Brennan v. Brennan Associates

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BRENNAN v. BRENNAN ASSOCIATES-—DISSENT
EVELEIGH, J., concurring in part and dissenting in
part. I agree with part II of the majority opinion and
concur as to that part. However, I respectfully disagree
with parts I and III of the majority opinion. In my view,
General Statutes § 34-362 (b) requires that the partner-
ship interest of the plaintiff, Thomas Brennan, be valued
on the date of the trial court’s judgment dissociating him
from the defendant partnership, Brennan Associates
(partnership).1 Further, in my view, the trial court prop-
erly concluded that the defendants’ attorney’s fees
should not be treated as a liability of the partnership.
Before reviewing the facts that I believe are relevant
to the present appeal, I set forth a brief summary of
these conclusions.
In construing General Statutes § 34-355, the statute
setting forth the causes of dissociation,2 the majority
places emphasis on the word ‘‘expulsion’’ in the phrase
‘‘expulsion by judicial determination’’ to conclude that
only after the plaintiff had been de facto expelled from
the partnership—by cessation of his management rights
occasioned when this court ended the appellate stay
in the prior appeal—was the plaintiff de jure dissociated
from the partnership pursuant to § 34-355. General Stat-
utes § 34-357, which is entitled ‘‘[e]ffect of partner’s
dissociation,’’ specifically provides for the cessation of
management rights as a result of dissociation and,
therefore, such an event cannot be a cause of dissocia-
tion pursuant to § 34-355, which is entitled ‘‘[e]vents
causing partner’s dissociation.’’ In my view, the majori-
ty’s emphasis on ‘‘expulsion’’ is contrary to the statutory
scheme which provides that the basis for dissociation
is the conduct that led to the judgment of dissociation,
not conduct thereafter on appeal of such judgment.
In my view, use of the term ‘‘expulsion’’ in § 34-355
is not dispositive of this issue as the majority would
suggest. In subdivisions (3), (4), and (5) of § 34-355,
‘‘expulsion’’ relates to the events that give rise to a
cause of action for dissociation of a partner, clearly
referring to some type of wrongful conduct on the part
of the partner with use of terms such as ‘‘wrongful,’’
‘‘breach,’’ and ‘‘unlawful.’’ See General Statutes § 34-355
(4) and (5). Contrary to the majority’s interpretation,
‘‘expulsion’’ does not relate to the moment at which
the already rendered judgment of dissociation becomes
effective or enforceable after disposition of an appeal.
My disagreement with the majority’s analysis is that it
construes the term ‘‘expulsion’’ in light of facts
occurring after the judicial determination that dissocia-
tion was an appropriate remedy for a partner’s wrongful
conduct. Section 34-355 does not allow for the use of
postjudgment events to justify the a priori judgment
of dissociation.
Moreover, in my view, the majority’s analogy to § 34-
355 (7) does not support its position. Subdivision (7)
of § 34-355 applies to dissociate a partner when he has
a physical or mental disability that affects his ability to
serve as a partner. Certainly § 34-355 (7) relates to a
situation which is not the fault of the partner. Constru-
ing the term ‘‘expulsion’’ to prevent this innocent part-
ner who has been dissociated pursuant to § 34-355 (7)
from valuing his interest in the partnership prior to the
time that any appeals have been disposed of would
be inappropriate.
Additionally, the defendants’ desire to value the plain-
tiff’s partnership interest as of 2009 belies the positions
they took in Brennan I, in which they wished to value
the plaintiff’s partnership interest as early as possible
and while the previous appeal was pending before this
court. See Brennan v. Brennan Associates, 293 Conn.
60, 89, 977 A.2d 107 (2009) (Brennan I). After this court
issued its opinion in Brennan I, the defendants sent a
letter to the plaintiff offering to purchase his interest
in the partnership as of ‘‘the date of [the plaintiff’s]
dissociation . . . .’’ The defendants’ letter indicated
that the plaintiff was dissociated in September, 2006,
the month in which the trial court rendered its original
judgment of dissociation. Only after the passage of time,
and subsequent decline in the real estate market, did the
defendants begin to claim that the date of dissociation
should be a date other than the date of the trial court’s
decision. As stated by the Pennsylvania Supreme Court
in a similar partnership context, ‘‘a party whose con-
tention is rejected [on appeal] should gain nothing by
the lapse of time . . . .’’ Scheckter v. Rubin, 349 Pa.
102, 104, 36 A.2d 315 (1944).
This conclusion is further supported by an examina-
tion of partnership law under the Uniform Partnership
Act (UPA), the Revised Uniform Partnership Act
(RUPA), and Connecticut’s Uniform Partnership Act
(CUPA).3 My review of cases in other states where an
automatic stay existed while the UPA was in effect
indicates that the proper date of dissolution is the date
of the trial court’s judgment of dissolution and not the
date a subsequent appeal from that judgment is
resolved. My review of cases in these other states fur-
ther indicates that this rule of law did not change upon
adoption of the RUPA.
The majority lists several policy reasons why its deci-
sion is sound in that ‘‘the plaintiff was not dissociated
until the conclusion of his appeal in Brennan I.’’ First,
‘‘a partner should not be allowed to participate in a
partnership when he does not share in the risk that
the partnership will lose value.’’ Second, ‘‘an outgoing
partner would be deprived of sharing in any value he
added to the partnership through his good faith efforts
to run the business during the pendency of his appeal
. . . .’’ Third, ‘‘a disgruntled, outgoing partner could
take a nonmeritorious appeal for the sole purpose of
intentionally sabotaging the business of the partnership,
knowing that he is not risking a diminution of his inter-
est.’’ In response to the first policy reason, in my view,
a dissociated partner does share in the risk that the
partnership will lose value even if his partnership inter-
est is valued before he ceases participation. The dissoci-
ated partner has an economic incentive to prevent the
loss of value and foster profitability of the partnership
so that he ultimately will be paid his full share. More-
over, the dissociated partner may properly be compen-
sated for his work during that time by the trial court.
While the majority’s second policy reason is a valid
reason, the opposite is also true in that a dissociated
partner does not share in any decline in value. Regard-
ing the third policy reason, a dissociated partner has a
fiduciary duty while working for the partnership, even
if he works postdissociation, which prevents him from
intentionally sabotaging the business of the partnership.
Further, any damage to the partnership may defeat the
partnership’s ability to pay him. Such a course of action
would be self-defeating if the court ultimately reversed
the decision dissociating that partner from the part-
nership.
In my view, there are additional contrary policy con-
siderations which should be entertained. The majority
permits the parties to continue to prolong this dispute.
The Brennan I trial court, Munro, J., ordered the plain-
tiff dissociated on September 27, 2006. The plaintiff
appealed the ruling and this court affirmed the trial
court’s decision on August 18, 2009. See Brennan v.
Brennan Associates, supra, 293 Conn. 60. The plaintiff
subsequently filed the present action seeking, inter alia,
valuation of his partnership interest pursuant to § 34-
362 (b). On December 11, 2012, the trial court, Shaban,
J., rendered judgment in favor of the plaintiff and, on
March 15, 2013, entered orders regarding the date of
valuation, interest and attorney’s fees. The defendants
appealed and the plaintiff cross appealed. It is now 2015
and the case is not over. As a result of the majority’s
decision, the case will be sent back for a new trial
regarding valuation and attorney’s fees. There is cer-
tainly the potential that any trial court decision will
then be appealed again due to both issues. The end
result of this litigation is that, although the partnership
interest will be valued as of 2009, the partner who was
dissociated in 2006 may be able to extend this matter
until 2016, the original ending date contained in the
partnership agreement.
I also take issue with the majority’s consideration of
the defendants’ claim as to the date of dissociation. The
defendants should have presented this issue in Brennan
I and never did. See id., 60. In my view, it is too late
to discuss the matter at this time. Brennan I discussed
the validity of the dissociation and certainly could have
discussed the effective date of dissociation, but the
issue was never raised. In my view, the defendants’
argument in this regard has been waived.
Unfortunately, the majority opinion does nothing to
shorten the length of time taken in this matter or the
delay occasioned by the parties. In my view, the proce-
dure employed in these cases should be as follows: (1)
the dissociation date should be the date the trial court
rendered judgment of dissociation; (2) the dissociated
party may then bring an appeal; cf. Hylton v. Gunter, 313
Conn. 472, 97 A.3d 970 (2014) (discussing final judgment
rule); (3) the trial court retains jurisdiction for valuation
purposes; (4) the parties wait for the statutory 120 day
period; see General Statutes § 34-362 (e); (5) the trial
court then hears the valuation case; and (6) once a
decision is received on the valuation, the judgment of
valuation may then be joined with the original appeal.
Either the Appellate Court or the Supreme Court would
then hear a consolidated appeal. This process would
save the parties at least three years involved in two
separate appeals, thereby reducing the delay and the
costs of attorney’s fees incurred by the parties on two
separate appeals.
Finally, as to part III of the majority opinion, I respect-
fully disagree with the majority’s conclusion regarding
attorney’s fees because, in my view, the defendants did
not offer any competent evidence during trial to sustain
their claim that those fees should be treated as a liability
of the partnership.
I would affirm the trial court’s finding that the date of
dissociation was September 27, 2006, and its conclusion
that the attorney’s fees were not a liability of the part-
nership. Accordingly, I respectfully dissent from parts
I and III of the majority opinion.
The trial court’s December 11, 2012 memorandum of
decision appropriately sets forth the following relevant
facts and procedural history. ‘‘On September 5, 1984, the
plaintiff, along with Richard Aiello and [the] defendants
Alexander Aiello and Serge Mihaly, entered into a writ-
ten general partnership agreement . . . for the opera-
tion and management of certain real property known
as the Trumbull Shopping Center . . . .
‘‘After [the defendants] Salvatore [DiNardo], Peter
[DiNardo], Leonard DiNardo and David Lehn became
involved in [the partnership] as coadministrators of the
estate of Richard Aiello,4 issues arose among the part-
ners regarding, among other things, who had check
signing authority, who had control of and access to the
books and records of the partnership, who should have
contact with prospective and current tenants, and how
decisions regarding leasing and improvements to the
premises were to be made. Animosity quickly grew par-
ticularly between [the plaintiff] and the other part-
ners. . . .
‘‘As a result of the situation, the plaintiff commenced
a civil action against the defendants seeking a declara-
tory judgment as to the rights of the various parties
under the partnership agreement. The defendants filed
a counterclaim against the plaintiff seeking to have him
statutorily dissociated from the partnership for his con-
duct. On September 27, 2006, a decision was rendered
[by the trial court dissociating] the plaintiff from the
partnership.’’ (Footnote added.) ‘‘In [that] ruling, the
[trial] court entered an order of dissociation pursuant
to . . . § 34-355 (5) (C), which allows dissociation if it
is found that ‘the partner had engaged in conduct relat-
ing to the partnership business which makes it not
reasonably practicable to carry on the business in part-
nership with the partner.’ Such a finding constituted
a wrongful dissociation which is defined by General
Statutes § 34-356 (b) (2): ‘In the case of a partnership
for a definite term or particular undertaking, before
the expiration of the term or the completion of the
undertaking . . . (B) the partner is expelled by judicial
determination under subdivision (5) of section 34-355.’ ’’
‘‘The dissociation did not, however, result in the dis-
solution or winding up of the partnership and it contin-
ued on in its business as allowed by statute. The plaintiff
filed an appeal [and] the trial court’s decision [was
affirmed] on August 18, 2009. [See Brennan v. Brennan
Associates, supra, 293 Conn. 60.] Because the parties
were unclear as to the effect of the appellate stay on the
plaintiff’s involvement with the partnership, the plaintiff
remained involved in its affairs during the pendency of
the appeal. . . . He continued to, amongst other things,
solicit tenants, attend partnership meetings, [and] write
to the partners about the partnership’s affairs . . . .
He also continued to receive $48,640 per month consti-
tuting his percentage draw from the partnership consis-
tent with the payments he had received prior to the
dissociation. This participation and payment structure
continued until the [plaintiff’s appeal in Brennan I was
resolved] at which time both his participation and the
payments ceased. . . . The total payments received by
the plaintiff from the . . . partnership between Sep-
tember 27, 2006 and August 18, 2009 were $1,702,400.
‘‘Thereafter, by letter dated September 3, 2009, the
plaintiff made demand upon the partnership pursuant
to . . . § 34-3625 for payment of his interest in the part-
nership. . . .
‘‘By letter dated February 12, 2010, the partnership
claimed that, based on a September 27, 2006 date of
dissociation, the amount due to the plaintiff for his
interest in the partnership was $3,272,340, with interest
at the rate of [5 percent]. . . . This amount was calcu-
lated based upon the defendants’ valuation of the plain-
tiff’s partnership interest less payments made to him
during the period of the appeal and for damages they
claim were caused by him due to his wrongful conduct
that led to the dissociation. The damages relative to
the claim of wrongful conduct were not itemized. No
response was received by the defendants from the plain-
tiff relative to the February 12, 2010 letter until [the
plaintiff filed the present action] on June 1, 2010.’’ (Cita-
tions omitted; footnotes altered.) The plaintiff sought
payment for the value of his partnership interest pursu-
ant to § 34-362, as well as damages from the defendants
resulting from mismanagement of the partnership
affairs since the death of Richard Aiello. The defendants
sought damages offsets pursuant to § 34-356 (c) for
attorney’s fees, as well as other damages resulting from
the plaintiff’s breach of fiduciary duty.
The trial court memorandum continued: ‘‘Prior to
trial, the parties disagreed on what was the appropriate
date of dissociation to be used by the court for the
valuation of the plaintiff’s interest in the partnership.
The plaintiff contended that the appropriate date was
the September 27, 2006 trial court decision. The defen-
dants argued that the appropriate date was the August
18, 2009 ruling . . . affirming the trial court’s decision.
Because the application of the statute under these cir-
cumstances appeared to be an issue of first impression
in this state, the court reserved judgment on the issue
and took evidence and argument from the parties rela-
tive to both dates.’’
‘‘The parties presented a significant volume of evi-
dence relative to the valuation of the plaintiff’s interest
in the partnership. This included, but was not limited
to, expert testimony as to the valuation of the real
estate, leasehold interests, cash and other holdings of
the partnership. [The] [p]laintiff’s experts valued the
plaintiff’s [32 percent] interest in the partnership to be
$9,400,000 as of September 27, 2006. [The] [d]efendants
presented expert testimony establishing the value of
the plaintiff’s interest in the partnership as of that date
to be $6,800,000.’’ Ultimately, the trial court found the
date of dissociation to be September 27, 2006, and val-
ued the plaintiff’s partnership interest at $8,640,000.
The trial court found, as a matter of law, that the
partnership was for a definite term and, thus, that ‘‘the
plaintiff was a partner who wrongfully dissociated
under § 34-356 (b) (2) (B).’’6 The trial court accordingly
applied § 34-362 (h) to determine whether the defen-
dants could defer payment to the plaintiff until January
1, 2016, the end of the partnership term. See footnote
5 of this concurring and dissenting opinion. The trial
court found ‘‘that having been aware of the dissociation
order since September 27, 2006, and [that decision hav-
ing been affirmed in 2009], the defendants easily could
have begun to set aside funds over that period of time
to ultimately make payment of any valuation of the
plaintiff’s interest in the partnership. Yet, there was no
evidence that it did so. By failing to take any such steps,
the court can infer that the defendants had little concern
as to the sufficiency of the partnership’s financial
resources to make payment of whatever was ultimately
determined to be the amount due for the plaintiff’s
interest.’’ The trial court found that ‘‘no undue hardship
[would] befall the partnership to require payment
before January 1, 2016, [and ordered that] the principal
amount due shall be paid in accordance with the follow-
ing schedule: $2,500,000 on March 1, 2013; $2,000,000
on January 1, 2014; $1,500,000 on January 1, 2015 and
$937,600 on January 1, 2016. Nothing shall preclude
the defendants from making additional payments or
payment in full in advance of this schedule.’’
To account for the plaintiff’s receipt of distributions
and participation in partnership affairs during the pen-
dency of the appeal, the trial court ‘‘allow[ed] a credit
for the monthly payments made to the plaintiff from
October 2006 through August 2009, totaling $1,702,400
. . . [finding that] [s]uch credit may be allowed given
the unique circumstances of this case under the princi-
ples of equity. The plaintiff’s continued participation in
the affairs of the partnership due to the parties’ per-
ceived ambiguity of the effect of the dissociation ruling
in light of the appeal and the fact the partnership had
no obligation to provide the plaintiff with a monthly
salary draw following the dissociation, justifies an equi-
table allowance of such credit.’’ The trial court further
concluded that ‘‘interest shall accrue from the date of
dissociation to the date of payment pursuant to § 34-
362 (b). In that the rate of interest is not specifically
set forth in that statute, pursuant to [General Statutes]
§ 34-304 (b) the rate of interest shall be calculated at
[8 percent] a year as set out in General Statutes § 37-1.’’
The defendants claimed offsets against the value of
the plaintiff’s partnership interest pursuant to §§ 34-356
(c) and 34-362 (c), (e), and (f) for costs associated with
‘‘all present and prior litigation between the parties [as]
part of the damages caused by [the] plaintiff’s wrongful
dissociation . . . [which included] costs and attor-
ney’s fees relative to the partnership’s involvement in
the summary process actions it brought against its own
tenants . . . [and] attorney’s fees for the posttrial
briefing in this matter.’’ In calculating the total amount
due, the trial court declined to award offsets for attor-
ney’s fees against the value of the plaintiff’s partnership
interest, finding ‘‘that the defendants [had] failed to
establish by a preponderance of the evidence their spe-
cial defenses that they [had] suffered any damages, in
the form of attorney’s fees or otherwise, as a result of
the actions involving the tenants, the dissociation or
the receivership action. There is insufficient evidence
to establish that the damages claimed were causally
related to the plaintiff’s conduct.’’
