on the record.
2. Equity: Appeal and Error. on appeal from an equity action, an appel-
late court resolves questions of law and fact independently of the trial
court’s determinations.
3. ____: ____. In an equity action, when credible evidence is in conflict on material
issues of fact, an appellate court considers and may give weight to the fact the
trial court observed the witnesses and accepted one version of the facts over
another.
4. Statutes. statutory interpretation presents a question of law.
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:55 AM CST

5. Partnerships. the interpretation of a partnership agreement presents a question
of law.
6. Partnerships: Time. after January 1, 2001, the Uniform partnership act
of 1998 applies to any Nebraska partnership, including those formed before
January 1, 1998.
7. Partnerships: Statutes: Words and Phrases. the revised Uniform partnership
act is largely a series of default rules that govern the relations among partners in
situations they have not addressed in a partnership agreement and control only
when a question is not resolved by the parties’ express provisions.
8. Partnerships. Under Neb. rev. stat. § 67-431 (reissue 2003), a partner’s vol-
untary withdrawal no longer results in mandatory dissolution; it results in a
partner’s dissociation.
9. Partnerships: Legislature. Under Neb. rev. stat. § 67-433(1) (reissue 2003),
the Legislature has created separate paths through which a dissociated partner can
recover partnership interests: dissolution and winding up or mandatory buyout.
10. Partnerships. a partnership’s dissolution under Neb. rev. stat. § 67-439(1)
(reissue 2003) is a default rule that applies only when the partnership agreement
does not provide for the partnership business to continue.
11. ____. the revised Uniform partnership act does not require strict compliance
with a buyout provision to prevent dissolution.
12. ____. When a partnership agreement mandates a buyout of a withdrawing part-
ner’s interest but fails to specify a remedy for the partnership’s failure to pay, or
to timely pay, the buyout price, the default rules of the Uniform partnership act
of 1998 apply.
13. ____. Under Neb. rev. stat. § 67-434 (reissue 2003), dissolution is not a remedy
for a partnership’s failure to timely pay an estimated buyout price.
14. ____. Under the Uniform partnership act of 1998, a withdrawing partner’s rights
are governed by the dissolution and winding up provisions or the mandatory buy-
out provisions, but not both.
15. ____. If a partnership agreement is silent on profit distributions to a withdrawing
partner, the default rule under Neb. rev. stat. § 67-434(2) (reissue 2003) does
not authorize profit distributions.
16. ____. the revised Uniform partnership act allows partners, in their partnership
agreement, to fix the method or formula for determining the buyout price for
a withdrawing partner’s interest unless the agreement causes a forfeiture of the
partner’s interest.
appeal from the District Court for Lancaster County: J effre
cHeuvronT, Judge. affirmed.
V. Gene summerlin, Marnie a. Jensen, and Justin Firestone,
of ogborn, summerlin & ogborn, p.C., for appellants.
Mark a. Christensen and andre r. barry, of Cline, Williams,
Wright, Johnson & oldfather, L.L.p., for appellees.
shoeMaker v. shoeMaker 	113
Cite as 275 Neb. 112

114 	275 Nebraska reports
H eAvicAn, C.J., connolly, G errArd, STePHAn, mccormAck,
and miller -lermAn, JJ.
connolly, J.
this appeal presents two main issues. the first is whether a
partnership is dissolved by operation of law under the Uniform
partnership act of 1998 (the 1998 Upa) when a partner volun-
tarily withdraws.1 the second is whether the parties intended
the partnership to dissolve if the remaining partners failed to
timely pay the buyout price for the withdrawing partner’s inter-
est. briefly stated, we hold that under the 1998 Upa, a partner’s
voluntary withdrawal does not dissolve a partnership if the par-
ties intended the business to continue. We further conclude that
the parties intended the business to continue and did not intend
the partnership to dissolve if the remaining partners failed to
timely pay the buyout price for a withdrawing partner’s inter-
est. accordingly, we affirm.
I. sUMMarY oF the Case
this action arose from a partnership dispute between two
brothers, Don shoemaker and harley G. shoemaker, and their
wives. each of the four partners owned an equal share of the
partnership, D & h real estate (D & h). after harley and his
wife, Marion shoemaker, gave notice that they were withdraw-
ing from D & h, the partners failed to agree on the buyout
price of harley’s and Marion’s interests. harley, as trustee of
his own trust, and their son David G. shoemaker, as trustee
of Marion’s trust, later sought an accounting and an order com-
pelling D & h to wind up and terminate its business. harley
and David claimed that D & h was already in dissolution once
the remaining partners failed to pay the buyout price within the
time specified by the partnership agreement.
the remaining partners, Don and his wife, Yvonne shoemaker,
counterclaimed for breach of contract. they claimed that harley
and Marion failed to complete an appraisal process in the part-
nership agreement for determining the buyout value of their
interests. they also claimed that harley and Marion continued
1 see Neb. rev. stat. §§ 67-401 to 67-467 (reissue 2003).

