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FREDERICKS PEEBLES v. ASSAM

Cite as 300 Neb. 670

Fredericks Peebles & Morgan LLP, app

v. Fred Assam, appellan

___ N.W.2d ___

Filed August 3, 2018. No. S-16-855.

1. Declaratory Judgments. An action for declaratory judgment is sui 

generis; whether such action is to be treated as one at law or one in 

equity is to be determined by the nature of the dispute.

2. Partnerships: Accounting: Appeal and Error. An action for a partnership dissolution and accounting between partners is one in equity and is 

reviewed de novo on the record.

3. Declaratory Judgments: Equity: Appeal and Error. In reviewing 

an equity action for a declaratory judgment, an appellate court tries 

factual issues de novo on the record and reaches a conclusion independent of the findings of the trial court, subject to the rule that where 

credible evidence is in conflict on material issues of fact, the reviewing court may consider and give weight to the fact that the trial court 

observed the witnesses and accepted one version of the facts over 

another.

4. Partnerships. The interpretation of a partnership agreement presents a 

question of law.

5. Appeal and Error. An appellate court independently reviews a lower 

court’s rulings on questions of law.

6. Courts: Jurisdiction: States. In answering any choice-of-law question, 

a court first asks whether there is any real conflict between the laws of 

the states.

7. Jurisdiction: States. An actual conflict exists when a legal issue is 

resolved differently under the law of two states.

8. Contracts. A contract written in clear and unambiguous language is not 

subject to interpretation or construction and must be enforced according 

to its terms.

9. Actions: Appeal and Error. An appellate court determines the nature of 

an action from the relief sought.

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

10/12/2018 01:11 AM CDT
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10. Breach of Contract: Damages. A suit for damages arising from breach 

of a contract presents an action at law.

11. Trial: Expert Witnesses. The trier of fact is not bound to accept expert 

opinion testimony.

12. Trial: Evidence. Evidence not directly contradicted is not necessarily 

binding on the triers of fact, and may be given no weight where it is 

inherently improbable, unreasonable, self-contradictory, or inconsistent 

with facts or circumstances in evidence.

13. Witnesses: Testimony. The credibility of a witness is a question for the 

trier of fact, and it is within its province to credit the whole of the witness’ testimony, or any part of it, which seemed to it to be convincing, 

and reject so much of it as in its judgment is not entitled to credit.

14. Options to Buy or Sell: Valuation: Words and Phrases. “Fair market 

value” is the price that a willing buyer would pay a willing seller, both 

persons having reasonable knowledge of all relevant facts and neither 

person being under compulsion to buy or to sell.

15. Options to Buy or Sell: Presumptions. The willing buyer-willing seller 

rule presumes that a potential transaction is to be analyzed from the 

viewpoint of a hypothetical buyer whose only goal is to maximize his or 

her advantage.

16. Options to Buy or Sell. The willing buyer-willing seller rule is applied 

using the viewpoint of an objective hypothetical buyer, rather than a 

subjective buyer.

Appeal from the District Court for Douglas County: Shell

R. Stratman, Judge. Affirm

David A. Domina, of Domina Law Group, P.C., L.L.O., for 

appellant.

Daniel P. Chesire, Brian J. Brislen, and Cathy S. TrentVilim, of Lamson, Dugan & Murray, L.L.P., and James J. 

Banks, of Banks & Watson, for appellee.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, 

Funke, JJ

Funke, J

This appeal concerns a determination of Fred Assam’s 

ownership interest in the law firm of Fredericks Peebles & 

Morgan LLP (FPM). After Assam voluntarily withdrew from 
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the firm, FPM filed suit seeking a declaration of the rights of 

FPM and Assam under the governing partnership agreement 

(Partnership Agreement). Following a bench trial, the district 

court for Douglas County declared the fair market value of 

Assam’s interest in FPM to be $590,000. For the reasons 

stated herein, we affirm.

I. BACKGROUND

1. Partnersh

FPM is a limited liability partnership composed of legal professionals. FPM has a nationwide practice which specializes in 

handling legal issues impacting Native American tribes, including, but not limited to, facilitating interrelationships between 

Native American tribes and the federal government, state governments, and other tribes, as well as foreign governments and 

foreign companies. FPM represents Native American tribes, 

entities, and individuals, as well as banks and financial institutions which deal with Native American tribes.

FPM was organized under the laws of the District of 

Columbia, and its principal place of business is located in 

Omaha, Nebraska. At the relevant time, FPM had dozens 

of attorneys throughout offices in Sacramento, California; 

Louisville, Colorado; Sioux Falls, South Dakota; Omaha, 

Nebraska; Winnebago, Nebraska; Peshawbestown, Michigan; 

and Washington, D.C.

As of October 1, 2014, FPM had five equity partners: 

Thomas W. Fredericks, John M. Peebles, Lance G. Morgan, 

Conly J. Schulte, and Assam. Fredericks, Peebles, Schulte, and 

Assam each held a 23.25 percent interest in FPM, and Morgan 

held the remaining 7 percent. FPM traditionally implemented 

a team approach in servicing its clients’ accounts, but nearly 

90 percent of FPM’s clients were brought in by Fredericks, 

Peebles, Morgan, and Schulte. Assam, a financial attorney, 

worked on accounts brought in by the other equity partners. 