After judgment, the plaintiff moved for offer of com-
promise interest and attorney’s fees pursuant to General
Statutes § 52-192a and Practice Book § 17-18, arguing
that the 8 percent interest awarded from the date of
dissociation until the future date of payment caused
the plaintiff’s recovery to exceed the offer of compro-
mise he had tendered to the defendants for $9,215,000.
In its memorandum of decision dated March 15, 2013,
the trial court ruled that, although the plaintiff’s recov-
ery exceeded the offer of compromise because of the
interest awarded pursuant to § 34-362 (b), the cause of
action giving rise to the plaintiff’s recovery under § 34-
362 was not an action for ‘‘money damages’’ or a ‘‘civil
action based upon contract’’ under § 52-192a (a).7
The defendants appealed from the judgment of the
trial court, claiming that the trial court improperly: (1)
valued the plaintiff’s partnership interest as of Septem-
ber 27, 2006; (2) awarded interest to the plaintiff from
the date of dissociation to the date of payment; and (3)
failed to include attorney’s fees as a liability when it
calculated the partnership value. The plaintiff cross
appealed from the judgment of the trial court, claiming
that the trial court improperly declined to award offer
of compromise interest pursuant to § 52-192a (a).
The majority holds that the trial court improperly
found that the date of dissociation, the date on which
the plaintiff’s partnership interest is valued pursuant
to § 34-362 (b), was September 27, 2006, the date the
Brennan I trial court rendered judgment of dissocia-
tion. Instead, the majority concludes that the date of
dissociation is August 29, 2009, the date on which the
parties could no longer file a motion seeking reconsider-
ation of this court’s opinion in Brennan I. Because the
decline of the real estate market in 2008 negatively
affected the profitability and value of the Trumbull
Shopping Center, the defendants urge the 2009 date and,
thus, the lower valuation of the plaintiff’s partnership
interest. The defendants claim that the trial court
improperly construed § 34-362 (b) by ignoring the effect
the date had on other provisions of the CUPA, particu-
larly § 34-357 (b) (1).8 Specifically, the defendants claim
and the majority agrees that, because Practice Book
§ 61-11 (a)9 stayed enforcement of the trial court’s judg-
ment of dissociation and, thus, prevented the plaintiff’s
de facto expulsion from the partnership between 2006
and 2009, the trial court should have concluded that
the plaintiff’s dissociation occurred on the later date.
The defendants point to the fact that, between 2006
and 2009, the plaintiff received monthly partnership
payments, participated in partnership affairs, and
enjoyed the rights and privileges attendant to being a
partner. Essentially, the defendants claim that the cause
of the plaintiff’s dissociation—‘‘expulsion by judicial
determination’’ pursuant to § 34-355 (5)—cannot occur
until the dissociated partner experiences the effects of
dissociation, namely, termination of management rights
pursuant to § 34-357 (b) (1). The plaintiff responds that
conduct occurring after the date of judgment of dissoci-
ation does not affect the fact that dissociation has
occurred. I agree with the plaintiff.
As the trial court aptly noted, application of the stat-
ute under these circumstances is an issue of first
impression in this state. This is due, in part, to the fact
that the legislature substantially revised Connecticut’s
partnership laws in 1995. See footnote 3 of this concur-
ring and dissenting opinion. Because of the paucity of
case law interpreting the CUPA, I must first begin with
case law in, and commentary about, the fundamental
principles of partnership law inherent in the UPA. Juris-
prudential understanding of the UPA caused and influ-
enced the relevant revisions seen in the RUPA. In fact,
in Brennan I, this court acknowledged the fact that the
history of the UPA informed our interpretations of the
RUPA, noting that ‘‘there is nothing in the history of,
or policy underlying, these provisions to support the
distinction [between the remedy of dissociation, a rela-
tively new term in partnership law, versus that of disso-
lution] proposed by the plaintiff’’ especially in light of
an official comment in the RUPA stating that ‘‘ ‘dissocia-
tion,’ is used in lieu of . . . the term ‘dissolution’
. . . .’’ Brennan v. Brennan Associates, supra, 293
Conn. 84, quoting Rev. Unif. Partnership Act of 1997,
§ 601, comment (1), 6 U.L.A. (Pt. 1) 164 (2001). This
court agreed with the trial court’s use of ‘‘case law
addressing the more established, and in [the trial
court’s] view analogous, standard for dissolution’’;
Brennan v. Brennan Associates, supra, 77; and noted
the conceptual similarities between dissociation and
dissolution. Id., 83–84.
The resolution of the defendants’ claim in the present
case requires me to interpret the phrase ‘‘date of dissoci-
ation’’ contained in § 34-362 (b), as well as other refer-
ences to dissociation in the CUPA. The proper
interpretation of the CUPA is a ‘‘question of law, ‘over
which [this court] exercise[s] plenary review. . . . The
process of statutory interpretation involves the determi-
nation of the meaning of the statutory language as
applied to the facts of the case . . . .’ ’’ Brennan v.
Brennan Associates, supra, 293 Conn. 78–79. When con-
struing a statute, ‘‘[o]ur fundamental objective is to
ascertain and give effect to the apparent intent of the
legislature. . . . [W]e also look for interpretive guid-
ance to the legislative history and circumstances sur-
rounding its enactment, to the legislative policy it was
designed to implement, and to its relationship to
existing legislation and common law principles govern-
ing the same general subject matter . . . .’’ (Internal
quotation marks omitted.) Kasica v. Columbia, 309
Conn. 85, 93, 70 A.3d 1 (2013); see also General Statutes
§ 1-2z. ‘‘[T]he legislature is always presumed to have
created a harmonious and consistent body of law . . . .
[T]his tenet of statutory construction . . . requires
[this court] to read statutes together when they relate
to the same subject matter . . . . Accordingly, [i]n
determining the meaning of a statute . . . we look not
only at the provision at issue, but also to the broader
statutory scheme to ensure the coherency of our con-
struction.’’ (Internal quotation marks omitted.) Bren-
nan v. Brennan Associates, supra, 90–91.
No court has squarely addressed a challenge to the
date of dissociation, under the RUPA, based on the
effect of an appellate stay. Additionally, no court has
squarely addressed a challenge to the date of dissolu-
tion, under the UPA, based on the effect of an appellate
stay. Accordingly, in the present case, three lines of
inquiry inform my conclusion that the date of dissocia-
tion is the date of the trial court’s decision in Brennan
I: (1) case law interpreting the analogous provisions on
partnership dissolution in the UPA and, specifically,
disputes over the date of dissolution by decree of court;
(2) problems with the dissolution provisions of the UPA
that the drafters of the RUPA attempted to remedy,
particularly confusion over the causes and effects of
dissolution; and (3) the relation of the RUPA to, and
its adoption of, the UPA principles of partnership disso-
lution in determining the appropriate date of dissocia-
tion, which comport with our appellate stay
jurisprudence and policy rationales.
I
DATE OF DISSOCIATION
A
Because dissociation is a relatively new concept
under partnership law, I begin, first, with a discussion
of the causes of partnership dissolution under the UPA,
which are analogous to the causes of dissociation under
the RUPA. Thereafter, because no court has squarely
addressed a challenge to the date of dissolution, under
the UPA, based on the effect of an appellate stay, I
discuss and glean principles from case law about the
date of dissolution that I will later apply in interpreting
the date of dissociation; specifically, that it is the con-
duct giving rise to the grounds for dissolution—the
cause of the dissolution—that controls the date of disso-
lution, and not conduct occurring postdissolution.
Under the UPA, the term ‘‘dissociation’’ did not exist;
instead of dissociation, if certain enumerated events
occurred, such as death, bankruptcy of a partner, or
expulsion of a partner, the underlying partnership
would be dissolved.10 Because some causes of dissolu-
tion were automatic and some required a decree of
court, courts encountered some difficulty in delineating
the exact moment in time a partnership dissolved under
the UPA. ‘‘Nearly half of the causes of dissolution [under
the UPA] require judicial action. That is, they are not
causes of dissolution per se, but rather are grounds
for dissolution by court decree.’’ (Emphasis added.) A.
Bromberg, ‘‘Partnership Dissolution—Causes, Conse-
quences, and Cures,’’ 43 Tex. L. Rev. 631, 639 (1965). For
example, bankruptcy of a partner caused an immediate
dissolution, with no judicial decree necessary to cause
the dissolution or judicially recognize that dissolution
has occurred. See footnote 10 of this concurring and
dissenting opinion. Other causes of dissolution under
the UPA required a decree of court, such as when a
partner was of ‘‘unsound mind . . . [a] partner has
been guilty of such conduct as tends to affect prejudi-
cially the carrying on of the business . . . [or] a partner
wilfully or persistently commits a breach of the partner-
ship agreement, or otherwise so conducts himself in
matters relating to the partnership business that it is
not reasonably practicable to carry on the business in
partnership with him . . . .’’ Unif. Partnership Act of
1914, § 32, 6 U.L.A. (Pt. 2) 404 (2001). ‘‘Judicial action
[would be] appropriate [in those cases] because [the
judicial causes of dissolution] involve the determination
of difficult [fact-intensive] matters (such as lunacy, per-
sistent breach, or, in the last analysis, impossibility of
performance) . . . .’’ J. Crane & A. Bromberg, Law of
Partnership (1968) § 78, p. 436. Even though nonjudicial
causes of dissolution under the UPA allowed automatic
dissolution without decree of court (e.g., bankruptcy
of a partner), ‘‘any dissolution [could] become judicial
to the extent that a partner [sought] a court-supervised
accounting, winding up, or receivership.’’ (Footnotes
omitted.) A. Bromberg, supra, 639.
‘‘To determine the date of dissolution, it is necessary
first to consider the cause of dissolution.’’ In re
Crutcher, 209 B.R. 347, 352 (Bankr. E.D. Pa. 1997).
Determining this date often required a court to choose
between nonjudicial and judicial causes of dissolution.
See id. (choosing earliest of three possible dates of
dissolution: [1] date partner had been expelled from
business by being cut off from all management duties,
judicial cause of dissolution under § 31 [1] [d] of UPA;
[2] date partner filed for bankruptcy, nonjudicial cause
of dissolution under § 31 [5] of UPA; or [3] date partner
filed adversary proceeding in Bankruptcy Court for
accounting, expressing his will to withdraw from part-
nership, nonjudicial cause of dissolution under § 31 [2]
of UPA).11
‘‘[Nonjudicial] causes [of dissolution] appear to oper-
ate ipso facto, and dissolution dates from the occur-
rence of the event.’’ J. Crane & A. Bromberg, supra,
§ 78, p. 436. In Robins v. Roland, Docket No. B191659,
2008 WL 615865, *1 (Cal. App. April 7, 2008), for exam-
ple, one partner of a three person real estate partnership
died in 1994, leaving his wife as the executrix of his
estate and the purported owner of his partnership inter-
est. For years after her husband’s death, the wife had
received distributions from the partnership, attended
company board meetings, signed minutes, and con-
sented to partnership actions. Id., *6. After relations
between the partners soured, the wife attempted to
dissociate from the partnership nine years later. Pursu-
ant to § 31 (d) (4) of the UPA, however, the death of
the partner had already ipso facto caused dissolution
because the partnership agreement did not provide for
continuation of the partnership upon a partner’s death.
Despite the wife’s receipt of partnership distributions
and participation in partnership affairs for years after
the dissolution caused by her husband’s death, the Cali-
fornia Court of Appeal held that the partnership had
dissolved as a matter of law upon the partner’s death
in 1994, thus rendering moot the wife’s attempt to disso-
ciate. Id., *3. The court reasoned that ‘‘[u]nder the UPA,
a dissolved partnership does not automatically termi-
nate but rather ‘continues until the winding up of part-
nership affairs is completed.’ . . . Thus, by default, the
partnership would continue until being finally wound
up and terminated. . . . [B]ecause the original over-
arching partnership dissolved upon [the partner’s]
death but has never been wound up, it continued to
operate and to pay distributions to anyone entitled to
receive them (‘they got whatever they got before’).’’
(Citations omitted.) Id., *4–5. The court in Robins prop-
erly determined that the effect of dissolution—ceasing
to carry on business together—need not occur on the
date of the cause of dissolution—death of a partner—
because of the intermediate step of winding up. Simi-
larly, another court noted that it did ‘‘not regard dissolu-
tion as immediately and necessarily moving the
partnership into the stage of winding up, although wind-
ing up is certainly necessary before the partnership is
ultimately terminated.’’ Anastos v. Stable, 443 Mass.
146, 152, 819 N.E.2d 587 (2004); see Estate of Webster
v. Thomas, Docket No. 5-12-0121, 2013 WL 164041, *3–4
(Ill. App. January 7, 2013) (affirming date of dissolution
to be date of partner’s death in 2002 even though part-
nership tax returns listed partner’s estate as partner
through 2006, partnership operated through 2007, and
action for distribution not brought until 2008); see also
Lassen v. Ogren, Superior Court, judicial district of
New Britain, Docket No. CV-07-5004349-S (September
28, 2011) (Swienton, J.) (finding date of dissolution of
joint venture to be date of partner’s filing for bank-
ruptcy, even though ‘‘the process of winding up the
joint venture’’ was ‘‘stayed and delayed by the bank-
ruptcy proceeding’’).
In contrast to nonjudicial causes of dissolution, judi-
cial causes of dissolution have less clearly defined
dates; it is more difficult to determine the exact moment
in time a partnership dissolves where a trial court’s
decree of court establishes that dissolution has
occurred. According to Alan Bromberg, a leading
scholar on partnership law, ‘‘a judicial dissolution dates
from the court decree, unless there is equitable reason
for the court to set an earlier date. These rules fix the
time when partners’ rights and powers are modified,
and when their rights to an accounting accrue.’’
(Emphasis added; footnotes omitted.) J. Crane & A.
Bromberg, supra, § 78, p. 436. In In re Woskob, 305 F.3d
177 (3d Cir. 2002), the United States Court of Appeals
for the Third Circuit chose between four possible dates
of dissolution by decree of court: (1) the date the debt-
or’s partner excluded the debtor from partnership pro-
ceeds in January 1997, a judicial cause of dissolution
under the UPA; (2) the date the debtor excluded the
debtor’s partner from management and income from the
partnership in April, 1997, a judicial cause of dissolution
under the UPA; (3) the debtor’s partner’s bankruptcy
in June 1997, a nonjudicial cause of dissolution under
the UPA; or (4) the debtor’s partner’s death in 1999, a
nonjudicial cause of dissolution under the UPA. With
respect to whether the partners’ expulsions in 1997
were ‘‘sufficient to dissolve [the] partnership through
operation of law and without the need for a judicial
decree,’’ the Third Circuit distinguished between expul-
sions that ‘‘result in the instantaneous dissolution of the
partnership’’—such as when a partner expels another in
accordance with power conferred by agreement under
§ 31 (1) (d) of the UPA—and those that ‘‘merely serve
as grounds by which a court can decree a dissolution’’—
such as when a partner expels another without power
conferred by agreement. Id., 183. The court held that
because the partnership agreement did not confer the
power to expel under § 31 (1) (d) of the UPA, and
because neither of the parties had brought suit for disso-
lution by decree of court after their purported exclu-
sions by each other, the exclusions had not operated
to ipso facto dissolve the partnership and were ‘‘irrele-
vant to the partnership’s date of dissolution.’’ Id.; cf.
Roberts v. Mariner, 195 Or. 311, 319, 245 P.2d 927 (1952)
(choosing date of dissolution by decree of court as date
Real Estate Commissioner cancelled partnership’s real
estate license in 1950, instead of date of partners’ dis-
agreement in 1949, or date of final decree of dissolution
in 1951, because ‘‘both [partners], in effect, abandoned
the partnership relation as of [the 1950] date . . . [and]
[u]nder all the facts and circumstances of this case, it
would be inequitable to fix a date later than . . . 1950,
although ordinarily the date of the decree would be
considered the date of final dissolution’’).
As in In re Woskob, supra, 305 F.3d 183, courts have
looked to the conduct of the parties to determine when
it would be equitable to set the date of dissolution at
a time other than the date of the court’s decree, finding
this inquiry to be easier when conduct giving rise to
grounds for dissolution is extreme, and harder where
conduct giving rise to grounds for dissolution is not
serious enough to ‘‘result in the instantaneous dissolu-
tion of the partnership.’’ When conduct giving rise to
grounds for dissolution by judicial decree is ‘‘serious
and unequivocal . . . the misconduct really dissolves
the partnership, the court decree merely giv[es] legal
effect thereto.’’ Vangel v. Vangel, 116 Cal. App. 2d 615,
626, 254 P.2d 919 (1953); see Fisher v. Fisher, 349 Mass.
675, 678, 212 N.E.2d 222 (1965) (fixing date of dissolu-
tion as date partner was notified in writing that he
was ‘‘ ‘permanently suspended’ ’’ from partnership, and
effectively ousted, instead of date of judicial decree,
and entering judgment nunc pro tunc, as of date he was
notified, in interest of ‘‘[e]quity and . . . furtherance
of justice’’); see also Edwards v. Edwards, 122 Idaho
963, 968, 842 P.2d 299 (1992) (‘‘[T]he effective date of
a dissolution is the date of the first effective act of
dissolution; subsequent acts or causes of dissolution
are irrelevant. . . . Thus, although a dissolution by
judicial decree generally dates from the date of the
court decree, the date of dissolution may be deemed to
have occurred earlier, where, as here, the partnership is
dissolved on the basis of findings that relate back to
a prior date.’’ [Citations omitted; emphasis added.]);
accord 68 C.J.S. 723, Partnership § 549 (2009).
But when grounds for dissolution by judicial decree
are ‘‘so disputed or equivocal that automatic dissolution
by operation of law, or self-help by partners [of exclud-
ing the offending partner] would be reckless’’; J.
Crane & A. Bromberg, supra, § 78, p. 437; the court may
otherwise fix the date of dissolution as the date of the
judicial decree. See Graham v. Dietze, Docket Nos. A-
08-796 and A-09-088, 2010 WL 1600562, *5–6 (Neb. App.