to negotiate past the buyout deadline and were estopped from
claiming that Don and Yvonne had breached the agreement.
each couple acted in unison. so, unless otherwise necessary
to explain the background facts, we will refer to harley and
David, Marion’s trustee, as “harley” and Don and Yvonne as
“Don.” the district court agreed with Don. It concluded that
harley was estopped from claiming that Don had breached the
agreement by failing to comply with the buyout deadline. It also
concluded that harley had breached the agreement by failing to
comply with the appraisal process. Finally, the court applied
part of the partnership’s distribution of earnings to harley
toward the purchase price of his interest in the partnership.
II. baCkGroUND
1. PArTnerSHiP AGreemenT
In 1984, Don and harley created D & h by oral agreement.
the partnership’s assets included 24 acres with improvements
west of Lincoln and the right to collect rent from tenants. harley
and David owned shoemaker’s truck station, Inc., a truckstop
and restaurant on the property. When Don and harley created
D & h, the partnership leased part of the property to the truck-
stop for 5 years and gave the truckstop the right to renew the
lease for 4 additional terms of 5 years. at all relevant times, the
truckstop was a tenant. In 1987, the partnership entered into a
99-year lease with Don on another part of the property. the par-
ties stipulated that Don’s son and daughter-in-law owned a motel
on this property.
In september 1989, Don and harley signed a written partner-
ship agreement for D & h. Don and harley each had a 50-percent
interest in D & h. the following sections are relevant:
section 3. term of partnership
the partnership commenced by oral agreement on the
1st day of July, 1984, and shall continue until dissolved by
mutual agreement or by the terms of this agreement.
. . . .
section 11. Dissolution or termination of the partnership
a. any partner may withdraw or retire from the partnership
upon 90 days prior notice to the remaining partner(s);
shoeMaker v. shoeMaker 	115
Cite as 275 Neb. 112

116 	275 Nebraska reports
b. the death or legal incapacity of a partner shall
immediately terminate the interest of such deceased or
legally incapacitated partner in future partnership profits
or losses;
c. In the event of the withdrawal [or] retirement . . . of
a partner, the remaining partner(s) shall have the right to
continue the business of the partnership themselves or in
conjunction with any other person or persons they may
select, but they shall pay to the retiring partner . . . the
value of such partner’s interest in the partnership as pro-
vided in the following section.
section 12. Valuation of partnership shares
the value of the interest of a withdrawing [or] retiring
. . . partner, as of the date of such withdrawal [or] retire-
ment . . . shall be determined in the following manner. In
the event that the remaining partner(s) and the . . . retiring
partner are unable to agree upon the value to be assigned
to the partnership shares, all interested individuals shall
select an appraiser and in the event they are not able to
agree upon an appraiser, the remaining partner(s) and the
. . . retiring partner shall be entitled to select an appraiser
with the appraisers separately submitting their appraisals.
If the appraisals are within ten percent of each other[,]
the value shall be an average of the two appraisals. If
the difference in the appraisals exceeds ten percent[,] the
two appraisers shall together attempt to reach agreement
on the value and if unable to do so shall obtain a third
appraiser with the three appraisers together agreeing upon
the value. the appraisers shall determine the value of the
partnership as a going concern with all assets to be valued
at their fair market value.
section 13. payment Upon Dissolution or termination
the value of the partner’s interest as determined in the
above section shall be paid without interest to the with-
drawing or retiring partner . . . not later than 90 days after
the effective date of the dissolution or termination.
section 14. termination and Liquidation
In the event the remaining partner(s) do not elect to
purchase the interest of the retiring, deceased or legally

incapacitated partner, or in the event the partners mutu-
ally agree to dissolve the partnership, the partnership shall
terminate and the partners shall proceed with reasonable
promptness to liquidate the business of the partnership.
In December 1992, Don and harley each assigned half of
their partnership interest to their wives.
2. HArley ’S W iTHdrAWAl from PArTnerSHiP
on september 19, 2001, harley sent Don a letter and stated
that he was withdrawing from the partnership: “therefore, pur-
suant to section 11[a] of the partnership agreement . . . this
letter constitutes notice that we withdraw from the partnership
effective 90 days after the date of this notice.” Don retained
attorney peter katt, and harley retained alan slattery.
on october 1, 2001, katt e-mailed slattery that he would
respond to harley’s letter within 30 days. on october 30, katt
wrote slattery that section 12 of the agreement, regarding the
appraisal of a withdrawing partner’s interest, applied only if the
partners did not agree on the value of the interest. he stated that
the parties should attempt to agree on the value before select-
ing an appraiser. on November 1, slattery responded that the
appraisal process in section 12 applied only if Don elected to
continue the business by December 20, 2001, the effective date
of harley’s withdrawal. he further stated that if Don made that
election, harley would participate in the valuation process. but
if Don failed to elect to continue the business by December 20,
then D & h would be dissolved.
on November 9, 2001, katt wrote slattery that he agreed
harley’s withdrawal was effective December 20. he also agreed
that if Don did not elect to purchase harley’s interest, then
section 14 of the agreement applied regarding termination and
liquidation of D & h. he stated Don would advise harley
whether he elected to purchase harley’s interest by December
15, “provided [harley] provides us with a value for his interest
on or before December 1, 2001.” katt also suggested mov-
ing the effective date to December 31 for accounting and
tax purposes.
on November 14, 2001, katt and slattery met to discuss
the value of harley’s interest and the possibility of harley’s
shoeMaker v. shoeMaker 	117
Cite as 275 Neb. 112

118 	275 Nebraska reports
purchasing Don’s interest instead. on November 28, harley
offered to purchase Don’s interest for $1.15 million. on
December 6, responding to an inquiry from slattery, katt
e-mailed slattery. he stated he was working on a “‘business
continuation’” proposal and that he was still waiting for a
response to his suggestion that the parties extend the deadlines
under the agreement. the next day, slattery responded that he
would not “extend any deadlines unless the parties have made
an agreement, or if it appears the parties are likely to reach an
agreement.” on December 13, katt wrote slattery that Don was
declining harley’s offer to purchase Don’s interest and that Don
was electing to continue the business. katt stated that although
harley’s offer had been based on an appraiser’s fair market
value of D & h, selling would cause Don a substantial loss of
annual income. katt again asked for the price that harley would
be willing to accept for his 50-percent interest.
3. buyouT P eriod
after Don elected to continue the business, harley continued
to pursue purchasing Don’s interest until January 18, 2002,
when it was clear that Don would not sell. on January 24,
harley agreed to sell his interest for $1.75 million. For this
price, he would allow D & h to amend the lease agreement
with the truckstop so that D & h would not be obligated to
pay for improvements when the lease ended. In February, Don
asked for tax returns and a list of improvements harley believed
belonged to the truckstop and not to the partnership. on March
12, harley provided depreciation schedules for 1999 and a list
of the improvements that belonged to the truckstop. but the
schedules only showed original costs and did not include depre-
ciation or amortization. on the same day, slattery e-mailed that
he would provide more current information when he received it
from harley.
on March 28, 2002, katt wrote that Don agreed to pay
harley $1.25 million for his interest. katt further stated that
Don was operating under a belief that the effective date of
harley’s withdrawal was December 31, 2001. on april 3,
slattery wrote that harley rejected Don’s offer. slattery stated:
“based on the apparent inability of the parties to agree upon the