Only three clients followed Assam when he left FPM, two of 

which maintained a relationship with FPM.
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In early 2014, FPM undertook a thorough financial review 

in order to implement long-term planning. The partners 

began to discuss changes to their compensation structure in 

order to reward younger partners for bringing in new clients. Fredericks proposed that compensation should be based 

on client generation, while others proposed that compensation should be based upon equity ownership. The partners 

exchanged and refined proposals over a period of months, 

and FPM ultimately arrived at a hybrid of the two compensation structures.

According to the testimony of Peebles, Assam had not kept 

up to date on the various proposals and voiced concern about 

only Fredericks’ initial proposal, which Assam felt negatively 

impacted his compensation. As a result of his concerns, Assam 

hired the accounting firm Eide Bailly LLP to perform a valuation of his equity interest in FPM.

On the evening of October 2, 2014, Assam sent an email to 

his partners in which he voluntarily resigned from FPM. In the 

email, Assam advised, “As you are all aware, over the course 

of the last few months, I have been under a personal attack 

by . . . Fredericks.” Assam stated the compensation structure 

Fredericks had proposed would “transfer complete control of 

[FPM] over to [Fredericks]. This means the life of my family 

and me will [sic] in complete control of a man who does not 

care for me and, in fact, will apparently act with intent to only 

to [sic] harm me.”

The following morning, Assam, whose office is located 

in Sioux Falls, flew to Denver, Colorado, to attend a partner 

meeting at the Louisville office, which had been scheduled 

prior to Assam’s resignation email. During his flight, Assam 

reviewed some of the more recent compensation structure 

proposals and realized the documents he had relied on when 

deciding to resign had significantly changed. At the meeting, 

Assam told the partners he had made a mistake and wanted to 

rescind his resignation and rejoin FPM. The partners declined 

and formally voted to accept Assam’s resignation.
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The FPM partners then continued their meeting and, as part 

of their ongoing financial review, addressed the agenda item 

of how to treat approximately $10 million in old accounts 

receivable. Many of FPM’s clients are sovereign under federal law and therefore may not be sued to collect on past-due 

billing absent a waiver of sovereign immunity. FPM has a 

practice of not requesting such a waiver from its clients so as 

to not jeopardize client relationships. As a result, according to 

the testimony of Morgan, FPM has a lower-than-average collection rate.

FPM carried a significant amount of outstanding accounts 

receivable for an extended period of time. At the partnership 

meeting, FPM decided to write off as uncollectable approximately $10 million in old accounts receivable.

After Assam’s resignation, the partners made him an offer 

of payment intended to represent the fair market value of 

his equity interest as set out in the Partnership Agreement. 

However, the two sides could not agree as to the value of 

Assam’s interest.

In late 2014, FPM filed a declaratory judgment action 

to determine the value of Assam’s interest. Assam filed an 

answer and counterclaim for an accounting and fair valuation 

of his interest in FPM, based on the Partnership Agreement. 

Assam sought a money judgment and attorney fees. FPM filed 

an amended complaint which asserted claims for breach of 

contract, breach of fiduciary duty, fraud, constructive fraud, 

rescission, disgorgement, and an accounting. Assam filed 

an answer which denied such claims and stated affirmative defenses.

At trial, FPM moved without objection to conform its pleadings to the adduced evidence in order to clarify that its sole 

claim was for declaratory judgment as to the amount it owed 

Assam for the fair market value of his ownership interest, as 

provided under the Partnership Agreement. Assam clarified 

that he maintained his counterclaim for an accounting, fair 

valuation, and a money judgment, plus attorney fees.
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The Partnership Agreement is dated May 1, 2007, and was 

signed by Fredericks, Peebles, Morgan, Schulte, and Assam 

on August 9, 2008. The parties agree that the provision which 

governs the determination of Assam’s equitable interest in 

FPM is:

In the event any Equity Partner gives a notice of voluntary 

withdrawal more than sixty months of July 1, 2003, such 

withdrawing Equity Partner will receive an amount equal 

to 100% of the fair market value of the Equity Partner’s 

interest in the Partnership as of the date of such notice of 

voluntary withdrawal, which amount will be paid out in 

six equal monthly installments without interest.

2. Expert Testim

The court heard valuation testimony from several expert 

witnesses. FPM called William Brennan, a management consultant for the legal profession. Assam called Chad Flanagan 

and Jay Fullerton, of Eide Bailly. In addition, Assam called 

Matthew Stadler as an expert witness. Assam himself also 

opined as to valuation.

(a) Brennan

Brennan has worked for over a decade as a principal with 

a law firm management consulting group. He testified that 

in the past 25 years, he has consulted with over 500 firms of 

all types and sizes. Prior to becoming a management consultant, Brennan worked as an accountant and auditor. Brennan’s 

work experience includes serving as chief financial officer 

and executive director for two law firms, one of which had 

250 attorneys.