2010) (finding impropriety in trial court’s setting date
of dissolution as date before suit brought, when most
reliable financial information had been available, and
holding that date was improper because parties’ con-
duct had not ipso facto amounted to dissolution and
parties had not sought judicial dissolution as of that
date); cf. Vangel v. Vangel, supra, 116 Cal. App. 2d 626
(The trial court fixed the date of dissolution as the
date of closing of evidence at trial instead of the date
judgment was entered or the date of exclusion because
‘‘a court may, because of a breach of the partnership
agreement, decree the dissolution of the partnership as
of a date prior to the judgment. In some cases where
the breach is serious and unequivocal the dissolution
may be decreed as of the date of the breach. . . . But
here the act of [the defendant] in excluding [the] plain-
tiffs did not ipso facto dissolve the partnership. His acts
simply provided grounds for an application to a court
of equity for such relief. . . . [The date of the close of
evidence] was entirely reasonable since the whole story
of the controversy was before the court as of that time.’’
[Citation omitted.]).
The conduct of the parties has always been relevant
to determining the date of dissolution by decree of court
because the conduct itself provides the factual basis
that gives rise to a cause of action for dissolution as a
matter of law. In Kruse v. Vollmar, 83 Ohio App. 3d
378, 382, 614 N.E.2d 1136 (1992), the Court of Appeals
of Ohio addressed whether a trial court had improperly
failed to dissolve a partnership even though it had
awarded punitive damages after finding that the defen-
dants had excluded the plaintiff from management deci-
sions. The Court of Appeals held that, on remand, the
trial court must dissolve the partnership and that ‘‘the
cause of the dissolution must be determined in the first
instance by the trial court . . . [and] the date on which
the parties’ interest in the partnership is to be finally
ascertained is the date on which the trial court enters
its judgment of dissolution consistent with this opinion
. . . .’’ Id., 385. Upon motion for reconsideration, how-
ever, the Court of Appeals of Ohio, in a per curiam
opinion, noted that, in holding that the date of dissolu-
tion must be the date of the trial court’s judgment, it
had ‘‘fail[ed] to fully consider that there may be events
that could cause the trial court, in the first instance, to
establish the date of dissolution at a time previous to
its final judgment entry.’’ (Emphasis added.) Kruse v.
Vollmar, 85 Ohio App. 3d 198, 199, 619 N.E.2d 482
(1993). Accordingly, the court held that ‘‘the trial court
should not be prevented from considering [events
occurring prior to the date judgment is rendered] to
ascertain what the proper date of dissolution should
be . . . .’’ Id.
Though trial courts have properly found earlier dates
of dissolution than the date the trial court renders judg-
ment of dissolution based on the conduct or circum-
stances of the parties, trial courts have neither found
nor attempted to find later dates of dissolution than
the date the trial court renders judgment of dissolution.
A trial court cannot find future facts and, thus, no appel-
late court has directly addressed whether an appeal of
the judgment of dissolution would alter the ‘‘date of
dissolution’’ to be subsequent to the date the trial court
renders judgment of dissolution. In Scheckter v. Rubin,
supra, 349 Pa. 104, however, the Supreme Court of
Pennsylvania addressed whether the date of dissolution
by decree of court should be the date specified in the
decree nisi dissolving the partnership or the date when
the trial court dismissed the exceptions to the decree
nisi and entered the final decree. The appellant sought
to gain the benefit of postdissolution appreciation in
the value of his partnership interest from the date of
the decree nisi to the date of the final decree. The court
held unequivocally that the effective date of dissolution
was the earlier date, ‘‘the date specified in the decree
nisi which, in express words, dissolved the partnership
as of that day. . . . There can be no serious objection,
on the dismissal of the exceptions [to the decree nisi],
to adopting, in the final decree, the date stated in the
decree nisi as the dissolution date. In such circum-
stances, a party whose contention is rejected [on
appeal] should gain nothing by the lapse of time
between the dates of the nisi and final decrees.’’ Id.;
accord Kirby v. Kalbacher, 373 Pa. 103, 95 A.2d 535
(1953) (holding date of dissolution by decree of court
to be date of decree nisi, notwithstanding affirmance of
decree three months later, because affirmance merely
restated fact of dissolution as of date on which it had
been adjudged in decree nisi).
These decisions all establish the principle that the
conduct giving rise to the grounds for dissolution—the
cause of the dissolution—controls the date of dissolu-
tion. No events relating to the grounds for dissolution
occur during the pendency of an appeal; conduct or
circumstances of the parties relevant to dissolution
have already occurred, the trial court has already found
facts, and no further factual developments during that
interim period can influence an appellate court as to
the propriety of upholding a dissolution because such
developments are not in the appellate record. A mere
lapse of time after a trial court renders judgment of
dissolution has no bearing on a trial court’s a priori
factual finding of dissolution as of a particular date.
Like the courts refusing to set the date of dissolution
after, at the latest, the date the trial court renders judg-
ment of dissolution, other courts have similarly refused
to allow valuation of partnership assets after the date
of dissolution because, under the UPA, the ‘‘value [of
the departing partner’s interest] is computed as of the
date of dissolution rather than the later time of settle-
ment, which means the outgoing interest is protected,
as against the other partners, from [postdissolution]
losses and does not get the benefit of [postdissolution]
appreciation.’’ (Footnotes omitted.) 2 A. Bromberg & L.
Ribstein, Bromberg and Ribstein on Partnership (2014)
§ 7.13 (b) (1), pp. 7:186–7:187. For example, in Oliker
v. Gershunoff, 195 Cal. App. 3d 1288, 1304, 241 Cal. Rptr.
415 (1987), the California Court of Appeal addressed
whether an expelled partner of a real estate syndication
partnership was entitled to a pro rata share of postdisso-
lution appreciation in value of the partnership-owned
realty. The real estate market during the Oliker partner-
ship was in the middle of a recession when the with-
drawing partner withdrew. Id., 1300. After the partners
mutually agreed to allow the withdrawing partner to
withdraw, an inflationary cycle began and real property
values boomed. Id. The California Court of Appeal held
that, in receiving the value of his interest in the partner-
ship, the withdrawing partner could not take advantage
of postdissolution appreciation of the partnership prop-
erty because ‘‘[t]o reach a contrary result would be
manifestly inequitable. [The withdrawing partner] had
no downside risk [after dissolution] because his inter-
est, in large part, was fixed as of the date of dissolution.
By a parity of reasoning, the withdrawing partner
should not be entitled to share in the upside potential.
Otherwise, a withdrawing partner would have no moti-
vation to settle his partnership accounts but instead
could delay such matter, gambling on the chance that
the partnership’s assets would rise in value in the
interim, and knowing that, in any event, his value in
the interest in the partnership determined as of the date
of dissolution could not be reduced by any subsequent
events.’’ Id., 1304.
Similarly, in King v. Evans, 791 S.W.2d 531, 535 (Tex.
App. 1990), the Court of Appeals of Texas discussed
how the UPA treated postdissolution fluctuations in
value: ‘‘Section 42 [of the UPA] is intended to give the
[noncontinuing] partner the benefit of asset apprecia-
tion at dissolution, and leave him unaffected by later
[postdissolution] losses. . . . [T]he statute was obvi-
ously intended to put the risk of operating the business
after dissolution on the continuing partner. This is the
reason that the value of an outgoing partner’s interest
must be computed as of the date of dissolution rather
than the later time of settlement. Conversely, neither
would an outgoing partner receive the benefit of post-
dissolution appreciation, should such occur.’’ (Citation
omitted; emphasis added.) The court in King noted that
the ‘‘risks of continuation of the farming business after
dissolution, including the risks of land depreciation in
a falling real estate market, have been placed by statute
on [the] continuing partner.’’ Id., 536; see also A. Brom-
berg, supra, 43 Tex. L. Rev. 651 n.128 (‘‘[v]aluation is
as of the date of dissolution’’), citing Vangel v. Vangel,
supra, 116 Cal. App. 2d 615.12
Courts refusing to alter either the date of dissolution
or the value of a partnership interest despite postdisso-
lution fluctuations in value are justified in this refusal,
notwithstanding that a departing partner had only later
felt the effects of dissolution (i.e., had received partner-
ship distributions or participated in partnership affairs
during an interim period). After all, courts valuing a
departing partner’s interest can equitably adjust the
valuation to account for postdissolution distributions
received while winding up or maintaining the status
quo. See, e.g., Robins v. Roland, supra, 2008 WL 615865,
*3 (finding date of dissolution to be date of death of
partner, even though partner’s wife continued to man-
age partnership affairs and receive distributions for
years after dissolution); Vangel v. Vangel, supra, 116
Cal. App. 2d 630 (affirming date of dissolution as date
of closing of evidence in trial court, even though ‘‘it
appear[s] from the briefs and from the oral argument
that the status quo with respect to the partnership oper-
ations has remained unaltered during the pendency of
this appeal’’); Scheckter v. Rubin, 355 Pa. 633, 635–36,
50 A.2d 668 (1947) (ordering reimbursement of funds
expended by former partner in maintaining partnership
business postdissolution and during pendency of
appeals because even former partners may be ‘‘justly
and properly entitled to reimbursement out of the [part-
nership] assets’’ in continuing dissolved business until
settlement and because such expenditures can ‘‘be
accounted for accordingly’’).13 Noteworthy in these and
almost all appellate decisions about the date of dissolu-
tion is the absence of arguments that the date of an
appellate decision has any relation—other than the
mere passage of time—to the date a trial court a priori
renders judgment of dissolution.
In accordance with the foregoing case law and princi-
ples of partnership law under the UPA, the date of
dissolution and, thus, the date of valuation of a partner-
ship interest is the date the trial court renders judgment
of dissolution, or a date prior to that if the parties’
conduct as found by the trial court—the cause of the
dissolution itself—compels an earlier finding. Scholar-
ship reinforces the principle that the date of dissolution
is the date the trial court renders judgment of dissolu-
tion, or some date prior to when the trial court renders
judgment of dissolution. See, e.g., J. Crane & A. Brom-
berg, supra, § 78, p. 436 and n.31; 2 A. Bromberg & L.
Ribstein, Bromberg and Ribstein on Partnership, supra,
pp. 7:98–7:99; R. Hillman, ‘‘Misconduct as a Basis for
Excluding or Expelling a Partner: Effecting Commercial
Divorce and Securing Custody of the Business,’’ 78 Nw.
U. L. Rev. 527, 544 n.63 (1983). Any date after the date
the trial court renders judgment of dissolution has no
factual relevance to the findings a trial court must make
in determining a priori whether dissolution is warranted
as a matter of law.
B
Having discussed case law interpreting the date of
dissolution under the UPA, I now address other com-
mon problems courts and commentators have encoun-
tered in interpreting its dissolution provisions. In
particular, I discuss problems with the definition of
dissolution and how the statutory language set forth in
the UPA created confusion about the causes and effects
of dissolution. These problems informed the choices
made by the drafters of the RUPA in overhauling the
UPA and creating the analogue to dissolution—dissoci-
ation—that we must interpret in the present case.
Lawyers often misunderstood the term ‘‘dissolution’’
in the UPA. ‘‘Dissolution is probably the most confusing
concept and area in all of partnership law.’’ D. Weidner,
‘‘A Perspective to Reconsider Partnership Law,’’ 16 Fla.
St. U. L. Rev. 1, 13 (1988). ‘‘The dissolution of a partner-
ship is but a preparatory step to its termination; a part-
nership continues after dissolution until the winding
up of its affairs is completed.’’ Bass v. Dalton, 218 Neb.
379, 381, 355 N.W.2d 225 (1984). Prior to the UPA, ‘‘the
subject of the dissolution and winding up of a partner-
ship [had been] involved in considerable confusion prin-
cipally because of the various ways in which the word
‘dissolution’ [was] employed. The term sometimes des-
ignate[d] the completion of the winding up of partner-
ship affairs. This, the end of the association, [instead]
should be called the termination of the partnership.’’
W. Lewis, ‘‘The Uniform Partnership Act,’’ 24 Yale L.J.
617, 626–27 (1915). Some confused dissolution as the
effect of some prior triggering event that caused the
partnership to eventually terminate. The correct inter-
pretation, however, was that the triggering event itself
was the dissolution, after which a partnership would
wind up and terminate.
The UPA attempted to implement a precise definition
of ‘‘dissolution’’—accompanied by distinct references
to winding up and termination—to clarify that dissolu-
tion did not mean termination. To remedy the misunder-
standing, the UPA defined dissolution as ‘‘ ‘the change
in the relation of the partners caused by any partner
ceasing to be associated in the carrying on [of the part-
nership’s business] as distinguished from the winding
up of the business.’ . . . [D]issolution is distinguished
from winding up and termination: ‘On dissolution the
partnership is not terminated, but continues until the
winding up of partnership affairs is completed.’ The
[o]fficial [c]omment [to the UPA] explains that ‘dissolu-
tion designates the point in time when the partners
cease to carry on the business together; termination is
the point in time when all the partnership affairs are
wound up; [and] winding up . . . [is] the process of
settling partnership affairs [that occurs] after dissolu-
tion.’ ’’ (Footnotes omitted.) D. Weidner, ‘‘A Perspective
to Reconsider Partnership Law,’’ supra, 16 Fla. St. U.
L. Rev. 14.
Even after the UPA attempted to clarify dissolution,
case law in the seventy-five years since the drafting of
the UPA did not evince this clarity. ‘‘Despite the relative
precision of the statutory language [of the UPA], [‘disso-
lution,’ ‘winding up,’ and ‘termination’] continue to be
used indiscriminately by many courts and lawyers.’’ J.
Crane & A. Bromberg, supra, § 73, p. 416.14 The National
Conference of Commissioners on Uniform State Laws
revisited principles of partnership dissolution in 1986,
deciding to undertake a complete revision of the UPA
and recommending sixty-six changes to the partnership
break-up provisions of the UPA. See UPA Revision Sub-
committee of the Committee on Partnerships and Unin-
corporated Business Organizations, ‘‘Should the
Uniform Partnership Act Be Revised?,’’ 43 Bus. Law.
121, 121–25 (1987). Despite the passage of the UPA
seventy-five years prior, ‘‘the law of partnership
breakups still is confused. . . . [T]here are cases that
appear to reflect a complete misunderstanding of the
concept of dissolution as it is used in the UPA.’’ (Foot-
notes omitted.) D. Weidner & J. Larson, ‘‘The Revised
Uniform Partnership Act: The Reporters’ Overview,’’ 49
Bus. Law. 1, 4 (1993).
The revision subcommittee specifically noted that the
leading scholar on partnership law ‘‘has criticized the
lack of coordination between the general definition of
dissolution under [§] 29 [of the UPA] and the specific
causes of dissolution under [§§] 31 and 32 [of the UPA].’’
UPA Revision Subcommittee of the Committee on Part-
nerships and Unincorporated Business Organizations,
supra, 43 Bus. Law. 161. The revision subcommittee
agreed that the definition of dissolution ‘‘confuses the
causes and effects in that [for example] a partner
expressing his will to dissolve is dissociating himself
and causing a dissolution, but the dissociation results
from the dissolution when it is caused by judicial decree
. . . .’’ Id.; see also J. Crane & A. Bromberg, supra, §73,
p. 417 and n.5; accord A. Bromberg, supra, 43 Tex.
L. Rev. 646 (‘‘[T]he general definition [of dissolution]
confuses cause and effect. Despite the good offices
of the act, many judges and lawyers continue to use
dissolution and termination more or less interchange-
ably.’’ [Footnote omitted.]). The revision subcommittee
also recommended changes to terminology used to
describe the effect of dissolution to ‘‘state affirmatively
that after dissolution the authority of each partner . . .
continues so far as may be necessary to wind up partner-
ship affairs and to complete transactions begun but
unfinished at dissolution . . . . The suggested change
would give a statutory basis for certain actions of the
partners sanctioned through a broad definition of ‘wind-
ing up’ as reflected in certain cases.’’ UPA Revision
Subcommittee of the Committee on Partnerships and
Unincorporated Business Organizations, supra, 167–68;
see Lange v. Bartlett, 121 Wis. 2d 599, 605, 360 N.W.2d
702 (App. 1984) (remanding to trial court for ‘‘testimony
as to whether a wind-up or a continuation occurred’’
in order to determine proper valuation of withdrawing
partner’s interest in partnership); see also Robins v.
Roland, supra, 2008 WL 615865, *3 (finding that years
of wife’s continued participation in partnership affairs
and receipt of distributions postdissolution to be
extended postdissolution, prewinding up period); see
also footnote 14 of this concurring and dissenting opin-
ion. Mid-revision, however, the cause and effect termi-
nology problem had no ready solution: scholarly
comments regarding one draft of the RUPA, in propos-
ing language that ‘‘cessation of a partner’s status does
not cause a dissolution and winding up,’’ noted that ‘‘it
is misleading to say that [expelled partners’] status as
partners has ‘ceased.’ . . . It may take time to ‘close
the books’ on a partner, whether she is paid the value
of her interest through a business liquidation or a buy-
out.’’ D. Weidner, ‘‘Three Policy Decisions Animate
Revision of Uniform Partnership Act,’’ 46 Bus. Law. 427,
447 (1991).
