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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Disotell v. Stiltner (11/05/2004) sp-5841

Disotell v. Stiltner (11/05/2004) sp-5841

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,


CARL DISOTELL,           )
                              )    Supreme Court No. S-10984
             Appellant,            )
                              )    Superior Court No. 3AN-00-4749
     v.                       )
                              )    O P I N I O N
EARL STILTNER,           )
                              )    [No. 5841 - November 5, 2004]
             Appellee.             )

          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Sen K. Tan, Judge.

          Appearances:  Ronald L. Bliss, Bliss, Wilkens
          &  Clayton, Anchorage, for Appellant.   Kevin
          G. Brady, Anchorage, for Appellee.

          Before:   Bryner,  Chief  Justice,  Matthews,
          Eastaugh, Fabe, and Carpeneti, Justices.

          EASTAUGH, Justice.


          Two  partners  formed a partnership  in  1997  for  the

purpose  of  converting an existing building into a hotel.   One,

Earl  Stiltner,  contributed  the  parcel  of  land  bearing  the

building  that was to be converted. The partnership was dissolved

in  1998 after the partners reached an impasse.  We consider here

whether the superior court, in winding up the partnership, should

have  liquidated the partnership, rather than permitting Stiltner

to buy out Carl Disotell, the other partner.  We affirm as to the

buyout, but remand because there was no evidence of the objective

value of buyout property.  We also remand for correction of other

minor errors.


          Carl  Disotell is an Eagle River resident who  develops

properties as a general contractor.1  His construction company is

Disotell  Construction.  Earl Stiltner is  also  an  Eagle  River

resident.   Stiltner owned and operated a real estate office  and

property  management company in Eagle River from May  1990  until

December 1997.  In 1994 he and his wife purchased Lots 10 and  11

of  Block 12 of the Revised Plat of the Walter G. Pippel Addition

No.  2  (the hotel property) for $275,000.  There was a two-story

commercial  building  on  the  property.   Stiltners  wife  later

quitclaimed her interest in the property to him.

          Disotell  and  Stiltner met in  1997.   They  discussed

Stiltners  property  and agreed to form an equal  partnership  to

develop,  construct, and operate a hotel on the  property.   They

never  entered  into  a  written  partnership  agreement.    They

intended  to  convert the two-story commercial  building  on  the

property  into a hotel that would open for business  by  May  15,

1998.   Disotell Construction was to serve as general contractor;

it  was  to provide its services on a cost-only basis.   Disotell

was  to use his experience as a developer to plan the project and

obtain the necessary permits and licenses.

          The  parties agreed that Disotell would purchase a one-

half  interest  in the hotel property for $137,500,  one-half  of

Stiltners  cost.   They  also agreed that the  funds  from  which

Disotell would buy the one-half interest would come only from the

profits  of the hotel.  After Stiltner had recovered his original

cost  basis  in  the  property and certain other  costs,  he  and

Disotell  were  to  share  profits on a fifty/fifty  basis.   The

parties dispute what those other costs included.  Disotell argues

that  they  included  the  costs of art and  equipment  owned  by

Stiltner  that they had planned to use in the hotel and the  cash

required  to  develop and construct the hotel.  Stiltner  asserts

          that they only included the former.

          Stiltner  quitclaimed one-half of his interest  in  the

hotel  property  to  Disotell  on March  3,  1998.   The  parties

disputed  who  was obligated to put up the cash for the  project.

Disotell  later testified that Stiltner was to have provided  all

of  the cash; Stiltner claimed they were to contribute equally to

the  expenses.  The superior court later found that the  partners

jointly  would provide for the projects cash needs.  The  parties

agreed that neither would charge interest for the purchase of the

hotel property or for cash expenses.

          After  learning that it could acquire a liquor  license

free  of  charge  for  a  hotel  of  fifty  or  more  rooms,  the

partnership agreed to convert the two-story building into a four-

story  hotel,  bar,  and restaurant.  The  partnership  hired  an

architect,  structural  engineer, and a civil  engineering  firm.

Disotell  testified  that he contributed  hundreds  of  hours  to

developing the project.

          In  1998  the partnership decided to purchase a parking

lot  for  the hotel.  Although the lot was purchased in Disotells

name,  Stiltner  provided  the earnest money  and  down  payment,

totaling  $50,000.   He also paid the mortgage  for  May  through

October  1998  and made one property tax payment.  Disotell  paid

the  mortgage  from  November 1998 through  July  2001  and  made

several tax payments.

