Nebraska Advance Sheets

ROBERTSON v. JACOBS CATTLE CO. 859

Cite as 285 Neb. 859

Richardson’s conviction and sentence. We remand the cause to 

the Court of Appeals with directions to reverse Richardson’s 

conviction and sentence and to remand the cause to the district 

court for a new trial.

Reversed and remanded with directions.

James E. Robertson et al., appellants and cross-appellees, 

v. Jacobs Cattle Company, a partnership, et al., 

appellees and cross-appellants.

___ N.W.2d ___

Filed May 10, 2013. No. S-12-370.

1. 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.

2. Equity: Appeal and Error. On appeal from an equity action, an appellate court 

resolves questions of law and fact independently of the trial court’s determinations. But when credible evidence is in conflict on material issues of fact, an 

appellate court considers and may give weight to the fact the trial court observed 

the witnesses and accepted one version of the facts over another.

3. Statutes. Statutory interpretation presents a question of law.

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

of law.

5. Judgments: Appeal and Error. An appellate court independently reviews a 

lower court’s rulings on questions of law.

6. Partnerships: Time. The Uniform Partnership Act of 1998 applies to any 

Nebraska partnership, including those formed prior to January 1, 1998.

7. Partnerships. Under the Revised Uniform Partnership Act, the dissociation of a 

partner does not necessarily cause a dissolution and winding up of the partnership’s business. Generally, the partnership must be dissolved and its business 

wound up only upon the occurrence of one of the events listed in § 801 of the 

Revised Uniform Partnership Act, upon which Neb. Rev. Stat. § 67-439 (Reissue 

2010) is based.

8. ____. Where a court determines that the conduct of one or more partners 

constitutes grounds for dissociation by judicial expulsion under Neb. Rev. 

Stat. § 67-431(5)(c) (Reissue 2010) and dissolution under Neb. Rev. Stat. 

§ 67-439(5)(b) (Reissue 2010), and there are no other grounds for dissolution, the 

court may in its discretion order either dissociation by expulsion of one or more 

partners or dissolution of the partnership.

9. Statutes: Appeal and Error. The language of a statute is to be given its plain and 

ordinary meaning, and an appellate court will not resort to interpretation to ascertain the meaning of statutory words which are plain, direct, and unambiguous.
Nebraska Advance Sheets

860 285 NEBRASKA REPORTS

10. Partnerships: Words and Phrases. The phrase “date of dissociation” as used in 

Neb. Rev. Stat. § 67-434(2) (Reissue 2010) refers to the date of the event which 

resulted in the dissociation.

Appeal from the District Court for Valley County: Karin

L. Noakes, Judge. Affirmed in part as modified, and in part 

reversed and remanded for further proceedings.

Patrick J. Nelson, of Law Office of Patrick J. Nelson, 

L.L.C., for appellants.

David A. Domina and Jason B. Bottlinger, of Domina Law 

Group, P.C., L.L.O., and Gregory G. Jensen for appellees.

Connolly, Stephan, McCormack, and Cassel, JJ.

Stephan, J.

Jacobs Cattle Company is a family partnership which owns 

agricultural land in Valley County, Nebraska. Four of its six 

partners sought dissolution and liquidation of the partnership. 

One of the other two partners then sought a judicial dissociation of those four partners. The district court refused to dissolve and liquidate the partnership, but it dissociated the four 

partners and ordered that the partnership buy out their interests 

in the partnership. In this appeal, the four partners (collectively 

appellants) contend the district court erred in not dissolving 

the partnership and further erred in determining the proper 

buyout price. The other two partners and the partnership crossappeal, contending the court erred in determining the date of 

asset valuation. We conclude that dissociation was proper, but 

reverse, and remand for recalculation of the buyout price and 

imposition of the proper rate of interest.

I. FACTS

Jacobs Cattle Company is a family partnership that was 

formally organized on January 1, 1979. The original partners 

were Leonard Jacobs and his wife, Ardith Jacobs; their children Dennis Jacobs, Duane Jacobs, and Patricia Robertson; 

and the respective spouses of those children, Debbie Jacobs, 

Carolyn Sue Jacobs, and James E. Robertson. At some point, 

Debbie withdrew from the partnership and Dennis acquired 

her interest.
Nebraska Advance Sheets

ROBERTSON v. JACOBS CATTLE CO. 861

Cite as 285 Neb. 859

Leonard died in March 1997. Probate proceedings determined that his capital interest in the partnership at the time of 

his death was 34 percent.

1. Partnership Agreement

The operative partnership agreement became effective on 

June 19, 1997. The partners were identified as Ardith, in her 

capacity as trustee of the Leonard Jacobs Family Trust and in 

her capacity as trustee of the Ardith Jacobs Living Revocable 

Trust; Duane; Carolyn; Patricia; James; and Dennis.

Pertinent provisions of the agreement include the following:

4. TERM

. . . This Partnership shall continue until terminated 

by mutual agreement, operation of law or as hereinafter provided.

. . . .