Thus came the RUPA, which added the term ‘‘dissoci-
ation’’ to the statutory scheme in an attempt to clarify
the moment in time when a partner begins the process
of leaving a continuing partnership. See Rev. Unif. Part-
nership Act of 1997, § 601, supra, 6 U.L.A. (Pt. 1) 163;
see also General Statutes § 34-355. ‘‘Although the term
dissociation is new to the statute, the concept is not.’’15
(Emphasis in original.) D. Weidner & J. Larson, supra,
49 Bus. Law. 7. The statutory scheme set forth in the
RUPA employs the term dissociation ‘‘in lieu of the UPA
term ‘dissolution’ to denote the change in the relation-
ship caused by a partner’s ceasing to be associated in
the carrying on of the business . . . . [because] the
dissociation of a partner does not necessarily cause
a dissolution and winding up of the business of the
partnership.’’ Rev. Unif. Partnership Act of 1997, § 601,
comment (1), supra, 6 U.L.A. (Pt. 1) 164. ‘‘ ‘[D]issocia-
tion’ ’’ is characterized as ‘‘the beginning of the end of
association. A partnership, like a marriage, often is far
easier to start than it is to end. . . . The process of
dissociation is more complicated than in the case of
[a shareholder selling shares in a public corporation]
because every partner has agency power and personal
liability that must be wound down. Whether there is a
buyout of the dissociating partner or a liquidation of
the partnership, the disengagement almost invariably
takes time. [The] RUPA’s list of the events that cause
dissociation answers the policy question of whether
enough has happened to trigger the contraction of a
partner’s association with the business.’’ D. Weidner &
J. Larson, supra, 7. ‘‘[The] RUPA rejects . . . [the con-
cept that dissociation is] a single moment when one
‘ceases’ to be a partner—disengagement from the part-
nership relationship is a process that takes time to
accomplish.’’ Id. As with dissolution, ‘‘the consequences
of the partner’s dissociation do not occur at the same
time. Thus, it is more useful to think of a dissociated
partner as a partner for some purposes, but as a former
partner for others.’’ Rev. Unif. Partnership Act of 1997
§ 601, comment (1), supra, 6 U.L.A. (Pt. 1) 164. Thus,
dissociation of a partner causes ‘‘a ‘mini-windup,’ ’’
because, simply stated, ‘‘a partner cannot walk away
from an interest in a partnership as easily as can a
shareholder from a share of stock.’’ D. Weidner, ‘‘Three
Policy Decisions Animate Revision of Uniform Partner-
ship Act,’’ supra, 46 Bus. Law. 447.
A review of the RUPA’s structure, language, and offi-
cial comments confirms that the concepts of dissocia-
tion and dissolution are analogous. We agreed with this
premise in Brennan I, noting that the drafters of the
RUPA used the term dissociation ‘‘in lieu of the ‘UPA
term ‘‘dissolution’’ . . . .’ ’’ Brennan v. Brennan Asso-
ciates, supra, 293 Conn. 84. Just as § 31 of the UPA
set forth ‘‘Causes of Dissolution’’ and § 32 of the UPA
elaborated more fully on ‘‘Dissolution by Decree of
Court,’’ § 601 of the RUPA sets forth ‘‘Events Causing
Partner’s Dissociation,’’ which include ‘‘expulsion by
judicial determination’’ in § 601 (5) of the RUPA, as is
relevant to the present case. See Rev. Unif. Partnership
Act of 1997, § 601, comment (6), supra, 6 U.L.A. (Pt. 1)
166 (‘‘[t]he enumerated grounds for judicial expulsion
are based on . . . grounds for judicial dissolution’’ set
forth in § 32 [1] of the UPA). ‘‘When the facts justify
either the judicial expulsion of a partner or the issuance
of a decree of dissolution of the partnership, the court
at its discretion may pursue either option.’’ (Emphasis
added.) R. Hillman et al., Revised Uniform Partnership
Act (West Ed. 2014–2015) § 801, author’s comment (4)
(e); see also A. Wensinger, ‘‘The Revised Uniform Part-
nership Act Breakup Provisions: Stability or Head-
ache?,’’ 50 Wash. & Lee L. Rev. 905, 934 (1993) (‘‘The
meaning of the RUPA’s ‘dissociation’ is analogous to
the . . . definition of dissolution [under the UPA].
. . . Although the RUPA has declined to define the term
‘dissociation,’ the RUPA’s dissociation now has virtually
the same meaning as the UPA’s dissolution: the occur-
rence of some event altering a partner’s willingness or
ability to continue in the business. The effect of the
RUPA’s ‘dissociation’ is also similar to the effect of
dissolution under the UPA. Like the UPA’s ‘dissolution,’
dissociation under the RUPA does not indicate the ter-
mination of the partnership business. Dissociation indi-
cates either that the partners continuing the partnership
will purchase the departing partner’s interest or that
the partnership will terminate and [have] its assets liqui-
dated.’’ [Footnotes omitted.]).
C
With this understanding of (1) how courts have inter-
preted the UPA in determining the date of dissolution,
(2) how the definition of dissolution confused cause
and effect and how the drafters of the RUPA acknowl-
edged this confusion, and (3) that ‘‘dissociation’’ was
meant to supplant dissolution, I now turn to case law
interpreting the date of dissociation under the RUPA.
No court has squarely addressed a challenge to the
date of dissociation under the RUPA based on the effect
of an appellate stay. Nevertheless, case law interpreting
the RUPA indicates that the same principles that guided
courts in determining the date of dissolution under the
UPA—that the conduct or circumstances giving rise to
the grounds for dissolution controls the date of dissolu-
tion—persevere in determining the date of dissociation
under the RUPA. That dissociation is analogous to dis-
solution—as this court previously determined in Bren-
nan v. Brennan Associates, supra, 293 Conn. 83–84—
compels this court to again look to dissolution case
law for guidance in determining the date of dissociation
by judicial determination under the RUPA. The official
comments to the RUPA explain that ‘‘[t]he phrase ‘judi-
cial determination’ is intended to include an arbitration
award, as well as any final court order or decree’’;
Rev. Unif. Partnership Act of 1997, § 601, comment (6),
supra, 6 U.L.A. (Pt. 1) 166; concisely reaffirming prior,
well established case law interpreting ‘‘dissolution by
decree of court’’ under the UPA. See also R. Hillman
et al., supra, § 601, author’s comment (6) (e) (‘‘Because
judicial expulsion is a response to prior conduct or
circumstances affecting a partner, an issue may arise
concerning the effective date of the dissociation of an
expelled partner. Nothing in [the RUPA] reveals an
intent to change prior case law, which suggests flexi-
bility to fix a date of separation to suit the circum-
stances of a given case. Accordingly, the effective date
of dissociation by judicial expulsion may be the date
of conduct or circumstances giving rise to the decree,
the date of the petition for judicial relief, or the date
of the decree itself. Normally, however, the date of the
decree should mark the date of dissociation.’’ [Empha-
sis added; footnote omitted.]). ‘‘The only significant dif-
ference between the approaches of [the UPA and the
RUPA] is that, under [the] RUPA, a partnership does
not necessarily ‘dissolve’ as a result of a partner’s disso-
ciation.’’ L. Ribstein, ‘‘The Revised Uniform Partnership
Act: Not Ready for Prime Time,’’ 49 Bus. Law. 45, 62
(1993).
The determination that dissociation is analogous to
dissolution also perseveres when I examine how the
RUPA values an outgoing partner’s partnership interest,
whether the partnership continues despite dissociation
or the partnership dissolves and liquidates. ‘‘The basic
policy judgment is that the departing partner should
get the same amount through the buyout that he or she
would get if the business were wound up. Theoretically,
the amount paid to the dissociating partner should be
the same whether there is a buyout by the continuing
partnership or a liquidation of the business.’’ D.
Weidner & J. Larson, supra, 49 Bus. Law. 11–12. Just
as the conduct or circumstances of the parties informed
the relevant date of dissolution under the UPA, the
‘‘ ‘moment of the event causing cessation’ ’’ informs the
relevant date of dissociation in determining the price
of a partner’s interest during a buyout under the RUPA.
D. Weidner, ‘‘The Revised Uniform Partnership Act Mid-
stream: Major Policy Decisions,’’ 21 U. Tol. L. Rev. 825,
840 (1990); see also In re Woskob, supra, 305 F.3d 177;
Vangel v. Vangel, supra, 116 Cal. App. 2d 626; Edwards
v. Edwards, supra, 122 Idaho 968; 68 C.J.S., supra, p. 723.
Case law interpreting dissociation under the RUPA
follows the same logic, policy rationales, and reasoning
inherent in partnership law as does case law interpre-
ting dissolution under the UPA. Just like the court in
In re Woskob, the court in Fotouhi v. Mansdorf, 427
B.R. 798, 803 (Bankr. N.D. Cal. 2010) also found, years
after the fact, that a partner had been dissociated ipso
facto upon his bankruptcy; accordingly, it valued the
dissociated partner’s partnership interest under the
RUPA as of the date he filed for bankruptcy, even
though the dissociated partner ‘‘chose to continue
working at the firm even though he was technically
dissociated, and should have been bought out.’’ The
court noted that ‘‘[t]he confounding factor is that even
though [the dissociated partner] became a dissociated
partner by operation of law, he continued conducting
business, even though he no longer had the right to
do so. The [Bankruptcy Court] correctly identified this
problem—it characterized [the dissociated partner] as
dissociated as a matter of law, but not as a matter of
fact. The [partnership] did not treat [the dissociated
partner] as dissociated, and it did not buy out his inter-
est as required by [the RUPA]. As the record clearly
reflects, the court appropriately found that [the dissoci-
ated partner] became dissociated when he filed his
bankruptcy petition. The court acknowledged that [the
dissociated partner] was dissociated, but also found
that the fact that he kept on working and being paid
as if he were still a partner complicated matters. This
recognition is not, as [a]ppellants would have us believe,
a failure to treat him as dissociated. It is merely a recog-
nition of the fact that he was dissociated in law, but
still a de facto partner in fact.’’ Fotouhi v. Mansdorf,
supra, 802. Thus, like in In re Woskob, postdissociation
participation in partnership affairs does not alter the
fact of dissociation.
Courts interpreting the RUPA must also be guided
by findings of fact with respect to the parties’ conduct
or circumstances that give rise to dissociation, just as
courts interpreting the UPA have done so with respect
to dissolution. Compare Graham v. Dietze, supra, 2010
WL 1600562, *5–6 (trial court improperly set date of
dissolution as date before action brought because par-
ties’ conduct had not ipso facto amounted to dissolution
and parties had not sought judicial dissolution as of
that date), Kruse v. Vollmar, supra, 85 Ohio App. 3d
199 (trial court entitled to find earlier date of dissolution
than date judgment is rendered if it makes factual find-
ings that establish dissolution as matter of law at earlier
date), with Robertson v. Jacobs Cattle Co., 285 Neb. 859,
874–75, 830 N.W.2d 191 (2013) (Valuation of dissociated
partner’s share under RUPA as of ‘‘date of dissociation’’
clearly ‘‘refers to the date of the event which resulted
in the dissociation’’ and because ‘‘the dissociation
occurred as a result of expulsion by judicial determina-
tion . . . [the dissociated partners] were not dissoci-
ated from the partnership until the [D]istrict [C]ourt
determined that they had engaged in conduct described
in [§ 601 of the RUPA]’’).
Setting the ‘‘date of dissociation’’ as the date of the
conduct or circumstances that cause dissociation
remains correct notwithstanding postdissociation fluc-
tuations in the value of the partnership. ‘‘During the
period between dissociation and the purchase of the
dissociated partner’s interest, the dissociated partner
is essentially a creditor of the partnership. The purchase
price of the dissociated partner’s interest is established
as of the date of dissociation, it does not reflect post
dissociation events in the life of the partnership.’’ R.
Hillman et al., supra, § 603, author’s comment (6); see
King v. Evans, supra, 791 S.W.2d 536 (UPA places ‘‘risks
of continuation of the farming business after dissolu-
tion, including the risks of land depreciation in a falling
real estate market [on the] continuing partner’’); accord
Robertson v. Jacobs Cattle Co., supra, 285 Neb. 874–75
(The court refused to find the date of dissociation to be
earlier than the date the trial court rendered judgment of
dissociation by judicial determination even though ‘‘the
appreciation of the land owned by the partnership,
[would make] using the earlier date to calculate the
partnership’s assets . . . result in [a] substantially
lower buyout price’’ because ‘‘[c]learly the phrase ‘date
of dissociation’ as used in [§ 701 of the RUPA] refers
to the date of the event which resulted in the dissocia-
tion. The events which may result in dissociation are
listed in [§ 601 of the RUPA]. Some of these, such as
a partner’s withdrawal or expulsion pursuant to the
partnership agreement, occur without any judicial inter-
vention. But in this case, the dissociation occurred as
a result of expulsion by judicial determination . . . .
[The] [a]ppellants were not dissociated from the part-
nership until the [D]istrict [C]ourt determined that they
had engaged in conduct described in [§ 601 of the
RUPA].’’ [Footnotes omitted.]).
D
With these principles in mind, I now turn to the pres-
ent case. The defendants claim, and the majority agrees,
that the date of dissociation for purposes of valuing the
plaintiff’s partnership interest pursuant to § 34-362 (b)
should be informed by § 34-357 instead of § 34-355.16
They claim that the date of dissociation should follow
this court’s 2009 decision in Brennan I because only
then did the plaintiff experience the effect of dissocia-
tion—termination of his ‘‘right to participate in the man-
agement and conduct of the partnership business
. . . .’’ General Statutes § 34-357 (b) (1). By ending the
appellate stay of the 2006 judgment of dissociation,
this court’s disposition of the parties’ appeals ‘‘finally
permitted the defendant partners to expel [the plaintiff]
from the partnership.’’ In light of the fact that the plain-
tiff received distributions and participated in partner-
ship affairs until 2009, the defendants claim that ‘‘if the
partner has not lost his right to participate in manage-
ment of the partnership, he cannot be said to be dissoci-
ated from the partnership.’’ I respectfully disagree.
I acknowledge that the effect of the appellate stay
pursuant to Practice Book § 61-11 (a) and the subse-
quent participation of the plaintiff in partnership affairs
‘‘complicated matters,’’ using the words of the court in
Fotouhi v. Mansdorf, supra, 427 B.R. 802. Just as the
dissociated partner in Fotouhi continued working post-
dissociation; id., 803; the plaintiff in the present case
also continued working postdissociation. The plaintiff
in the present case was dissociated as a matter of law,
but not as a matter of fact, even though he had no
technical right to participate in partnership manage-
ment pursuant to § 34-357 (b) (1). Adopting the defen-
dants’ interpretation of ‘‘dissociation’’ as the date a
partner in fact ceases to participate in the management
and conduct of the partnership, instead of the date the
trial court factually determines that the partner must
be dissociated, either as of the date of the judgment of
dissociation or at a prior date, however, would confuse
cause and effect. See UPA Revision Subcommittee of
the Committee on Partnerships and Unincorporated
Business Organizations, supra, 43 Bus. Law. 161 (noting
that definition of dissolution, for which dissociation
was later substituted, ‘‘confuses the causes and effects’’
of dissolution); see also J. Crane & A. Bromberg, supra,
§ 78, p. 417 and n.5. The true cause of the plaintiff’s
dissociation was the trial court’s finding that an event
causing the partner’s dissociation had occurred, specifi-
cally, the trial court’s finding that the plaintiff had
‘‘engaged in conduct relating to the partnership busi-
ness which makes it not reasonably practicable to carry
on the business in partnership with the partner . . . .’’
General Statutes § 34-355 (5) (C). The plaintiff’s postdis-
sociation conduct—participating in partnership affairs
and receiving distributions despite technical dissocia-
tion—is not itself a cause of dissociation listed in § 34-
355. See Rev. Unif. Partnership Act of 1997, § 601, com-
ment (1), supra, 6 U.L.A. (Pt. 1) 164 (‘‘[§] 601 enumerates
all of the events that cause a partner’s dissociation’’
[emphasis added]).17 ‘‘[The] list of the events that cause
dissociation [in the RUPA] answers the policy question
of whether enough has happened to trigger the contrac-
tion of a partner’s association with the business.’’ D.
Weidner & J. Larson, supra, 49 Bus. Law. 7. As of the
date of the Brennan I trial court’s decision, all of the
conduct and circumstances relevant to the plaintiff’s
dissociation had already occurred: enough had hap-
pened to trigger the departure of the plaintiff from the
partnership. No subsequent conduct could alter that
fact, duly found by the trial court in Brennan I, nor
could any subsequent conduct during the pendency of
the appeal even be considered on appeal, as it would
not have been part of the appellate record.18
In the present case, though the plaintiff felt the effect
of dissociation—termination of management rights and
receipt of distributions—in 2009, I agree with the trial
court that the cause of dissociation—findings of fact
establishing grounds for dissociation pursuant to § 34-
355 (5) (C)—occurred in 2006 and, therefore, that the
plaintiff was dissociated in 2006. It is well established
that the effects ‘‘of the partner’s dissociation do not all
occur at the same time. Thus, it is more useful to think
of a dissociated partner as a partner for some purposes,
but as a former partner for others.’’ Rev. Unif. Partner-
ship Act of 1997, § 601, comment (1), supra, 6 U.L.A.
(Pt. 1) 164; see D. Weidner, ‘‘Three Policy Decisions
Animate Revision of Uniform Partnership Act,’’ supra,
46 Bus. Law. 447 (‘‘[I]t is misleading to say that [expelled
partners’] status as partners has ‘ceased.’ . . . It may
take time to ‘close the books’ on a partner, whether
she is paid the value of her interest through a business
liquidation or a buyout.’’). The RUPA recognizes the
complication that a partner might not necessarily cease
to participate in partnership affairs despite dissociation
and, accordingly, ‘‘rejects . . . [the idea that dissocia-
tion is] a single moment when one ‘ceases’ to be a
partner—disengagement from the partnership relation-
ship is a process that takes time to accomplish.’’ (Foot-
note omitted.) D. Weidner & J. Larson, supra, 49 Bus.
Law. 7; cf. footnote 14 of this concurring and dis-
senting opinion.19
Disengagement of the plaintiff from the partnership
took time because both parties appealed the trial court’s
decision in Brennan I that dissociated the plaintiff.
Though the appellate stay set forth in Practice Book
§ 61-11 (a) caused the parties to maintain the status quo
of partnership distributions and management authority
during the pendency of the appeal, the plaintiff had
already been dissociated by the judgment of the trial
court in Brennan I.20 See Rev. Unif. Partnership Act of
1997, § 601, comment (1), supra, 6 U.L.A. (Pt. 1) 164
(‘‘[T]he consequences of the partner’s dissociation do
not occur at the same time. Thus, it is more useful to
think of a dissociated partner as a partner for some
purposes, but as a former partner for others.’’).