value of the interest to be sold, and pursuant to section 12 . . .
all parties are to select an appraiser.”
4. APPrAiSAl P eriod
the parties continued to make offers and counteroffers in
May 2002 but failed to agree. From May to July 10, the parties
unsuccessfully attempted to create a joint set of instructions for
appraisers. In July, the parties instructed their separate apprais-
ers. sometime between august 27 and october 1, the appraisers
met with Don and harley to decide what items the partner-
ship owned. on october 1, Don’s appraiser determined the
retrospective value of the partnership’s “‘leased fee estate’” was
$2.66 million. on october 11, harley sued Don, and on october
18, he instructed his appraiser to suspend work.
5. communicATionS WHile lAWSuiT WAS P endinG
on october 25, 2002, Don informed harley that he was
ready to close on short notice once harley’s appraiser had
reached a valuation. on November 20, Don offered to purchase
harley’s interest based on Don’s appraisal. he stated that if
harley did not respond by the end of November, Don would
consider his failure an intent to breach the agreement. two
days later, harley responded that Don’s “efforts to now per-
form the agreement, months after such performance was due,
are very telling,” and that “rather than try to resurrect a dead
agreement,” they should “both devote our time to getting the
pending lawsuit decided.”
In February 2003, harley assigned his 25-percent interest to
the harley G. shoemaker revocable trust, and Marion assigned
her 25-percent interest to the Marion p. shoemaker revocable
trust. Marion died in July 2003. as noted, their son David is
the trustee of Marion’s trust; harley is the trustee of his trust.
the parties stipulated that during the pendency of the lawsuit,
harley and Marion or their trusts continued to receive “earnings”
from the partnership. (the parties’ use of the term “earnings”
in their stipulation apparently refers to the partnership’s profit
distributions.) Don claimed that the court should apply these
payments toward the buyout price for harley’s interest. From
December 20, 2001, to December 31, 2005, the partnership
shoeMaker v. shoeMaker 	119
Cite as 275 Neb. 112

120 	275 Nebraska reports
paid to harley and Marion or their trusts $570,180, representing
50 percent of truckstop earnings, and $14,540, representing 50
percent of motel earnings.
6. PArTieS’ A lleGATionS
In harley’s January 2005 amended complaint, he alleged that
D & h was in dissolution. he asked that D & h be wound up
and terminated. he claimed that Don failed to elect to continue
the business when he failed to pay for harley’s interest by
March 20, 2002, or within 90 days after harley’s withdrawal
was effective. Don answered that he had tendered payment
under the agreement but that harley had refused to accept pay-
ment. Don also alleged that by his conduct, harley had modi-
fied the agreement to eliminate the requirement that payment
be made within 90 days, had waived that right, or was estopped
from claiming that Don had breached the agreement by failing
to pay for harley’s interest within 90 days. Don counterclaimed
that harley had breached the agreement by refusing to complete
the appraisal process and prayed for specific performance. he
requested the court to transfer harley’s interest at the price
determined by Don’s appraiser or to require harley to complete
his own appraisal.
7. diSTricT courT concludeS PArTnerSHiP iS noT diSSolved
And orderS HArley To comPleTe APPrAiSAl
the district court found that harley had negotiated in good
faith but had caused Don to rely on his continued negotiations
past the buyout deadline. the court concluded harley did not
intend to complete the valuation process. the court found that
all the elements of equitable estoppel were satisfied. the court
also found that the parties had modified the agreement on the
buyout deadline by continuing to negotiate. on the counter-
claim, the court found that harley had breached the agreement
by failing to complete the appraisal process and ordered him to
complete that process within 60 days. harley appealed, but the
Court of appeals dismissed for lack of jurisdiction.2
2 Shoemaker v. Shoemaker, 13 Neb. app. lxvi (No. a-05-476, May 18,
2005).

8. diSTricT courT vAlueS HArley ’S inTereST And APPlieS
PArT of HArley ’S “eArninGS” T oWArd
P urcHASe P rice of H iS inTereST
on remand, the district court ordered harley to complete his
appraisal by July 29, 2005. afterward, the court ordered the
parties’ appraisers to reach an agreement on the partnership’s
value because there was more than a 10-percent difference
in their valuations. Don’s appraiser valued the partnership at
$2.66 million, and harley’s appraiser valued it at $2.285 mil-
lion. In setting the value, the appraisers agreed on $2.35 million.
the court determined that the appraisers had properly valued
the partnership based on its leased fee value and accepted their
agreed-upon valuation.
In January 2006, the court heard arguments on whether the
partnership’s distributions of “earnings” to harley and Marion
or their trusts constituted profit distributions or payments toward
the buyout price for harley’s interest. harley argued that the
payments were profit distributions because Don had not pur-
chased his interest or, alternatively, that he was entitled to inter-
est. the court concluded that the parties had negotiated in good
faith until october 2002. but it determined that if harley had
not breached the agreement by failing to complete the appraisal
process, Don would have purchased harley’s interest by late
2002. the court further determined that Don did not have to pay
interest to harley; the court reasoned that interest would only
be required if the remaining partners had refused to pay harley
the value of his partnership interest, which had not occurred. It
ruled that harley’s interest was $1.175 million. It further ruled
that the partnership’s distributions of earnings after December
31, 2002, $431,206.98, applied to the buyout price of harley’s
interest. Finally, it ruled that Don did not owe interest because
he had not refused to pay the buyout price and because the part-
nership agreement provided that no interest was to be paid.
III. assIGNMeNts oF error
harley assigns, restated, that the district court erred in con-
cluding that (1) the partnership was not in dissolution when
Don failed to pay for harley’s interest within the 90-day time
limit and (2) harley lost his right to enforce the partnership
shoeMaker v. shoeMaker 	121
Cite as 275 Neb. 112