7. MANAGEMENT

Ardith Jacobs, Trustee of the Ardith Jacobs Living 

Revocable Trust shall have general management authority to conduct day to day business on behalf of the 

Partnership, and Ardith Jacobs shall have the authority 

to bind the Partnership; provided however, a vote of 6 

Partners shall have authority to override a decision made 

by Ardith Jacobs. Votes can be cast by Partners as follows: [Ardith and Dennis each have two votes; Patricia, 

James, Duane, and Carolyn each have one vote.]

Matters that cannot be agreed upon shall be submitted 

to Arbitration as established hereinbelow.

. . . .

11. PROFITS AND LOSSES

The net profits and net losses of the Partnership shall 

be distributable or chargeable, as the case may be, to 

each of the Partners in proportion to the votes they have 

herein as set forth in paragraph 7. The term “net profits” 

and “net losses” shall mean the net profits and net losses 

of the Partnership as determined by generally accepted 

accounting principles. . . .

. . . .

17. QUARTERLY MEETING
Nebraska Advance Sheets

862 285 NEBRASKA REPORTS

A quarterly meeting of all Partners shall be held on the 

first Monday following the close of the preceding quarter. 

The purpose of the meeting is to discuss business operations, profits, losses, capital accounts, income accounts, 

and all other Partnership business. . . .

. . . .

19. MISCELLANEOUS

. . . .

(c) . . . . The books of account shall be examined, and 

reviewed as of the close of a fiscal year by a Certified 

Public Accountant agreeable to all Partners, who shall 

make a report thereon.

2. Partnership Business

The partnership owns approximately 1,525 acres of land in 

Valley County. The land is mostly farmland and pasture and 

is unencumbered. A real estate appraiser valued the land as 

of January 1, 2011, at $4,545,000, and as of September 20, 

2011, at $5,135,000. The $590,000 increase in appraisal value 

represented a 12.98 percent increase, which when annualized 

amounted to an 18.02 percent increase.

The partnership rented its land to others. Patricia and James, 

Dennis, and Duane and Carolyn all rented land from the partnership, although James did not sign a lease. At least some of 

the land was rented for less than its fair rental value.

Since June 19, 1997, the partnership has not returned a 

profit and there have been no distributions of net profits to 

the partners. Since Leonard’s death, no partner has contributed 

new land or capital to the partnership.

3. Partnership Issues

In July 2004, the attorney for the partnership sent a letter to 

the partners informing them that none of the tenants had paid 

their rent for 2004. There were no partnership meetings after 

January 2005. In late 2004 or early 2005, Ardith terminated 

the services of Robert D. Stowell as the attorney for the partnership. In April 2005, Ardith retained a new attorney for the 

partnership. In 2005, Ardith terminated the services of Mick 

Puckett as the accountant for the partnership and hired a new 
Nebraska Advance Sheets

ROBERTSON v. JACOBS CATTLE CO. 863

Cite as 285 Neb. 859

accountant. Puckett was the last certified public accountant 

agreeable to all of the partners, and Stowell was the last attorney agreeable to all partners.

In March 2005, Dennis and Patricia were involved in a 

physical altercation. As a result, Dennis pled no contest to 

criminal assault charges. On April 28, Patricia and James were 

served with a notice to quit the leased premises for nonpayment of rent. Around the same time, Duane was also notified 

that he needed to quit the premises he was leasing due to nonpayment of rent. Duane eventually paid his rent, but on May 

4, the partnership sued Patricia and James for rents due for the 

years 2003 and 2004. Ardith alone made the decision to file 

the lawsuit. On August 11, a court entered judgment against 

Patricia for unpaid rent. The court did not enter judgment 

against James because his name was not on the lease. The land 

which the partnership had leased to Patricia was later rented 

to Dennis.

II. PROCEDURAL HISTORY

1. Pleadings

In July 2007, appellants filed the operative amended complaint for dissolution of the partnership against the partnership, 

Ardith, and Dennis (collectively appellees). The complaint 

sought a dissolution and winding up of the partnership under 

the Uniform Partnership Act of 19981 (1998 UPA). Appellees 

filed an answer in September. A December 2010 amended 

answer and counterclaim, styled as an amended cross-claim, 

alleged that dissociation of appellants, not dissolution of the 

partnership, was the proper remedy.

2. September 20, 2011, 

Interlocutory Order

After conducting a bench trial, the district court entered an 

order on September 20, 2011. The court concluded that appellants did not prove the occurrence of events authorizing dissolution under § 67-439(5) because (1) nothing had occurred 

to interfere with the partnership’s ability to buy, own, and rent 

1 Neb. Rev. Stat. §§ 67-401 to 67-467 (Reissue 2009).
Nebraska Advance Sheets

864 285 NEBRASKA REPORTS

land; (2) no partners took steps to override decisions made by 

Ardith and “[j]ust because a partner does not like the decision of the managing partner does not make it impracticable 

to continue the partnership with that partner”; and (3) Ardith 

had not acted beyond the partner restrictions specified in the 

partnership agreement. The court reasoned that nothing had 

occurred to make the partnership agreement difficult or impossible with which to comply, and it dismissed appellants’ dissolution claims.