The drafters of the RUPA explicitly stated that ‘‘disso-
ciation’’ was meant to supplant ‘‘dissolution’’ and that
‘‘dissolution’’ now had a new meaning. Id. (‘‘An entirely
new concept, ‘dissociation,’ is used in lieu of the UPA
term ‘dissolution’ . . . . ‘Dissolution’ is retained but
with a different meaning.’’).
There can be no dispute that ‘‘dissolution’’ under the
UPA, by virtue of its once confusing definition, had
occupied two roles. See part I B of this concurring and
dissenting opinion (discussing cause and effect); 2 A.
Bromberg & L. Ribstein, Bromberg and Ribstein on
Partnership, supra, p. 7:6. The first role was its role in
defining the cause of the change in the partnership, i.e.,
death, bankruptcy, misconduct of a partner. The second
role was its role in defining the effects of the change
in the partnership, i.e., winding up and termination.
For dissolution’s first role, defining the cause, the
drafters of the RUPA decided to replace the word ‘‘dis-
solution’’ with the word ‘‘dissociation,’’ ‘‘answer[ing]
the policy question of whether enough has happened
to trigger the contraction of a partner’s association with
the business.’’ D. Weidner & J. Larson, supra, 49 Bus.
Law. 7. If enough had happened—if dissociation had
been caused—the partnership would thereafter choose
between one of two paths. On the first path, after disso-
ciation of a partner for misconduct, the business could
continue and the dissociating partner could be bought
out. On the second path, after dissociation of a partner
for misconduct, the business could treat such partner’s
dissociation as a dissolution of the partnership and
thereafter wind up and terminate. On both paths, at
least in the context of a change in the partnership due
to a partner’s misconduct, there must first have been
a dissociation of the partner.
For dissolution’s second role, defining the effect of
a change in the partnership, i.e., winding up and termi-
nation, the drafters of the RUPA decided to retain the
word ‘‘dissolution.’’ Dissolution was, thus, repurposed
to describe the second path, the result or effect of the
dissociation that meant that the partnership would wind
up and terminate. See Rev. Unif. Partnership Act of
1997, § 701, supra, 6 U.L.A. (Pt. 1) 175 (‘‘[i]f a partner
is dissociated from a partnership without resulting in
a dissolution and winding up of the partnership business
under [§] 801’’ [emphasis added]). This interpretation
is corroborated by the commentary’s description of dis-
sociation as a ‘‘ ‘switching’ provision’’ and its statement
that ‘‘after a partner’s dissociation, the partner’s interest
in the partnership must be purchased pursuant to the
buyout rules in [§ 701] unless there is a dissolution
and winding up of the partnership business under
[§ 801]. Thus, a partner’s dissociation for misconduct
will always result in either a buyout of the dissociated
partner’s interest or a dissolution and winding up of
the business.’’ (Emphasis added.) Rev. Unif. Partnership
Act of 1997, § 603, comment (1), supra, 6 U.L.A. (Pt. 1)
172. ‘‘Under [the] RUPA, not every partner dissociation
causes a dissolution of the partnership. Only certain
[dissociations] trigger a dissolution. The basic rule is
that a partnership is dissolved, and its business must
be wound up, only upon the occurrence of one the
events listed in [§] 801. All other dissociations result in
a buyout of the partner’s interest under [§ 701] and a
continuation of the partnership entity and business by
the remaining partners.’’ Rev. Unif. Partnership Act of
1997, § 801, comment (1), supra, 6 U.L.A. (Pt. 1) 190.
Automatic stays existed prior to the adoption of the
RUPA and, despite their existence, the cases cited nev-
ertheless yielded the same rule of law that the proper
date of dissolution was the date of judgment of dissolu-
tion and not the date a subsequent appeal was resolved.
See, e.g., In re Woskob, supra, 305 F.3d 177; Fotouhi v.
Mansdorf, supra, 427 B.R. 802; In re Crutcher, supra,
209 B.R. 352; Estate of Webster v. Thomas, supra, 2013
WL 164041; Anastos v. Stable, supra, 443 Mass. 146;
Fisher v. Fisher, supra, 349 Mass. 675.21 Apart from the
majority’s claim that the stay changes the result, the
majority has offered no law to that effect nor explained
how this result would alter our jurisprudence regarding
appellate stays in other cases.
My own review of our jurisprudence interpreting
appellate stays indicates that the date of dissociation
does not change even if a judgment of dissociation
is stayed pending appeal. I begin by noting that the
appropriate time to challenge the effect of the automatic
stay on the plaintiff’s participation in partnership affairs
would have been during the appeal in Brennan I. Prac-
tice Book § 61-14 provides in relevant part that ‘‘[t]he
sole remedy of any party desiring the court to review
an order concerning a stay of execution shall be by
motion for review under Section 66-6. . . .’’ Practice
Book § 66-6 provides in relevant part that ‘‘[t]he court
may, on written motion for review stating the grounds
for the relief sought, modify or vacate any order made
by the trial court . . . concerning a stay of execution
in a case on appeal . . . . Motions for review shall be
filed within ten days from the issuance of notice of the
order sought to be reviewed. . . .’’ Cf. In re Melody L.,
290 Conn. 131, 172–73, 962 A.2d 81 (2009) (‘‘If the motion
[for relief from stay] is denied, a [party] may seek to
have that denial reviewed by filing a motion for review
pursuant to Practice Book § 66-6, as the [parties] did
in this case. Indeed, it appears that the [parties’] appeal
from their motion for [relief from a stay] pending appeal
is merely an attempt for further review of the same
issues decided in the motion for review.’’ [Footnote
omitted.]).
If the defendants had truly questioned the effect of
the appellate stay on the judgment of dissociation as
it related to the plaintiff’s continued participation in
the partnership, they should have included this claim
in Brennan I. The fact of the matter is that the defen-
dants did not question the propriety of the stay in the
appellate system until it had an economic incentive to
do so, when real estate prices fell years later and when
it realized that the date of dissociation could impact
the valuation of the partnership under the RUPA. In
fact, in 2006, the defendants acknowledged that the
plaintiff would have management rights during the pen-
dency of the appeal, that the defendants might have to
pay interest during that time period; see footnote 13 of
this concurring and dissenting opinion; and, yet, that
‘‘the [trial] court [had] granted the defendants’ remedy
of dissociation’’ as of September 2006. Notwithstanding
these acknowledgments, the defendants asked the trial
court to set a valuation hearing date within thirty days of
its posttrial brief of issues to be resolved. We normally
would decline to review the defendants’ challenge to
the effect of the appellate stay years after the fact and
merely because real estate values did not go in the
direction the defendants had hoped. Cf. Sargent v.
Smith, 272 Conn. 722, 733, 865 A.2d 1129 (2005) (deny-
ing plaintiff’s claim in second appeal that he would have
been entitled to money collected by receiver during
pendency of first appeal, and noting that ‘‘no equitable
considerations warrant a contrary result’’ because same
parties were involved in both actions, that plaintiff
could have alerted trial court in first action to his claim,
and that plaintiff could have taken appeal challenging
actions of receiver when actions actually occurred).
I next note that the present case is not about the
plaintiff’s participation in partnership affairs: that was
Brennan I. The present case is about the valuation of
the plaintiff’s partnership interest. Partnership law is
not the only area of law in which a judgment effects a
change in the parties’ relationship and sets a date on
which to value the parties’ assets. In divorce actions,
for example, the judgment of divorce changes the rela-
tionship of the parties and sets the date on which to
value the parties’ assets. Although a party to a divorce
may appeal the judgment of dissolution, the appeal of
that judgment—that both judicially separates the par-
ties and sets the date on which to value the marital
assets—has no effect on the date of valuation of the
marital assets. In Sunbury v. Sunbury, 216 Conn. 673,
676–77, 583 A.2d 636 (1990), this court concluded that
property distributed by way of equitable distribution
must be valued as of the date of dissolution of the
marriage, not as of the date of remand after appeal of
an aspect of the judgment of dissolution. This was true
notwithstanding that the marital assets valued as of the
date of dissolution, and in the sole possession of one
party, had substantially appreciated during the pen-
dency of the appeal. Id., 677. We noted that ‘‘it becomes
important to fix the parties’ circumstances at some
point in time to serve as a bench mark’’ and that ‘‘[s]uch
a construction of our dissolution statutes also comports
with well recognized principles regarding the finality
of actions. ‘It is not in the public interest . . . to con-
done a procedure which would permit a plaintiff to
litigate the same question over and over again, encum-
bering the mechanisms our society has established to
resolve disputes . . . . Litigation must end at some
point.’ ’’ Id., quoting Corey v. Avco-Lycoming Division,
163 Conn. 309, 321, 307 A.2d 155 (1972), cert. denied,
409 U.S. 1116, 93 S. Ct. 903, 34 L. Ed. 2d 699 (1973).
We also commented on a trial court’s ability, or lack
thereof, to do justice to the parties by piecemeal consid-
eration of discrete aspects of the financial relationship
between the parties, noting that attempting to do so
years after the fact ‘‘could no more fashion just and
equitable financial orders . . . than it could reassem-
ble a broken vase with only one piece.’’ (Internal quota-
tion marks omitted.) Sunbury v. Sunbruy, supra, 216
Conn. 675, quoting Sunbury v. Sunbury, 210 Conn. 170,
173, 553 A.2d 612 (1989).
The parties’ appeal in Brennan I did not challenge
the notion that the parties should be prevented from
working together; indeed, the plaintiff stated in his brief
that he ‘‘has never disputed the fact that there was a
great deal of dissension between [the] defendants and
[the] plaintiff.’’ Instead, Brennan I was merely about
the appropriateness of the remedy: the plaintiff claimed
that, instead of his being dissociated from the partner-
ship, the partnership should have been dissolved, or
that it should have been the defendants’ being forced
to withdraw from the partnership. Specifically, the
plaintiff claimed in his brief that ‘‘[e]ven if [the] defen-
dants’ newly discovered attitude towards the plaintiff’s
twenty year old conduct were genuine, it is their change
of attitude, not [the] plaintiff’s conduct, that makes it
reasonably impracticable to carry on the partnership.
In that case, perhaps withdrawal of the objecting part-
ners, or dissolution of the partnership might be appro-
priate; but dissociation of [the] plaintiff is not.’’
[Emphasis in original.] Like in Sunbury, the parties
merely appealed an aspect of the judgment of dissocia-
tion; they never desired to prevent their separation.
Now, after eight years and the benefit of hindsight, the
defendants challenge the date on which to value the
plaintiff’s partnership interest on the basis of considera-
tions that would have been more properly raised in
Brennan I. I would not condone the defendants’
attempts to strategically litigate an issue that they failed
to raise at the proper time. The ultimate result of the
majority’s decision is that the party bringing the appeal
can gauge market conditions while the appeal is pend-
ing. If the market goes up, thereby increasing the appel-
lant’s share, the appeal may be pursued. However, if
the market shows signs of decreasing the appellant’s
share, the appellant may withdraw his appeal and argue
for a valuation date as of the trial court’s date of judg-
ment. A party should not be allowed to manipulate the
court system in this manner.
I also note that, to the extent a judgment of dissocia-
tion can be characterized as a form of injunctive relief
and disregarding the fact that the defendants could have
raised this claim in Brennan I, the automatic stay of
Practice Book § 61-11 (a) would be inapplicable. For
the dissociated partner, the judgment acts as a restraint
on further conducting business as a partner. The ques-
tion then becomes whether the injunctive relief inherent
to a judgment of dissociation is subject to the auto-
matic stay.
In Tomasso Bros., Inc. v. October Twenty-Four, Inc.,
230 Conn. 641, 652–58, 646 A.2d 133 (1994), this court
explored what types of injunctions are automatically
stayed by Practice Book (1994) § 4046, the predecessor
to and functional equivalent of Practice Book § 61-11.
This court traced the history of the automatic stay provi-
sion, noting that, generally, prohibitory injunctions,
which restrain a party from commission of an act, were
not automatically stayed pending appeal, while manda-
tory injunctions, which command a party to perform
an act, were. Id., 652–54. ‘‘The primary purpose of these
rules was to preserve the status quo during the pen-
dency of the appeal. . . . Under this view, therefore,
in the case of [not automatically staying] a prohibitory
injunction, the enjoined party was prevented from doing
irreparable harm to the party that successfully sought
the injunction; in the case of [automatically staying]
a mandatory injunction, the enjoined party was not
required to assume a burden until the equities had been
conclusively established.’’ (Citation omitted.) Id., 653.
Our case law interpreting prior versions of our rules
of practice confirmed that stays of prohibitory injunc-
tions, as well as those of mandatory injunctions, were
not automatic on appeal. Id., 654. We concluded that
prohibitory injunctions were not automatically stayed
and that ‘‘the enjoined party ought to be required to
request the trial court to rule on a stay pending appeal,
and that absent such a request, the injunction ought to
be considered in effect. . . . [D]ifferent portions of the
same injunction may be treated differently for some
purposes . . . the fact that the same injunction may
have both prohibitory and mandatory aspects counsels
that both aspects be treated similarly for purposes of
whether the injunction is automatically stayed pending
appeal.’’ (Citation omitted.) Id., 657–58. The continuing
vitality of this rule, that prohibitory injunctions are not
automatically stayed on appeal, was reaffirmed in Sulli-
van v. McDonald, 281 Conn. 122, 126 n.2, 913 A.2d 403
(2007); see also 43A C.J.S. 464, Injunctions § 397 (2004)
(‘‘[i]t is within the discretion of the court to stay the
operation of the decree [granting an injunction] pending
an appeal therefrom, until the hearing of the appeal on
the merits, but taking an appeal does not of itself oper-
ate as a stay’’ [footnotes omitted]).
Pursuant to Tomasso Bros., Inc., the injunctive
aspect of the judgment of dissociation in the present
case—enjoining, by prohibition, the plaintiff from con-
tinuing to be a partner—was not automatically stayed
pending appeal notwithstanding the provisions of Prac-
tice Book § 61-11. Accordingly, because the prohibitory
injunction restraining the plaintiff from acting as a part-
ner was not stayed, all aspects of the dissociation
became effective upon entry of the judgment of dissoci-
ation. Cf. Cologne v. Westfarms Associates, 197 Conn.
141, 148, 496 A.2d 476 (1985) (affirming judgment of
contempt for party’s violation of injunction during pen-
dency of appeal, notwithstanding that injunction was
reversed at conclusion of such appeal, because ‘‘court
orders must be obeyed; there is no privilege to disobey
a court’s order because the alleged contemnor believes
that it is invalid’’). Judgments have full vitality during
the pendency of an appeal, even if the appeal results
in reversal of the judgment. This is especially true if
the case is not one ‘‘ ‘where the injunction was transpar-
ently invalid or had only a frivolous pretense to valid-
ity.’ ’’ Id., 147, quoting Walker v. Birmingham, 388 U.S.
307, 315, 87 S. Ct. 1824, 18 L. Ed. 2d 1210, reh. denied,
389 U.S. 894, 88 S. Ct. 12, 19 L. Ed. 2d 202 (1967).
In the present case, however, the parties assumed
the applicability of an automatic stay under Practice
Book § 61-11, which, in effect, reinstated the plaintiff as
a partner, and then requested relief from the automatic
stay, which would have again enjoined the plaintiff from
being a partner. The trial court in Brennan I denied
the defendants’ request for relief from the automatic
stay under Practice Book § 61-11. Arguably, if the par-
ties treated the plaintiff as a partner during the pen-
dency of the appeal in Brennan I because they believed
the injunctive aspects of the judgment of dissociation
had been stayed, this court should accordingly treat
the plaintiff as having been a partner during that time
and set the date of dissociation as the date of resolution
of the appeal in Brennan I. Whether the parties, or
the trial court in Brennan I, considered the injunctive
aspects of the judgment of dissociation to be stayed
pending appeal is not controlling on this court, however,
especially in light of their failure to seek review pursu-
ant to Practice Book § 66-6 and their failure to even
raise this argument. The trial court in the present case
said it all when it aptly noted that ‘‘the parties were
unclear as to the effect of the appellate stay on the
plaintiff’s involvement with the partnership [and so]
the plaintiff remained involved in its affairs during the
pendency of the appeal.’’ We should not entertain the
defendants’ post hoc attempt to engineer the best finan-
cial scenario for its mandatory buyout of the plaintiff,
years after the fact.
The majority’s interpretation encourages appeals and
detracts from this court’s policy of conserving our
scarce judicial resources. It allows for the possibility
of either party’s benefiting from postjudgment market
conditions and, thus, creates incentives to lodge appeals
and gamble on fluctuating market conditions where
such incentives did not exist previously. See Scheckter
v. Rubin, supra, 349 Pa. 104 (‘‘a party whose contention
is rejected [on appeal] should gain nothing by the lapse
of time between the dates of the nisi and final decrees’’).
Additionally, the majority’s interpretation precludes
settlement because, after an appeal has been filed, the
date of dissociation would change to an unknown future
date and, therefore, the parties could not possibly nego-
tiate or settle because any appraisals they had would
be meaningless. The majority’s interpretation runs con-
trary to this court’s declaration that ‘‘it becomes
important to fix the parties’ circumstances at some
point in time to serve as a bench mark’’ and that we
encourage ‘‘well recognized principles regarding the
finality of actions. It is not in the public interest . . .
to condone a procedure which would permit a plaintiff
to litigate the same question over and over again,
encumbering the mechanisms our society has estab-
lished to resolve disputes . . . . Litigation must end at
some point.’’ (Internal quotation marks omitted.) Sun-
bury v. Sunbury, supra, 216 Conn. 677.