122 	275 Nebraska reports
agreement through one of the following theories: waiver, equi-
table estoppel, implied modification, bad faith dealing, or breach
of the agreement. harley alternatively assigns that if the partner-
ship was not in dissolution, then the court erred by applying part
of his earnings toward the purchase price of his interest and in
determining the amount Don owed to harley for his interest.
IV. staNDarD oF reVIeW
[1-3] an action for a partnership dissolution and accounting
between partners is one in equity and is reviewed de novo on
the record.3 on appeal from an equity action, we resolve ques-
tions of law and fact independently of the trial court’s determi-
nations.4 but when credible evidence is in conflict on material
issues of fact, we consider and may give weight to the fact the
trial court observed the witnesses and accepted one version of
the facts over another.5
[4,5] statutory interpretation presents a question of law.6 the
interpretation of a partnership agreement presents a question
of law.7
V. aNaLYsIs
1. APPlicAbiliTy And effecTive dATe of THe 1998 uPA
Generally, the parties agree that the partnership agreement
governs whether the partnership was dissolved. Nonetheless,
the parties at times rely on the 1998 Upa,8 and the act is rele-
vant. so, in our analysis, we will be focusing on the interplay
between the 1998 Upa and the partnership agreement.
3 see Gast v. Peters, 267 Neb. 18, 671 N.W.2d 758 (2003).
4 see County of Sarpy v. City of Gretna, 273 Neb. 92, 727 N.W.2d 690
(2007).
5 see Smith v. City of Papillion, 270 Neb. 607, 705 N.W.2d 584 (2005).
6 In re Adoption of Kailynn D., 273 Neb. 849, 733 N.W.2d 856 (2007).
7 Dissolution of Midnight Star Enterprises, 724 N.W.2d 334 (s.D. 2006);
Wallerstein v. Spirt, 8 s.W.3d 774 (tex. app. 1999); Waikoloa Ltd.
Partnership v. Arkwright, 268 Va. 40, 597 s.e.2d 49 (2004).
8 see §§ 67-401 to 67-467.

[6] In the 1998 Upa, the Legislature set a termination date
for the original Uniform partnership act (the original Upa)9
and adopted the subsequent model act that is commonly called
the revised Uniform partnership act (rUpa).10 thus, the 1998
Upa is Nebraska’s counterpart to rUpa. sections 67-464 and
67-466 provide that after January 1, 2001, the 1998 Upa shall
apply to any Nebraska partnership, including those formed
before January 1, 1998. the original Upa provisions terminated
on January 1, 2001.11
here, the relevant events occurred after the effective date
of January 1, 2001, so the 1998 Upa unquestionably gov-
erns the parties’ dispute although they formed their partnership
in 1989.12
2. effecT of HArley ’S W iTHdrAWAl And don ’S fAilure To
T imely PAy THe buyouT P rice for HArley ’S inTereST
(a) parties’ Contentions
although the parties rely on the partnership agreement, they
disagree on the effect of Don’s failure to purchase harley’s
interests before the 90-day time limit expired in section 13
of the agreement. Don contends that under the plain language
of the partnership agreement, his failure to pay harley within
90 days did not dissolve the partnership. Don also argues that
the agreement did not provide time was of the essence. he
contends that he offered to purchase harley’s interest within
a reasonable time because harley was attempting to purchase
Don’s interest during part of the 90-day period. he also points
out that harley’s attorney had stated an appraisal was neces-
sary after harley rejected Don’s buyout offer. Don alterna-
tively argues that harley modified the time limit or waived his
right to enforce it by continuing to negotiate the buyout price.
9 see Neb. rev. stat. §§ 67-301 to 67-346 (reissue 2003).
10 see, Introducer’s statement of Intent, L.b. 523, banking, Commerce and
Insurance Committee, 95th Leg., 1st sess. (Feb. 18, 1997); prefatory Note,
Unif. partnership act (1997), 6 (pt.1) U.L.a. 5 (2001).
11 see § 67-301.
12 see, Della Ratta v. Larkin, 382 Md. 553, 856 a.2d 643 (2004); Warnick v.
Warnick, 76 p.3d 316 (Wyo. 2003).
shoeMaker v. shoeMaker 	123
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124 	275 Nebraska reports
Finally, he argues that even if he breached section 13 by failing
to pay the buyout price within 90 days, harley’s remedy was
specific performance.
of course, harley views the matter differently, but we believe
harley’s arguments are inconsistent. harley primarily asserts a
contract interpretation argument. he contends that because Don
failed to comply with the 90-day time limit under section 13 of
the agreement, Don did not elect to purchase harley’s interest
under section 14—one of the events triggering dissolution and
termination under section 14. harley also asserts statutory argu-
ments under the default rules of the 1998 Upa. First, he con-
tends that under the 1998 Upa, a partner’s voluntary withdrawal
from an at-will partnership results in mandatory dissolution and
winding up of the partnership. second, he argues that under
the original Upa, courts will not enforce “anti-dissolution”
provisions that avoid automatic dissolution unless the remain-
ing partners strictly comply with the provision.13 he implicitly
contends that rUpa similarly requires strict compliance. We
first address harley’s statutory argument regarding mandatory
dissolution for a partner’s voluntary withdrawal.
(b) 1998 Upa’s effect on Voluntary Withdrawals
We believe harley misconstrues rUpa’s effect on partnership
law. he contends that the partnership was in dissolution under
the 1998 Upa because Don failed to strictly comply with the
buyout provision. Under the original Upa, dissolution of an
at-will partnership was mandatory upon a partner’s expressed
will to dissolve the partnership.14 “Unless otherwise agreed,” the
partners who had not wrongfully dissolved the partnership had
the right to wind up the partnership affairs.15 the partnership was
terminated once the winding up of its affairs was completed.16
[7] although dissolution was mandatory, the partners could
agree to prevent termination of the business.17 but problems
13 brief for appellants at 22.
14 see § 67-331.
15 § 67-337.
16 see § 67-330.
17 see § 67-337.