As a consultant, Brennan developed a specialty in law 

firm mergers and acquisitions, which included performing firm 

valuations. Over his career, he had performed about 25 firm 

valuations. He previously testified in court seven times as an 

expert in law firm valuation. He is published in the area of 

valuation and is a frequent speaker on the issue of law firm 

financial management.
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Brennan spent over 100 hours on his valuation of FPM 

and drafted a 48-page report. Brennan’s report demonstrated 

several different business valuation approaches for comparison. Brennan testified that although market-based, asset-based, 

and income-based approaches are each generally accepted, the 

income approach is best for valuing law firms. Brennan stated 

the market-based approach is not useful for valuing law firms, 

because such businesses are privately owned and therefore a 

firm’s private transaction data is not publicly available to be 

used to compare value with other businesses in the market. As 

for an asset-based approach, Brennan testified firm assets must 

be adjusted down to their cash value in order to determine the 

asset’s “net realizable value.” Without this adjustment, assets 

such as encumbered assets and uncollectible accounts receivable would be overvalued.

Brennan testified that the income approach has several 

subsets, including the discounted cashflow approach and the 

“capitalization of economic income” approach. Brennan’s 

methodology focused on future cashflows and relied on 5 

years of historical income statements which were adjusted 

to normalize the income stream by removing nonrecurring 

expenses and adding liabilities not present on income tax 

forms. Brennan’s analysis considered economic environment 

risks, government regulation risks, and risks specific to FPM 

such as sustainability, infrastructure, and technological and 

data security risks. Brennan employed the “Ibbotson Build-Up 

Method” to determine an appropriate discount rate which 

considered a risk-free rate, an equity premium, systemic 

environmental risk unique to the legal industry, and specific risks unique to FPM such as aging partners generating 

the majority of the client revenue and lower-than-average 

collection rates, coupled with an inability to pursue legal 

action against nonpaying clients. Brennan also emphasized 

that certain factors limit the control and marketability of a 

law firm, including that only attorneys can own law firms, 

that lawyers cannot ethically restrict their ability to serve 
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clients through the use of noncompete agreements, and that 

most firms have partnership agreements which control compensation and/or admission into the firm. In considering all 

of these factors, Brennan applied a 60-percent discount to 

Assam’s partnership interest. Brennan’s ultimate opinion was 

a valuation of $590,000.

(b) Eide Bailly

Flanagan, the director of Eide Bailly’s business valuation 

department, and Fullerton, a senior official in Eide Bailly’s 

business valuation department, coauthored two reports regarding the value of Assam’s interest. Their reports complied with 

industry standards outlined by the “Statements on Standards 

for Valuation Services” and the National Association of 

Certified Valuation and Analysts. The first report was a calculation engagement in 2014, and the second report was a more 

detailed valuation engagement in 2016. Between Flanagan and 

Fullerton, approximately 50 hours were spent compiling the 

second report.

Flanagan is a certified public accountant who is a member 

of the American Institute of Certified Public Accountants. 

Flanagan also holds the designation of being accredited in 

business valuation. Fullerton holds a juris doctorate degree, a 

master’s degree in business administration, and a bachelor of 

science degree in economics with a minor in accounting.

In his practice, Flanagan performs between 150 and 200 

business valuations per year. Fullerton testified he had performed 300 business valuations in his career. Flanagan and 

Fullerton performed business valuations for various industries including wholesale, retail, manufacturing, insurance, 

real estate holding companies, restaurants, dental practices, 

construction, and farming operations. Flanagan had performed 

one law firm valuation, and Fullerton had not performed a law 

firm valuation prior to this case. Neither had ever performed 

financial consulting services for a law firm or had published 

any scholarly articles in the area of law firm valuation.
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Eide Bailly’s opinion also employed a buildup rate which 

included industry risk and firm risk to reach a discount rate 

of 4 percent. The opinion also incorporated a 10-percent 

discount for lack of control as to nonoperating assets and 

a 5-percent discount for lack of marketability, because the 

Partnership Agreement provides a market for the sale of 

those shares.

Flanagan admitted his valuation assumed that in a fair market value analysis, FPM should be understood as the specific 

hypothetical buyer of Assam’s interest. Fullerton admitted 

this assumption was part of Eide Bailly’s scope of engagement. In addition, Fullerton testified that Assam suggested 

to Eide Bailly that the reference to fair market value in the 

Partnership Agreement should equate to fair value. Fullerton 

further testified that fair value is essentially the same thing as 

fair market value without any discounts for lack of control or 

lack of marketability.

Prior to commencing the valuation engagement, Assam’s 

counsel sent a letter to Eide Bailly, dated April 28, 2016, which 

indicated:

The District of Columbia statutes permit a partnership 

agreement or a limited partnership agreement to specify buy-out terms. The [Partnership] Agreement in this 

case uses the phrase “fair market value”. However, the 

[Partnership] Agreement provides for a market within 

[FPM] and its Equity Partners. This means the transaction 

occurs at a fair price and on fair terms, not as if the sale 

were to a stranger. The internal market assures retention 

of client relationships, partnership identity, business continuity, and avoidance of startup costs and cash flow limitations. It is . . . Assam’s view that these circumstances 

require that “fair market value” be understood as the fair 

value of the partner interest in the context of the market 

created by the [Partnership] Agreement itself. This is, we 

think, the same as “fair value” in model corporate and 

business entity statutes.
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In their reports, Flanagan and Fullerton used an income 

approach which utilized FPM’s average normalized annual 

pretax revenue over a 4-year period. Eide Bailly also upwardly 

adjusted the value of the partnership due to its having a 

passthrough entity tax status. Flanagan testified that passthrough 

tax status is, in effect, a capitalization of taxes saved because 

FPM, as a limited liability partnership, is not subject to corporate taxation.