However, the court found that appellants’ failure to pay rent 

in a timely manner supported appellees’ request that appellants 

be dissociated from the partnership under § 67-431(5)(a) and 

(c). The court reasoned that because the primary purpose of 

the partnership was to rent land, appellants’ delinquency in 

paying rent materially and adversely affected the partnership 

business and made it not practicable for the partnership to 

carry on with appellants as partners. The court thus ordered 

dissociation of appellants by judicial expulsion pursuant to 

§ 67-431(5)(a) and (c) and ordered the partnership to purchase 

appellants’ interests in the partnership as required by § 67-434. 

The court specifically ordered the parties to prepare buyout 

proposals and found that the value of partnership assets was 

“to be determined as of the date of the dissociation, which is 

the date this judgment is filed.”

3. Final Judgment

On November 4, 2011, the partnership filed a buyout proposal with the district court. The proposal set out the value 

of the partnership based on its assets and liabilities, including 

the value of the appreciated land, and then proposed that each 

appellant be paid $275,941.96. Although the proposal did not 

contain mathematical calculations, it stated that this sum represented each appellant’s “equal partnership fractional interest.” 

This mathematically equates to each appellant’s 5.33 percent 

capital account ownership.

Appellants filed written objections to the proposed buyout 

on December 5, 2011. One objection was that the proposed 

buyout did not “contain either (a) an analysis or calculation of the profits that would result from the liquidation of 
Nebraska Advance Sheets

ROBERTSON v. JACOBS CATTLE CO. 865

Cite as 285 Neb. 859

the Partnership’s assets on September 20, 2011, or (b) how 

such profits would be allocated to each of the partners in 

the Partnership.” Another objection was that the buyout proposal did not “provide for the distribution to [appellants] of 

their respective portions of the profits of the Partnership to 

which [they] would be entitled under §§ 67-434 and 67-445.” 

Appellants submitted an alternative buyout proposal which 

included the analysis and calculation they argued was missing 

from the partnership’s proposal. The alternative proposal did 

not include mathematical calculations, but it generally calculated the buyout price based on the provision in paragraph 11 

of the partnership agreement allocating profit percentages to 

the partners’ income accounts. The alternative buyout proposal 

generally requested that each appellant receive 12.5 percent of 

the partnership’s liquidation value.

In a January 4, 2012, journal entry, the district court found it 

would “not consider” the objections raised by appellants. The 

court granted appellants leave to submit written offers of proof 

in support of their objections, but ruled appellants could not 

present testimony on the objections. A formal hearing on the 

amount of the buyout was held on March 6.

At that hearing, appellants offered exhibit 118 as an offer 

of proof in support of their objections. The exhibit stated 

that if allowed to, Patricia would testify that she is a certified 

public accountant who is familiar with the meanings of the 

terms “net profits” and “net losses” as determined by generally 

accepted accounting principles. It further noted that Patricia 

had prepared a written statement of the book basis of the 

capital accounts of the partnership based upon a liquidation of 

assets on September 20, 2011, and attached her calculations. 

According to Patricia’s calculations, the proper allocation of 

each partner’s interest in the partnership was approximately 

12.5 percent of the total value. This percentage was calculated 

after considering how profits from the hypothetical sale of the 

land required by §§ 67-434(2) and 67-445(2) would be allocated under the partnership agreement.

The partnership submitted a written objection to this offer 

of proof, but the district court did not rule on the objection 

on the record. In its final order, however, the court noted that 
Nebraska Advance Sheets

866 285 NEBRASKA REPORTS

all “[o]bjections [had been either] taken under advisement 

or ruled upon on the record.” It then expressly stated that 

“[o]bjections to all items of evidence taken under advisement 

are overruled.”

The district court ultimately approved the partnership’s proposed buyout, with minor alterations not related to appellants’ 

stated objections. In computing the amount appellants were 

entitled to as a result of the required buyout, the district court 

arrived at a liquidation value for the partnership by subtracting 

the partnership’s liabilities from its assets. The assets included 

the appreciated value of the partnership’s land. The court then 

distributed the liquidation value to each partner based on his or 

her capital account, so appellants each received 5.33 percent 

of the total liquidation value. The court stated that if the sums 

were not paid by the 30th day, interest would accrue at the 

judgment interest rate of 2.056 percent.

III. ASSIGNMENTS OF ERROR

Appellants assign, restated and summarized, that the district court erred in (1) failing to dissolve the partnership 

under § 67-439(5); (2) determining that James, Duane, and 

Carolyn failed to pay rent to the partnership and that all appellants engaged in wrongful conduct and should be dissociated 

from the partnership under § 67-431(5); (3) determining the 

amount of the buyouts of appellants and failing to include 

in the buyout amount of each appellant one-eighth of the net 

profits which would have resulted from capital gains arising 

from the liquidation of the partnership’s assets; (4) failing to 

determine that interest on all buyouts payable to appellants 

commenced accruing on September 20, 2011; and (5) determining that the interest rate to be paid to appellants on their 

respective buyouts was the judgment rate rather than a market 

rate of interest.

