Medd v. Medd

• Decision Date: 23 April 1980
• Docket Number: No. 63490,O-L,63490
• Citation: 291 N.W.2d 29
• Parties: Robert R. MEDD, Appellant, v. C. R. MEDD; Richard L. Medd; Ralph C. Medd; Davenport Dairy Queen, a co- partnership; R & I Dairy Queen Stores, a co-partnership; Medd-ane Dairy Products, Inc.; and First National Bank of Moline, Appellees.
• Court: Iowa Supreme Court

Page 29

291 N.W.2d 29

Robert R. MEDD, Appellant, v. C. R. MEDD; Richard L. Medd; Ralph C. Medd; Davenport Dairy Queen, a co- partnership; R & I Dairy Queen Stores, a co-partnership; Medd-O-Lane Dairy Products, Inc.; and First National Bank of Moline, Appellees.

No. 63490.

Supreme Court of Iowa.

April 23, 1980.

Rehearing Denied May 16, 1980.

Walter Newport of Newport, Fortini & Hohenadel, Davenport, for appellant.

Richard M. Batcher and Hubbard Neighbour of Bozeman, Neighbour, Patton & Noe, Moline, Ill., for appellees.

Considered en banc.

REES, Justice.

The plaintiff, Robert R. Medd, appeals from the dismissal of his petition in equity seeking dissolution of two family partnerships and the distribution of his pro rata share in the assets of those partnerships. The trial court concluded that plaintiff's share of the assets upon withdrawal had been established by a general agreement of the partners and that partition of assets of the partnerships or distribution of the cash equivalent thereof was not legally justified. We affirm.

The plaintiff filed his petition on April 28, 1977, contending that the family partnerships owned by him and the defendants (his father C. R. Medd, and his brothers Richard, Ralph and Ronald Medd) had been dissolved when he gave defendants notice to that effect as required by both Iowa and Illinois law. Application of the law of both states was necessitated by the fact that one of the partnerships, Davenport Dairy Queen, is an Iowa partnership, while R & I Dairy Queen Stores is an Illinois partnership. Robert consequently sought to have the court partition the assets of the partnerships or to award him the fair market value of his interest in the partnerships.

In their answer the defendants denied the material allegations of plaintiff's petition, and stated that they had offered to Robert the value of his capital accounts in the partnerships, the amount which they claim is established by agreement of the parties as the distributive share for a withdrawing partner.

At trial it became clear that the bone of contention between the parties is the effect to be given to the withdrawal provision contained in a 1947 "co-adventure agreement" entered into by the parties. ¹ This instrument, facially applicable only to a Dairy Queen venture in Ohio, clearly states that a withdrawing partner would receive only the value of his or her capital account. A supplemental agreement was executed later in 1947 regarding Dairy Queen operations in Scott County, Iowa, which anticipated an additional agreement which would provide further elaboration on the rights and obligations of those involved. No subsequent documents were executed regarding either of the partnerships at issue.

Robert contends that the withdrawal provision has no application to the Davenport Dairy Queen and R & I Dairy Queen Stores partnerships and that he is therefore entitled to his pro rata share of the partnership assets upon his withdrawal. The defendants, while acknowledging the facial inapplicability of the withdrawal provision of the 1947 agreement, allege that the parties, by their mutual agreement and conduct, have made the termination of interest provision applicable to the partnerships in question. They point to the withdrawal from the partnerships of Mildred Medd in 1956 and that of the plaintiff in 1969 as prior examples of the provision being applied by the parties. ² While not ruling directly on whether Robert had effected a dissolution of the partnership, the trial court found that the defendants, by clear, satisfactory and convincing evidence, had shown that the 1947 co-adventure agreement and its supplement, particularly the withdrawal or termination provision, constitute the controlling agreements between the Medd family members in their business activities. Finding plaintiff's share upon retirement was determined by the agreement, the trial court dismissed Robert's action.

Shortly after entry of the trial court's decree, the defendants tendered to the plaintiff an amount equivalent to his capital accounts in the partnerships pursuant to the withdrawal provision of the co-adventure agreement, which was accepted. In so doing, Robert specifically reserved his right to appeal the judgment and decree of the district court, accepting the check as it represented the admitted minimum amount due him. Robert then filed his notice of appeal to this court.

The following issues are presented for our consideration:

(1) Did plaintiff's acceptance of the amount tendered by the defendants render this appeal moot?

(2) Is our review of this case at law or in equity?

(3) Did the plaintiff dissolve the two family partnerships by giving the other partners notice of his intention to do so?

