Title: Estate of James H. Matteson v. Robert R. Matteson

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2008 WI 48 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
CASE NO.: 
2005AP2607 
COMPLETE TITLE: 
 
 
Estate of James H. Matteson, 
          Plaintiff-Respondent-Cross-Appellant, 
     v. 
Robert R. Matteson, Nancy L. Matteson and 
Matteson Communications, 
          Defendants-Appellants-Cross-
Respondents-Petitioners. 
 
 
 
 
 
 
REVIEW OF A COURT OF APPEALS DECISION 
2007 WI App 23 
Reported at: 298 Wis. 2d 791, 729 N.W.2d 749 
(Ct. App. 2007-Published) 
 
 
OPINION FILED: 
May 29, 2008   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
November 28, 2007   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Fond du Lac   
 
JUDGE: 
Robert J. Wirtz   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the defendants-appellants-cross-respondents-petitioners 
there were briefs by Stephen L. Morgan, Jennifer M. Krueger, and 
Murphy Desmond S.C., Madison, and oral argument by Stephen L. 
Morgan. 
 
For the plaintiff-respondent-cross-appellant there were 
briefs by Charles J. Hertel, Daniel J. Posanski, and Dempsey, 
Williamson, Kelly & Hertel, LLP, Oshkosh, and oral argument by 
Charles J. Hertel and Daniel J. Posanski. 
 
 
 
 
2008 WI 48
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2005AP2607  
(L.C. No. 
2001CV730) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Estate of James H. Matteson, 
 
          Plaintiff-Respondent-Cross-Appellant, 
 
     v. 
 
Robert R. Matteson, Nancy L. Matteson, and 
Matteson Communications, 
 
          Defendants-Appellants-Cross- 
          Respondents-Petitioners. 
 
FILED 
 
MAY 29, 2008 
 
David R. Schanker 
Clerk of Supreme Court 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed in 
part, reversed in part, and cause remanded.   
 
¶1 
LOUIS B. BUTLER, JR., J.   Robert Matteson, Nancy 
Matteson, and Matteson Communications (collectively, Robert) 
seek review of a published court of appeals opinion1 that 
affirmed in part, reversed in part, and remanded a decision of 
the Fond du Lac County Circuit Court, the Honorable Robert J. 
Wirtz presiding, related to the dissolution of a business 
partnership.   
                                                 
1 Estate of Matteson v. Matteson, 2007 WI App 23, 298 Wis. 
2d 791, 729 N.W.2d 749. 
No. 
2005AP2607   
 
2 
 
¶2 
Robert and James Matteson, who are half-brothers, 
owned Matteson Communications, a business that sold and serviced 
radios and related equipment.  The dissolution of their business 
partnership began when James sent Robert a notice of dissolution 
in May 2001 which described the partnership as dissolved, 
subject only to winding up, but which also contained an apparent 
offer 
to 
allow 
the 
business 
to 
continue 
under 
certain 
conditions.  After the Mattesons were unsuccessful in resolving 
a dispute over the amount due James for his share of the 
business, James sent Robert a formal Notice of Dissolution in 
November 2001 demanding a wind-up of the partnership.  Following 
James' death, the Estate of James Matteson (the Estate) filed 
suit against Robert in December 2001 on various grounds, seeking 
relief including a wind-up. 
¶3 
After a bifurcated trial, the circuit court, applying 
the Wis. Stat. § 178.37 (2003-04)2 continuation statute rather 
than the Wis. Stat. §§ 178.32-.33(1) wind-up statutes, awarded 
the Estate a net judgment of $119,735.35, which reflected 
calculations of James' interest on the date of dissolution, 
business profits attributable to that share, interest, and 
costs.  Both parties appealed.   
¶4 
The court of appeals affirmed in part, reversed in 
part, and remanded the cause to the circuit court with 
directions to modify the judgment.  Specifically, the court of 
                                                 
2 All subsequent references to the Wisconsin Statutes are to 
the 2003-04 version unless otherwise indicated. 
No. 
2005AP2607   
 
3 
 
appeals affirmed the circuit court's application of Wisconsin's 
continuation, rather than wind-up, statutes; the circuit court's 
calculations under that statute related to application of a 
predissolution profit sharing ratio; and the circuit court's 
order requiring payment of one year's interest as a condition of 
stay of execution.  The court of appeals, however, reversed the 
circuit court's rulings regarding Robert's compensation for his 
labor efforts.  
¶5 
Robert petitioned this court for review, raising the 
issues of the appropriate burdens of proof and method of 
calculating "profits attributable" under Wis. Stat. § 178.37, 
and challenging the aspect of the court's stay of execution 
order requiring payment of one year's worth of interest at 12 
percent along with the judgment. 
¶6 
We conclude that the Estate, representing the retired 
partner, has the burden under Wis. Stat. § 178.373 of proving the 
profits attributable to the business's use of the retiring 
partner's right in the property, and that the circuit court 
erred in applying a predissolution profit-sharing ratio as the 
                                                 
3 Assuming that this is the correct statute to be applied.  
As we discuss, there are procedural concerns about this case, 
the record of which indicates that both the complaint in this 
case and James' November 12, 2001, Notice of Dissolution 
explicitly requested the statutory wind-up remedies under Wis. 
Stat. § 178.32-.33, not the Wis. Stat. § 178.37 continuation 
remedies which are the focus of the lower court decisions and 
the parties' briefing.  However, we will assume, without 
concluding, that the Estate properly elected continuation in 
this case subsequent to the complaint and Notice of Dissolution, 
thereby abandoning its Wis. Stat. § 178.32-.33 wind-up claims in 
favor of Wis. Stat. § 178.37 continuation remedies. 
No. 
2005AP2607   
 
4 
 
basis for postdissolution division of profits under § 178.37.  
However, we conclude that the circuit court did not err in 
conditioning a stay of execution of judgment upon Robert's 
depositing with the court the judgment amount plus 12 percent 
interest for one year.  We therefore affirm in part, reverse in 
part, and remand this matter to the circuit court for further 
proceedings consistent with this opinion. 
I 
¶7 
Matteson Communications was created in 1950 by Ralph 
S. Matteson, the father of half-brothers James and Robert.  The 
business involves the servicing and sales of two-way radios and 
related equipment.  James, who joined the business in the early 
1960s, was a licensed communications engineer; Robert, who 
joined the business in the mid-1970s, is not.  When their father 
retired in the late 1970s, James and Robert continued the 
business as a partnership.  For the most part, James performed 
the service, installation, and repair work, and Robert handled 
customer service and sales.  The business was conducted out of 
James' residence, and there was no written agreement formalizing 
the partnership.  However, from 1987 until the partnership's 
dissolution, the agreed upon annual profit-sharing arrangement 
was for James to receive 55 percent and Robert to receive 45 
percent, with losses as well as profits divided on that 55/45 
percent basis.   
¶8 
In July 2000, James advised Robert of his intention to 
leave the business and retire, but disputes arose regarding 
dissolution of the partnership.  Negotiations were unsuccessful, 
No. 
2005AP2607   
 
5 
 
and in a letter dated May 31, 2001, James' attorney advised 
Robert's attorney that James was providing notice of dissolution 
of the partnership effective as of May 31, 2001, subject only to 
winding up, and that James (and his wife, Darlene) would no 
longer be working for the business.  The letter also stated that 
James did not want the business to shut down "because of the 
concern that this might cause damage to the goodwill and 
continuing business[,]" and offered a settlement.  Upon James' 
request but without a wind-up, Robert transferred the business's 
equipment, inventory and other assets from James' residence; 
Robert 
then 
continued 
operating 
Matteson 
Communications, 
restructuring it as a limited liability company, and using the 
same business assets, product lines, inventory, bank accounts, 
equipment, vendors, and customers.    
¶9 
On November 12, 2001, James issued a Notice of 
Dissolution pursuant to Wis. Stat. § 178.26, electing that the 
affairs of Matteson Communications be wound up forthwith.4  A 
month later, on December 11, James died.  On December 20, 2001, 
his estate sued Robert and Matteson Communications, seeking, in 
relevant part, a winding up and distribution of wind-up proceeds 
pursuant to Wis. Stat. § 178.32; payment of 55 percent of the 
profits earned between January 1, 2001, and November 12, 2001, 
as well as those earned during wind-up; an accounting of the 
                                                 
4 The circuit court found the dissolution date to be May 31, 
2001, however, based on the earlier letter.  The parties do not 
contest this finding or address it within the context of the 
formal Notice of Dissolution dated November 12, 2001.  
No. 
2005AP2607   
 
6 
 
business; the appointment of a receiver to manage and conduct 
the partnership's business during the winding up process, to 
liquidate assets, and to take other necessary actions; and 
damages and injunctive relief.  The complaint also alleged 
breach of fiduciary duties, failure to provide partnership 
documents, violations of Wis. Stat. § 178.15, unjust enrichment, 
and bad faith.  An amended complaint added Nancy Matteson, 
Robert's wife, as a defendant.   
¶10 During the trial, the Estate stipulated to the 
dismissal of its claims for appointment of receivership and for 
information, but it did not dismiss its other claims, including 
claims for winding up and accounting.  Following the trial, each 
side submitted post-trial briefs.5  The Estate's post-trial brief 
asked the court to determine whether the business of the 
partnership was continued by Robert, or whether the partnership 
was "in a wind-up," setting forth requested remedies for each 
scenario.  The brief also stated that the Estate had the right 
                                                 