According to Flanagan’s testimony, Eide Bailly’s calculation engagement in 2014 concluded the value of Assam’s 

interest in FPM to be $3,420,000. Eide Bailly’s valuation 

engagement in 2016, using more recent revenue streams, 

concluded the value of Assam’s interest to be $3,120,000. 

Eide Bailly’s valuation accounted for FPM’s nonoperating 

assets, such as an interest in real estate and dormant accounts 

receivable.

(c) Stadler

Stadler was engaged by Assam to review and compare the 

fair market value opinions of Brennan, Eide Bailly, and Assam. 

Stadler is a certified public accountant who holds a juris 

doctorate and a master’s degree in professional accountancy. 

Stadler also has an accreditation in business valuation. Stadler 

has never worked in a law firm and has valued only one other 

law firm.

At Assam’s request, Stadler examined only Brennan’s valuation report, Eide Bailly’s calculation report, and Assam’s 

calculation report, and no other evidence. In doing so, Stadler 

did not develop an opinion as to value. Stadler identified deficiencies in each of the reports he reviewed. In the Eide Bailly 

report, Stadler opined that the failure to include 2010 data 

was a concern, that long-term growth rate was too high, and 

that the capitalization rate was too low. In regard to Brennan’s 

report, Stadler found fault in the capitalization rate as being 

too high and the discount for lack of control and lack of marketability as being too high. Ultimately, Stadler concluded 
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that Brennan’s opinion was understated by $1,235,000 and 

that Eide Bailly’s opinion was overstated by $1,275,000. 

Stadler fundamentally disagreed with Assam’s approach and 

described Assam’s valuation as not being credible “in any 

respect” and “ridiculous.”

(d) Assam

Assam is a financial attorney whose practice includes business valuation matters. Assam valued his interest in FPM 

at $4,877,850. Assam testified his valuation included his 

23.25-percent share of the $10 million in written-off accounts 

receivable. Assam encouraged the court to reject his experts’ 

valuations and adopt his own.

3. Trial Court Judgme

In its written order, the court found the proper remedy was 

declaratory judgment; it dismissed Assam’s counterclaim and 

declined to award attorney fees. In doing so, the court found 

FPM’s decision to write off approximately $10 million in old 

accounts receivable was not done in bad faith or with an intent 

to harm Assam, because the writeoff equally affected all equity 

partners and was set on the agenda for the partners’ meeting 

prior to Assam’s notice of resignation.

The court also determined, based on the language of the 

Partnership Agreement, that Assam’s interest was the fair market value of his equity partnership interest in FPM as of the 

date of his notice of voluntary withdrawal, October 2, 2014.

The court further found Assam’s valuation opinion was 

“unreliable and not credible.” The court accepted Assam’s 

testimony that the court should not adopt the opinions offered 

by Eide Bailly or Stadler and found that Assam attempted to 

“influence in an upward manner” Eide Bailly’s conclusion as to 

the fair market value of Assam’s interest. The court concluded 

that the April 28, 2016, letter from Assam’s counsel to Eide 

Bailly showed that Eide Bailly’s “calculation engagement” 

report included an incorrect assumption that FPM must be 
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the hypothetical buyer of Assam’s interest under a fair market 

value analysis.

The court declined to adopt Eide Bailly’s opinion, because 

Flanagan and Fullerton collectively had valued a law firm on 

only one other occasion; neither had ever worked at a law firm, 

been a chief financial officer for a law firm, or provided financial consulting services to a law firm; and neither had published any scholarly articles in the area of law firm valuation. 

The court noted that Stadler also lacked comparable expertise 

in law firm valuation for these same reasons.

The court found that the testimony of Brennan was credible; Brennan’s 60-percent lack-of-control and marketability 

discount was credible; Brennan’s discounts were appropriate 

as part of a “fair market value” analysis, because they helped 

replicate a public marketplace for a private entity; Brennan’s 

discount analysis was consistent with the fair market value 

standard of a hypothetical buyer’s ability to convert the ownership interest to cash and control the investment; and Brennan 

was the only expert to weigh risk factors which were credible 

and relevant to determining the fair market value test of a fully 

informed hypothetical willing buyer’s desire to maximize his 

economic interest.

The court found that the Partnership Agreement was not 

ambiguous; the Partnership Agreement did not contain a 

choice-of-law provision; there was no conflict with Nebraska 

law and District of Columbia law with regard to interpretation of a contract; if there were a conflict, Nebraska law 

would control due to Nebraska’s interest in and contacts with 

the dispute; and neither party had breached the Partnership 

Agreement.

The court found and declared that the fair market value of 

Assam’s equity partner interest in FPM is $590,000; pursuant to the Partnership Agreement, FPM may pay Assam this 

amount; and Assam was not entitled to a money judgment or 

attorney fees.