To reach its interpretation of the date of dissociation,
the majority places emphasis on the word ‘‘expulsion’’
in construing ‘‘expulsion by judicial determination
. . . .’’ (Internal quotation marks omitted.) Specifically,
the majority concludes that ‘‘[t]he language of § 34-355
(5) (C) . . . indicates that . . . dissociation under
that provision occurs not merely upon a judicial deter-
mination that the partner has engaged in improper con-
duct . . . but, rather, upon the partner’s ‘expulsion by
judicial determination’ that such grounds exist.’’
(Emphasis omitted.) The majority thus appears to
require two judicial determinations: first, a judicial
determination that cause exists to expel the partner
from the partnership and, second, a judicial determina-
tion that the dissociating partner ceased his or her par-
ticipation in the partnership after having found cause
to expel the partner in the first instance. Thus, the
majority would require expulsion in and of itself as a
basis of dissociation. However, the majority’s require-
ment that a partner be de facto expelled from a partner-
ship before he or she can be dissociated ignores the
plain language of § 34-357, which provides for cessation
of management rights upon dissociation, not as form-
ing the basis of dissociation. In essence, the majority
conflates cause and effect, which the drafters of the
RUPA attempted to prevent. See part I B of this concur-
ring and dissenting opinion; R. Hillman et al., supra,
§ 601, author’s comment (6) (e) (‘‘judicial expulsion is
a response to prior conduct or circumstances affecting
a partner’’ [emphasis added]).
In support of its emphasis on the word ‘‘expulsion,’’
the majority states that ‘‘[§] 34-355 (7) (C) is particularly
illuminating [in highlighting the importance of the term
expulsion in § 34-355 (5)], given that dissociation under
that subparagraph, like under § 34-355 (5), involves a
judicial determination,’’ and yet § 34-355 (7) (C) does
not use the term ‘‘expulsion.’’ The majority’s reference
to § 34-355 (7) (C) does not advance the case for ‘‘expul-
sion’’ being the operative term, however, because § 34-
355 (7) discusses events of physical or mental incapac-
ity, such as ‘‘[t]he partner’s death’’ and ‘‘the appointment
of a guardian or general conservator . . . .’’ The term
‘‘expulsion’’ used in subdivisions (3), (4), and (5) of
§ 34-355 clearly refers to some wrongful conduct on
the part of the partner, while subdivision (7) refers to
incapacity through no fault of the partner.
The case law discussed previously in this opinion
interprets the date of dissolution under the UPA with
reference to the causation role dissolution had played,
not the effect role dissolution had played. The courts
cited have uniformly held that the causation type disso-
lution was the relevant moment to define the date of
dissolution. Therefore, it has been noted that, ‘‘[n]othing
in [the RUPA] reveals an intent to change prior case law
[of determining the date of dissolution], which suggests
flexibility to fix a date of separation to suit the circum-
stances of a given case. Accordingly, the effective date
of dissociation by judicial expulsion may be the date
of conduct or circumstances giving rise to the decree,
the date of the petition for judicial relief, or the date
of the decree itself. Normally, however, the date of the
decree should mark the date of dissociation.’’ (Footnote
omitted.) R. Hillman et al., supra, § 601, author’s com-
ment (6) (e).
I would conclude that the trial court appropriately
valued the plaintiff’s partnership interest as of 2006,
the date of dissociation, rather than the date the plaintiff
ceased to participate in partnership affairs, despite
postdissociation fluctuations in value.22 Setting this date
comports with principles of partnership law that set
the ‘‘value [of the departing partner’s interest] as of
the date of dissolution rather than the later time of
settlement, which means the outgoing interest is pro-
tected, as against the other partners, from post-dissolu-
tion losses and does not get the benefit of post-
dissolution appreciation.’’ (Footnotes omitted.) 2 A.
Bromberg & L. Ribstein, Bromberg and Ribstein on
Partnership, supra, pp. 7:186–7:187; see R. Hillman et
al., supra, § 603, author’s comment (6) (‘‘During the
period between dissociation and the purchase of the
dissociated partner’s interest, the dissociated partner
is essentially a creditor of the partnership. The purchase
price of the dissociated partner’s interest is established
as of the date of dissociation [and] it does not reflect
post dissociation events in the life of the partnership.’’
[Emphasis added.]); see also Oliker v. Gershunoff,
supra, 195 Cal. App. 3d 1304 (‘‘[The withdrawing part-
ner’s interest] was fixed as of the date of dissolution.
By a parity of reasoning, the withdrawing partner
should not be entitled to share in the upside potential.
Otherwise, a withdrawing partner would have no moti-
vation to settle his partnership accounts but instead
could delay such matter, gambling on the chance that
the partnership’s assets would rise in value in the
interim, and knowing that, in any event, his value in
the interest in the partnership determined as of the date
of dissolution could not be reduced by any subse-
quent events.’’).
Additionally, the defendants’ arguments to value the
plaintiff’s partnership interest as of 2009 belie the posi-
tions they took in Brennan I, in which they wished
to value the plaintiff’s partnership interest as early as
possible and while the appeal was pending. See Bren-
nan v. Brennan Associates, supra, 293 Conn. 64. After
this court issued its opinion in Brennan I, the defen-
dants sent an offer to purchase the plaintiff’s interest
in the partnership as of ‘‘the date of [the plaintiff’s]
dissociation (September 2006).’’23 Only after the passage
of time, and subsequent decline in the real estate mar-
ket, did the defendants begin to claim that the date of
dissociation was a date other than the date of the trial
court decision. See R. Hillman, ‘‘RUPA and Former Part-
ners: Cutting the Gordian Knot with Continuing Partner-
ship Entities,’’ 58 Law & Contemp. Probs. 7, 16 (Spring
1995) (‘‘[a]mbiguity concerning withdrawal may give
the dissociating partner, or the continuing partners for
that matter, an opportunity to define ex post the most
advantageous date of withdrawal’’); see also Scheckter
v. Rubin, supra, 349 Pa. 104 (‘‘a party whose contention
is rejected [on appeal] should gain nothing by the lapse
of time between the dates of the nisi and final decrees’’).
I would, accordingly, reject the majority’s interpreta-
tion of the RUPA and, instead, reaffirm well established
principles of partnership law, holding the date of disso-
ciation to be the date the trial court rendered judgment
of dissociation, or a date prior to when the trial court
renders judgment of dissociation, if the parties’ conduct
as found by the trial court—the cause of the dissociation
itself—compels an earlier finding.
II
ATTORNEY’S FEES
As to part III of the majority’s opinion, in my view,
aside from some vague generalities, the defendants
offered no proof that the partnership should have
treated their attorney’s fees as a liability of the partner-
ship. Therefore, I respectfully dissent from the majority
opinion regarding attorney’s fees and would have
affirmed the decision of the trial court.
The partnership never treated the attorney’s fees as
a liability of the partnership. All of the tax returns and
evidence at trial support a contrary conclusion. Further,
I disagree with the majority’s characterization that the
trial court decided the issue as a matter of law under
§ 34-356 (c) or § 34-362 (c). In my view, the trial court
viewed the issue as one of causation in that the defen-
dants had not proven attorney’s fees should be treated
as a liability.
The defendants claim that the trial court improperly
failed to consider the defendants’ attorney’s fees as a
liability of the partnership when computing the value
of the plaintiff’s partnership interest. They claim that
the trial court improperly construed the partnership
agreement24 and that this construction constituted an
error of law, over which this court exercises plenary
review. See Crews v. Crews, 295 Conn. 153, 162, 989
A.2d 1060 (2010). In opposition, the plaintiff claims that,
at trial, the defendants couched their claim for attor-
ney’s fees as a claim for damages pursuant to §§ 34-
356 (c) and 34-362 (c), not as a claim that the attorney’s
fees were a liability of the partnership. The plaintiff
thus claims that this court should not disturb the trial
court’s finding that the attorney’s fees, as damages, did
not causally relate to the plaintiff’s dissociation. I agree
with the plaintiff.
Section 34-362 (b) provides a valuation formula for
the purchase of a dissociated partner’s partnership
interest, as discussed previously in this opinion. Sec-
tions 34-356 (c) and 34-362 (c) also authorize offsets to
the buyout price for any damages caused by a wrong-
fully dissociating partner—damages caused by ‘‘the
wrongful nature of the dissociation.’’ Rev. Unif. Partner-
ship Act of 1997, § 602, comment (3), supra, 6 U.L.A.
(Pt. 1) 170. Damages can include ‘‘substantial expenses
resulting from a partner’s premature withdrawal from
a term partnership, such as replacing the partner’s
expertise or obtaining new financing. The wrongfully
dissociating partner would be liable to the partnership
for those and all other expenses and damages that are
causally related to the wrongful dissociation.’’
(Emphasis added.) Rev. Unif. Partnership Act of 1997,
§ 602, comment (3), supra, 6 U.L.A. (Pt. 1) 171.
At trial in the present case, the defendants sought the
entirety of their substantial attorney’s fees as damages
pursuant to §§ 34-356 (c) and 34-362 (c). The trial court
noted that the defendants sought ‘‘costs and attorney’s
fees of all present and prior litigation between the par-
ties [as] part of the damages caused by plaintiff’s wrong-
ful dissociation.’’ The defendants’ attorney’s fees
included fees incurred during Brennan I and the pre-
sent case, as well as fees relating to the partnership’s
involvement in summary process actions it brought
against some of its tenants. In support of their position
on attorney’s fees, the defendants cited exclusively to
cases discussing the award of damages during partner-
ship breakups.
Addressing the defendants’ argument that it should
award attorney’s fees as damages, the trial court found
that ‘‘the defendants have failed to prove by a prepon-
derance of the evidence the allegations and applicability
of their first and second special defenses. There is no
evidence that the damages claimed by the defendants,
whether for attorney’s fees or otherwise, are causally
related to the wrongful dissociation.’’ In finding that
‘‘the conduct of the plaintiff did not lead to damage to
the partnership but rather simply made management
of the partnership unworkable’’ the court ‘‘decline[d]
to award attorney’s fees as an offset against the buyout
price due the plaintiff.’’
On appeal, had the defendants challenged the trial
court’s determination that the attorney’s fees did not
causally relate to the plaintiff’s wrongful dissociation,
we would have reviewed the ‘‘trial court’s determination
of causation under the clearly erroneous standard.’’
Beverly Hills Concepts, Inc. v. Schatz & Schatz, Ribi-
coff & Kotkin, 247 Conn. 48, 58, 717 A.2d 724 (1998).25
In the present case, however, the defendants do not
challenge the legal or factual bases of the trial court’s
decision on causation. The defendants instead claim
entitlement to attorney’s fees based on an entirely dif-
ferent theory: they now claim that the attorney’s fees
should have been treated as a liability of the partnership
pursuant to the partnership agreement. The plaintiff
notes that, at trial, the defendants couched their claim
for attorney’s fees as a claim for damages under the
RUPA. I agree with the plaintiff and would hold that,
based on the defendants’ theory of the case at trial, the
trial court was entitled to treat the claim for attorney’s
fees as a claim for damages pursuant to §§ 34-356 (c)
and 34-362 (c).
At trial, the defendants did not properly raise the
claim that the attorney’s fees were a liability of the
partnership; the overwhelming presentation of the
claim was that the attorney’s fees constituted damages.
The defendants’ counterclaim requested that the attor-
ney’s fees be awarded exclusively as damages for
wrongful dissociation pursuant to §§ 34-356 (c) and 34-
362 (c); they did not claim in the alternative that the
attorney’s fees were a liability of the partnership. Prior
to sending their 2010 offer letter, the defendants
engaged the partnership’s accounting firm to provide
balance sheets for the partnership over a period of
years. These balance sheets did not list the attorney’s
fees as a liability.26 The defendants’ 2010 offer letter,
prepared by the attorney for the estate of Richard Aiello,
based its valuation of the plaintiff’s partnership interest
on the defendants’ 2006 appraisal and balance sheets
that had been prepared by the partnership’s accountant;
the letter treated the attorney’s fees as damages, not
as a liability.27 At trial, the valuation experts of both the
plaintiff and the defendants neither treated nor argued
for treatment of the attorney’s fees as a liability.28 Nei-
ther party objected to the fact that both of their experts
relied on partnership books and records, as well as
partnership tax returns, all of which did not treat the
attorney’s fees as a liability.
The defendants did not offer the testimony of the
partnership’s accountant, who prepared the balance
sheets or tax returns that both parties relied upon, to
testify as to the accounting practices of the partnership.
In lieu of the accountant’s testimony, the parties instead
stipulated to the amounts of the partnership’s two liabil-
ities for the two claimed dates of dissociation; those
liabilities included only the amounts due on the mort-
gage and the tenants’ security deposits owed, and did
not include attorney’s fees.29 During his testimony, Lehn
discussed why the partnership records did not reflect
the attorney’s fees as a liability.30 Other portions of
Lehn’s testimony confirm that the parties never consid-
ered the attorney’s fees to be a liability of the partner-
ship and, indeed, that the parties would only have
considered them to be so if and when the partnership
failed to recover the fees as damages from the plaintiff.31
The defendants did suggest that the attorney’s fees
were a liability once in pretrial briefing32 and once in
posttrial briefing.33 Notwithstanding these passing refer-
ences to indemnification, the defendants cited exclu-
sively to cases discussing the award of damages during
partnership breakups. At most, the defendants’ refer-
ences to indemnification demonstrate, in their own
words, a mere ‘‘intent that the legal fees incurred in
this action be reimbursed by the partnership’’ only after
‘‘recovery of these fees from [the plaintiff] in the current
matter.’’ (Emphasis added.)
The defendants’ theory at trial evinces a choice
between two alternatives. On the one hand, the defen-
dants could have chosen to book the attorney’s fees
as a contingent liability of the partnership—contingent
because the partnership, for want of cash, had not yet
reimbursed the estate—thereby reducing the value of
the plaintiff’s partnership interest by the plaintiff’s pro-
portional share of all attorney’s fees. See footnote 36
of this concurring and dissenting opinion. On the other
hand, the defendants could have chosen to forgo book-
ing the attorney’s fees as a contingent liability in the
hopes of recovering, as damages pursuant to §§ 34-356
(c) and 34-362 (c), the cash to pay off the estate in full;
the partnership would ‘‘receive’’ the cash to pay off the
estate by offsetting the entirety of the attorney’s fees, as
damages, against the value of the plaintiff’s partnership
interest. Put another way, if the trial court calculated
the attorney’s fees as a liability, those fees, possibly
including attorney’s fees incurred by the plaintiff,34
would have been subtracted from the net assets of the
partnership, and charged to the plaintiff in proportion
to his partnership interest pursuant to § 34-362 (b), thus
yielding a lower value of the plaintiff’s partnership inter-
est. If the trial court awarded the attorney’s fees as
damages pursuant to §§ 34-356 (c) and 34-362 (c), the
defendants’ attorney’s fees would have been offset,
below the line, against a higher value of the plaintiff’s
partnership interest. The defendants chose the latter
theory. See footnote 30 of this concurring and dis-
senting opinion.
Scholars are familiar with the strategic choice
involved in characterization of contingent liabilities dur-
ing a valuation proceeding. See R. Hillman, ‘‘RUPA and
Former Partners: Cutting the Gordian Knot with Contin-
uing Partnership Entities,’’ supra, 58 Law & Contemp.
Probs. 22 (‘‘[i]t is in the partnership’s advantage to con-
sider contingent liabilities in arriving at its estimate of
the buyout price’’); id., 22 n.93 (‘‘[T]he partnership has
an incentive to insist that all known liabilities be taken
into account since they will reduce the buyout price.
The dissociating partner might prefer to ignore contin-
gent liabilities in favor of a higher buyout price and
take the chance of their ever materializing [or failing
to materialize]. The known liabilities rule, however,
contemplates that all contingent or uncertain liabilities
can and will be recognized in the valuation of the with-
drawing partner’s account, using estimates and proba-
bilities. . . . [T]he partnership still has the incentive
to use only the most favorable assumptions in arriving
at its estimate of the value of the dissociated partner’s
interest.’’ [Citation omitted; emphasis altered; internal
quotation marks omitted.]).
In the present case, by choosing the damages theory
of entitlement to attorney’s fees, the partnership chose
to ignore its contingent liabilities in favor of a higher
buyout price, taking the chance that the trial court
would: (1) find the plaintiff liable for damages repre-
senting the full amount of their attorney’s fees; (2) offset
the damages in full against the purchase price; and (3)
thus require the defendants to pay a much lower buyout
price to the plaintiff. In doing so, the partnership also
took the chance that the trial court would not find the
plaintiff liable for the attorney’s fees as damages, which
occurred in the present case, causing the defendants
to pay the higher buyout price and still owe the entirety
of their own attorney’s fees to the estate.
By choosing the damages claim of entitlement to
attorney’s fees, and presenting their arguments and evi-
dence accordingly, the defendants failed to sufficiently
raise their claim of entitlement to attorney’s fees as a
liability. See White v. Mazda Motor of America, Inc.,
313 Conn. 610, 631, 99 A.3d 1079 (2014) (‘‘Even if we
assume that [the defendant’s] passing suggestion actu-
ally referenced [the claim raised on appeal], it was too
little, too late, for several reasons. . . . [A]n issue must
be ‘distinctly raised’ before the trial court, not just
‘briefly suggested . . . .’ ’’). The defendants pursued
the theory on attorney’s fees—damages pursuant to
§§ 34-356 (c) and 34-362 (c)—that would have yielded
the most favorable valuation had they been successful;
the defendants would have recovered all reasonable
litigation related expenses as an offset against the value
of the plaintiff’s partnership interest. That the defen-
dants did not prevail on this theory is not reason enough
to permit the defendants to pursue, for the first time
on appeal, an entirely distinct and unpreserved theory,
which they could have presented at trial with competent
evidence. See id., 620–21 (‘‘‘[t]he requirement that
claims be raised timely and distinctly also recognizes
that counsel should not have the opportunity to surprise
an opponent by interjecting a claim when opposing
counsel is no longer in a position to present evidence
against such a claim’ ’’).35
The defendants’ damages claim of entitlement to
attorney’s fees belies the overwhelming evidence they
presented at trial, which confirms that the defendants
chose what they believed at the time to be the most
advantageous presentation of their claim.36
Absent an argument that the trial court’s determina-
tion of causation had been improper, legally or factually,
I would decline to disturb the trial court’s adjudication
of the defendants’ claim of entitlement to attorney’s
fees. On the basis of the defendants’ theory of the case
at trial, the trial court was entitled to treat the claim
for attorney’s fees as a claim for damages pursuant to
§ 34-356 (c). See Blumberg Associates Worldwide, Inc.
v. Brown & Brown of Connecticut, Inc., 311 Conn. 123,
146, 84 A.3d 840 (2014) (‘‘[i]n our adversary system . . .
in the first instance and on appeal, we follow the princi-
ple of party presentation’’ [internal quotation marks
omitted.]). The record is insufficient to review the
defendants’ claim that this court should characterize
the attorney’s fees as a liability. Accordingly, I would
affirm the trial court’s finding as to attorney’s fees.