5 At the close of testimony on May 11, 2004, the circuit 
court explained to the parties that it needed additional 
information from the parties in the form of briefs, letter 
memoranda, or an accounting with  
a little more detail, what you are asking for, each of 
you . . . even an accounting, if you will, you know, 
with a ledger saying —— almost like in a divorce case 
where you have, you know, to this person and to that 
person, and this set off and that set off and, then, 
an ultimate net figure . . . .  I think that would be 
helpful.  I think all I’m suggesting, in a little bit 
shorter explanation, is if you could put in a succinct 
form, essentially, your calculation for what you feel 
your client's due. 
No. 
2005AP2607   
 
7 
 
to choose either continuation or wind-up remedies because 
Matteson Communications had "continued on after it dissolved on 
an uninterrupted basis [and therefore the] Estate elects to 
claim against the continuing business of Matteson Communications 
as a creditor."  
¶11 Robert's post-trial brief was in the form of a letter 
containing 
various 
exhibits, 
which 
Robert 
described 
as 
establishing that damages flowing directly from the partnership 
far exceeded the company's existing assets at the time of 
dissolution.  In contrast with the Estate's brief, Robert's 
letter brief identified the court's request as being limited to 
a request for the calculations Robert provided rather than the 
type of legal analysis provided by the Estate's brief.6   
¶12 The court issued two separate sets of findings of 
facts and conclusions of law.  In the first set of findings and 
conclusions, dated August 9, 2004, the court found that the 
partnership dissolved on May 31, 2001, but that there had not 
yet been a wind-up of the affairs of the partnership, and that 
in light of the partnership's continuation, Wis. Stat. § 178.37 
                                                 
6 In its post-trial letter brief responding to the court's 
request and criticizing the Estate's response, Robert stated 
that "[p]ursuant to the Court's request, this Memorandum deals 
only with calculations as opposed to the 'law' and the normal 
briefing schedule as the Court has not requested that form of 
Memorandum 
be 
submitted 
to 
the 
Court." 
 
Rather, 
Robert 
described, the circuit court merely directed the parties at the 
close of testimony to forward to the court "a Letter Memorandum 
with attached figures indicating the parties' position regarding 
damages." 
No. 
2005AP2607   
 
8 
 
was the applicable statute.7  The court concluded that the Estate 
was entitled to $68,641, which the court describes as the value 
of James' 55-percent share of the partnership as of May 31, 
2001, 
minus 55 percent of the fee for a court-ordered 
accountant.  The court found that, pursuant to Wis. Stat. 
§ 178.37, the Estate was additionally entitled to an election of 
either (1) interest on that amount, or (2) 55 percent of the 
business's profits from May 31, 2001, through the date such 
profits were paid to the Estate.  In its second set of findings, 
the circuit court ruled, without apparent objection by the 
parties, that the Estate chose the second option, which it 
described as an election of "the 55% share of such profits that 
are attributable to the plaintiff."8  
                                                 
7 Listed as a "finding of fact" was the court's conclusion 
reflecting, as we describe in this opinion, an erroneous 
understanding of the law, that: 
 
8. 
Because of the continuation of business by 
Robert Matteson, the Estate of James Matteson is 
entitled to an election under Section 178.37, Wis. 
Stats. of either (a) interest on the value of the 
Partnership interest of James Matteson from May 31, 
2001 as contemplated in the Findings of Fact above, or 
(b). . . 55% of the profits of the business of the 
Partnership that was continued by Robert Matteson 
since May 31, 200[1].   
8 During a July 30, 2004, hearing, the court elaborated:  
[A]s I understand, [the Estate] has elected to ask for 
that percentage share of profits, although the statute 
talks something a little bit differently, although it 
may turn out to be the same thing.  It talks about the 
profits attributable to the use of the retired or 
deceased partner's right in the property of the 
dissolved partnership.  That may be the same thing.   
No. 
2005AP2607   
 
9 
 
¶13 The circuit court retained jurisdiction over the 
determination of the amounts of interest and profits, noting 
that the parties agreed that accountant Dave Haas would conduct 
a valuation of profits.  The court also reserved a ruling on 
whether Robert was entitled to compensation for his work that 
occurred after May 31, 2001.  The court then held a separate 
trial on these issues, during which Haas's partner, Kenneth 
Stephani, CPA, testified about the business's profits after May 
31, 2001.  He gave two figures for the profits accrued between 
June 1, 2001, and February 28, 2005, citing $282,886.80 as 
profit for that period, but also citing $344,789.29 as the 
"adjusted" profit prior to deductions for legal and professional 
fees, accountant fees, IRA expenses, and Robert's health 
insurance.  Also in the 2001 through 2005 period, payments to 
Robert and Nancy for draws, compensation and health insurance 
benefits were calculated at $368,574.58, while the Estate 
received no distributions during that period.   
¶14 In its second set of findings of fact and conclusions 
of law, issued on September 16, 2005, the court employed the 
predissolution 55/45 ratio, finding that:  
 
The 
profits 
of 
the 
partnership, 
Matteson 
Communications, from May 31, 2001 through the date of 
trial were in the sum of $282,886.80.  Accordingly, 
the 55% share of such profits that are attributable to 
the plaintiff is in the amount of $155,587.00.  The 
Court 
previously 
found 
that 
the 
value 
of 
the 
partnership interest of James Matteson as of May 31, 
2001, the date of dissolution of the partnership, was 
in the amount of $68,641.00.  Such sum is to be 
reduced by 55% of the accounting fees incurred to 
Schenck Business Solutions, which reduces the interest 
No. 
2005AP2607   
 
10 
 
of James Matteson's interest in and to the partnership 
as of the date of dissolution considering accounting 
fees through the date of the trial to be in the sum of 
$50,292.00. 
 
Accordingly, 
the 
value 
of 
James 
Matteson's interest in Matteson Communications plus 
his share of the profits before considering deductions 
therefrom is in the sum of $205,879.00.   
The Estate's award was then reduced from $205,879 to $95,113.50 
after the court subtracted the value of a truck awarded to 
James; the cost for storage of partnership records; the time 
spent 
by 
Robert, 
Nancy, 
and 
their 
son 
concluding 
the 
partnership's affairs; and 55 percent of additional fees due the 
court-appointed accountant.9  The court concluded that because 
the Estate had filed an offer of settlement, it was also 
entitled under Wis. Stat. § 807.01 to interest and fees, which 
it calculated at $17,542.57 interest with double taxable costs 
in the amount of $7,079.28.  The net judgment awarded to the 
Estate was $119,735.35.   
¶15 On September 20, 2005, Robert moved to stay execution 
of the judgment, pursuant to Wis. Stat. § 808.07(2)(a).10  The 
                                                 
9 Our review of the record revealed a number of mathematical 
errors in the circuit court's calculations.  We asked the 
parties to address this issue in supplemental briefing to this 
court, 
and 
the 
parties 
agreed 
that 
the 
circuit 
court's 
calculations were erroneous, with the $95,113.50 judgment amount 
calculated by the circuit court not reflecting the sum of the 
figures provided by the court.  However, the parties disagree 
about what the correct amount should be, focusing on different 
factors and discrepancies in the circuit court's calculations.  
We direct the circuit court to address this issue on remand. 
10 Wisconsin Stat. § 808.07(2)(a) provides: 
(2) Authority of a court to grant relief pending 
appeal. (a) During the pendency of an appeal, a trial 
court or an appellate court may: 
No. 
2005AP2607   
 
11 
 
motion requested that the amount of the judgment along with "any 
accumulated interest to the date of deposit" be deposited with 
the clerk of court for Fond du Lac County and placed in an 
interest bearing account pending the outcome of the appeal.  The 
motion suggested that the deposit of funds with the clerk should 
toll the accumulation of interest awarded on the judgment.  
¶16 In response, the circuit court ordered the Estate to 
post a surety bond, but when the Estate was unable to procure 
the bond, the court instead ordered Robert to post security in a 
sum representing the amount of judgment plus 12 percent interest 
for one-year's time.  The court ordered that the clerk of courts 
place the deposited money in an interest bearing account, with 
the interest accruing on that money to be deemed Robert's 
property.11   
¶17 Robert deposited the amount ordered on November 22, 
2005, and both he and the Estate appealed.  In an opinion issued 
on January 10, 2007, the court of appeals affirmed in part, 
reversed in part, and remanded.  Estate of Matteson v. Matteson, 
2007 WI App 23, ¶¶3, 25, 298 Wis. 2d 791, 729 N.W.2d 749.  The 
                                                                                                                                                             