          In May 1998 Disotell advised Stiltner that the property

required a sewer line.  Construction on the property had not  yet

begun.   Stiltner disagreed that a sewer line was  necessary;  he

thought  there would be no increase in sewage from the  property,

because  Disotell had not yet commenced construction.  He  denied

Disotell  the  building access needed to assess  the  mechanical,

electrical,  and other systems.  He also refused  to  remove  his

personal  property from the building.  The superior  court  later

found  that   a  complete breakdown in the  relationship  between

Stiltner  and Disotell occurred in May 1998, after which Stiltner

refused to continue the project.

          The  partnership never produced a profit.  Stiltner has

exclusively possessed the hotel property since May 15, 1998.   He

testified that he occupies the premises as his residence and  has

stored his personal possessions there.

          Disotell  filed  suit  in the superior  court,  seeking

dissolution of the partnership, judicially supervised  windup  of

partnership  affairs,  appointment of a  receiver,  and  damages.

Stiltner  answered and later counterclaimed.  He sought recission

of  the  partnership agreement.  Following a two-day bench trial,

the  court  entered findings of fact and conclusions  of  law  on

December  11, 2001.  Disotell unsuccessfully moved to  amend  the

conclusions  of  law.   On May 28, 2002  he  moved  to  introduce

evidence  of partnership asset and liability values.   The  court

denied  this  motion.  It entered final judgment on  February  7,

2003.  Disotell appeals.


     A.   Standard of Review

          Interpretation  of the Alaska Uniform Partnership  Act2

(the  Act)  presents  a question of law to  which  we  apply  our

independent  judgment.3   We review the superior  courts  factual

findings for clear error.4

     B.   It Was Not Error To Give Stiltner a Buyout Opportunity.

          Disotell  argues  that  the superior  court  failed  to

follow  the  Act  when  the court gave  Stiltner  the  option  to

purchase Disotells partnership interest for $73,213.50, the value

of  Disotells interest as calculated by the court.  The  superior

court  proposed  two  alternative  methods  for  winding  up  the

partnership.  The first alternative allowed Stiltner to  purchase

Disotells  partnership interest.  The court  reasoned  that  this

would  avoid  the unnecessary cost of appointing a  receiver  and

would   reduce  economic  waste.   The  second  alternative   was

available if Stiltner had insufficient funds to pay Disotell; the

court would then appoint a receiver to take possession of and  to

          sell the partnership property, to pay the costs of the receiver,

and distribute the remaining proceeds according to [its] findings

of fact and conclusions of law.

          Disotell  claims that the Uniform Partnership Act  made

liquidation  a matter of right.  He argues that any  partner  who

has  not  wrongfully  caused dissolution of the  partnership  may

demand  liquidation.   He asserts that the superior  court  erred

when  it  concluded  that  liquidation  is  not  mandatory.    He

therefore seeks a remand with instructions for appointment  of  a

receiver to take possession of the assets and liquidate them.

          Alaska   Statute  32.05.320  provided   that   [u]nless

otherwise  agreed the partners who have not wrongfully  dissolved

the partnership . . . may wind up the partnership affairs . . . .

Alaska Statute 32.05.330 provided in part:

          (a)   When dissolution is caused in any  way,
          except  in  contravention of the  partnership
          agreement,  each  partner,  as  against   the
          copartners  and all persons claiming  through
          them  in  respect  of their interest  in  the
          partnership,  unless  otherwise  agreed,  may
          have  the  partnership  property  applied  to
          discharge  its liabilities, and  the  surplus
          applied  to pay in cash the net amount  owing
          to the respective partners. . . .
          (b)    When   dissolution   is   caused    in
          contravention  of  the partnership  agreement
          the  rights  of the partners are as  follows:
          (1)   each   partner  who  has   not   caused
          dissolution wrongfully has (A) all the rights
          specified in (a) of this section, and (B) the
          right, as against each partner who has caused
          the  dissolution wrongfully, to  damages  for
          breach of the agreement . . . .
          Disotell  argues that Stiltner breached the partnership

agreement  by  dissolution; Stiltner maintains that the  superior

courts conclusion that neither party was at fault in causing  the

dissolution  of  the partnership since . . . either  party  could

terminate it at will was not clearly erroneous.  Because  neither

party  argues  on  appeal  that Disotell  wrongfully  caused  the

dissolution, he may invoke the rights granted by AS 32.05.330(a).