arose with third parties and partnership property that partnership
agreements could not prevent.18 by making the partnership a
distinct entity from its partners, rUpa avoids problems caused
by mandatory dissolution.19
rUpa’s underlying philosophy differs radically from
Upa’s, thus laying the foundation for many of its inno-
vative measures. rUpa adopts the “entity” theory of
partnership as opposed to the “aggregate” theory that the
Upa espouses.[20] Under the aggregate theory, a partner-
ship is characterized by the collection of its individual
members, with the result being that if one of the partners
dies or withdraws, the partnership ceases to exist.[21] on
the other hand, rUpa’s entity theory allows for the part-
nership to continue even with the departure of a member
because it views the partnership as “an entity distinct from
its partners.”22
rUpa effects this change by
giv[ing] 	supremacy 	to 	the 	partnership 	agreement 	in
almost all situations. [rUpa] is, therefore, largely a
series of “default rules” that govern the relations among
partners 	in 	situations 	they 	have 	not 	addressed 	in 	a
partnership agreement. . . .
. . . .
. . . rUpa’s basic thrust is to provide stability for part-
nerships that have continuation agreements. . . . [rUpa]
provides that there are many departures or “dissociations”
that do not result in a dissolution.
18 see, 2 alan r. bromberg & Larry e. ribstein, bromberg and ribstein on
partnership § 7.03(a) (2007); rUpa, supra note 10, § 801, comment 1 at
190.
19 see § 67-409(1).
20 thomas r. hurst, Will the Revised Uniform Partnership Act (1994) Ever Be
Uniformly Adopted?, 48 Fla. L. rev. 575 (1996).
21 see Joan e. branch, Note, The Revised Uniform Partnership Act Breakup
Provisions: Should They Be Adopted?, 25 Creighton L. rev. 701 (1992).
22 Creel v. Lilly, 354 Md. 77, 89-90, 729 a.2d 385, 392 (1999).
shoeMaker v. shoeMaker 	125
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126 	275 Nebraska reports
. . . Many dissociations result merely in a buyout of the
withdrawing partner’s interest rather than a winding up of
the partnership’s business.23
this means that rUpa’s default rules are gap-filling rules that
control only when a question is not resolved by the parties’
express provisions in an agreement.24
section 67-404 carries out the legislative intent to make the
partnership provisions the controlling rules and the 1998 Upa
provisions the default rules. except for limited exceptions that
do not apply here,
relations among the partners and between the partners and
the partnership are governed by the partnership agreement.
to the extent the partnership agreement does not otherwise
provide, the Uniform partnership act of 1998 governs
relations among the partners and between the partners and
the partnership.25
[8,9] section 67-431 provides that a partner’s voluntary with-
drawal no longer results in mandatory dissolution; it results in a
partner’s “dissociation.” section 67-433(1) manifests a legisla-
tive intent to create separate paths—dissolution and winding up
or mandatory buyout—through which a dissociated partner can
recover partnership interests: “If a partner’s dissociation results
in a dissolution and winding up of the partnership business, sec-
tions 67-439 to 67-445 [dealing with dissolution and winding
up] apply; otherwise, sections 67-434 to 67-438 [dealing with
mandatory buyout] apply.”26 the comment to § 603 of rUpa,
the section upon which § 67-433 is patterned, specifically pro-
vides that it operates as a “‘switching’” provision.27
(c) Under the 1998 Upa, Dissolution Is only a Default rule
harley incorrectly argues that § 67-439(1) mandates dissolu-
tion. apart from circumstances that are not present, § 67-439,
in relevant part, provides:
23 prefatory Note, Unif. partnership act (1997), supra note 10 at 5-6.
24 see black’s Law Dictionary 1357 (8th ed. 2004).
25 § 67-404.
26 § 67-433(1).
27 Unif. partnership act (1997) § 603, supra note 10, comment 1 at 172.