Therefore, I respectfully concur in part II of the
majority opinion and dissent from parts I and III of the
majority opinion.
1
Alexander Aiello, Serge Mihaly, David Lehn, Peter DiNardo, Leonard
DiNardo, and Salvatore K. DiNardo are also named as defendants in the
present action. Aiello and Mihaly are partners in the partnership. Lehn, Peter
DiNardo, Leonard DiNardo, and Salvatore K. DiNardo are coadministrators
of the estate of a deceased partner, Richard Aiello. See Brennan v. Brennan
Associates, 293 Conn. 60, 63 n.1, 977 A.2d 107 (2009). I refer to these defen-
dants individually by name and, unless otherwise noted, references to the
defendants throughout this opinion include both the individual defendants
and the partnership.
2
General Statutes § 34-355 provides in relevant part: ‘‘A partner is dissoci-
ated from a partnership upon the occurrence of any of the following events:
‘‘(1) The partnership’s having notice of the partner’s express will to with-
draw . . .
‘‘(2) An event agreed to in the partnership agreement as causing the
partner’s dissociation;
‘‘(3) The partner’s expulsion pursuant to the partnership agreement;
‘‘(4) The partner’s expulsion by the unanimous vote of the other part-
ners . . .
‘‘(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; (B) the partner wilfully or persistently committed a material breach
of the partnership agreement or of a duty . . . 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;
‘‘(6) The partner’s: (A) Becoming a debtor in bankruptcy; (B) executing
an assignment for the benefit of creditors; (C) seeking, consenting to or
acquiescing in the appointment of a trustee. . . or (D) failing . . . to have
vacated or stayed the appointment of a trustee . . .
‘‘(7) In the case of a partner who is an individual: (A) The partner’s death;
(B) the appointment of a guardian or general conservator for the partner;
or (C) a judicial determination that the partner has otherwise become incapa-
ble of performing the partner’s duties under the partnership agreement;
‘‘(8) In the case of a partner that is a trust . . . distribution of the trust’s
entire transferable interest in the partnership . . .
‘‘(9) In the case of a partner that is an estate . . . distribution of the
estate’s entire transferable interest in the partnership . . . or
‘‘(10) Termination of a partner who is not an individual, partnership,
corporation, trust or estate.’’
3
Connecticut originally enacted legislation based on the UPA in 1961. See
Public Acts 1961, No. 158. This legislation was subsequently codified in
General Statutes §§ 34-39 to 34-81. In 1995, our legislature repealed these
provisions and enacted the CUPA, which mirrors the RUPA in all relevant
respects. See Public Acts 1995, No. 95-341; see also General Statutes §§ 34-
300 through 34-399.
4
The partnership agreement specifically provided that ‘‘[u]pon death or
incompetency of a partner, his or her estate or personal representative shall
succeed to such partner’s interest.’’
5
General Statutes § 34-362 provides in relevant part: ‘‘(a) If a partner is
dissociated from a partnership without resulting in a dissolution and winding
up of the partnership business under section 34-372, the partnership shall
cause the dissociated partner’s interest in the partnership to be purchased
for a buyout price determined pursuant to subsection (b) of this section.
‘‘(b) The buyout price of a dissociated partner’s interest is the amount
that would have been distributable to the dissociating partner under subsec-
tion (b) of section 34-378 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.
‘‘(c) Damages for wrongful dissociation under subsection (b) of section
34-356, and all other amounts owing, whether or not presently due, from
the dissociated partner to the partnership, must be offset against the buyout
price. Interest must be paid from the date the amount owed becomes due
to the date of payment. . . .
‘‘(e) If no agreement for the purchase of a dissociated partner’s interest
is reached within one hundred twenty days after a written demand for
payment, the partnership shall pay, or cause to be paid, in cash to the
dissociated partner the amount the partnership estimates to be the buyout
price and accrued interest, reduced by any offsets and accrued interest
under subsection (c) of this section.
‘‘(f) If a deferred payment is authorized under subsection (h) of this
section, the partnership may tender a written offer to pay the amount it
estimates to be the buyout price and accrued interest, reduced by any offsets
under subsection (c) of this section, stating the time of payment, the amount
and type of security for payment and the other terms and conditions of the
obligation. . . .
‘‘(h) A partner who wrongfully dissociates before the expiration of a
definite term or the completion of a particular undertaking is not entitled
to payment of any portion of the buyout price until expiration of the term
or completion of the undertaking, unless the partner establishes to the
satisfaction of the court that earlier payment will not cause undue hardship
to the business of the partnership. A deferred payment must be adequately
secured and bear interest.
‘‘(i) A dissociated partner may maintain an action against the partnership
. . . to determine the buyout price of that partner’s interest, any offsets
under subsection (c) of this section or other terms of the obligation to
purchase. . . . The court shall determine the buyout price of the dissociated
partner’s interest, any offset due under subsection (c) of this section and
accrued interest, and enter judgment for any additional payment or refund.
If deferred payment is authorized under subsection (h) of this section, the
court shall also determine the security for payment and other terms of the
obligation to purchase. The court may assess reasonable attorney’s fees and
the fees and expenses of appraisers or other experts for a party to the
action, in amounts the court finds equitable, against a party that the court
finds acted arbitrarily, vexatiously or not in good faith. The finding may be
based on the partnership’s failure to tender payment or an offer to pay or
to comply with subsection (g) of this section.’’
6
General Statutes § 34-356 provides in relevant part: ‘‘(b) A partner’s
dissociation is wrongful only if . . .
‘‘(2) In the case of a partnership for a definite term or particular undertak-
ing, before the expiration of the term or completion of the undertaking . . .
(B) the partner is expelled by judicial determination under subdivision (5)
of section 34-355 . . . .
‘‘(c) A partner who wrongfully dissociates is liable to the partnership and
to the other partners for damages caused by the dissociation. The liability
is in addition to any other obligation of the partner to the partnership or
to the other partners.’’
7
The plaintiff’s second revised and amended complaint included causes
of action for: (1) payment of the value of his partnership interest pursuant
to § 34-362; (2) ‘‘damages resulting from mismanagement of the partnership
affairs’’; and (3) an accounting pursuant to General Statutes § 52-404 relating
to overpayment of taxes in 2009 and 2010. The plaintiff recovered only under
the first count, the second count was barred by the statute of limitations,
and the third count was struck by the trial court. Accordingly, this appeal
addresses only the first count of the plaintiff’s second revised and
amended complaint.
8
General Statutes § 34-357 (b) provides in relevant part: ‘‘Upon a part-
ner’s dissociation:
‘‘(1) The partner’s right to participate in the management and conduct of
the partnership business terminates . . . .’’
9
Practice Book § 61-11 (a) provides in relevant part: ‘‘Except where other-
wise provided by statute or other law, proceedings to enforce or carry out
the judgment or order shall be automatically stayed until the time to take
an appeal has expired. If an appeal is filed, such proceedings shall be stayed
until the final determination of the cause. . . .’’
10
Section 31 of the UPA provides in relevant part: ‘‘Dissolution is caused
. . . [b]y the termination of the definite term or particular undertaking
specified in the agreement . . . [b]y the express will of any partner . . .
[b]y expulsion of any partner . . . [b]y any event which makes it unlawful
for the business of the partnership to be carried on . . . [b]y the death of
any partner . . . [b]y the bankruptcy of any partner or the partnership . . .
[b]y decree of court under section 32.’’ Unif. Partnership Act of 1914, § 31,
6 U.L.A. (Pt. 2) 370 (2001).
11
Parties can, of course, stipulate to the date of dissolution or dissociation.
See, e.g., Rappaport v. Gelfand, 197 Cal. App. 4th 1213, 1218, 129 Cal. Rptr.
3d 670 (2011).
12
At least one court has permitted a postdissolution adjustment in property
value in order to comport with the equitable principles involved in settling
partnership affairs during a complete liquidation of partnership assets,
though it did so because the parties had not offered evidence about the
property’s value prior to that date. See Flynn v. Haddad, 25 Mass. App. 496,
502, 520 N.E.2d 169 (noting that ‘‘[g]enerally, the value of the partnership
assets for the purposes of a final accounting and settlement is determined
as of the date of dissolution, not the date of the final accounting’’ because
application of that principle ‘‘presupposes reasonably contemporaneous
distribution of the partnership assets,’’ though allowing valuation of main
partnership asset at later date during liquidation proceedings if better evi-
dence is not offered as to value of asset to be liquidated, and finding that ‘‘the
trial judge was not clearly wrong in adopting the motion judge’s valuation,
especially in view of the lack of any evidence by [the objecting partner]
as to a different valuation’’), review denied, 402 Mass. 1104, 524 N.E.2d
400 (1988).
13
Section 42 of the UPA allowed a former partner of a continuing partner-
ship to receive interest from the date of dissolution to the date of settlement.
Section 42 also allowed the former partner to elect to receive profits attribut-
able to the use of his interest in the partnership, in lieu of interest, from
the date of dissolution until the date of settlement. This interest or profits
election may have played a part in the parties’ willingness to entertain
appeals and not challenge the date of dissolution as being the date of an
appellate decision. In fact, the purpose of the interest or profits election
was to ‘‘hasten [on the part of the continuing partners] the settlement of
the outgoing interest. The election also has been characterized as compensa-
tion for the breach of duty by the continuing partners in prolonging settle-
ment.’’ (Footnote omitted.) 2 A. Bromberg & L. Ribstein, Bromberg and
Ribstein on Partnership, supra, p. 7:209. ‘‘[T]he election may operate unfairly
when the delay in making settlement is caused by the [former partner] or
is otherwise beyond the [continuing] partners’ control.’’ Id., p. 7:209 n.97.
Without explanation, the RUPA eliminated the interest-or-profits election
of a former partner. See Rev. Unif. Partnership Act of 1997, § 701, comment
(3), supra, 6 U.L.A. (Pt. 1) 176.
14
The differences between dissolution, winding up, and termination
caused disputes about a former partner’s ability to enter into postdissolution
transactions for the purpose of winding up. After all, after dissolution,
partners should have ‘‘ceased’’ to carry on business together pursuant to
§ 29 of the UPA even though the partners were tasked with winding up the
business and settling affairs. This seeming impossibility—ceasing to carry on
business together and yet entering into transactions to wind up partnership
affairs—caused disputes as to the extent that partners of a dissolved partner-
ship could enter into contracts, sell partnership property, receive payment
of obligations due to the partnership, or litigate claims by and against the
partnership. See J. Crane & A. Bromberg, supra, § 80, pp. 454–60. With
respect to the authority of partners of dissolved, yet winding up partnerships,
‘‘[u]nless expressly enlarged [by agreement], actual authority to charge the
firm property and create personal liabilities of co-partners is confined to
acts appropriate for winding up, and does not extend to new business.’’
(Footnotes omitted.) Id., p. 455. ‘‘In general, strictures on the partner’s post-
dissolution authority yield to the necessity for winding up.’’ Id., p. 457.
15
While § 29 of the UPA explicitly defined ‘‘dissolution,’’ the RUPA omitted
the definition of ‘‘dissolution’’ and further did not explicitly define ‘‘disso-
ciation.’’
16
The parties did not cite case law interpreting the meaning of ‘‘expulsion
by judicial determination’’ under § 601 (5) of the RUPA or dissolution by
‘‘decree of court’’ under §§ 31 (6) and 32 of the UPA.
17
Unlike a case in which a partner’s conduct was so serious or unequivocal
that it ipso facto caused dissolution at the time of the conduct, the present
case demonstrates conduct that, in the aggregate, merely provided grounds
for dissociation on the date of the judgment. Put another way, the plaintiff’s
conduct provided a cause of action for dissociation by judicial determination,
though the conduct was not so extreme or unequivocal such that the trial
court in Brennan I equitably found dissociation at a date earlier than the
date it rendered judgment of dissociation. Cf. Vangel v. Vangel, supra, 116
Cal. App. 2d 626 (‘‘[T]he act of [the defendant] in excluding [the] plaintiffs
did not ipso facto dissolve the partnership. His acts simply provided grounds
for an application to a court of equity for such relief.’’).
Suppose the plaintiff had engaged in conduct that had ipso facto caused
dissociation as a matter of law on the date of the conduct, such as giving
the defendants notice of his express will to withdraw as a partner; General
Statutes § 34-355 (1); or filing for bankruptcy. General Statutes § 34-355 (6)
(A). Under that scenario, a trial court’s finding of dissociation on a date
prior to the date it rendered judgment of dissociation would be meaningless
if, by any party’s lodging an appeal and maintaining the status quo, the date
of dissociation would automatically move to the date of disposition of the
appeal. Such an interpretation runs contrary to well established principles
of partnership law allowing a trial judge to establish dissociation of a partner
or dissolution of a partnership, and thus the date of valuation of a partnership
interest, at the ‘‘ ‘moment of the event causing cessation.’ ’’ D. Weidner, ‘‘The
Revised Uniform Partnership Act Midstream: Major Policy Decisions,’’ supra,
21 U. Tol. L. Rev. 840; see Robins v. Roland, supra, 2008 WL 615865, *3;
Vangel v. Vangel, supra, 116 Cal. App. 2d 630; Estate of Webster v. Thomas,
supra, 2013 WL 164041, *4; Anastos v. Stable, supra, 443 Mass. 151–52;
Scheckter v. Rubin, supra, 355 Pa. 634–35; see also Lassen v. Ogren, supra,
Superior Court, Docket No. CV-07-5004349-S.
18
The majority’s interpretation of the date of dissociation as the date of
disposition on appeal would necessitate subsequent trials to determine if
any conduct of the parties during the pendency of the appeal might justify
changing the date of dissociation. This: (1) frustrates the ability of the parties
to negotiate and settle their affairs during the pendency of the appeal or
even value the partnership as of a set date and, thus, avoid conducting
multiple appraisals; and (2) runs contrary to the spirit of the RUPA in
encouraging settlement.
The defendants themselves recognized this in their 2006 posttrial brief,
noting that the purpose of § 34-362 (i) was to provide ‘‘a process by which
the partners may exchange information about the valuation of the assets
and liabilities and voluntarily resolve the valuation issue. This exchange of
information has already occurred in this case. Not only have the parties
examined the books and records of the company, they have each appraised
the real estate and exchanged the appraisals with each other. Requiring
additional time to pass before some other court takes up the issues will not
add any information or result in a voluntary resolution. The parties simply
disagree on the valuation issues and there is nothing left to do but have the
[trial] court adjudicate these differences.’’ Cf. Lange v. Bartlett, supra, 121
Wis. 2d 603 n.1 (‘‘A policy of judicial administration is that lawsuits should
come to an end sometime. Once the final accounting has been determined
and a judgment is entered, it would be expensive and time consuming for
parties and witnesses to come back into court to determine the amount of
profit from the date of judgment until payment.’’).
Moreover, the majority’s interpretation of the date of dissociation as the
date of disposition on appeal raises more questions than it answers. If the
parties withdrew their appeals, would the date of dissociation be the date(s)
of those withdrawals? If the parties maintained the status quo, but later
were granted relief from the appellate stay, as the parties in the present
case attempted to do, would the date of dissociation be the date of the
relief from stay? The events described in the previous two questions have no
relation to the conduct or circumstances that trigger dissociation pursuant to
§ 34-355 and, indeed, are not listed as causes of dissociation within § 34-
355. The exact date of dissociation would depend on factors—e.g., whether
the parties’ schedules permitted oral argument at an earlier date, whether
the parties requested extensions of time for appellate briefing, the expedi-
ency that an appellate court rendered its decision, etc.—wholly unrelated
to the factual findings upon which the trial court found cause, as a matter
of law, for dissociation.
19
Commentators agree that the statutory language leaves much to be
desired. See A. Wensinger, supra, 50 Wash. & Lee L. Rev. 935–36 (‘‘The
potential for confusion created by the terminology of the RUPA breakup
provisions seems astronomical given the similarity between [the] UPA ‘disso-
lution’ and the RUPA ‘dissociation,’ the . . . new definition of dissolution
[under the RUPA], and the . . . substitution of dissolution with dissociation
as the trigger for the breakup provisions [under the RUPA]. Further, the
structure of the RUPA is awkward in its seemingly desperate continuation
of the term ‘dissolution,’ and this is especially curious when one considers
that a seeming consensus existed among the drafters that the term causes
confusion.’’); 2 A. Bromberg & L. Ribstein, Bromberg and Ribstein on Partner-
ship, supra, p. 7:98 (‘‘[T]he dissolution occurs when the relevant ‘judicial
determination’ is made. Because it is not clear whether the ‘determination’
is an initial order, a final resolution, or some other stage of the proceeding,
[the RUPA] carries forward, if not exacerbates, the uncertainty concerning
the time of dissolution . . . .’’).