Assam appealed, and we moved the case to our docket.
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II. ASSIGNMENTS OF ERROR

Assam assigns, restated, that the district court erred by (1) 

failing to apply District of Columbia law; (2) finding FPM 

did not breach the Partnership Agreement; (3) adopting the 

opinion of FPM’s expert, Brennan, whose valuation opinion 

excluded approximately $10 million in old accounts receivable, as well as the value of real estate, automobiles, tenant 

improvements, and equipment; and (4) failing to award Assam 

a money judgment and attorney fees.

III. STANDARD OF REVIEW

[1-3] An action for declaratory judgment is sui generis; 

whether such action is to be treated as one at law or one in 

equity is to be determined by the nature of the dispute.1 An 

action for a partnership dissolution and accounting between 

partners is one in equity and is reviewed de novo on the 

record.2 In reviewing an equity action for a declaratory judgment, an appellate court tries factual issues de novo on the 

record and reaches a conclusion independent of the findings of 

the trial court, subject to the rule that where credible evidence 

is in conflict on material issues of fact, the reviewing court 

may consider and give weight to the fact that the trial court 

observed the witnesses and accepted one version of the facts 

over another.3

1 Christiansen v. County of Douglas, 288 Neb. 564, 849 N.W.2d 493 

(2014); Vlach v. Vlach, 286 Neb. 141, 835 N.W.2d 72 (2013); Lone Cedar 

Ranches v. Jandebeur, 246 Neb. 769, 523 N.W.2d 364 (1994).

2 Robertson v. Jacobs Cattle Co., 288 Neb. 846, 852 N.W.2d 325 (2014); In 

re Dissolution & Winding Up of KeyTronics, 274 Neb. 936, 744 N.W.2d 

425 (2008); Bass v. Dalton, 213 Neb. 360, 329 N.W.2d 115 (1983). See 

Darr v. D.R.S. Investments, 232 Neb. 507, 441 N.W.2d 197 (1989).

3 Gast v. Peters, 267 Neb. 18, 671 N.W.2d 758 (2003); Lake Arrowhead v. 

Jolliffe, 263 Neb. 354, 639 N.W.2d 905 (2002). See Badran v. Bertrand, 

214 Neb. 413, 334 N.W.2d 184 (1983).
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[4,5] The interpretation of a partnership agreement presents 

a question of law.4 An appellate court independently reviews a 

lower court’s rulings on questions of law.5

IV. ANALYSIS

1. No Conflict of

In Assam’s first assignment of error, he claims that the district court erred by determining that no conflict in substantive 

law existed between District of Columbia law and Nebraska 

law, as pertaining to the governing effect of the Partnership 

Agreement. Assam argues the district court erred when it 

concluded that if there were a conflict of laws, Nebraska 

law would control over District of Columbia law, because of 

Nebraska’s pertinent interest in the subject matter. Assam further argues that the choice of law impacts three legal issues, 

including what constitutes a breach of duty by FPM to Assam, 

what is “fair market value,” and attorney fees.

As we will discuss in more detail later, Assam did not 

properly raise a claim for breach of contract; as a result, any 

claim that the laws of the District of Columbia differ from 

the laws of the State of Nebraska on breach of contract is 

without merit. In addition, since we find that Assam was not 

entitled to attorney fees, any difference of law on that issue 

is irrelevant.

The only remaining issue is the determination of fair market value of Assam’s partnership interest. The record indicates 

that FPM was organized as a Washington, D.C., limited liability partnership. In addition, the Partnership Agreement does 

not contain a specific choice-of-law provision, and District of 

Columbia law does not allow for such a provision.6

4 Robertson, supra note 2; Shoemaker v. Shoemaker, 275 Neb. 112, 745 

N.W.2d 299 (2008).

5 Id.

6 D.C. Code Ann. § 29-701.07(b)(2) (West, Westlaw through 2013 

legislation).
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As our analysis will show, the determination of fair market 

value is controlled by the Partnership Agreement and no real 

conflict exists between the laws of the District of Columbia 

and the laws of the State of Nebraska with respect to the controlling effect of partnership agreements.

[6,7] In answering any choice-of-law question, a court first 

asks whether there is any real conflict between the laws of the 

states.7 An actual conflict exists when a legal issue is resolved 

differently under the law of two states.8 We agree with the 

district court when it found there was no conflict between 

District of Columbia and Nebraska substantive law governing 

the determination of Assam’s equity interest.

Under Nebraska’s Uniform Partnership Act of 1998,9 FPM 

is a “foreign limited liability partnership,” because FPM was 

formed under the laws of the District of Columbia.10 Section 

67-457 provides that the law under which a foreign limited 

liability partnership is formed governs relations among the 

partners and between the partners and the partnership.

Under the laws of the District of Columbia, relations among 

the partners and between the partners and the partnership are 

governed under the controlling partnership agreement.11 In 

addition, under Nebraska law, relations among the partners 

and between the partners and the partnership are also governed 

by the partnership agreement.12 Thus, whether the laws of the 

District of Columbia or the laws of the State of Nebraska are 

applied, the terms of the partnership agreement are controlling. 

As a result, no actual conflict of laws exists.