a partnership is dissolved, and its business must be
wound up, only upon the occurrence of any of the follow-
ing events:
(1) In a partnership at will, the partnership’s having
notice from a partner . . . of that partner’s express will
to withdraw as a partner, or on a later date specified by
the partner.
[10] It is true that this section does not clearly state it is a
default rule that does not apply if the agreement provides oth-
erwise. but we construe statutes relating to the same subject
matter to maintain a sensible and consistent scheme and to give
effect to every provision.28 When read together with § 67-404
(partnership agreement controls except for limited exceptions)
and § 67-433 (providing separate paths of dissolution or man-
datory buyout), we conclude dissolution for a partner’s volun-
tary withdrawal under § 67-439(1) is a default rule. section
67-439(1) applies only when the partnership agreement does not
provide for the partnership business to continue. Moreover, the
1998 Upa specifically requires that we apply and construe the
act “to effectuate its general purpose to make uniform the law
with respect to the subject of the act among states enacting it.”29
section 67-439 is taken from § 801 of rUpa. Comment 1 to
§ 801 provides in part:
With only three exceptions, the provisions of section
801 are merely default rules and may by agreement be
varied or eliminated as grounds for dissolution. the first
exception is dissolution under [subsection (4)] resulting
from carrying on an illegal business. the other two excep-
tions cover the power of a court to dissolve a partnership
under [subsection (5)] on application of a partner and
under [subsection (6)] on application of a transferee.30
regarding voluntary withdrawal from a partnership, comment
3 explicitly provides that rUpa’s rule of mandatory dissolution
upon a partner’s withdrawal is a default rule. It “applies only
28 see State v. County of Lancaster, 272 Neb. 376, 721 N.W.2d 644 (2006).
29 § 67-463.
30 Unif. partnership act (1997) § 801, supra note 10, comment 1 at 190.
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128 	275 Nebraska reports
[absent] an agreement affording the other partners a right to
continue the business.”31 Comment 1 explains that a partnership
agreement cannot preclude a partner from seeking a judicial
dissolution under § 67-439(5), but harley did not seek a judi-
cial dissolution. In fact, he was actively seeking to continue
the business himself by purchasing Don’s interest. harley’s
actions were consistent with the partnership agreement, which
allows the remaining partners to continue the business despite
a partner’s voluntary withdrawal.
(d) parties Intended partnership to Continue
We reject harley’s argument that the partnership was dis-
solved upon his voluntary withdrawal under § 67-439(1) because
we conclude that the parties’ agreement gave the remaining
partners a right to continue the business. although section 11 of
the partnership agreement is titled “Dissolution or termination
of the partnership,” the reference to dissolution in the title
merely reflects the original Upa rules. those rules mandated a
partnership’s dissolution after a voluntary withdrawal or death
of a partner.32 but what is relevant under the 1998 Upa is
whether the parties agreed the business could continue. three
separate provisions of the partnership agreement show that Don
and harley intended to allow the partnership to continue.
First, section 3 provides that the partnership “shall continue
until dissolved by mutual agreement or by the terms of this
agreement.” In section 14, the parties explicitly agreed that ter-
mination of the partnership would occur only upon two events:
(1) “the remaining partner(s) do not elect to purchase the inter-
est of the retiring, deceased or legally incapacitated partner,” or
(2) “the partners mutually agree to dissolve the partnership.”
Finally, subparagraph (c) of section 11 provides: “In the event
of the withdrawal . . . the remaining partner(s) shall have the
right to continue the business of the partnership . . . , but they
shall pay to the retiring partner . . . the value of such partner’s
interest in the partnership as provided in [section 12].” We con-
clude that the agreement gave the remaining partners a right to
31 Id., comment 3 at 190.
32 see §§ 67-331 and 67-342.

continue the business despite the withdrawal of a partner. so the
default rule of dissolution under § 67-439(1) did not apply.
(e) partnership Was Not Dissolved because of Don’s
Failure to timely pay the buyout price
because dissolution is no longer mandatory, the parties’
agreement that a remaining partner has the right to continue
the business controls. harley, however, contends that because
Don failed to comply with the 90-day time limit for purchas-
ing a withdrawing partner’s interest under section 13, Don did
not elect to purchase harley’s interest under section 14. his
argument is twofold. harley’s statutory argument is that rUpa
requires strict compliance with an “anti-dissolution” provi-
sion to avoid automatic dissolution and winding up. his con-
tract interpretation argument is that the partnership agreement
required dissolution when Don failed to timely pay the buyout
price for his interest.
(i) RUPA Does Not Require Strict Compliance With
a Buyout Provision to Avoid Dissolution
harley’s statutory argument that the partnership is dissolved
is diametrically opposed to rUpa’s main premise—that the
partnership agreement controls in almost every circumstance.
except for an unpublished trial court judgment from Florida,33
the cases harley cites are not on point; they do not support a
strict compliance rule that requires dissolution for breach of a
buyout provision.34
the Florida case fails to persuade us. We acknowledge the
Florida trial court stated that agreements to avoid automatic dis-
solution “are in derogation of the common law and the Uniform
partnership act.”35 but New York’s partnership law controlled
that wrongful expulsion action, and New York has not adopted
rUpa. Further, the trial court did not cite any authority for this
33 see Beasley v. Cadwalader, Wickersham & Taft, No. CL-94-8646 “aJ,” 1996
WL 449247 (Fla. Cir. Mar. 29, 1996) (unpublished opinion).
34 see, Teeter v. De Lorenzo, 275 a.D.2d 528, 711 N.Y.s.2d 629 (2000); Clark
v. Gunn, 134 N.Y.s.2d 206 (N.Y. sup. 1954); Hanes v. Giambrone, 14 ohio
app. 3d 400, 471 N.e.2d 801 (1984).
35 Beasley, supra note 33, 1996 WL 449247 at *2.
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130 	275 Nebraska reports
statement. the decision was motivated by the audacity of the
partnership’s argument that in expelling a partner, it had contrac-
tually insulated itself from dissolution no matter how egregious
its conduct in breaching its partnership agreement.36
[11] More important, concluding that rUpa requires strict
compliance with a buyout provision to prevent a partnership’s
dissolution would be inconsistent with a main purpose of
rUpa—to prevent mandatory dissolution. Further, harley had
a statutory remedy for buyout disputes. section 67-434(9) pro-
vides judicial remedies for a partnership’s failure to pay a buyout
price. If strict compliance with a buyout provision were required
to avoid dissolution, rUpa would not provide a withdrawing
partner with remedies. the result would simply be dissolution.
We reject harley’s strict compliance argument. the question
remains, however, whether the parties intended the business to
dissolve because of a remaining partner’s failure to timely pay
the buyout price for the withdrawing partner’s interest.
(ii) Parties Did Not Intend Partnership to Dissolve
for Late Payment of Buyout Price
We reject harley’s contract interpretation argument that
because Don failed to pay the buyout price within the 90-day
time limit under section 13, Don did not elect to purchase
harley’s interest under section 14. before harley’s withdrawal
was effective, Don informed harley that he was electing to con-
tinue the business and asked harley the price at which harley
would be willing to sell his interest. the agreement’s provisions
do not show that Don’s election to continue the business was
conditioned upon his timely payment of the buyout price.
as noted, section 13 provides that “[t]he value of the part-
ner’s interest as determined in [section 12] shall be paid without
interest to the withdrawing or retiring partner . . . not later than
90 days after the effective date of the dissolution or termina-
tion.” so, under section 13, if the parties do not agree on the
buyout price, the agreement effectively requires the appraisal
process in section 12 to be completed within 180 days of a
withdrawing partner’s giving notice to withdraw.
36 Id.