          Disotell  argues  that the most reasonable  and  almost

universally  accepted interpretation of AS 32.05.330(a)  requires

sale of partnership assets, absent a partnership agreement to the

contrary.  He claims that the Act makes the policy choice that  a

sale  is the most effective means of determining the fair  market

value  of  partnership  assets.  Although this  remedy  may  seem

harsh,  he  points out that partners are free to make alternative

provisions in the partnership agreement.  Because the partnership

agreement  did  not address the consequences of dissolution,  the

statutory provisions govern by default.

          We  have  not previously considered whether liquidation

was  discretionary  under  the Act.  In  Pieper  v.  Musarra,  we

concluded that Pieper had failed to demonstrate that the superior

court  made  an error in applying the Alaska Uniform  Partnership

Act  when  it allowed Piepers partner to purchase her partnership

interest.5   We  did not explain the basis for  this  conclusion.

Because  no Alaska decisions address the issue, we look to  cases

from other jurisdictions interpreting the uniform statute.

          In  Dreifuerst  v.  Dreifuerst, cited  by  Disotell  on

appeal,  the  Wisconsin Court of Appeals,  construing  a  statute

identical  to  Alaskas, held that lawful dissolution  gives  each

partner  the  right  to force liquidation.6   Other  courts  have

recognized   that   the  winding  up  that  follows   partnership

dissolution  generally involves liquidation  of  the  partnership

assets.7   Indeed, the drafters official comment on  the  uniform

statute explains:

          The  right  given  to each  partner  [by  the
          statute],  where no agreement has been  made,
          to  have his share of the surplus paid to him
          in    cash    makes   certain   an   existing
          uncertainty.   At present it is  not  certain
          whether a partner may or may not insist on  a
          physical  partition of the property remaining
          after third persons have been paid.[8]
Although the language of the Act and the general rule would  seem

to favor liquidation and cash distribution absent agreement to do

otherwise,  some courts construing statutes identical to  section

.330 have refused to compel liquidation.9

          We decline to follow the line of cases holding that the

statute  requires liquidation.  We hold that the  superior  court

did  not err in reading subsection .330(a) to allow it to  permit

Stiltner  to  buy  out Disotells partnership  interest.   Careful

reading of the text of AS 32.05.330(a) does not convince us  that

this  subsection  absolutely compels liquidation  and  forbids  a

buyout.     Under   appropriate,   although   perhaps    limited,

circumstances, a buyout seems a justifiable way of winding  up  a

partnership.   The superior court reasoned that  a  buyout  would

reduce  economic  waste  by avoiding the  cost  of  appointing  a

receiver and conducting a sale.  Even though there was no ongoing

business,  the superior court noted that the expense  of  a  sale

could  total  as  much as twelve percent of the propertys  value.

This was a valid reason and potentially benefitted both partners.

The  potential  savings were significant. The  courts  effort  to

avoid  further  loss to both partners justifies its  decision  to

offer Stiltner the buyout option.  Further, properly conducted, a

buyout  guaranteed  Disotell a fair  value  for  his  partnership

interest.  Liquidation exposed Disotell to the risk that no buyer

would  offer  to  pay  fair market value  for  the  property.   A

liquidation sale in which no other buyers participated might have

given  Stiltner an opportunity to buy the property for less  than

fair market value, to Disotells disadvantage.

     C.   It  Was  Error  To  Permit a Buyout  Without  Objective
          Evidence   of   the  Value  of  Disotells   Partnership
          Although it was not error to grant Stiltner the  option

to buy out Disotells partnership interest, it was error to permit

the  buyout without requiring some objective determination of the

value of all of the partnership assets, particularly the land and

building  Stiltner  contributed.  The  superior  court  used  tax

appraisals  to  establish the value of  the  hotel  property  and

parking  lot.  The court relied on a report by an expert  witness

who,  to  explain  the  accounting  methodology  set  out  in  AS

32.05.350,  assume[d], for illustrative purposes only,  that  the

hotel property and parking lot would sell for their tax-appraised

values.   The  tax appraisals were not introduced into  evidence.