7 O’Brien v. Cessna Aircraft Co., 298 Neb. 109, 903 N.W.2d 432 (2017).

8 Id.

9 Neb. Rev. Stat. §§ 67-401 to 67-467 (Reissue 2009 & Cum. Supp. 2014).

10 See, § 67-402(4); D.C. Code Ann. § 29-701.06 (West, Westlaw through 

2013 legislation).

11 D.C. Code Ann. § 29-701.07(a).

12 § 67-404.
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Assuming without deciding that the district court erred 

when it determined that if there were a difference in the 

law of the State of Nebraska and the law of the District of 

Columbia, Nebraska law would apply exclusively, any such 

error was harmless.

[8] The Partnership Agreement is clear and unambiguous. A contract written in clear and unambiguous language 

is not subject to interpretation or construction and must be 

enforced according to its terms.13 Therefore, the terms of the 

Partnership Agreement provide the legal framework for our 

analysis.

2. No Breach of Con

In Assam’s second assignment of error, he claims that 

the district court erred by failing to find FPM breached the 

Partnership Agreement. We find no merit to this assignment 

of error.

[9,10] Assam did not assert an independent claim for breach 

of contract, but merely asserted a breach of contract claim as 

an affirmative defense to FPM’s amended complaint. At the 

commencement of trial, Assam clarified that he was seeking 

only an accounting and a fair valuation of his interest in FPM. 

We determine the nature of an action from the relief sought.14

Even though Assam’s first two assignments of error advance 

breach of contract arguments, at oral argument, Assam emphasized to this court that this is a proceeding in equity. A suit for 

damages arising from breach of a contract presents an action 

at law.15

We agree with the district court that this is a declaration of 

rights proceeding. The Partnership Agreement does not specify 

a particular amount due to Assam or a time period for payment. 

13 Frohberg Elec. Co. v. Grossenburg Implement, 297 Neb. 356, 900 N.W.2d 

32 (2017).

14 See Elting v. Elting, 288 Neb. 404, 849 N.W.2d 444 (2014).

15 Id.
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Instead, the Partnership Agreement requires that FPM pay 

Assam “an amount equal to 100% of the fair market value” of 

his 23.25-percent interest. The relief sought by both parties is 

the determination of the “fair market value” of Assam’s interest. Consistent with Assam’s view, we find the nature of the 

dispute to be one in equity, and as a result, this assignment of 

error is without merit.

3. District Court Did Not

In Determining A

Equity Inter

In Assam’s third assignment of error, he claims the district 

court erred when it adopted the opinion of Brennan, because 

Brennan’s opinion did not account for FPM’s nonoperating 

assets. Assam claims the court erred by assigning no value to 

approximately $10 million in uncollectable accounts receivable 

and FPM’s real estate investments. We find no merit to this 

assignment of error.

(a) Conclusions of Law

[11,12] The trier of fact is not bound to accept expert 

opinion testimony.16 The determination of the weight that 

should be given expert testimony is uniquely the province 

of the fact finder.17 Evidence not directly contradicted is not 

necessarily binding on the triers of fact, and may be given 

no weight where it is inherently improbable, unreasonable, 

self-contradictory, or inconsistent with facts or circumstances 

in evidence.18

[13] The credibility of a witness is a question for the trier 

of fact, and it is within its province to credit the whole of the 

16 Green v. Box Butte General Hosp., 284 Neb. 243, 818 N.W.2d 589 (2012). 

See Lewison v. Renner, 298 Neb. 654, 905 N.W.2d 540 (2018).

17 Pohlmann v. Pohlmann, 20 Neb. App. 290, 824 N.W.2d 63 (2012).

18 Marston v. Drobny, 166 Neb. 747, 90 N.W.2d 408 (1958). See Maloney v. 

Kaminski, 220 Neb. 55, 368 N.W.2d 447 (1985).
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witness’ testimony, or any part of it, which seemed to it to be 

convincing, and reject so much of it as in its judgment is not 

entitled to credit.19

[14-16] Under the laws of the District of Columbia, “fair 

market value” is the price that a willing buyer would pay a 

willing seller, both persons having reasonable knowledge of 

all relevant facts and neither person being under compulsion to 

buy or to sell.20 The willing buyer-willing seller rule presumes 

that a potential transaction is to be analyzed from the viewpoint of a hypothetical buyer whose only goal is to maximize 

his or her advantage.21 The willing buyer-willing seller rule is 

applied using the viewpoint of an objective hypothetical buyer, 

rather than a subjective buyer.22

(b) Analysis

The evidence of fair market value included the opinions of 

Brennan, Assam, Flanagan, Fullerton, and Stadler. Each expert 

posited a different fair market value, and each based his opinion on different factors. Just as the trial court did, we too find 

that there is evidence in conflict on material issues of fact concerning the appropriate considerations in valuing Assam’s fair 

market value interest. As a result, under our de novo review, 

we consider and give weight to the fact that the trial court 

observed the witnesses and accepted one version of the facts 

over another.23

In reaching his opinion that the fair market value of his ownership interest was $4,877,850, Assam used the asset approach, 

the income approach, and the market approach. Assam testified 

19 General Fiberglass Supply v. Roemer, 256 Neb. 810, 594 N.W.2d 283 

(1999); In re Estate of Ross, 19 Neb. App. 355, 810 N.W.2d 435 (2011).