On cross-appeal, appellees assign that the district court erred 

in (1) holding the date of dissociation was September 20, 2011, 

rather than May 2005, when appellants failed to pay their rents, 

and (2) determining the value of the partnership assets as of 

September 2011 instead of May 2005.
Nebraska Advance Sheets

ROBERTSON v. JACOBS CATTLE CO. 867

Cite as 285 Neb. 859

IV. STANDARD OF REVIEW

[1,2] An action for a partnership dissolution and accounting 

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

the record.2 On appeal from an equity action, we resolve questions of law and fact independently of the trial court’s determinations.3

 But when credible evidence is in conflict on material 

issues of fact, we consider and may give weight to the fact the 

trial court observed the witnesses and accepted one version of 

the facts over another.4

[3-5] Statutory interpretation presents a question of law.5

The interpretation of a partnership agreement presents a question of law.6

 An appellate court independently reviews a lower 

court’s rulings on questions of law.7

V. ANALYSIS

[6] The legal framework for our analysis is the 1998 UPA, 

which is Nebraska’s counterpart to the model act known as 

the Revised Uniform Partnership Act (RUPA).8 The 1998 UPA 

applies here even though the partnership was formed in 1997, 

because after January 1, 2001, the 1998 UPA became applicable to any Nebraska partnership, including those formed prior 

to January 1, 1998.9

The 1998 UPA replaced the original Uniform Partnership 

Act10 and brought about significant changes in partnership law. 

2 Shoemaker v. Shoemaker, 275 Neb. 112, 745 N.W.2d 299 (2008).

3 Id.

4 Id.

5 Id.

6 Id.

7 See Blakely v. Lancaster County, 284 Neb. 659, 825 N.W.2d 149 (2012).

8 See Shoemaker, supra note 2 (citing Introducer’s Statement of Intent, 

L.B. 523, Banking, Commerce, and Insurance Committee, 95th Leg., 1st 

Sess. (Feb. 18, 1997); Prefatory Note, Unif. Partnership Act (1997), 6 

(part I) U.L.A. 5 (2001).

9 §§ 67-464 and 67-467; Shoemaker, supra note 2.

10 See Neb. Rev. Stat. §§ 67-301 to 67-346 (Reissue 2003). See Shoemaker, 

supra note 2.
Nebraska Advance Sheets

868 285 NEBRASKA REPORTS

Prior law required an at-will partnership to dissolve upon any 

partner’s expressed will to dissolve the partnership.11 RUPA, 

on which the 1998 UPA is based, sought to avoid mandatory dissolution of partnerships by making a partnership a 

distinct entity from its partners.12 As we noted in Shoemaker 

v. Shoemaker,

13

“RUPA’s underlying philosophy differs radically from 

[the original Uniform Partnership Act], thus laying the 

foundation for many of its innovative measures. RUPA 

adopts the ‘entity’ theory of partnership as opposed to the 

‘aggregate’ theory that the [original Uniform Partnership 

Act] espouses. Under the aggregate theory, a partnership is characterized by the collection of its individual 

members, with the result being that if one of the partners 

dies or withdraws, the partnership ceases to exist. On the 

other hand, RUPA’s entity theory allows for the partnership to continue even with the departure of a member 

because it views the partnership as ‘an entity distinct from 

its partners.’”

RUPA, as embodied by our 1998 UPA, provides gap-filling 

rules that control only when a question is not resolved by the 

parties’ express provisions in an agreement.14 The parties agree 

that this case must be resolved by application of the statutory 

principles of the 1998 UPA.

1. Dissociation or Dissolution?

The parties are in general agreement that they cannot continue in partnership with each other. They differ as to the 

appropriate remedy to be employed in ending their relationship. Appellants contend that the partnership should have been 

dissolved. Appellees argue that the district court correctly dissociated appellants from the partnership because this allows 

the partnership itself to continue with Ardith and Dennis as its 

remaining partners.

11 See, § 67-331; Shoemaker, supra note 2.

12 Shoemaker, supra note 2.

13 Id. at 125, 745 N.W.2d at 309-10 (citations omitted).

14 Shoemaker, supra note 2.
Nebraska Advance Sheets

ROBERTSON v. JACOBS CATTLE CO. 869

Cite as 285 Neb. 859

The statutory provisions governing dissociation and dissolution are similar but not identical. Dissolution of a partnership is governed by § 67-439, which provides that “[a] 

partnership is dissolved, and its business must be wound up, 

only upon the occurrence of any of the following events,” 

which include

(5) On application by a partner, a judicial determination that:

(a) The economic purpose of the partnership is likely to 

be unreasonably frustrated;

(b) Another partner has engaged in conduct relating to 

the partnership business which makes it not reasonably 

practicable to carry on the business in partnership with 

that partner; or

(c) It is not otherwise reasonably practicable to carry 

on the partnership business in conformity with the partnership agreement[.]

