Opinion ID: 2534320
Heading Depth: 1
Heading Rank: 6

Heading: The Accounting Called For In the Compromise

Text: We turn next to Ed's contention that the court erred when it deemed all claims regarding the partners' accounts settled as of October 1999. Ed testified that Mike used Partnership funds for non-Partnership purposes during the pre-Compromise years. Mike acknowledged such use but pointed out that Ed had done the same. The parties disputed whether all such expenditures were to be re-examined under the Compromise. In its Findings and Conclusions the district court ruled that each brother's claims against the other's capital accounts merged into the Compromise and were thus settled. The court wrote that (1) deferring to the accountants was compatible with the partners' admitted-to use of Partnership property for non-Partnership uses and the resulting difficulty in distinguishing between Partnership and non-Partnership property; (2) by titling the Compromise a compromise the parties intended claims predating the Compromise to be merged therein; (3) the parties delegated to the accountants the task of resolving the claims regarding the accounts. The Compromise recites that it was intended to be binding and enforceable upon the terms stated herein, notwithstanding the fact that additional documentation is required to carry out such terms. The document goes on to provide a complete scheme for winding up the Partnership, including provisions for resolving disputes that may arise. The parties included a provision to determine their capital account balances, assigning this task to named accountants. They agreed in paragraph 1.14 of the Compromise to have an analysis of the capital accounts from the beginning of the partnership performed by Ray Simms in conjunction with Harold Bussman [sic] and Mike Lindstrom at the cost of the Partnership, to determine the correct present capital account balances. The partners subsequently agreed to excuse Mr. Simms. The accounting was performed by Mr. Busmann, representing Ed, and Mr. Lindstrom, representing Mike. Both accountants signed off on the accounting, although Ed's counsel contended at oral argument that Mr. Busmann had no authority to do so. [3] The Compromise states that it is intended to memorialize the terms of a compromise and settlement agreement made by and between the parties. As part of their settlement, the parties agreed to have their accountants determine their capital account balances. The accountants' report was based upon Partnership financial documents, it covered the Partnership's full lifespan, and it included itemized charges for personal expenditures made by the partners. During the Partnership's existence, its financial statements and tax returns were prepared for, and signed and filed by, the partners, utilizing this information. Accordingly, the analysis of the partners' capital accounts, as prepared by the parties' accountants and adopted by the court in the Judgment, is supported by substantial evidence and will not be disturbed on appeal. D.