1. Stay execution or enforcement of a judgment or 
order; 
2. Suspend, modify, restore or grant an injunction; or 
3. Make any order appropriate to preserve the existing 
state of affairs or the effectiveness of the judgment 
subsequently to be entered. 
11 The specific language of these orders is discussed in 
detail in our analysis. 
No. 
2005AP2607   
 
12 
 
court of appeals affirmed the postdissolution application of the 
predissolution 55/45 ratio for profit distribution, as well as 
the order that Robert pay 12 percent interest for one year along 
with the judgment amount as a condition of the stay of 
execution.  Id., ¶¶22, 24.  The court also affirmed the circuit 
court's ruling that the burden of proving profits attributable 
is on the continuing partner, not the retiring partner.  Id., 
¶20.  However, the court of appeals reversed the circuit court's 
decision to compensate Robert only for his work to wind up the 
partnership rather than ordering full compensation for his labor 
and management services to the business.  Id., ¶3 (quoting Lange 
v. Bartlett, 121 Wis. 2d 599, 360 N.W.2d 702 (Ct. App. 1984)).  
The court also reversed the circuit court's decision to deduct 
Robert's compensation from the Estate's share, rather than from 
the profits of the partnership.  Id.   
¶18 The court of appeals directed the circuit court to 
modify its judgment on remand and to award Robert "compensation 
for his reasonable labor and management services to Matteson 
Communications for the time between dissolution and the date of 
trial" as well as ordering that that amount, along with storage 
expenses, be divided at a 55/45 ratio between Robert and the 
Estate in calculating the profits of the business.  Id., ¶25.   
¶19 Robert filed a petition for review, and on April 17, 
2007, we granted the petition.  On March 25, 2008, following 
oral argument, we ordered supplemental briefing, and the parties 
No. 
2005AP2607   
 
13 
 
responded with letter briefs filed April 4 and April 8, 2008.12  
Along with its supplemental briefing, the Estate also submitted 
a motion to supplement the record with certain circuit court 
briefs, which we granted on April 18, 2008.   
II 
¶20 Judicial 
actions involving the dissolution of a 
partnership and the liquidation of its affairs are proceedings 
in equity, in which circuit courts have broad discretion in 
achieving a fair accounting between the parties involved.  See 
Gull v. Van Epps, 185 Wis. 2d 609, 626-27, 517 N.W.2d 531 (Ct. 
App. 1994).  We will uphold the circuit court's exercise of 
discretion if it "examined the relevant facts, applied a proper 
standard of law, and, using a demonstrated rational process, 
arrived at a conclusion that a reasonable judge could reach."  
DeWitt Ross & Stevens, S.C. v. Galaxy Gaming and Racing Ltd. 
P'ship, 2004 WI 92, ¶21, 273 Wis. 2d 577, 682 N.W.2d 839. 
¶21 In this case, the determination of whether the court's 
application of the law was reversible error requires us to 
examine three issues related to the dissolution of the Matteson 
brothers' partnership:  (1) as between the retiring and 
remaining partner, which one has the burden under Wis. Stat. 
§ 178.3713 of proving the profits attributable to the business's 
use of the retiring partner's right in the partnership; (2) 
                                                 
12 We describe the reason for ordering supplemental briefing 
and the substance of the parties' responses in our analysis 
below, at infra, ¶¶26-36. 
13 Assuming that this is the correct statute to be applied. 
No. 
2005AP2607   
 
14 
 
whether the ratios used for predissolution partnership profit 
distribution should be used as the basis for postdissolution 
division of profits under § 178.37; and (3) whether the circuit 
court erred in conditioning a stay of execution of a judgment 
upon Robert's depositing with the court the judgment amount plus 
one-year's worth of interest at 12 percent.   
¶22 Each of these issues involves questions of statutory 
interpretation, as well as application of those statutes to 
undisputed facts, which we review de novo.  See Village of Cross 
Plains v. Haanstad, 2006 WI 16, ¶9, 288 Wis. 2d 573, 709 N.W.2d 
447.  The purpose of statutory interpretation is to give the 
statute its "full, proper, and intended effect."  State ex rel. 
Kalal v. Circuit Court, 2004 WI 58, ¶44, 271 Wis. 2d 633, 681 
N.W.2d 110.  Statutory interpretation begins with the language 
of the statute.  Id., ¶45.  Statutory language is generally 
accorded its common, ordinary and accepted meaning, but we give 
legal terms of art their accepted legal meaning.  Id.; Wis. 
Citizens Concerned for Cranes & Doves v. DNR, 2004 WI 40, ¶6, 
270 Wis. 2d 318, 677 N.W.2d 612.  "If the meaning of the statute 
is plain, we ordinarily stop the inquiry."  Kalal, 271 Wis. 2d 
633, ¶45.  However, if a statute is ambiguous, we may examine 
extrinsic sources to ascertain its meaning.  Id., ¶50. 
¶23 In reviewing a circuit court's determination of the 
value of interest or amount of profits distributable, and in 
reviewing discretionary stays of execution, we examine the 
record to determine if the circuit court reached its conclusion 
by a "reasoned application of the appropriate legal standard to 
No. 
2005AP2607   
 
15 
 
the relevant facts in the case."  Franke v. Franke, 2004 WI 8, 
¶55 n. 38, 268 Wis. 2d 360, 674 N.W.2d 832 (citation omitted). 
III 
¶24 When a partner retires or dies, the partnership is 
dissolved.  Lange, 121 Wis. 2d at 601.  A notice of dissolution 
does not, by itself, terminate a partnership.  The termination 
of a dissolved partnership is complete only when the partnership 
affairs are settled through a "winding up."  Wis. Stat. 
§ 178.25(2).  Absent an agreement to settle the partnership 
affairs without asset liquidation, winding up "involves reducing 
the 
assets 
to 
cash 
(liquidation), 
paying 
creditors, 
and 
distributing 
to 
partners 
the 
value 
of 
their 
respective 
interests."  First Nat'l Bank of Kenosha v. Schaefer, 91 Wis. 2d 
360, 375-76, 283 N.W.2d 410 (Ct. App. 1979)(citations omitted).   
¶25 An exiting partner has two primary options upon 
initiating a partnership dissolution.  The exiting partner may 
opt either (1) (continuation) to permit the business to continue 
and claim his or her interest in the dissolution value as a 
creditor, or (2) (wind-up) to force the dissolved business to 
wind up and take his or her part of the proceeds.  See Lange, 
121 Wis. 2d at 601.  If the exiting partner opts to force a 
wind-up, that partner is not a creditor, but rather shares both 
profits and losses after dissolution until termination, which 
occurs when all the partnership affairs are wound up.  Such 
situations are governed by Wis. Stat. §§ 178.32-.33.  See also 
Lange, 121 Wis. 2d at 602.  However, if the exiting partner opts 
to permit the business to continue and elects to proceed under 
No. 
2005AP2607   
 
16 
 
Wis. Stat. § 178.37, rather than force the business to wind up 
under Wis. Stat. §§ 178.32-.33, that partner is entitled as a 
creditor to an additional election under Wis. Stat. § 178.37.  
Specifically, the exiting partner is entitled, in addition to 
the value of interest at the time of dissolution, to either 
interest or "profits attributable": 
If any partner retires or dies, and the business is 
continued under any of the conditions set forth in s. 
178.33(2)(b) or 178.36(1), (2), (3), (5) and (6), 
without any settlement of accounts as between the 
retired or deceased partner or the deceased partner's 
estate and the person or partnership continuing the 
business, unless otherwise agreed, the retired partner 
or the deceased partner's legal representative as 
against such persons or partnership may have the value 
of the retired or deceased partner's interest at the 
date of dissolution ascertained, and shall receive as 
an ordinary creditor an amount equal to the value of 
the retired or deceased14 partner's interest in the 
dissolved partnership with interest, or, at the option 
of the retired partner or the deceased partner's legal 
representative, in lieu of interest, the profits 
attributable to the use of the retired or deceased 
partner's right in the property of the dissolved 
partnership; provided that the creditors of the 
dissolved 
partnership 
as 
against 
the 
separate 
creditors, or the representative of the retired or 
deceased partner, shall have priority on any claim 
arising 
under 
this 
section, 
as 
provided 
by 
s. 
178.36(8). 
Wis. Stat. § 178.37; see also Lange, 121 Wis. 2d at 602-03. 
                                                 
14 Even though, at the time this action was filed, James was 
both retired and deceased, we treat him as a retired partner for 
purposes of this case because it was his retirement which 
initially caused the dissolution in this case. 
No. 
2005AP2607   
 
17 
 
 
A 
¶26 The present case has arrived at our doorstep in a 
problematic procedural posture.  The original May 31, 2001, 
dissolution letter from James provided notice of dissolution 
subject to winding up, but also appeared to consent to 
continuation of the business.  However, the letter did not 
invoke Wis. Stat. § 178.37 or the continuation remedies under 
that statute, but rather offered settlement terms distinct from 
the statute's "profits attributable" or interest option.   
¶27 In addition, any consent to continuation apparently 
given by James in the letter appears to have dissolved over the 
next few months as negotiations failed.  Consequently, the 
complaint in this case and the November 12, 2001, Notice of 
Dissolution sought only a winding up under Wis. Stat. § 178.32, 
rather than the continuation remedies available under Wis. Stat. 
§ 178.37.   
¶28 Despite the language of the complaint seeking  Wis. 
Stat. § 178.32 wind-up rather than the Wis. Stat. § 178.37 
continuation remedies, and despite the similar language of the 
Notice of Dissolution demanding wind-up and other descriptions 
No. 
2005AP2607   
 