The district court concluded that none of these circumstances 

existed because (1) nothing had occurred which would frustrate the partnership’s ability to buy, sell, or own land, and 

(2) Ardith, as managing partner, had authority on behalf 

of the partnership to take the actions with which appellants disagreed.

Dissociation is a new concept introduced by RUPA “to 

denote the change in the relationship caused by a partner’s 

ceasing to be associated in the carrying on of the business.”15

Under RUPA, “the dissociation of a partner does not necessarily cause a dissolution and winding up of the business of the 

partnership.”16 Section 67-431 lists events which may trigger a 

partner’s dissociation, including

(5) On application by the partnership or another partner, the partner’s expulsion by judicial determination 

because:

(a) The partner engaged in wrongful conduct that 

adversely and materially affected the partnership business;

15 Unif. Partnership Act (1997), supra note 8, § 601, comment 1 at 164.

16 Id.
Nebraska Advance Sheets

870 285 NEBRASKA REPORTS

(b) The partner willfully or persistently committed a 

material breach of the partnership agreement or of a duty 

owed to the partnership or the other partners under section 67-424; or

(c) The partner engaged in conduct relating to the 

partnership business which makes it not reasonably 

practicable to carry on the business in partnership with 

the partner.

In this case, the district court concluded that the grounds for 

dissociation stated in § 67-431(5)(a) and (c) were met by the 

failure of appellants to pay timely rent for the land leased from 

the partnership.

With these principles in mind, we first consider appellants’ 

argument that the district court erred in determining that there 

were grounds to dissociate them from the partnership. Given 

that the sole business of the partnership was to own farmland 

which it leased to others, we have no difficulty concluding that 

the failure of appellants who executed leases to pay timely 

rents constituted wrongful conduct that adversely and materially affected the partnership business and made it not reasonably practical to carry on the partnership business with the 

existing partners. And we are not persuaded by the argument 

that James bore no responsibility for the nonpayment of rent 

because he had not signed a lease. Patricia initially testified 

that she and James had rented land from the partnership from 

1997 through 2004. Later in her testimony, when shown a copy 

of the lease and asked if James had “ever been a tenant under 

a lease with Jacobs Cattle Company,” she responded, “Not 

according to the lease agreements.” But James testified that he 

owed money to the partnership prior to 2010. There is a reasonable inference that James knew that rent had not been paid 

to the partnership of which he and Patricia were both partners. 

Thus, regardless of whether he was legally obligated on the 

lease, James engaged in conduct which satisfied the grounds 

for dissociation stated in § 67-431(5)(a) and (c) to the same 

extent as the other appellants.

Next, we consider whether the district court erred in concluding that appellants failed to establish grounds for dissolution of the partnership. Appellees argue the district court 
Nebraska Advance Sheets

ROBERTSON v. JACOBS CATTLE CO. 871

Cite as 285 Neb. 859

correctly decided this issue because no wrongdoing on the 

part of Ardith or Dennis has been proved. But even appellees 

acknowledge that “much acrimony exists between and among 

the parties.”17 At oral argument, appellees’ counsel conceded 

that there were unspecified grounds for dissolution of the 

partnership, but argued that dissociation was nevertheless the 

appropriate remedy. We perceive this concession as agreement that the somewhat autocratic manner in which Ardith 

conducted the affairs of the partnership in recent years, even 

if not in violation of the partnership agreement, would constitute grounds for dissolution under § 67-439(5)(b), i.e., “conduct relating to the partnership business which makes it not 

reasonably practicable to carry on the business in partnership 

with that partner.” We find no other possible grounds for dissolution. As we have noted, such conduct is also grounds for 

dissociation under § 67-431(5)(c), and the record supports the 

district court’s determination that appellants engaged in such 

conduct. Thus, we conclude that there are grounds for dissolution of the partnership under § 67-439(5)(b) and dissociation of 

appellants under § 67-431(5)(a) and (c).

[7] Under the RUPA model upon which our statutes are 

based, the dissociation of a partner does not necessarily 

cause a dissolution and winding up of the partnership’s 

business.18 Generally, the partnership must be dissolved and 

its business wound up only upon the occurrence of one of 

the events listed in § 801 of RUPA, upon which Nebraska’s 

§ 67-439 is based.19 The question we must resolve is whether 

dissolution is mandatory where the conduct of multiple partners constitutes grounds for dissolution under § 67-439(5)(b) 

and also constitutes grounds for dissociation pursuant to 

§ 67-431(5)(c).

We have found no authority on this precise point. But the 

decision of the Supreme Court of Connecticut in Brennan v. 

17 Brief for appellees at 24.

18 See, Unif. Partnership Act (1997), supra note 8, § 601, comment 1; 

Warnick v. Warnick, 76 P.3d 316 (Wyo. 2003).