20
At oral argument in this court, the parties discussed a dissociated part-
ner’s diminished fiduciary duties after dissociation pursuant to § 34-357 (b)
(2), which provides that the duty of loyalty to refrain from competing with
the partnership ceases upon dissociation, and § 34-357 (b) (3), which pro-
vides that the duty of loyalty to account, the duty of loyalty to refrain from
adverse interests, the duty of care to refrain from grossly negligent conduct
continue for predissociation matters, but cease with respect to postdissocia-
tion matters, unless the partner participates in winding up. See A. Brom-
berg & L. Ribstein, Special Release on the Revised Uniform Partnership Act
(1993), p. 85 (‘‘[Section] 404 [of the RUPA] imposes fiduciary duties on any
‘partner.’ Section 603 (b) assumes that ‘partner’ does not apply to a dissoci-
ated partner. But nothing in [the] RUPA prevents courts from holding that
a dissociated [yet participating] partner retains some partnership attributes,
including fiduciary duties. That would be consistent with [the] RUPA’s recog-
nition of fiduciary duties in connection with ‘winding up’ and that a dissoci-
ated partner may participate in winding up. It is also supported by the UPA
cases . . . holding that partners have fiduciary duties after dissociation.
As a policy matter, the conditions that initially gave rise to the partners’
fiduciary duties still exist as long as a former partner retains control over
partnership property or management power.’’ [Footnotes omitted.]); R. Hill-
man et al., supra, § 603, author’s comment (4) (‘‘Is the dissociated partner
a partner or a former partner for purposes of the obligation of good faith
and fair dealing? During the period between the act of dissociation and the
purchase of the dissociated partner’s interest . . . it is reasonable to require
the dissociated partner to fulfill any remaining duties and exercise any
remaining rights consistent with an obligation of good faith and fair dealing,
[and therefore] the dissociated partner should be treated as a ‘partner’ for
purposes of the obligation of good faith and fair dealing.’’).
The trial court found that the plaintiff had been dissociated despite his
participation in partnership affairs during the appeal. Given the circum-
stances particular to the present case, the trial court might reasonably have
been entitled to find that the plaintiff retained some fiduciary duties despite
his technical dissociation. The trial court found that ‘‘the defendants have
failed to establish by a preponderance of the evidence that for the period
[during the appellate stay] the plaintiff was engaged in conduct that violated
the duty of loyalty set forth in [General Statutes] § 34-338 (b) (1) or (2).
Nor did he violate, to the extent it may be applicable to [the] defendants’
claim, any duty of care under § 34-338 (c) to not engage in grossly negligent
or reckless conduct, intentional misconduct or a knowing violation of law.’’
The trial court also concluded that ‘‘[e]ven if one were to assume that there
was a viable claim of breach of fiduciary duty [prior to lapse of the cause
of action for breach of fiduciary duty in September 2008] based on the
plaintiff’s continued involvement with the partnership despite the dissocia-
tion ruling, the defendants have failed to meet their burden of proof under
either the [CUPA] or the common law.’’
21
Although it is unclear whether the cases in states with only discretionary
stays involved the application of such stays, this does not affect my analysis.
22
Though the plaintiff received monthly payments during the pendency
of the appeal, he received no windfall because the trial court adjusted the
valuation of the plaintiff’s partnership interest under § 34-362 by ‘‘allowing
a credit [from the buyout price] for the monthly payments made to the
plaintiff from October 2006 through August, 2009 . . . given the unique
circumstances of this case under the principles of equity.’’
23
The defendants also claim that the trial court improperly admitted into
evidence and allegedly relied upon the defendants’ 2010 offer letter, sent
pursuant to § 34-362 (f), for purposes of determining the date of dissociation.
‘‘[I]t is well settled that the trial court’s evidentiary rulings are entitled to
great deference. . . . The trial court is given broad latitude in ruling on the
admissibility of evidence, and we will not disturb such a ruling unless it is
shown that the ruling amounted to an abuse of discretion. . . . When
reviewing a decision to determine whether the trial court has abused its
discretion, we make every reasonable presumption in favor of upholding
the trial court’s ruling, and only upset it for a manifest abuse of discretion.’’
(Citation omitted; internal quotation marks omitted.) Chief Information
Officer v. Computers Plus Center, Inc., 310 Conn. 60, 97–98, 74 A.3d 1242
(2013). My review of the record indicates that the trial court clearly did not
decide that September 27, 2006, was the date of dissociation based solely
on this letter and, even if admitting the letter had been improper, any
impropriety was harmless.
24
Section 8 (f) of the partnership agreement provides: ‘‘The partnership
shall, to the extent of partnership assets only; indemnify and save harmless
each [p]artner from and against all liability, loss, expense, or damage
incurred or sustained by reason of any act or omission in the conduct of
the business of the partnership except if such [p]artner shall have been
guilty of fraud or gross negligence, including indemnification by the partner-
ship against the reasonable expenses, including attorney’s fees, actually and
necessarily incurred by any of [the partners] in connection with the defense
of any action to which any of them may be made a party by reason of his
activities on behalf of the partnership.’’
25
‘‘This involves a two part function: where the legal conclusions of the
court are challenged, we must determine whether they are legally and logi-
cally correct and whether they find support in the facts set out in the
memorandum of decision; where the factual basis of the court’s decision
is challenged, we must determine whether the facts set out in the memoran-
dum of decision are supported by the evidence or whether, in light of the
evidence and the pleadings in the whole record, those facts are clearly
erroneous.’’ (Internal quotation marks omitted.) Beverly Hills Concepts, Inc.
v. Schatz & Schatz, Ribicoff & Kotkin, supra, 247 Conn. 58.
26
Lehn offered the following testimony on direct examination:
‘‘[The Defendants’ Counsel]: Were there any issues that arose, I suppose
you’re aware of, in connection with [the partnership’s accountant] putting
that balance sheet together?
‘‘[Lehn]: Yes. . . . The one open item was the value of the real estate,
which obviously is the primary issue in this case.’’
27
Lehn offered the following testimony on cross-examination:
‘‘[The Plaintiff’s Counsel]: And then in your formulation you deducted $2
million as an offset, correct?
‘‘[Lehn]: Correct.
‘‘[The Plaintiff’s Counsel]: And that was to represent attorney’s fees, loss
of partnership income and damage to the partnership’s reputation and good-
will, correct?
‘‘[Lehn]: Yes, sir.’’ (Emphasis added.)
28
The defendants’ valuation expert, Kevin Vannucci, offered the follow-
ing testimony:
‘‘[The Plaintiff’s Counsel]: And then you came to a total value of the real
estate investment; am I right?
‘‘[Vannucci]: Yes . . . .
‘‘[The Plaintiff’s Counsel]: Okay. Then you took a 3 percent selling cost?
‘‘[Vannucci]: That is correct.
‘‘[The Plaintiff’s Counsel]: And then you deducted the balance on the
mortgage on the property?
‘‘[Vannucci]: We deducted the liabilities that existed that I was—informa-
tion I was shown, so, yes, we deducted those liabilities. We deducted notes
payable, second line after that shows tenants’ security deposits deducted.’’
(Emphasis added.)
The plaintiff’s valuation expert, Kenneth Pia, testified that ‘‘[the partner-
ship] is a box. And it’s an entity that is filled with various assets and two
liabilities. The assets are in the form of real estate and there’s a little bit
of cash as well and the liabilities are, simply, the mortgage related to the
real estate and the tenant security deposits, as it is a real estate intensive
entity.’’ (Emphasis added.)
29
On May 24, 2012, counsel for the defendants made the following repre-
sentation to the trial court: ‘‘We had intended to call an accountant for the
partnership . . . . [Plaintiff’s counsel] and I have stipulated to certain val-
ues that he would testify to, and I’m prepared to read those into the record
at this time. . . . [I]f [the partnership’s accountant] were here, he would
testify to these three numbers as of these dates. . . . [A]s to the date of
August 18, 2009, cash on hand, $247,953. On the same date, the note payable
amount would be $3,066,133, that function is a liability. And second liability
would be the tenant lease deposits at $148,493. . . . As of September 30,
2006, he would testify to the following numbers: cash on hand, $374,942,
the mortgage payable on that date would be $3,480,527, and the tenant lease
deposits that were owed would be $149,056.’’ Thereafter, counsel for the
plaintiff confirmed this agreement, stating: ‘‘Your Honor, we so stipulate
those [six] numbers.’’
30
Specifically, Lehn testified as follows:
‘‘[Lehn]: The partnership records, both for 2006 and 2009, and today, do
not reflect any liability on the books and records of the partnership for
the amount [of attorney’s fees] owed to the estate.
‘‘[The Defendants’ Counsel]: And do you know why they have not been
booked yet by the partnership?
‘‘[Lehn]: Because the partnership’s position is that [the plaintiff] is liable
for those fees, so it would be—it would be an asset and an offsetting liability
if—if it’s a receivable from [the plaintiff] and offsetting liability from the
partnership, so it wasn’t worth putting both numbers on there. But obviously
if [the plaintiff] did not pay, then there would be a liability for the partner-
ship.’’ (Emphasis added.)
31
Specifically, Lehn testified as follows:
‘‘[Lehn]: Well, obviously from these partners’ perspective, we felt that [the
plaintiff] would ultimately be responsible for [the attorney’s fees], but . . .
‘‘[The Defendants’ Counsel]: In the meantime, who was going to pay
the fees?
‘‘[Lehn]: The estate would on behalf of the partnership and the part-
ners. . . .
‘‘[The Defendants’ Counsel]: [I]n connection with the attorneys’ fees, what
does the estate expect in terms of repayment of those fees?
‘‘[Lehn]: Well, it expects that [the plaintiff] will repay those [attorney’s]
fees to the partnership, which will then repay those fees to the individual
law firms—to the estate.
‘‘[The Defendant’s Counsel]: Has the estate made demand on the partner-
ship to this date to reimburse it for the fees?
‘‘[Lehn]: No.
‘‘[The Defendant’s Counsel]: Okay. And why not?
‘‘[Lehn]: Again, because we’re hopeful that this court will find that [the
plaintiff is] responsible, and so that the fees will come through [the plaintiff]
rather than through the partnership directly.
‘‘[The Defendant’s Counsel]: And on what basis do you seek to have [the
plaintiff] repay those fees—pay those fees to the estate?
‘‘[Lehn]: That’s under [§§ 34-362 and 34-356], providing for a damage
offset to the amount that [the plaintiff] is entitled to from the partner-
ship. . . .
‘‘[The Defendants’ Counsel]: And if [the attorney’s fees become] a liability
for the partnership, how is it that the estate would expect to be repaid?
’’[Lehn]: Well, if the partnership is required to pay back the estate and is
not paid by [the plaintiff], then there is not sufficient cash at this time. The
partnership will have to pay back the amount due to the estate over some
extended period of time. We haven’t worked out the details yet, but it’s clear
that there’s not enough cash available to do that now.’’ (Emphasis added.)
32
Specifically, the defendants’ pretrial memorandum, dated May 4, 2012,
contained the following statement: ‘‘The defendants have countersued to
recover attorney’s fees, for example, not only as ‘damage’ of wrongful
dissociation but as part of the written indemnity provided for under the
partnership agreement.’’ (Emphasis added.)
33
Specifically, the defendants’ posttrial memorandum, dated August 3,
2012, contained the following statement: ‘‘Pursuant to the plain language of
the partnership agreement, the defendants are entitled to be indemnified
by the partnership for legal fees incurred in these actions.’’ The defendants,
of course, mentioned attorney’s fees as damages multiple times during
posttrial briefing.
34
The plaintiff noted as such in his posttrial reply brief, stating: ‘‘Finally,
even if the defendants could prove that the [p]artnership is liable to the
partners for the legal fees, [the plaintiff] would not be responsible for the
entire amount of legal fees. Instead he would be liable solely for his share
. . . of the legal fees incurred.’’ The reply brief continued: ‘‘Accordingly, if
the defendants are entitled to attorney’s fees pursuant to the [p]artnership
agreement, then [the plaintiff] is as well.’’
35
The plaintiff presented his own claim for attorney’s fees pursuant to
§ 34-362 (h), which the trial court denied. Had the defendants presented
their claim to attorney’s fees as a liability at trial, I do not doubt that the
plaintiff would have argued for inclusion of his attorney’s fees in that figure.
See footnote 34 of this concurring and dissenting opinion. Indeed, had the
defendants presented their claim for attorney’s fees as a liability at trial,
the trial court might have addressed a variety of other issues, including, but
not limited to: (1) whether and to what extent the plaintiff’s attorney’s fees
could be included in the liability; (2) the reasonableness of all parties’
attorney’s fees; (3) whether the partnership agreement requires the individ-
ual partners, and not the estate of Richard Aiello, to actually pay their own
attorney’s fees—not just owe their attorney’s fees to the estate—in order
to incur a liability pursuant to the terms of the indemnity provision, which
allows indemnity for ‘‘attorney’s fees, actually . . . incurred by any of [the
partners]’’; (emphasis added); (4) the accounting practices of the partnership
in booking liabilities; (5) the validity and effect of two agreements purporting
to obligate the partners and/or the partnership to reimburse the estate of
Richard Aiello for attorney’s fees paid; and (6) the effect of § 34-362 (d),
which provides that ‘‘[a] partnership shall indemnify a dissociated partner
whose interest is being purchased against all partnership liabilities, whether
incurred before or after the dissociation, except liabilities incurred by an
act of the dissociated partner under section 34-363.’’
36
In partnership accounting actions, courts frequently encounter argu-
ments about the characterization of partnership assets and liabilities. For
example, ‘‘[p]artnerships will frequently seek to characterize contributions
as advances rather than capital, in order to obtain a higher priority or
interest. Characterization of the contribution presents a factual question as
to the parties’ intent.’’ 2 A. Bromberg & L. Ribstein, Bloomberg and Ribstein
on Partnership, supra, p. 6:32; see also id., p. 6:44 (characterization issues
for liabilities and rights to indemnification). Upon dissociation or dissolution,
valuation and characterization disputes invariably center upon the partner-
ship books and records. See 2 A. Bromberg & L. Ribstein, Bloomberg and
Ribstein on Partnership, supra, pp. 7:189–7:191 (‘‘[U]nless otherwise pro-
vided in the partnership agreement, the starting point for valuation of the
outgoing interest is the capital and [if separately maintained] income
accounts on well-kept partnership books. These are adjusted for apprecia-
tion and depreciation of assets and other matters adjudged in an accounting
action. The value of assets may be determined through expert testimony
and such evidence as prior sales of assets.’’ [Footnotes omitted.]).
When the parties acquiesce to use of well-kept partnership books and
records as the bases of an accounting or an appraisal, courts may properly
decline to disturb the parties’ characterizations of partnership items in the
absence of compelling evidence to the contrary. In Kerasotes v. Estate of
Kerasotes, 238 Ill. App. 3d 1020, 1027, 605 N.E.2d 643 (1992), for example,
the Appellate Court of Illinois rejected the contention that the trial court
should have characterized a parent partnership’s asset as the asset, instead,
of a subsidiary company. The court declined to do so, noting that, for many
years, the parent partnership’s financial statements had treated the asset
as an asset of the parent partnership. Id. The court noted that ‘‘[t]he audit
reflected this, and these amounts were included in determining the net
assets of [the parent partnership]. It does not sit well for [one of the members
of the subsidiary company], who was the president and chief executive
officer of [the parent partnership], to now allege the accounting procedure
employed for many years was incorrect and that he did not know that the
[asset, composed of advertising revenue and soft drink rebates] would be
included as revenue of [the parent partnership].’’ Id. The court noted that
the parties had acquiesced, via a dissolution agreement, to the manner of
the audit, relying on ‘‘audit of the books and records of the partnership
. . . to certify the assets and liabilities of each partnership.’’ Id. The court
held that the members of the subsidiary company were ‘‘bound by this
agreement and cannot now disregard the terms of [the dissolution
agreement] simply because [the members of the subsidiary company] have
discovered the terms are less profitable to them than they anticipated when
they entered into it.’’ Id.; see Cowan v. Maddin, 786 S.W.2d 647, 658 (Tenn.
App. 1989) (‘‘It is not inequitable to plaintiff to continue treating prepaid
expenses in the same manner as those expenses had been treated from [the
beginning of the partnership in 1974 to the date of dissolution in 1986]. The
plaintiff has had the benefit of that treatment over the years . . . .’’); see
also Dawson v. White & Case, 88 N.Y.2d 666, 673, 672 N.E.2d 589, 649
N.Y.S.2d 364 (1996) (affirming trial court’s exclusion of unfunded pension
plan payments from calculation of the partnership liabilities in part because
partnership ‘‘never included the unfunded pension plan as a liability in the
firm’s financial statements’’).
Because the defendants chose the damages theory of entitlement to attor-
ney’s fees, the record is insufficient for this court—let alone the trial court—
to decide whether the partnership’s failure to characterize the attorney’s
fees as a liability throughout the many years of ongoing litigation now should
be disregarded at the defendants’ own request. See footnote 35 of this
concurring and dissenting opinion. As to evidence of characterization, in
Cowan, the court relied upon findings of a Special Master, who specifically
took proof ‘‘regarding the manner in which the partnership had treated
prepaid expenses,’’ including testimony from the partnership’s accountant.
Cowan v. Madden, supra, 786 S.W.2d 657. Unlike in Cowan, the defendants
in the present case have not offered proof as to the manner in which the
partnership has treated attorney’s fees, or liabilities in general, in the past.
As to selectively-asserted accounting methods, in Dawson, the Court of
Appeals of New York affirmed exclusion of a law firm’s unfunded pension
plan payments from the firm’s liabilities, agreeing with the Appellate Divi-
sion’s reasoning that ‘‘[t]he purported multi-million dollar liability never
appeared in any of [the] defendant’s financial statements and was never
assessed against either defendant or any of its partners for accounting
purposes. It is only against plaintiff that defendant seeks to impose this
burden. The unfunded plan was, and is, if anything, a future, not a current,
liability . . . .’’ (Emphasis added.) Dawson v. White & Case, 212 A.D.2d
385, 386 (N.Y. App. 1995). Like the defendant in Dawson, the defendants in
the present case only seek, after an unfavorable ruling by the trial court,
to impose the burden of attorney’s fees as a liability against the plaintiff.