18 
 
of this as a wind-up case,15 the circuit court in this case 
proceeded as if the partnership involved a continuation, without 
reconciling such an assumption with the wind-up request to the 
contrary in the complaint and November 12, 2001, Notice of 
Dissolution.  
¶29 Failing to make the required finding pursuant to Wis. 
Stat. § 178.3716 that James consented to continuation, the court 
appears to have based its treatment of this case as a 
continuation rather than a wind-up on a lay interpretation of 
the word "continued."  Specifically, the court found that, in 
the lay sense of the word, Robert had "continued" the business 
                                                 
15 In addition to the May 31, 2001, and November 12, 2001, 
notices of dissolution and the complaint's use of wind-up 
language, an October 2, 2003, response from the Estate's counsel 
to a motion to dismiss contained an affidavit from Attorney 
Charles J. Hertel with the averment that "[t]his action involves 
the wind-up of the affairs of Wisconsin general partners named 
Matteson 
Communications. . . .  
Under 
Chapter 
178, 
Robert 
Matteson has the responsibility to wind-up the affairs of the 
partnership."   
16 See First Nat'l Bank of Kenosha v. Schaefer, 91 Wis. 2d 
360, 378, 283 N.W.2d 410 (Ct. App. 1979): 
The 
determination 
of 
whether 
or 
not 
the 
legal 
representative consented to or acquiesced in the 
continuation 
of 
the 
business 
is 
a 
fact 
to 
be 
determined by the trier of fact.  Since the trial 
court felt that sec. 178.37, Stats., applied whenever 
a partner died, regardless of whether there was 
consent to continue the business, no finding of fact 
was 
made 
on 
consent. 
 
Ordinarily, 
under 
these 
circumstances, we would have to remand the case back 
to the trial court for a finding of fact. 
See also Lange v. Bartlett, 121 Wis. 2d 599, 601-02, 360 N.W.2d 
701 (Ct. App. 1984). 
No. 
2005AP2607   
 
19 
 
of the partnership, and that wind-up had failed to occur.  The 
court's interpretation of § 178.37 "continuation" as a default 
statutory scheme that applies when wind-up has not yet occurred 
rather 
than 
something 
requiring 
the 
exiting 
partner's 
affirmative consent is revealed in the following July 30, 2004, 
explanation by the court of its rulings: 
 
In 2001, the partnership was dissolved. . . .  
What happened thereafter is that Mr. Robert Matteson 
continued . . . a 
similar 
business; 
a 
little 
bit 
different name or different business type, rather, 
formed an LLC . . . did what would be necessary to 
indicate that there was a different entity and then 
did a couple things:  Continued to operate [the] 
business using the assets of the partnership and, 
also, took over trying to deal with the windup of – I 
think, in some respects, tried to deal with the windup 
of what was left of the assets that he and his brother 
had had as part of the partnership. 
 
I say "windup" even though that's sort of a 
technical term.  I'm not convinced that this was a 
true dissolution and, then, a windup of the affairs.  
It strikes me, from the evidence, that what happened 
was that the business of Matteson Communications 
continued; continued in terms of the assets used by 
Mr. Robert Matteson, continued in terms of similar 
customer/customer base.  This isn't the wholesale 
stopping of a business and, then, the starting of a 
different business.  This is a continuation of a 
business. . . .  
¶30 At the point at which the circuit court apparently 
began 
treating 
this 
as 
a 
Wis. 
Stat. 
§ 178.37 
"profits 
attributable" continuation case rather than a Wis. Stat. 
§ 178.32 wind-up case, the court stated: 
I think, Mr. Hertel, that your client is entitled to 
their 55 percent interest as of the value — of the 
value of the partnership at May 31, 2001.  As I 
understand, your client has elected to ask for that 
No. 
2005AP2607   
 
20 
 
percentage share of profits, although the statute 
talks something a little bit differently, although it 
may turn out to be the same thing.  It talks about the 
profits attributable to the use of the retired or 
deceased partner's right in the property of the 
dissolved partnership.  That may be the same thing. 
This transition from treating the case as a § 178.32 wind-up 
case to treating it as a § 178.37 "profits attributable" 
continuation case was set in stone by the court's ensuing 
findings 
of 
fact, 
including 
"finding" 
number 
eight 
that 
"[b]ecause of the continuation of business by Robert Matteson, 
the Estate of James Matteson is entitled to an election under 
Section 178.37 . . . ."   
¶31 The circuit court's "finding" that Wis. Stat. § 178.37 
is the applicable statute by virtue of the "continuation" of the 
business is problematic.  As explained in Lange, the first task 
for a circuit court in a partnership dissolution case "is to 
determine what election the retiring partner made at the point 
of dissolution.  Every partnership dissolution causes a wind-up 
rather 
than 
a 
continuation 
unless 
the 
outgoing 
partner 
'consents' to a continuation."  Lange, 121 Wis. 2d at 601-02.  
See also Schaefer, 91 Wis. 2d at 378 (explaining that whether 
the exiting partner consented to continuation is a fact which 
must be determined by the trier of fact, and where such a 
finding has not been made prior to application of § 178.37, 
remand is generally appropriate).   
¶32 In addition to Wis. Stat. § 178.37 requiring a finding 
that the exiting partner consented to continuation before the 
statute can be applied, § 178.37 imposes different rules for 
No. 
2005AP2607   
 
21 
 
distribution of profits than the wind-up statutes, Wis. Stat. 
§ 178.32-.33(1).  See Gull, 185 Wis. 2d at 617-18 ("[D]ifferent 
rules apply depending on whether a partnership is winding up its 
affairs or the business is continued. . . .  Section 178.37 does 
not apply when the partnership is continued only for the purpose 
of winding up its affairs.")(citations omitted); Timmermann v. 
Timmermann, 538 P.2d 1254, 1261 (Or. 1975)(explaining that an 
exiting partner may elect either a wind-up or, "[i]n the 
alternative, the withdrawing partner may allow the business to 
continue or accept the fact that it has continued")(citing J. 
Crane and A. Bromberg, Law of Partnership § 86(c), at 495 
(1968)).  But see McDonald v. McDonald, 68 Wis. 2d 292, 301, 228 
N.W.2d 727 (1975) (suggesting that Wis. Stat. § 178.37 applies 
during the period between dissolution and termination, absent an 
agreement to the contrary).17   
                                                 
17 But see Schaefer, explaining that McDonald v. McDonald, 
68 Wis. 2d 292, 301, 228 N.W.2d 727 (1975), 
did not hold that sec. 178.37, Stats., applies 
regardless of whether the business is wound-up or 
continued.  To interpret McDonald in this manner would 
be to destroy the distinction between a wind-up and a 
continuation of the business.  It would also destroy 
the distinction between secs. 178.33(1) and 178.37, 
Stats.  Lastly, it would eliminate the necessity for 
the language in sec. 178.37, Stats., which states:  
"When any partner retires or dies, and the business is 
continued under any of the conditions set forth in s. 
178.33(2)(b) 
or 
178.36(1), 
(2), 
(3), 
(5) 
and 
(6) . . . ."  [Emphasis added by Schaefer court.]  We 
do not believe the supreme court intended such 
results. 
No. 
2005AP2607   
 
22 
 
¶33 However, in this case, the court's transformation of 
this case from a wind-up case to a Wis. Stat. § 178.37 case (or, 
perhaps more accurately, its treatment of this case as a hybrid 
between the two, at times addressing continuation in terms of 
wind-up) was not objected to.  The circuit court's findings of 
fact and conclusions of law and the parties' briefs consistently 
treat this as a Wis. Stat. § 178.37 case, with no objection 
raised to the altered posture of this case, despite the 
complaint having only sought a winding up under Wis. Stat. 
§§ 178.32-.33, 
not 
a 
§ 178.37 
resolution 
allowing 
for 
continuation.   
¶34 Pursuant to our order asking the parties to address 
these issues, both parties have continued to treat this as a 
continuation case.18  Nevertheless, neither party has pointed to 
any evidence in the record that James consented to such 
continuation rather than wind-up at the time of dissolution, and 
neither party addressed the significance of the express wind-up 
election 
in 
James' 
November 
2001 
Notice 
of 
Dissolution.  
Further, in its supplemental brief to this court, the Estate 
                                                                                                                                                             
Schaefer, 
91 
Wis. 
2d 
at 
385 
(first 
emphasis 
added).  
Furthermore, in McDonald, there was an agreement to continue the 
business after each partner's death.  68 Wis. 2d at 304-05. 
 
