By the Uniform Partnership Act it is provided: When dissolution is caused in contravention of the partnership agreement the rights of the partners shall be as follows: The partners who have not caused the dissolution wrongfully may continue, during the agreed term for the partnership and for that purpose may possess the partnership property, by payment of an approved bond, or pay to any partner who has caused the dissolution wrongfully, the value of his interest less any damages recoverable under S.D. Codified Laws § 49.0610(2).
Plaintiff partner appealed a judgment from Circuit Court, Pennington County (South Dakota) rendered in his action against defendant partners for an accounting, dissolution, and winding up of a real estate brokerage partnership. Defendant partners provided the capital for the partnership. After a few months of operation, plaintiff partner was dissatisfied with his draw, which was set by agreement, and filed this action. Plaintiff claimed error in the findings that he caused the dissolution wrongfully, and the calculation of the value of the partnership.
Did the trial court err in its finding that plaintiff caused the dissolution wrongfully and erroneously valued the partnership property?.
In affirming the judgment, the court held that the evidence supported the findings that plaintiff spent most of his time in bars, had been convicted of reckless driving and jailed, and had wrongfully caused the dissolution. The court next held that the trial court did not err in placing a value on the partnership that was less than the amounts remaining to be paid to defendants for their capital contribution, thus providing for no distribution to plaintiff. While the pending real estate listings of the business represented going concern value, not good will that was excludable from the valuation of the partnership per S.D. Codified Laws § 49.0610(2)(c), the trial court appropriately accounted for the value of these listings and then excluded some of it on the assumption that many of these listings would follow the plaintiff to his new business.