section 13, however, does not state that the partnership’s
failure to pay the buyout price within 90 days shall result in
the dissolution of the partnership. similarly, section 11 does
not condition a remaining partner’s right to continue the part-
nership upon his timely payment of the buyout price. Instead,
section 11 states that if a remaining partner elects to continue
the business, the remaining partner shall pay the value of the
withdrawing partner’s interest. and section 14 does not provide
that the business will terminate if a remaining partner fails to
timely pay the buyout price. thus, we do not interpret the part-
nership agreement as requiring dissolution because Don failed
to timely purchase harley’s interest under section 13. harley’s
contract interpretation argument fails.
[12] Instead, we read the partnership agreement to mandate
a buyout of a withdrawing partner’s interest, but it failed to
specify a remedy for the partnership’s failure to pay, or to timely
pay, the buyout price. therefore, because the agreement is silent
on this point, the default rules of the 1998 Upa apply.
(f) Default remedy for breach of a
Mandatory buyout provision
as noted, under the switching provision in § 67-433(1), when
a partner’s dissociation does not result in dissolution of the part-
nership, the mandatory buyout provisions of “sections 67-434
to 67-438 apply.” the purchase of a dissociated partner’s inter-
est is governed by § 67-434. harley argues that subsection
(5) required Don to pay an estimated buyout price of harley’s
interest when the parties could not agree on the value. section
67-434(5) provides:
If no agreement for the purchase of a dissociated partner’s
interest is reached within one hundred twenty days after
a written demand for payment, the partnership shall pay,
or cause to be paid, in cash to the dissociated partner the
amount the partnership estimates to be the buyout price
and accrued interest, reduced by any offsets and accrued
interest under subsection (3) of this section.
harley further argues that under § 67-434(5), his notice of
his intent to withdraw constituted a written demand for pay-
ment. thus, he argues, Don had a total of 180 days, under the
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132 	275 Nebraska reports
partnership agreement, to pay the estimated buyout price. We
disagree. subsection (5) does not refer to any time limit within
a partnership agreement. the 180 days under the partnership
agreement is irrelevant under subsection (5). Instead, the event
that triggers a partnership’s duty to pay an estimated buyout
price within 120 days is a written demand, which harley did not
make. We conclude that this provision has no application.
[13,14] Further, even if subsection (5) applied, nothing in
§ 67-434 provides dissolution as a remedy for a partnership’s
failure to timely pay an estimated buyout price. harley cannot
rely on a mandatory buyout provision in § 67-434 to bolster his
argument that the partnership was in dissolution. such an argu-
ment is inconsistent with § 67-433(1), which creates separate
paths through which a withdrawing partner can recover his or
her interest. a withdrawing partner’s rights are governed by the
dissolution and winding up provisions or the mandatory buyout
provisions, but not both. section 67-434(9) provided harley’s
remedy for the partnership’s failure to timely pay the buyout
price or its unsatisfactory offer:
a dissociated partner may maintain an action against the
partnership, pursuant to subdivision (2)(b)(ii) of section
67-425, to determine the buyout price of that partner’s
interest, any offsets under subsection (3) of this section,
or other terms of the obligation to purchase. The action
must be commenced within one hundred twenty days after
the partnership has tendered payment or an offer to pay
or within one year after written demand for payment if no
payment or offer to pay is tendered.
harley, however, failed to use this provision. on March 28,
2002, Don offered to pay harley $1.25 million for his interest.
harley did not seek a judicial valuation of his interest under
§ 67-434(9) within 120 days of March 28. so he has waived
this remedy.
In sum, the district court correctly concluded that the part-
nership was not dissolved, but we believe its reasoning regard-
ing Don’s breach of section 13’s buyout deadline was incorrect.
the district court concluded that harley had lost his right to
enforce the partnership agreement. Implicit in this determina-
tion was the court’s reasoning that if harley could have enforced