18 The parties appear to remain confused about continuation 
being something a court "finds" after a business takes too long 
to wind up, rather than continuation being something the exiting 
party must clearly consent to and elect in lieu of wind-up at 
the time of dissolution.  
No. 
2005AP2607   
 
23 
 
"acknowledged . . . that it did not at any time amend the 
Amended Complaint or otherwise withdraw its demand for a wind-up 
as found in Claim I of the Amended Complaint."   
¶35 However, absent any objection by Robert, we accept the 
procedural posture of this action as an elected continuation.  
In the Estate's post-trial brief to the circuit court, a copy of 
which was recently added to the appellate record of this case, 
the following statement was also made:  "The Estate elects to 
claim against the continuing business of Matteson Communications 
as a creditor."  In his letter brief to this court, Robert 
similarly argued that James' personal representative consented 
to continue the business, and had elected to proceed under Wis. 
Stat. § 178.37.  Absent any objection by Robert, we assume, 
without concluding, that the Estate's post-trial brief statement 
may suffice as an election of continuation rather than wind-up 
as required by § 178.37 (and as explained by Lange, 121 Wis. 2d 
at 601-02, and Schaefer, 91 Wis. 2d at 378, 385).   
¶36 We also find it necessary to treat this as a 
continuation case because neither party objected to the circuit 
court's 
conclusion 
that 
this 
is 
a 
Wis. 
Stat. 
§ 178.37 
continuation case rather than a wind-up case, and because since 
then both parties have consistently briefed and argued this 
matter pursuant to § 178.37.  We appreciate the Estate's 
explanation in its letter brief to this court that: 
 
In retrospect, it appears to counsel for the 
Estate that none of the parties understood the 
implications of Lange when the decision to dissolve 
Matteson Communications was made.  As a consequence, 
No. 
2005AP2607   
 
24 
 
the parties may have utilized language and filed 
pleadings without full appreciation of the implication 
of their actions.  It is submitted that consistent 
with the adage that "actions speak louder than words" 
that the parties through their actions evidence an 
intention if not agreement that the business of the 
partnership was to be continued. 
We will therefore treat this case as a § 178.37 case.   
B 
¶37 Under Wis. Stat. § 178.37, if the exiting partner has 
elected continuation, that partner has an additional election. 
In addition to the value of the retired partner's interest in 
the property at the date of the dissolution, the exiting partner 
is also entitled to an election of either interest on that 
value, or in lieu of that interest, postdissolution profits 
attributable to the use of his share in the partnership.  
Regardless of whether the exiting partner elects, in addition to 
the dissolution date value, interest on that value or "profits 
attributable," 
§ 178.37 provides that the exiting partner 
receives the elected sum "as an ordinary creditor," with 
creditors of the dissolved partnership having priority over an 
exiting partner's claims under the statute, as provided by Wis. 
Stat. § 178.36(8).19  As the court of appeals explained in Lange, 
                                                 
19 Wisconsin Stat. § 178.36(8) provides:  
If the business of a partnership after dissolution is 
continued under any conditions set forth in this 
section, the creditors of the dissolved partnership, 
as against the separate creditors of the retiring or 
deceased partner or the representative of the deceased 
partner, have a prior right to any claim of the 
retired partner or the representative of the deceased 
partner against the person or partnership continuing 
the business, on account of the retired or deceased 
No. 
2005AP2607   
 
25 
 
profits elected under § 178.37 are different from wind-up 
profits "because, in a continuation, the outgoing partner is not 
responsible for the debts of the continuing partnership.  The 
outgoing partner, instead, takes as a creditor."  Lange, 121 
Wis. 2d at 602-03 (citations omitted).   
¶38 In this case, we assume that the Estate exercised its 
statutory options to select the second continuation option 
rather than court-ordered wind-up or the first continuation 
option, thereby entitling it to both the value of James' 
interest at the time of dissolution and the profits attributable 
to that interest.20  The only contested issues related to Wis. 
Stat. § 178.37 that require resolution pertain to how to 
calculate "profits attributable," and whose burden it is to 
establish that amount.   
¶39 For the below reasons, we conclude that the burden of 
proof is on the Estate, representing the retiring partner, to 
determine the amount of profits attributable to the use of 
James' right in the property, and to establish that the 
calculations employed by both the circuit court and the court of 
appeals to ascertain those profits attributable were flawed. 
                                                                                                                                                             
partner's interest in the dissolved partnership or on 
account 
of 
any 
consideration 
promised 
for 
such 
interest or for the retired or deceased partner's 
right in partnership property. 
20 The record does not establish when any such election took 
place, and as noted earlier, the Notice for Dissolution demanded 
winding up the partnership. 
No. 
2005AP2607   
 
26 
 
 
1 
¶40 We first address the burden of proof issue.  The 
circuit court and court of appeals in this case both held that 
Robert, as the continuing partner, had the burden of proving the 
value of the profits attributable to the use of James' rights in 
the business after dissolution.  Robert argues that the circuit 
court and the court of appeals were both wrong on this point 
because the burden is on the retiring partner, not the 
continuing partner, to prove profits attributable.21  We agree. 
¶41 Wisconsin is a Uniform Partnership Act (UPA) state, 
with Wis. Stat. § 178.37 substantially identical to Section 42 
of the Revised Uniform Partnership Act, which provides:  
When any partner retires or dies, and the business is 
continued under any of the conditions set forth in 
section 41 (1, 2, 3, 5, 6), or section 38(2b) without 
any settlement of accounts as between him or his 
estate and the person or partnership continuing the 
business, unless otherwise agreed, he or his legal 
                                                 
21 The Estate proposes that we not reach the burden of proof 
issue at all, describing the issue as moot, because the parties 
agreed to stipulate to calculations from a neutral accountant.  
However, 
the 
court-appointed 
accountant 
was 
"engaged 
to 
calculate the amount of profits of the business continued by 
Robert Matteson after May 31, 2001," not to calculate "profits 
attributable" within the meaning of Wis. Stat. § 178.37.  
Furthermore, as the Estate acknowledges, a matter is moot if its 
determination cannot have a practical effect on an existing 
controversy.  State v. Leitner, 2002 WI 77, ¶13, 253 Wis. 2d 
449, 646 N.W.2d 341.  In this case, because we are remanding 
this action for a new determination of profits attributable, the 
determination of which party bears the burden of proving profits 
attributable 
will 
necessarily 
have 
an 
effect 
on 
this 
controversy. 
No. 
2005AP2607   
 
27 
 
representative as against such persons or partnership 
may have the value of his interest at the date of 
dissolution ascertained, and shall receive as an 
ordinary creditor an amount equal to the value of his 
interest in the dissolved partnership with interest, 
or, at his option or at the option of his legal 
representative, in lieu of interest, the profits 
attributable to the use of his right in the property 
of the dissolved partnership; provided that the 
creditors of the dissolved partnership as against the 
separate creditors, or the representative of the 
retired or deceased partner, shall have priority on 
any claim arising under this section, as provided by 
section 41(8) of this act. 
Rev. Unif. P'ship Act § 42, 6-II U.L.A. 593 (2001). 
¶42 Because Wis. Stat. § 178.37 is a Uniform Partnership 
Act statute, we initially look there for guidance.  See Skaar v. 
DOR, 61 Wis. 2d 93, 98, 211 N.W.2d 642 (1973).  Wisconsin Stat. 
§ 178.02(4) 
provides 
that 
"[t]his 
chapter 
shall 
be 
so 
interpreted and construed as to effect its general purpose to 
make uniform the law of those states which enact it."  The 
purpose of uniform laws is to establish both uniformity of 
statutory law and uniformity of case law construing the 
statutes, ensuring certainty and guidance to litigants who rely 
on the courts to interpret uniform statutes in a predictable and 
consistent manner.  See M.J. Wallrich Land & Lumber Co. v. 
Ebenreiter, 216 Wis. 140, 143, 256 N.W. 773 (1934).   
¶43  We note that other UPA states have concluded that the 
burden of proof is on the exiting partner to prove profits 
No. 
2005AP2607   
 
28 
 
attributable.22  See e.g., Cadwalader, Wickersham & Taft v. 
Beasley, 728 So. 2d 253, 258 (Fla. Dist. Ct. App. 1998)("As the 
record 
does 
not 
clarify 
what 
portion, 
if 
any, 
of 
the 
postdissolution 
profits 
earned 
on 
services . . . was 
attributable to Beasley, we find that Beasley failed to carry 
his burden of showing what the quantum meruit value of his 
services was after he left the firm."); Hughes v. Aycock, 598 
S.W.2d 370, 376-77 (Tex. App. 1980)("[T]o recover profits in 
lieu of interest under Section 42, [the exiting partner] was 
required 
to 
prove 
by 
competent 
evidence 
'the 
profits 
attributable to the use of his right in the property of the 
dissolved partnership,'" which requires proving not only the 
profits the partnership earned after dissolution, but also "what 
portion of those profits are directly attributable to his 
capital investment.")(citations omitted).  See also 2 Alan R. 
Bromberg 
& 
Larry 
E. 
Ribstein, 
Bromberg 
and 
Ribstein 
on 
Partnership § 7.13(f), at 7:211 (Supp. 2006) ("When profits have 
been elected, the retiree must prove what profits were earned 
after dissolution, as well as what profits were attributable to 
the use of partnership assets as distinguished from the services 
                                                 