19 See Unif. Partnership Act (1997), supra note 8, § 601, comment 1, and 

§ 801.
Nebraska Advance Sheets

872 285 NEBRASKA REPORTS

Brennan Associates20 provides helpful guidance. In that case, 

the court concluded that a single partner’s conduct fell within 

Connecticut’s statutory equivalents of our §§ 67-431(5)(c) and 

67-439(5)(b) such that it was not practicable for the remaining 

partners to carry on the business of the partnership with that 

partner. The court rejected an argument that the conduct would 

justify judicial dissolution of the partnership but not dissociation of the offending partner, concluding that “an irreparable 

deterioration of a relationship between partners is a valid basis 

to order dissolution, and, therefore, is a valid basis for the 

alternative remedy of dissociation.”21 A Kansas appellate court 

in Giles v. Giles Land Co., L.P.22 followed the reasoning of 

Brennan in concluding that a court did not err in dissociating a 

partner where the evidence established that his conduct would 

justify either dissociation or dissolution under that state’s counterparts to our §§ 67-431(5)(c) and 67-439(5)(b).

[8] We perceive no good reason to apply a different rule 

where the conduct of multiple partners makes it “not reasonably practicable to carry on the business in partnership” with 

each other.23 Construing the dissolution remedy as mandatory 

in this circumstance would be contrary to the entity theory of 

partnership embodied in RUPA. As we noted in Shoemaker,

24

a main purpose of RUPA is “to prevent mandatory dissolution” of a partnership. Accordingly, we hold that where a 

court determines that the conduct of one or more partners 

constitutes grounds for dissociation by judicial expulsion under 

§ 67-431(5)(c) and dissolution under § 67-439(5)(b), and there 

are no other grounds for dissolution, the court may in its discretion order either dissociation by expulsion of one or more 

partners or dissolution of the partnership.

We conclude that dissociation by judicial expulsion of 

appellants is an appropriate remedy under the facts of this 

20 Brennan v. Brennan Associates, 293 Conn. 60, 977 A.2d 107 (2009).

21 Id. at 81, 977 A.2d at 120.

22 Giles v. Giles Land Co., L.P., 47 Kan. App. 2d 744, 279 P.3d 139 (2012).

23 § 67-431(5)(c).

24 Shoemaker, supra note 2, 275 Neb. at 130, 745 N.W.2d at 312.
Nebraska Advance Sheets

ROBERTSON v. JACOBS CATTLE CO. 873

Cite as 285 Neb. 859

case. Individually and in trust, Ardith and Dennis have a 

capital interest in the partnership of approximately 78 percent. 

Pursuant to the partnership agreement, Ardith has general management authority to conduct the day-to-day business on behalf 

of the partnership. We agree with the finding of the district 

court that there is no apparent reason why the partnership cannot continue to exist and function in accordance with the partnership agreement with Ardith and Dennis as its sole partners. 

Accordingly, we conclude that the first and second assignments 

of error as restated above are without merit.

2. Issues Pertaining to

Buyout Price

The remaining issues pertain to the district court’s calculation of the buyout price which the dissociated partners are to 

receive for their interests in the partnership. This price is governed by § 67-434(2), which provides:

The buyout price of a dissociated partner’s interest is the 

amount that would have been distributable to the dissociating partner under subsection (2) of section 67-445 if, 

on the date of dissociation, the assets of the partnership 

were sold at a price equal to the greater of the liquidation 

value or the value based on a sale of the entire business 

as a going concern without the dissociated partner and 

the partnership were wound up as of that date. Interest 

must be paid from the date of dissociation to the date 

of payment.

Section 67-445(2) provides in pertinent part:

Each partner is entitled to a settlement of all partnership 

accounts upon winding up the partnership business. In 

settling accounts among the partners, profits and losses 

that result from the liquidation of the partnership assets 

must be credited and charged to the partners’ accounts. 

The partnership shall make a distribution to a partner 

in an amount equal to any excess of the credits over the 

charges in the partner’s account. A partner shall contribute to the partnership an amount equal to any excess of 

the charges over the credits in the partner’s account but 

excluding from the calculation charges attributable to an 
Nebraska Advance Sheets

874 285 NEBRASKA REPORTS

obligation for which the partner is not personally liable 

under section 67-418.

(a) Date of Dissociation

The district court determined the date of dissociation was 

September 20, 2011, the date it entered its order that appellants 

were dissociated by judicial expulsion pursuant to § 67-431(5). 

In their cross-appeal, appellees contend that the court should 

have found the date of dissociation to be in May 2005, when 

the nonpayment of rent which the district court determined to 

be grounds for dissociation occurred. Due to the appreciation 

of the land owned by the partnership, using the earlier date to 

calculate the partnership’s assets would result in a substantially 

lower buyout price.

Appellees urge us to adopt the reasoning of two pre-RUPA 

partnership dissolution cases from other jurisdictions, King v. 

Evans25 and Oliker v. Gershunoff.26 King involved a dissolution 

caused by the nonjudicial expulsion of a partner, while Oliker 

involved a dissolution resulting from a partner’s withdrawal 

from the partnership. In each case, partnership assets were valued as of the date of dissolution, i.e., the partner’s nonjudicial 

expulsion in King and the partner’s withdrawal in Oliker. But 

we find both cases distinguishable because neither involves a 

dissociation of a partner by judicial expulsion under a statute 

based on the RUPA model.