the agreement, the partnership would have been dissolved.
this reasoning was incorrect. Under the partnership agreement,
harley did not have the right to force the partnership’s dissolu-
tion when Don elected to continue the business. although Don
failed to timely pay the buyout price, absent a remedy provision
in the agreement, harley’s remedy was statutory. his statutory
remedy against the partnership did not include dissolution, and
he waived the remedy of judicial valuation. therefore, section
12 of the agreement provided the method for determining his
interest’s value.
3. HArley WAS noT enTiTled To P rofiT
diSTribuTionS or A ccrued inTereST
harley alternatively argues that if the district court cor-
rectly determined the partnership was not in dissolution, then
the court erred in (1) applying part of his earnings toward the
buyout price of his interest and (2) determining what Don owed
harley for his interest. the court determined that the value of
harley’s interest was $1.175 million. It also determined that the
partnership’s payments to harley and Marion through December
31, 2002, were income distributions. the parties stipulated that
between the effective date of harley’s withdrawal, December
20, 2001, to December 31, 2002, the partnership paid harley
and Marion $153,513.18, which represented 50 percent of its
earnings for that period. but the court determined that the
partnership’s payments from January 1, 2003, to December 31,
2005, totaling $431,206.98, applied toward the purchase price
of harley’s interest. Finally, it determined that harley was not
entitled to accrued interest for two reasons: (1) Interest was
only available if Don had refused to pay harley, which was not
the case, and (2) the agreement provided that no interest was
to be paid.
harley 	is 	not 	disputing 	the 	partnership’s 	valuation 	at
$2.35 million. but he contends that the court erred in apply-
ing the partnership earnings he received after January 1, 2003,
toward the purchase price of his interest. he argues that because
Don had not yet purchased his interest, the payments after
January 1, 2003, should have been considered “income or
interest payments to dissociated partners” under § 67-434—the
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134 	275 Nebraska reports
mandatory buyout statute dealing with the purchase of a dissoci-
ated partner’s interest.37
(a) Dissociated partners are Not entitled to
profit Distributions Under § 67-434
[15] the partnership agreement is silent on whether a with-
drawing partner is entitled to profit distributions until the
remaining partners pay for his interest. thus, the statutory
default rules for mandatory buyouts under § 67-434 control this
issue. Under the original Upa, when a partnership continued
after dissolution, § 67-342 allowed a withdrawing partner, in
specified circumstances, to elect to receive the value of his part-
nership interest plus interest. or, instead of interest, a partner
could elect to receive a share of profits until the accounts were
settled.38 Don correctly argues, however, that the 1998 Upa did
not carry over the option to elect a share of profits. Under the
1998 Upa, § 67-434(2) provides that the buyout price for a
dissociated partner’s interest must include the value of his inter-
est, plus interest “paid from the date of dissociation to the date
of payment.” It does not authorize profit distributions. rUpa’s
counterpart to § 67-434 is § 701. the comments to § 701 spe-
cifically provide that “[t]he Upa . . . option of electing a share
of the profits in lieu of interest has been eliminated.”39
In his reply brief, harley acknowledges this change in the
law. We conclude that harley was not entitled to profit distribu-
tions after the effective date of his withdrawal.
(b) the partnership agreement precludes accrued Interest
[16] harley next contends that he was entitled to have the
court consider the distributions he received as accrued interest
on the value of his partnership interest. the district court rea-
soned, in part, that harley was not entitled to interest because
the partnership agreement precluded the payment of interest.
section 13 provides: “the value of the partner’s interest as
determined in [section 12] shall be paid without interest to the
37 brief for appellants at 33.
38 § 67-342.
39 Unif. partnership act (1997) § 701, supra note 10, comment 3 at 177.

withdrawing or retiring partner . . . .” but harley counters that
“[t]he partnership agreement is silent as to what should happen
if the buyout is not completed within ninety days.”40 he argues
that § 67-434(2) therefore operates as a gap filler and requires
interest to be paid from the date of his dissociation to the date
the partnership pays the buyout price. harley’s argument over-
looks the obvious fact that the partnership agreement is not
silent on the payment of interest. section 13 specifically pre-
cludes interest. Comment 3 of rUpa’s counterpart to § 67-434
provides in part:
the section 701 rules are merely default rules. the
partners may, in the partnership agreement, fix the method
or formula for determining the buyout price and all of the
other terms and conditions of the buyout right. Indeed, the
very right to a buyout itself may be modified, although a
provision providing for a complete forfeiture would prob-
ably not be enforceable.41
In his reply brief, harley argues that the purpose of requir-
ing a partnership to pay interest is to compensate dissociated
partners for the use of their capital. he claims that requiring
interest eliminates the partnership’s incentive to delay pay-
ing the buyout price. Comment 3 to § 701 of rUpa supports
harley’s contention that “the partnership must pay interest . . .
to compensate the dissociating partner for the use of his interest
in the firm.”42 and we recognize that equity principles apply in
partnership disputes unless displaced by the 1998 Upa.43 Yet
enforcing section 13 does not cause a forfeiture of harley’s
partnership interest. Nor can we conclude that the partnership
has unfairly benefited from the use of harley’s capital interest
when harley was largely responsible for delays in the appraisal
process. Moreover, the court gave harley the benefit of profit
distributions through December 2002 that he was not statutorily
entitled to receive. We conclude that the partnership agreement
40 brief for appellants at 34.
41 Unif. partnership act (1997) § 701, supra note 10, comment 3 at 177.
42 Id.
43 see § 67-405.
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136 	275 Nebraska reports
controls and that harley was not entitled to accrued interest
on the value of his partnership interest because the partnership
agreement precluded interest. because harley was not entitled
to profit distributions or accrued interest, the district court did
not err in applying the partnership’s distributions after January
1, 2003, to the purchase price of harley’s interest.
VI. CoNCLUsIoN
For reasons other than those stated by the district court, we
conclude that the court did not err in determining that the part-
nership was not dissolved by Don’s failure to timely pay the
buyout price for harley’s interest after harley withdrew from
the partnership. We further conclude that the district court did
not err in applying some partnership distributions to harley
toward the buyout price of his partnership interest. harley was
not entitled to profit distributions after his dissociation. the
court also did not err in failing to treat the distributions as
accrued interest when the partnership agreement specifically
provided that the partnership was not required to pay interest on
the value of a withdrawing partner’s interest.
A ffirmed .
W riGHT, J., not participating.
mAry lyn lyncH And THomAS lyncH, individuAlly And AS
rePreSenTATiveS of All oTHerS SimilArly SiTuATed ,
APPellAnTS, v . STATe fArm muTuAl A uTomobile
inSurAnce comPAny , APPellee .
745 N.W.2d 291
Filed February 22, 2008. 	No. s-06-737.
1. Summary Judgment. summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose no genuine issue as to any material fact
or as to the ultimate inferences that may be drawn from those facts and that the
moving party is entitled to judgment as a matter of law.
2. Summary Judgment: Appeal and Error. In reviewing a summary judgment, an
appellate court views the evidence in a light most favorable to the party against
whom the judgment is granted and gives such party the benefit of all reasonable
inferences deducible from the evidence.
3. Insurance: Contracts. an insurance policy is a contract.