22 In other contexts as well, courts in UPA states have held 
that the party seeking an accounting, or the dissolution value 
of his or her interest, has the burden of proof.  See, e.g., 
Thigpen v. Aldred, 165 S.E. 27, 28 (Ga. 1932)(in a case 
addressing a petition for accounting and settlement of a 
partnership, the Georgia Supreme Court ruled that the plaintiff 
carried the burden imposed by law of proving his right to 
recover by a preponderance of the evidence); Palmer v. Manville, 
228 N.W. 20, 21 (Iowa 1929)(involving an action in equity for an 
accounting between a contractor and real estate operator).   
No. 
2005AP2607   
 
29 
 
of the partners.")(citations omitted).  Placing the burden on 
the exiting partner comports with the UPA election option's 
purpose being in part to hasten settlement of accounts.  See 
McDonald, 68 Wis. 2d at 302. 
¶44 Bader v. Cox, 701 S.W.2d 677 (Tex. App. 1985), another 
case affirming that the burden is on the exiting partner to 
establish profits attributable, is of particular relevance to 
our burden of proof discussion.  In Bader, the widow of a 
deceased partner sought to recover profits of the partnership's 
business, and the court placed the burden on the widow to prove 
profits attributable, concluding that it is the exiting partner 
who "must prove, by competent evidence, the profits gained after 
dissolution and prior to termination which are attributable to 
the use of decedent's right in the property of the dissolved 
partnership."  Id. at 684.  
¶45 The lower courts in the present case seemed to base 
their decisions to switch the burden of proof from the exiting 
to the remaining partner on policy grounds unsupported by 
precedent, with the court of appeals even acknowledging that 
"[t]hough other jurisdictions have decided differently, it is 
clear to us that the continuing partner, who runs the business 
and has access to all of its records, is the one who should have 
to 
show 
how 
profits 
are 
earned 
and 
to 
what 
they 
are 
attributable."  Estate of Matteson, 298 Wis. 2d 791, ¶20 
(emphasis added).   
¶46 Echoing the lower courts, the Estate argues that from 
a public policy perspective it makes more sense to place the 
No. 
2005AP2607   
 
30 
 
onus on the continuing partner to prove the postdissolution 
profits attributable, with that partner being in a better 
position to access the business's records than the exiting 
partner, who might have to resort to litigation.  The Estate 
also argues that the remaining partner is better positioned to 
assess how the exiting partner's assets are being used for 
purposes of calculating profits attributable to those assets.   
¶47 We acknowledge that these policy arguments have merit.  
However, although it is particularly the case where, as here, 
the retiring partner died after leaving the partnership, that 
the continuing partner has greater access to the business's 
records as the one running the business, this does not 
necessitate a general rule placing the burden on the continuing 
partner to prove profits attributable.  This is so for a number 
of reasons.   
¶48 To begin with, one of the underlying policies of the 
Uniform Partnership Act is to hasten the settlement and the 
orderly winding up of dissolved partnerships.  McDonald, 68 Wis. 
2d at 302.  It is in the interest of both parties to settle this 
promptly.   
¶49 In addition, the burden of proof is generally on the 
party invoking the judicial process in its favor.  Richards v. 
First Union Sec., Inc., 2006 WI 55, ¶17, 290 Wis. 2d 620, 714 
N.W.2d 913.  Here, the circuit court found that it was the 
Estate's choice to elect the "profits attributable" distribution 
rather than a statutory rate of interest.   
No. 
2005AP2607   
 
31 
 
¶50 As for the competing policy arguments for and against 
placing the burden on the partner with less immediate access to 
the business records, we have explained that although the party 
with exclusive access to facts "should ordinarily bear the 
burden of proof on that issue," and this is a relevant factor in 
determining 
burden 
of 
proof, 
this 
factor 
should 
not 
be 
overemphasized because one must often plead and prove matters as 
to which one's adversary has superior access to the evidence, 
but "with liberal discovery, parties are placed on more equal 
footing with regard to evidence."  Acuity Mut. Ins. Co. v. 
Olivas, 2007 WI 12, ¶43, 298 Wis. 2d 640, 726 N.W.2d 258 
(citations omitted).  
¶51 Finally, this case presents a unique fact situation in 
that it involves a retiring partner who also died shortly after 
retiring.  We do not deem it appropriate to create a new rule 
contrary to that adopted in other Uniform Partnership Act states 
as a response to the unique facts of this case. 
¶52 Consequently, we will follow the path taken by other 
UPA states that have interpreted their corresponding statutes as 
placing the burden of proof on the exiting partner.   
2 
¶53 We next 
address the appropriate methodology for 
calculating the profits attributable, and whether the lower 
courts erred in concluding that the partnerships' predissolution 
distribution ratio of 55/45 is the appropriate measure for a 
postdissolution Wis. Stat. § 178.37 calculation of profits 
attributable to the retired partner's right in the property.  
No. 
2005AP2607   
 
32 
 
¶54 Robert argues that the 55/45 ratio was no longer an 
appropriate measure of profit division once James exited the 
partnership, because James ceased actively contributing to the 
business and no longer faced the risk of joint and several 
liability for the debts of the partnership.  Robert further 
argues 
that 
because 
a 
business 
partnership 
requires 
the 
participation of two or more persons, when one partner forces 
dissolution by retiring, that former partner relinquishes the 
right 
to 
profit 
distribution 
according 
to 
agreed 
upon 
predissolution percentages.   
¶55 Robert also points out the sizable discrepancy between 
the $14,000 that would have been awarded the Estate had it opted 
for the interest option of Wis. Stat. § 178.37, and the $155,587 
over and above his $68,641 investment which the circuit court 
awarded to it under the "profits attributable" option, after 
employing the predissolution 55/45 profit-sharing ratio.  This 
result, Robert suggests, cannot reflect the purpose of the 
Uniform Partnership Act.   
¶56 The Estate argues that the division of profits after 
dissolution 
must 
be 
based 
on 
the 
same 
profit-sharing 
distribution which the partners employed up to the time of 
dissolution 
because 
a 
partnership 
is 
not 
terminated 
at 
dissolution, but continues until the exiting partner receives 
his or her original percentage interest in the partnership 
during the wind-up process, citing Lange, 121 Wis. 2d at 601-02.  
Such continued application of the agreed upon profit-sharing 
percentages helps prevent remaining partners from prolonging the 
No. 
2005AP2607   
 
33 
 
wind-up while using the exiting partner’s assets to conduct 
business, and helps limit the amount a minority-interest 
continuing partner such as Robert can unfairly amass, the Estate 
argues.   
¶57 While Robert's arguments might make sense in a wind-up 
context,23 the wind-up incentive rationale does not apply the 
same way in a Wis. Stat. § 178.37 continuation case.  In 
continuation cases, UPA states have concluded that exiting 
partners are not entitled to a full predissolution profit share 
after dissolution because the predissolution profit-sharing 
ratio was predicated in part on that partner's contribution of 
services, which ended upon dissolution, while after dissolution, 
the exiting partner is compensated for the use of its investment 
in the partnership.  See Bromberg and Ribstein on Partnership, 
§ 7.13(f), at 7:210.   
¶58 Consistent with the approach of other UPA states, we 
conclude that a proper determination of the profits attributable 
to James' interest requires more than simply dividing the 
profits according to the 55/45 percentages agreed upon for 
sharing profits during the predissolution active partnership.  
In postdissolution situations involving a retired partner, the 
situation has changed; the retiring partner no longer takes on 
the same shared risks, such as liability, and therefore should 
                                                 
23 See Schaefer, 91 Wis. 2d at 381 ("If a partnership is 
seasonably wound up after dissolution, profits and losses during 
the liquidation are shared by the partners in proportion to 
their 
predissolution 
ratios, 
unless 
they 
have 
agreed 
otherwise."). 
No. 
2005AP2607   
 
34 
 
not be rewarded the profits in the same ratio as if he were 
still actively contributing to the partnership.   
¶59 As the Bader court explained, using predissolution 
percentages 
to 
calculate 
the 
postdissolution 
profits 
attributable is a flawed approach.  The demonstration of which 
portion of profits is directly attributable to an exiting 
partner's investments "requires more than simply multiplying the 
percentage 
figure 
representing 
[the 
exiting 
partner's] 
contribution to capital by the total profits for the period in 
question."  Bader, 701 S.W.2d at 684 (quoting Hughes, 598 S.W.2d 
at 377).  Instead, the Bader court explained, "the portion of 
the profits attributable to the [exiting partner's] ownership 
interest must be distinguished from the portion attributable to 
the skill, time, efforts, and diligence of the remaining 
partners."  Id. 
¶60 Wisconsin Stat. § 178.37 explicitly sets forth a 
different methodology for postdissolution profit allocation than 
the predissolution profit-sharing agreement.  The statute treats 
the exiting partner as an ordinary creditor after dissolution, 
and not as a partner whose profits attributable remain subject 
to ongoing 55/45 division.  
¶61 While both lower courts in this case erred in applying 
the predissolution 55/45 profit ratio to a calculation of 
postdissolution profits attributable, the court of appeals was 
correct in charging the circuit court with additionally erring 
by refusing to compensate Robert for his substantial labor and 
management services in running the business, not just his 
No. 
2005AP2607   
 