20 Adkins Ltd. Ptp. v. O Street Management, 56 A.3d 1159 (D.C. 2012).

21 Eisenberg v. C.I.R., 155 F.3d 50 (2d Cir. 1998); Estate of Curry v. United 

States, 706 F.2d 1424 (7th Cir. 1983).

22 See Estate of Bright v. United States, 658 F.2d 999 (5th Cir. 1981).

23 See cases cited supra note 3.
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that in his practice, he routinely used business valuations to 

assist his clients in obtaining financing and would retain individuals to perform the business valuations. In determining how 

to prepare his valuation, Assam testified that he relied upon 

“some articles” that he read, including one by the American 

Bar Association and one from “Inc. Magazine.”

In preparing his valuation, Assam included in the asset 

approach real estate, automobiles, tenant improvements, equipment, and $10 million of old accounts receivable. For the 

income approach, he simply added 2013 income figures together 

with estimated 2014 income figures and divided the sum by 

two. For the market approach, he determined an average annual 

gross revenue (the amount determined in the income approach) 

and multiplied it by two. Ultimately, he determined amounts 

for each valuation method, added the values together, divided 

the total by three, and multiplied the amount by his partnership 

interest. Nothing in the record supports the valuation process 

used by Assam. In fact, Assam’s own expert, Stadler, testified 

that Assam’s valuation was “ridiculous.”

In regard to Eide Bailly’s opinion as to fair market value, 

both Flanagan and Fullerton testified that it was premised 

upon FPM’s being the hypothetical buyer. However, as mentioned above, fair market value is the price that a willing buyer 

would pay a willing seller. A willing buyer is presumed to be a 

hypothetical buyer whose only goal is to maximize his or her 

advantage. The willing buyer is considered from the viewpoint 

of an objective hypothetical buyer, rather than a subjective 

buyer. In using FPM as the willing buyer, Eide Bailly’s opinion 

failed to fully consider discounts for lack of control and lack 

of marketability.

In addition, Eide Bailly employed 4 years of income instead 

of 5 years of income. In doing so, Eide Bailly disregarded 

2010 income based on the determination that 2010 income 

was lower than the other years and was nonrepresentative of 

FPM’s regular annual income. However, both Brennan and 

Stadler testified that using the income figures over a 5-year 
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period was preferred over using income figures over a 4-year 

period. Even Flanagan testified that, typically, they use a sample of 5 years of income. Additionally, Eide Bailly annualized 

2014 income, because they did not have final figures for that 

year when preparing the report in May 2016. However, the 

record indicates that the 2014 income figures were finalized 

in March 2015.

Eide Bailly also adjusted the value of FPM due to having a 

“pass-through entity tax status.” However, Flanagan testified 

that this passthrough status had not been accepted by the U.S. 

Tax Court.

Further, though Flanagan and Fullerton are in the profession 

of preparing business valuation, neither had significant experience in valuating law firms. Prior to their engagement with 

Assam, Flanagan had performed only one law firm valuation 

and Fullerton had performed no law firm valuations.

Each of these decisions by Eide Bailly upwardly impacted 

its valuation. As a result, we agree with the district court that 

the valuation determined by Eide Bailly of $3,120,000 does 

not accurately reflect the value of FPM as of October 2, 2014. 

Albeit for different reasons, Assam also testified that Eide 

Bailly’s opinion should not be followed by the court.

In regard to Stadler’s testimony that Brennan’s opinion 

was understated by $1,235,000 and that Eide Bailly’s opinion 

was overstated by $1,275,000, Assam testified that the court 

should not adopt Stadler’s analysis. In addition, the record 

indicates that Stadler has limited experience in valuating law 

firms, Stadler testified that Brennan was more experienced in 

that particular field, and Stadler examined only the reports of 

the other experts and no other evidence. Further, Stadler used 

an industry risk premium for companies having much larger 

revenues than FPM; he used a lower specific company risk 

premium without reviewing the Partnership Agreement or any 

financial documents of FPM; and he used the passthrough 

entity tax status, which has not been widely adopted by the 

U.S. Tax Court. All of these decisions increased his “opinion” 
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of FPM’s fair market value. Lastly, Stadler included approximately $2.5 million of goodwill, which from the evidence is 

attributable to personal goodwill of the remaining partners as 

opposed to goodwill of FPM, resulting in an overstating of 

the fair market value by $573,000. As a result, we agree that 

Stadler’s determination of value was not accurate.

In regard to Brennan’s opinion, the trial court noted his 

vast experience in valuating law firms, including working 

for a law firm management consulting group dealing with 

over 500 law firms, working as an accountant and auditor, 

and serving as chief financial officer and executive director for two law firms. At the time of trial, Brennan had also 

performed approximately 25 law firm valuations and had 

testified in court seven times as an expert in law firm valuation. Ultimately, the trial court expressly based its findings 

on a credibility determination which accepted Brennan’s version of the facts over Assam’s and Eide Bailly’s. The court 

found Brennan’s testimony credible and controlling, because 

he implemented an approach which valued Assam’s interest in the context of a market. The court therefore found the 

60-percent discount for lack of control and marketability 

assigned by Brennan to be credible, because of the limitations 

presented by Assam’s minority interest in a law firm with 

a specialized practice area and equity partnership makeup 

such as FPM. The court found that Assam and Eide Bailly 

sought to remove the need for a market from the fair market 

value analysis dictated by the Partnership Agreement and that, 

therefore, their small discounts for lack of control and marketability were not credible.