(4) Did the trial court err in ruling that plaintiff's share in the partnership assets upon his withdrawal was determined by the 1947 co-adventure agreement and in therefore not applying the otherwise applicable provisions of Iowa and Illinois law?

(5) Was the plaintiff entitled to interest on his capital account?

I. The defendants first contend that this appeal has been mooted by Robert's acceptance of the $68,755.00 offered by the defendants after entry of the trial court's judgment. They seek to raise this issue solely by inclusion in their brief. They have not filed a motion to dismiss or otherwise attempted to create a record on which to base their argument. While we express doubt as to whether the matter is properly before the court and specifically reserve ruling on the question, we find resolution of that issue unnecessary as we do not find merit in the defendants' mootness argument.

The amount tendered by the defendants shortly following the trial court judgment represents the amount which they contend is due the plaintiff on his withdrawal from the partnerships. It is the admitted minimum amount owed the plaintiff, the amount which the defendants argue is owed the plaintiff under the partnership agreement. In accepting the defendants' payment, Robert, by letter, made clear that he did not intend to waive his right to appeal, but was accepting the amount tendered as it was concededly the minimum amount due him.

Under these circumstances, we cannot conclude that Robert waived his right to appeal or accepted the payment as an accord and satisfaction of his claim. See, e. g., Starke v. Horak, 260 N.W.2d 406, 407-08 (Iowa 1977); Millsap v. Cedar Rapids Civil Service Commission, 249 N.W.2d 679, 683-84 (Iowa 1976); In re Marriage of Abild, 243 N.W.2d 541, 543 (Iowa 1976). Just as we concluded that the appellate waiver doctrine should not be applied so as to discourage the early reparation of injured parties, Starke v. Horak, 260 N.W.2d at 408, neither should the doctrine prevent the disbursement of funds over which there is no disagreement. We hold that Robert did not waive his right to appeal in accepting the amount tendered by the defendants. In so ruling we place emphasis on the undisputed nature of the amount tendered and the fact that the defendants were informed of the conditions under which the acceptance was made. See Starke v. Horak, 260 N.W.2d at 407-08.

II. The defendants next contend that since the issues presented herein are largely legal in nature and do not involve complex accounting procedures, this case should be treated as a case at law for purposes of this appeal. Any merit which the defendants' position may have had is undermined by the timing of their contention. Our standard of review is determined by the nature of the trial proceeding. This action was filed and tried in equity. Our review is therefore de novo. E. g., Jensen v. Schreck, 275 N.W.2d 374, 378 (Iowa 1979); Murphy v. Hahn, 208 Iowa 698, 701, 223 N.W. 756, 759 (1929); Iowa R.App.P. 4. If the defendants had wished our review to be at law they should have advanced their position before the trial court so that the trial could have proceeded accordingly, if it had found their contentions compelling.

Having established our standard of review, we further note that we review the facts and law of the case and determine the appropriate disposition under all the circumstances. Gibson v. Deuth, 270 N.W.2d 632, 634 (Iowa 1978). While we give weight to the findings of the trial court, we are not bound by them. Iowa R.App.P. 14(f)(7).

As a preliminary matter we note that this action involves Illinois and Iowa partnerships and that resolution of the issues before us necessarily involves the application of both Illinois and Iowa law. Our task is somewhat simplified by the fact that both states have enacted the Uniform Partnership Act, see Uniform Partnership Act, Ill.Rev.Stat. ch. 106 1/2 (1975) and ch. 544, The Code 1977, and a general similarity of the partnership law of both states. As the same issues are presented regarding both partnerships, we will be citing to Iowa and Illinois law regarding material points of law.

III. Initially we are faced with the issue of whether Robert effectuated the dissolution of the Davenport Dairy Queen and R & I Dairy Queen Stores partnerships when he notified his father and brothers of his intent to withdraw from the partnerships. The trial court made no finding that a dissolution had or had not occurred. We will address the issue as dissolution is a requisite to "winding up" the partnerships, the procedure by which the plaintiff alternatively seeks relief.

The applicability of the Uniform Partnership Act (hereinafter UPA) is limited by section 4(5) of the Act which provides that the UPA should not be construed to impair any contract in effect when the Act went into effect. See Ill.Rev.Stat. ch. 106 1/2, section 4(5); section 544.4(5), The Code. As the Illinois statute was enacted in 1917, no contract or action of the parties predates the effective date of the Act. The Iowa statute does not impair contractual obligations undertaken on or before July 1, 1971. See section 544.4(5), The Code. Thus there is a question as to...