35 
 
efforts in winding it up.  As the court explained in Lange, 121 
Wis. 2d at 606, such deductions to compensate the remaining 
partner for labor and management services should be made, and 
should be calculated before the final accounting of profits due 
the exiting partner.   
¶62 We agree with the court of appeals that Wis. Stat. 
§ 178.15(6) is not applicable in this case.24  In Gull, 185 Wis. 
2d at 625, the court of appeals explained that § 178.15(6) 
applies to the extra compensation accorded to surviving partners 
when a partnership is dissolved due to the death of a partner, 
which is not the case here.  James' death did not occur until 
six months after the dissolution, which resulted from his 
retirement, not death.  
¶63 The 
appropriate 
approach 
to 
the 
calculation 
of 
"profits attributable" has been set forth by decisions in other 
UPA states which have already addressed this issue.  In such 
states, courts have determined that: 
 
The first step in computing a retiree's or 
estate's postdissolution profits or interest is to 
determine 
the 
extent 
of 
the 
former 
partner's 
investment . . . [with] 
the 
basis 
of 
compensation . . . not 
[] 
limited 
to 
the 
amount . . . [of] the partner's account on the books 
of the partnership when that amount does not reflect 
profits that have not been closed out to the capital 
accounts, appreciation in the value of partnership 
                                                 
24 Wisconsin Stat. § 178.15(6) provides that "[n]o partner 
is entitled to remuneration for acting in the partnership 
business, except that a surviving partner is entitled to 
reasonable compensation for his or her services in winding up 
the partnership affairs." 
No. 
2005AP2607   
 
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assets, or goodwill.  It has been held that the 
relevant percentage is determined by comparing the 
partner's capital to net assets rather than to total 
assets . . . .  
 
When profits have been elected, the retiree must 
prove what profits were earned after dissolution, as 
well as what profits were attributable to the use of 
partnership assets as distinguished from the services 
of the partners.  The latter is often particularly 
difficult.  The retiree or estate might proceed by 
comparing both earnings and work performed by the 
partners (and any employees hired to replace the 
outgoing 
partner 
or 
estate) 
before 
and 
after 
dissolution.  The profits or interest should generally 
be computed on the basis of the partner's percentage 
investment in the firm . . . .  
Bromberg and Ribstein on Partnership § 7.13(f), at 7:211-12 
(citations omitted).  
¶64 Consequently, in this case, the burden is on the 
Estate to provide an accounting, which should start with the 
$68,641 that the parties agree represents James' right in the 
property as of the dissolution date.  The accounting should then 
add to that starting figure the net postdissolution profit 
attributable to the $68,641.  Although we do not provide an 
exact formula for the determination of "profits attributable," 
which is a fact-specific determination, the accounting of 
profits attributable upon remand should be made by establishing 
(1) the gross profits of the business from May 31, 2001, through 
the date of final accounting;25 (2) the net profit, calculated by 
subtracting, for example, deductions for borrowed funds and 
                                                 
25 See Lange, 121 Wis. 2d at 603 ("The right to a share of 
the profits exists only until the final accounting has been 
made.").   
No. 
2005AP2607   
 
37 
 
reasonable 
labor costs and expenditures (including health 
insurance, pension payments, and reasonable compensation to 
Robert or others working for the business, both for their 
efforts in maintaining the business and in their efforts related 
to this lawsuit); and (3) in what amount those net profits 
following dissolution are attributable to James' dissolution 
date $68,641 right in the business, as opposed to profits 
generated by Robert's or others' efforts or capital.  This 
accounting on remand should trace the profits to their source, 
and provide a clear record of such tracing, and must reflect an 
actual accounting, not a flat 55/45 division.   
¶65 As a final note, we address a dispute about whether 
James' $68,641 right in the business as of the dissolution date, 
to which profits attributable are traced, includes intangible 
assets such as goodwill.  With respect to Wis. Stat. § 178.37, 
we adopt the analysis of the UPA provided by the California 
court of appeals, which has explained that leasehold interests, 
permits to do business, and the goodwill of partnerships are as 
much assets as tangible property, and that goodwill "is property 
recognized and protected by the law as such . . . .  How far its 
value might be affected by the competition of the retiring 
partner is an element, of course, to be taken into consideration 
in fixing of such value."  Ruppe v. Utter, 243 P. 715, 717 (Cal. 
Ct. App. 1925).  See also Schaefer, 91 Wis. 2d at 382 (The 
calculation of a deceased partner's dissolution date value in 
the business includes "asset appreciation and good will up to 
that date, plus interest or profits from the date of death to 
No. 
2005AP2607   
 
38 
 
final settlement.  The 'profits,' however, do not include asset 
appreciation."). 
¶66 In this case, the circuit court took into account the 
value of goodwill and other intangible assets as required by 
Wis. Stat. § 178.37; the partnership property which contributed 
to the business's success after dissolution was described by the 
circuit court as including "not only the tangible assets but 
also the goodwill, reputation prior to dissolution that have 
contributed to the success of, in essence, the business."   
IV 
¶67 Finally, we are asked to determine whether the circuit 
court erred in ordering Robert to post security in the amount of 
judgment plus 12 percent interest for one year's time, with any 
further interest accruing on the deposited money to be deemed 
Robert's property, as a condition of the stay of execution.   
¶68 A court has broad discretionary authority under Wis. 
Stat. § 808.07(2)(a)3. to issue a stay of execution of judgment.  
Section 808.07(2)(a)3. provides that a circuit court may "make 
any order appropriate to preserve the existing state of affairs 
or the effectiveness of the judgment subsequently to be entered" 
pending appeal.   
¶69 In Management Computer Services, Inc., v. Hawkins, 
Ash, Baptie & Co., 224 Wis. 2d 312, 330, 592 N.W.2d 279 (Ct. 
App. 1998), the court of appeals affirmed the broad level of 
discretion a circuit court has under Wis. Stat. § 808.07(2)(a)3. 
in tailoring a stay of execution to a particular case.  In that 
case, as in this one, the court issued a stay of execution 
No. 
2005AP2607   
 
39 
 
requiring deposit of money with the court, and requiring the 
court to place that money into an interest-bearing account.  Id. 
at 330-31.26  The court of appeals in Management Computer 
Services explained that "one goal of statutory interest mandates 
is to compensate prevailing parties for the time-value of their 
money."  Id. at 331.  That goal is effectuated by granting 
courts broad discretion in conditioning stays of execution on 
such terms as the courts deem appropriate.  Id. at 330.  
¶70 The 
procedural 
history 
of 
the 
contested 
order 
pertaining to payment of interest in the present case is as 
follows.  First, in an order dated November 1, 2005, in 
accordance with its authority under Wis. Stat. § 808.07 to grant 
stays of execution, the circuit court granted Robert's request 
for such a stay.  As a condition of the stay of execution, the 
court ordered the Estate to post a surety bond, while allowing 
that "[i]n the event that the [Estate] is unable to procure a 
surety bond as described in the preceding paragraph, the Court 
shall again consider [Robert's] motion and shall require 
[Robert] to post adequate security pending the appeal."  After 
the Estate was unable to procure the bond, the circuit court 
issued a new order on November 10, 2005, with the following 
provisions:  
1. 
Provided that [Robert] post[s] the security as 
described in the following paragraph, the execution of 
                                                 
26 Unlike this case, however, the court in Management 
Computer Services, Inc., v. Hawkins, Ash, Baptie & Co., 224 Wis. 
2d 312, 330, 592 N.W.2d 279 (Ct. App. 1998), did not require 
payment of interest along with payment of judgment. 
No. 
2005AP2607   
 
40 
 
the judgment entered in the above-referenced matter is 
stayed pending appeal. 
2. 
[Robert] shall post with the Fond du Lac County 
Clerk of Court the amount of $134,400, which sum 
represents the approximate amount of the judgment plus 
interest 12% for one year's time.  The Clerk of Court 
for Fond du Lac County, Wisconsin is directed to 
invest such sum in an interest bearing account at a 
financial institution doing business in Fond du Lac 
County, Wisconsin.  The Court finds that interest on 
the judgment at 12% per annum protects the respective 
interests of both [the Estate] and [Robert] during the 
pendency of the appeal. 
3. 
The Court reserves the right to amend this order 
in the event that the duration of the appeal is in 
excess of 12 month[s] from the date of this Order. 
¶71 Another order was issued on November 14, 2005.  This 
order was identical to the November 10 order except that the 
following sentence was added to the end of paragraph 2:  "All 
interest accumulating on the deposited funds at the market rate 
of interest shall be deemed the property of [Robert]."  The 
funds were deposited with the clerk on November 22, 2005.   
¶72 Despite the language in the November 14, 2005, order 
deeming interest accumulating on the deposited funds to belong 
to Robert, Robert argues that the circuit court's stay of 
execution orders violated Wis. Stat. § 807.01(4)27 in ordering 
                                                 