The record indicates that Brennan considered several different business valuation approaches for comparison, including market-based, asset-based, and income-based approaches. 

Brennan was able to articulate why the income approach was 

the most suitable valuation method. Brennan used income figures for 5 years as opposed to 4 years, and he did not apply the 

passthrough entity tax status calculation. Brennan employed 
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the “Ibbotson Build-Up Method” to determine an appropriate 

discount rate, and his analysis considered economic environment risks, government regulation risks, and risks specific to 

FPM such as sustainability, infrastructure, and technological 

and data security risks. Though Brennan’s capitalization and 

discount rates were significantly higher than those propounded 

by the other experts, Brennan was able to articulate why law 

firms should be valued differently from other professional 

services industries. We therefore agree with the district court 

that Brennan’s opinion of value as to FPM is the most appropriate value.

In regard to FPM’s decision to write off approximately 

$10 million in old accounts receivable, the trial court found 

that it was not done in bad faith or with an intent to harm 

Assam. Specifically, the court noted that the writeoff equally 

affected all equity partners.

At trial, Peebles testified that the accounts receivable were 

“years old” and that the decision to write off the receivables 

was not made suddenly but was part of an ongoing analysis 

of compensation, partner continuity, personnel, and finances. 

He further testified that each of the partners was charged with 

the responsibility to review the accounts he was associated 

with and to make a determination as to collectability. Morgan 

testified that FPM’s collection rate was close to 70 percent. 

Assam testified that the aggregate of the accounts receivable 

was in excess of $15 million, of which $10.8 million was over 

120 days old.

Assam also testified that he was not part of any decision 

to write off the accounts receivable. Brennan testified that the 

longer a receivable ages, the less likely it will be collected 

in full, and that as they continue to age, especially beyond a 

year, it is unlikely that a firm would collect any such receivable. Brennan also testified that the partners made a specific 

determination for each of the receivables to be written off, 

that some of the accounts were 4 to 5 years old, and that 

the partners determined that nothing more could be done to 
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collect the accounts. As a result, Brennan opined that the 

uncollectable accounts receivable were appropriately written 

off, because that was a correct reflection of the “net realizable value” of the assets. Even Eide Bailly’s valuation report 

indicated that nearly $9 million in accounts receivable was 

likely uncollectable.

Despite Assam’s testimony that the writing off of accounts 

receivable was not discussed in 2014, he also testified that 

the subject of the writeoff was on the agenda for the partners’ 

meeting prior to the night he sent his notice of withdrawal. In 

addition, the majority of FPM’s clients were Native American 

tribes and therefore entitled to sovereign immunity, preventing FPM from bringing suit to collect on unpaid legal fees. As 

a result, we agree with the district court that the writeoff of 

accounts receivable was not improper.

Finally, Assam contends that the trial court failed to apply 

any value for the assets of FPM, including the building and 

the vehicles. However, all of the experts, with the exception 

of Assam, testified that the asset approach was not the best 

method to value FPM, due to the absence of significant capital. 

The income approach adopted by the trial court took into consideration FPM’s past and present revenue stream and determined an appropriate fair market value for it.

We agree with the trial court that Brennan’s testimony is 

persuasive and controlling. Based upon our de novo review, we 

find no merit to this assignment of error.

4. Failure to Award Money Judg

and Attorney F

Because we find no error in the district court’s ruling that 

FPM did not breach the Partnership Agreement, Assam is not 

entitled to a money judgment. Though a court may grant a 

money judgment as consequential relief in a declaratory judgment action,24 FPM was the entity seeking the declaratory 

24 See Hoiengs v. County of Adams, 245 Neb. 877, 516 N.W.2d 223 (1994).
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relief. In its pleadings, FPM did not seek a money judgment. 

Only Assam sought a money judgment, which was part of his 

claim for breach of contract. Having failed to prove the elements of a breach of contract, Assam is not entitled to a money 

judgment. Consequently, the district court did not err in declining to award him a money judgment.

In regard to Assam’s request for attorney fees, the Partnership 

Agreement allows for attorney fees for any prevailing party 

who was required to institute an action or proceeding to 

enforce any term or provision of the Partnership Agreement. 

However, because we find no merit to Assam’s claim that FPM 

breached the Partnership Agreement or that the district court 

erred by adopting the valuation opinion of Brennan, Assam 

was not a prevailing party. The district court did not err in 

refusing to award Assam attorney fees.

V. CONCLUSION

For the foregoing reasons, we affirm the order of the 

district court which declared Assam’s interest in FPM to be 

$590,000, and that FPM should pay Assam such sum according to the terms of the Partnership Agreement.

Affirm

Kelch, J., not participating in the decisio

Wright, J., not participating