[9,10] The language of a statute is to be given its plain 

and ordinary meaning, and an appellate court will not resort 

to interpretation to ascertain the meaning of statutory words 

which are plain, direct, and unambiguous.27 Clearly, the phrase 

“date of dissociation” as used in § 67-434(2) refers to the date 

of the event which resulted in the dissociation. The events 

which may result in dissociation are listed in § 67-431. Some 

of these, such as a partner’s withdrawal28 or expulsion pursuant 

25 King v. Evans, 791 S.W.2d 531 (Tex. App. 1990).

26 Oliker v. Gershunoff, 195 Cal. App. 3d 1288, 241 Cal. Rptr. 415 (1987).

27 See Pittman v. Western Engineering Co., 283 Neb. 913, 813 N.W.2d 487 

(2012).

28 § 67-431(1).
Nebraska Advance Sheets

ROBERTSON v. JACOBS CATTLE CO. 875

Cite as 285 Neb. 859

to the partnership agreement,29 occur without any judicial 

intervention. But in this case, the dissociation occurred as 

a result of expulsion by judicial determination pursuant to 

§ 67-431(5). Appellants were not dissociated from the partnership until the district court determined that they had engaged in 

conduct described in § 67-431(5)(a) and (c). We find nothing 

in § 67-431 or § 67-434 which would make the dissociation 

retroactive to the date of the conduct which was judicially 

determined to be grounds for expulsion, and we will not read 

into a statute a meaning that is not there.30 Accordingly, we 

conclude that the district court did not err in calculating the 

buyout price as of September 20, 2011, the date of dissociation 

by judicial expulsion.

(b) Appellants’ Share of Appreciated 

Value of Land

The land owned by the partnership is a capital asset. Under 

the operative partnership agreement, the partners each had a 

capital account. The value of the capital account was “directly 

proportionate to [each partner’s] original Capital contributions 

as later adjusted for draws taken from the Partnership.” At 

the time of dissociation, the capital account of each appellant was approximately 5.33 percent of the total capital in 

the partnership.

Each partner also had an income account under the partnership agreement. Net profits and net losses of the partnership were to be “credited or debited to the individual income 

accounts [of each partner] as soon as practicable after the close 

of each fiscal year.” The agreement provided that the “term[s] 

‘net profits’ and ‘net losses’ shall mean the net profits and net 

losses of the Partnership as determined by generally accepted 

accounting principles.” It further noted that “[t]he net profits 

and net losses of the Partnership” were distributable or chargeable “to each of the Partners in proportion to the votes they 

have.” Under the agreement, Ardith had two votes (one as 

29 § 67-431(3).

30 Blakely v. Lancaster County, supra note 7; Butler Cty. Sch. Dist. v. 

Freeholder Petitioners, 283 Neb. 903, 814 N.W.2d 724 (2012).
Nebraska Advance Sheets

876 285 NEBRASKA REPORTS

trustee for each trust), Dennis had two votes, and appellants 

each had one vote, for a total of eight votes. Thus, appellants 

each had a 12.5 percent share of net profits and losses in their 

income account.

The district court expressly found that appellants’ “interests in the partnership shall be purchased by the partnership 

as required by Neb.Rev.Stat.Sec. 67-434.” In its ruling, the 

district court considered the value of the partnership’s assets, 

including the appreciated value of the land, less the partnership’s liabilities, and arrived at a liquidation value for the 

partnership. It then accepted appellees’ argument that the 

proper buyout price was calculated by applying each partner’s 

capital account percentage to the partnership’s total liquidation value.

On appeal, appellants agree the buyout was to be calculated 

pursuant to § 67-434 and agree with the district court’s liquidation value of the partnership. But they argue the district 

court erred in calculating the buyout price because it did not 

consider how the hypothetical capital gain realized from treating the land as though it had been sold on the date of dissociation would flow to each partner based on the partnership 

agreement’s allocation of net profits and losses. Appellants 

contend the proper calculation results in each of them receiving a buyout equal to 12.5 percent of the liquidation value of 

the partnership.

Appellants’ argument rests on two premises: (1) that a 

capital gain would be realized upon a hypothetical selling of 

the partnership land pursuant to § 67-434(2), which would 

constitute “profits” within the meaning of § 67-445(2), and 

(2) that the hypothetical profit would constitute “net profits” 

within the meaning of paragraph 11 of the partnership agreement. Section 67-434(2) provides that the buyout price of a 

dissociated partner’s interest is to be based on the amount that 

“would have been distributable to the dissociating partner” 

under § 67-445(2) “if, on the date of dissociation, the assets of 

the partnership were sold at . . . liquidation value . . . and the 

partnership were wound up as of that date.” Section 67-445(2) 

then provides that “profits and losses that result from [such] 
Nebraska Advance Sheets

ROBERTSON v. JACOBS CATTLE CO. 877

Cite as 285 Neb. 859

liquidation of the partnership assets must be credited and 

charged to the partners’ accounts.”