27 Wisconsin Stat. § 807.01, addressing settlement offers, 
provides in relevant part: 
(1) After issue is joined but at least 20 days before 
the trial, the defendant may serve upon the plaintiff 
a written offer to allow judgment to be taken against 
the defendant for the sum, or property, or to the 
effect therein specified, with costs. . . .  
. . . . 
No. 
2005AP2607   
 
41 
 
him to pay even a year's worth of interest in advance.  He cites 
Management Computer Services and Downey v. Bradley Center Corp., 
188 Wis. 2d 435, 524 N.W.2d 915 (Ct. App. 1994), for the rule 
that, under § 807.01(4)'s provision that post-judgment interest 
only accrues until the judgment is "paid," such payment must be 
recognized as having been made when it is deposited with the 
clerk of courts.  He argues that the circuit court erred in 
requiring him to pay a year's worth of interest in advance, 
which in effect fails to honor his payment to the clerk, which 
halts interest accrual under § 807.01(4).  
¶73 Robert also argues that the court of appeals in this 
case erroneously distinguished Downey as a case involving 
interest accrual pursuant to Wis. Stat. § 815.05(8), not Wis. 
Stat. § 807.01(4).  He contends that the language of both 
statutes limits accrual of interest until judgment is paid.   
¶74 We agree that Wis. Stat. § 807.01(4) is the applicable 
statute, in that it applies to the context of proposed and 
rejected settlement offers, as occurred in this case.  In 
                                                                                                                                                             
(4) If there is an offer of settlement by a party 
under this section which is not accepted and the party 
recovers a judgment which is greater than or equal to 
the amount specified in the offer of settlement, the 
party is entitled to interest at the annual rate of 
12% on the amount recovered from the date of the offer 
of settlement until the amount is paid.  Interest 
under this section is in lieu of interest computed 
under ss. 814.04(4) and 815.05(8). 
(5) Subsections (1) to (4) apply to offers which may 
be made by any party to any other party who demands a 
judgment or setoff against the offering party. 
No. 
2005AP2607   
 
42 
 
contrast, Wis. Stat. § 815.05(8) by its express language does 
not apply when § 807.01(4) is in effect.   
¶75 Although Wis. Stat. § 807.01(4) is the statute which 
applies to this case, Wis. Stat. §§ 815.05(8) and 807.01(4) use 
similar language reflecting that the accrual of interest tolls 
upon the payment of judgment.  Section 807.01(4) describes a 
party's right in some situations to interest "at the annual rate 
of 12% on the amount recovered from the date of the offer of 
settlement 
until 
the 
amount 
is 
paid," 
while 
§ 815.05(8) 
similarly describes a party's right in other situations to 
interest "at the rate of 12% per year on the amount recovered 
from the date of the entry of the judgment until it is paid."  
As such, we examine Downey's interpretation of the similar 
language in § 815.05(8) to interpret what § 807.01(4) means by 
the language, "until the amount is paid." 
¶76 In Downey, the court of appeals held that payment of 
the judgment to the clerk of courts tolls further accrual of 
interest, with the clerk standing in for the winning party as 
the receiver of payment for purposes of tolling interest 
accrual.  Downey, 188 Wis. 2d at 448-49.  The purpose of this 
rule, the court explained, is to motivate the debtor to pay the 
judgment.  Id. at 449. 
¶77 The Estate suggests that Downey should be formally 
overruled because it has already been "silently overruled" by 
this court in Weber v. White, 2004 WI 63, 272 Wis. 2d 121, 681 
N.W.2d 137, as recognized by the court of appeals in Wisconsin 
Central Farms, Inc. v. Heartland Agricultural Marketing, Inc., 
No. 
2005AP2607   
 
43 
 
2006 WI App 199, ¶44, 296 Wis. 2d 779, 724 N.W.2d 364.  We 
conclude that any perceived conflict between Downey and Weber is 
overstated in Wisconsin Central Farms.   
¶78 The conflict that the court of appeals in Wisconsin 
Central Farms perceived between Downey and Weber appears to be 
as follows:  while Downey provides that interest is tolled as a 
result of paying a judgment to a clerk of courts, in Weber, this 
court held that a circuit court may exercise its discretion to 
deny a request to stay an execution in order to avoid paying 
interest pending appeal.  
¶79 The tension between the cases is merely that of 
different 
results 
by 
courts 
similarly 
exercising 
their 
discretion.  Downey recognizes that in some cases, executions 
may be stayed, tolling interest, and in Weber, we recognized 
that in other cases, a court may decline such a request for 
stay.  There is no substantial conflict in these differing 
results that calls into question the precedential value of 
either case.  Whether a stay of execution may be granted is an 
exercise of discretion subject to the four-factor test of 
Scullion v. Wisconsin Power & Light Co., 2001 WI App 120, ¶31, 
No. 
2005AP2607   
 
44 
 
237 Wis. 2d 498, 614 N.W.2d 565,28 but once a stay of execution 
is granted, the determination of whether payment of a judgment 
tolls interest remains governed by the rule of law correctly 
articulated by Downey.   
¶80 In this case, the parties disagree about the terms of 
the stay, not the circuit court's decision to grant one.  As 
such, Downey, not Weber or Scullion, applies. 
¶81 Although we agree with Robert that Downey establishes 
that interest stops accruing upon payment of a judgment to the 
court, we decline to adopt the application of the rule he urges 
in this case.  Robert argues that the court's stay condition in 
this case violated Wis. Stat. § 807.01(4)'s prohibition of 
interest accruing past payment of judgment because it included a 
requirement of paying one-year's worth of interest.   
¶82 We reject this argument.  The interest ordered by the 
circuit court, coming within the context of a stay condition, 
fell within the court's discretion.  The court ordered an amount 
equal to one-year's interest to be paid along with an amount 
equal to the judgment as a condition of granting the stay, but 
                                                 
28 In Weber, this court described the four-factor test of 
Scullion v. Wisconsin Power & Light Co., 2001 WI App 120, 237 
Wis. 2d 498, 614 N.W.2d 565, as requiring circuit courts to 
decide whether to grant a stay of a money judgment pending 
appeal on the bases of four factors:  (1) the issues appealed 
and likelihood of success on the issues; (2) the need to ensure 
the collectibility of the judgment and accumulated interest if 
the appellant is unsuccessful on appeal; (3) the  interest of 
the appellant; and (4) potential harm to the respondent if the 
judgment is not paid until completion of the appeal.  Weber v. 
White, 2004 WI 63, ¶35, 272 Wis. 2d 121, 681 N.W.2d 137.   
No. 
2005AP2607   
 
45 
 
once the judgment was paid, the court's order did not require 
ongoing, further accrual of interest.  Further, it is clear from 
the court's subsequent order that any interest accruing after 
the deposit of the judgment and the conditional interest payment 
tied to the stay would be returned to Robert, not given to the 
Estate.   
¶83  At oral argument, the Estate appeared to argue that 
all the interest that accrues on the deposited funds should go 
to it, not Robert, despite the circuit court's explicit November 
14, 2005, order allowing Robert to keep any interest that 
accrued on the deposited funds after the initial deposit.   
¶84 However, the circuit court was within its discretion 
and in compliance with statutory mandates to order that interest 
accruing on the deposited funds past the date of deposit should 
revert to Robert, as well as being within its discretion in 
issuing the stay of execution with payment of one year's worth 
of interest along with judgment.  The two orders, viewed 
together, are consistent with important policy goals of securing 
funds for additional statutory interest that may accrue if the 
Estate wins on appeal, while also protecting Robert's time-value 
of the money interest in the judgment deposited with the court. 
See Management Computer Servs., 224 Wis. 2d at 330. 
¶85 Although we agree with Robert that interest accrues 
only until judgment is paid to the clerk of courts, we conclude 
that the circuit court did not err in ordering Robert to deposit 
with the court the judgment amount plus 12 percent interest for 
one year, particularly in light of its later order protecting 
No. 
2005AP2607   
 
46 
 
Robert's right to further interest that accrues on the deposited 
money.   
V 
¶86 In sum, we conclude that, assuming a Wis. Stat. 
§ 178.37 "profits attributable" election was made, the Estate, 
representing the retired partner, James, has the burden under 
Wis. Stat. § 178.37 of proving the profits attributable to the 
business's use of James' right in the business, and that the 
circuit court erred in applying a predissolution profit-sharing 
ratio as the basis for postdissolution division of profits under 
§ 178.37.  However, we conclude that the circuit court did not 
err in conditioning a stay of execution of judgment upon 
Robert's depositing with the court the judgment amount plus 12-
percent interest for one year.   
By the Court.— The decision of the court of appeals is 
affirmed in part, reversed in part, and the cause remanded to 
the circuit court for proceedings consistent with this opinion. 
 
 
No. 
2005AP2607   
 
 
 
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