It is clear from the plain language of § 67-434(2) that the 

proper calculation must be based upon the assumption that the 

partnership assets, here the land, were sold on the date of dissociation, even though no actual sale occurs. Here, the initial 

question is whether selling the partnership land on the date of 

dissociation would result in a capital gain and “profits” in the 

context of § 67-445(2). We consider this to be a question of 

statutory interpretation.

The term “capital gain” means “profit realized when a 

capital asset is sold or exchanged.”31 The term “profit” is 

generally defined as the “excess of revenues over expenditures in a business transaction.”32 We are required to give 

the language of a statute its plain and ordinary meaning.33

Accordingly, we conclude that the capital gain which would 

be realized upon a hypothetical liquidation of the partnership’s land on the date of dissociation (as required by 

§ 67-434(2)) would constitute “profits” within the meaning 

of the phrase in § 67-445(2).

The remaining question is how those “profits” should be 

“credited and charged to the partners’ accounts”34 in this particular situation. Appellants contend that it must be done pursuant to paragraph 11 of the partnership agreement, which 

specifically states how “net profits” and “net losses” “as determined by generally accepted accounting principles” are to be 

distributed to the partners. But there is no expert testimony 

equating this type of capital gain to “net profits” under “generally accepted accounting principles.” Appellants attempted 

to introduce Patricia’s testimony on this issue to explain how 

such a characterization would affect the ultimate distribution 

of the partnership assets, but the district court refused the evidence and instead allowed only an unsworn offer of proof. We 

31 Black’s Law Dictionary 237 (9th ed. 2009).

32 Id. at 1329.

33 See Pittman v. Western Engineering Co., supra note 27.

34 See § 67-445(2).
Nebraska Advance Sheets

878 285 NEBRASKA REPORTS

conclude that the district court erred in refusing to consider 

evidence on this issue, and we reverse that portion of its order 

calculating the amount of the buyouts and remand the cause 

with directions for the court to reconsider the buyout calculations after receiving appellants’ evidence on this issue. In this 

respect, we note that RUPA

eliminates the distinction in [the original Uniform 

Partnership Act] between the liability owing to a partner 

in respect of capital and the liability owing in respect 

of profits. Section 807(b) [of RUPA] speaks simply of 

the right of a partner to a liquidating distribution. That 

implements the logic of RUPA Sections 401(a) and 

502 under which contributions to capital and shares 

in profits and losses combine to determine the right 

to distributions.

35

(c) Interest

The district court determined that the amounts due appellants for their partnership interests should be paid within 30 

days of the final order entered April 18, 2012, and that if not 

paid within that period, interest would accrue at the judgment 

rate. Appellants argue that the interest actually began to accrue 

on September 20, 2011, the date the court determined that 

appellants were dissociated from the partnership. We agree. 

Section 67-434(2) specifically provides that interest on the 

buyout price of a dissociated partner’s interest “must be paid 

from the date of dissociation to the date of payment.” As we 

have noted, the “date of dissociation” was September 20, 2011. 

Appellants are entitled to interest on the buyout price from that 

date until the date of payment.

Appellants also contend that the district court erred in 

ordering that interest should be computed at the “judgment 

interest rate.” They contend that they are instead entitled to 

interest at the higher “market rate.”36 We agree in part with 

this argument.

35 Unif. Partnership Act (1997), supra note 8, § 807, comment 3 at 207 

(emphasis supplied).

36 Brief for appellants at 15.
Nebraska Advance Sheets

ROBERTSON v. JACOBS CATTLE CO. 879

Cite as 285 Neb. 859

Neb. Rev. Stat. § 45-103 (Reissue 2010) is the source of the 

district court’s “judgment interest rate.” It specifies the interest rate to be paid on judgments for the payment of money. 

However, § 45-103 provides that its rate shall not apply to “(1) 

[a]n action in which the interest rate is specifically provided 

by law.” Here, § 67-434 specifically provides that interest is to 

be paid from the date of dissociation until the date the buyout 

payment is made. And § 67-405 provides that “[i]f an obligation to pay interest arises under [the 1998 UPA] and the rate is 

not specified, the rate is that specified in section 45-104.01 . . 

. .” And Neb. Rev. Stat. § 45-104.01 (Reissue 2010) provides 

that interest be assessed at a rate of 14 percent per annum. We 

conclude that it is this rate, and not the judgment rate, that 

applies in this case.

VI. CONCLUSION

Based upon our de novo review and for the reasons discussed, we conclude that the district court did not err in dissociating appellants from the partnership by judicial expulsion as 

of September 20, 2011. We also conclude that the district court 

did not err in declining to dissolve the partnership. However, 

we conclude the district court erred in failing to allow appellants to introduce evidence on the proper calculation of the 

buyout price and further erred in its determination with respect 

to interest. We modify the judgment to provide that interest 

on the amounts due appellants should accrue at 14 percent per 

annum from September 20, 2011, until paid, and we reverse the 

judgment and remand the cause for further proceedings on the 

proper calculation of the buyout price.

 Affirmed in part as modified, and in part reversed

and remanded for further proceedings.

Heavican, C.J., and Miller-Lerman, J., participating on 

briefs.

Wright, J., not participating.