The  expert  discussed them only hypothetically to illustrate  an

entirely  different  point,  not as support  for  an  opinion  of

property  values.   Neither  party  introduced  evidence  of  any

appraisal.   Disotell and Stiltner both acknowledge that  neither

offered any evidence of value of the partnership assets.

          Because a buyout is appropriate only if it is for  fair

market value, and there was no admissible evidence of fair market

value,  we  must  remand.   It will be  necessary  on  remand  to

determine the value of the assets before Stiltner attempts to buy

out Disotell.  The parties may offer any evidence relevant to the

value  of  the  partnership property.10  The  partnership  assets

include   both   the   hotel  property  and  the   parking   lot.

Contemporaneous  appraisals of both will  be  necessary  so  that

neither party is prejudiced by a fluctuation in the value of  one

asset.  On appeal, Disotell claims that he had no pretrial notice

that  the  superior  court  would  establish  a  value  for   the

partnership  property.  The  remand will  provide  Disotell  full

opportunity to introduce evidence or otherwise address the issue.

     D.   It  Was  Error  To  Characterize  as  Partnership  Debt
          Disotells   Obligation   To   Pay   for   His   Capital
          Disotell  argues that the court erred by characterizing

as  partnership debt the obligation he incurred to  pay  for  his

capital contribution.11  The parties stipulated that the partners

had  agreed that the funds from which Disotell would pay for  his

one-half interest in the hotel property would only come from  the

profits of the hotel.  The superior court found:

          The   partnership  obligated  itself  to  pay
          Stiltner all the profits from the partnership
          until  he  had  recovered his  original  cost
          basis  of  the Hotel property. . . . Further,
          the   partnership  took  on  Disotells   loan
          obligation, and promised to pay Stiltner  the
          $137,500.   Therefore, this court  views  the
          $137,500 as a loan obligation the partnership
          owes Stiltner.
The  superior  court  classified the $137,500  as  a  partnership

liability, deducting it from the net value of the partnership.

          Our primary concern is determining the partners intent.12

The   partners litigation stipulation stated that they had agreed

that  the  funds from which Disotell would pay for  his  one-half

interest  would  only come from the profits of the  hotel.   This

stipulation  is  not reasonably susceptible to an  interpretation

that   the   partnership  assumed  Disotells   loan   obligation.

Stiltners  trial  testimony is also inconsistent  with  any  such


          THE   COURT:       .  .  .  [P]art   of   the
          stipulation,  paragraph 7G, essentially  says
          that you were then to receive all the profits
          of  the  partnership until you had  recovered
          your   original  cost  basis  in  the   hotel
          property.   Can you explain to  me  how  that
          piece fits into your agreement?
          [STILTNER]:    Thats my purchase of the hotel.
          THE COURT:     Mm-hmm (affirmative).
          A:    That  him paying for that half  of  the
          hotel  was  delayed until the  hotel  started
          turning a profit.
          THE COURT:     Okay.
          A:    The 150 that he would owe me for  a  50
          percent  interest  in  the  hotel,  that  was
          delayed  until  the hotel started  turning  a
This  testimony  implies that the loan obligation was  Disotells,

not  the  partnerships.  It is unlikely that Stiltner would  have

been  willing to assume the obligation as a partnership debt  and

thereby  effectively  agree to pay half of Disotells  obligation.

We  conclude,  therefore, that it was error to  characterize  the

obligation as partnership debt.

          The  partners  stipulated that  Disotell  had  promised

Stiltner: (1) to supply development and construction services  on

a  cost-only basis to construct a hotel and (2) to contribute his

interest in the hotel property as capital and to subordinate  his

interest  in  profits until Stiltner had recovered  his  original

cost  basis  in the hotel.  The partners explicitly  agreed  that

Disotell  would pay for his one-half interest only from  profits.

It  is  not clear, however, whether the parties contemplated  the

          situation before us when they entered into the agreement.  The

superior  court  did not enter any findings  as  to  whether  the

repayment  only out of profits provision of the parties agreement

was intended to apply in the event that the partnership dissolved

before  making  profits.   We  therefore  remand  the  case  with

instructions  to  the  superior court to  determine  whether  the

parties intended the provision to apply in this context.

          If  the superior court finds that the provision was not

intended  to  apply in this situation, it may supply a  provision

that is reasonable under the circumstances.  Under section 204 of

the  Restatement (Second) of Contracts, [w]hen the parties  to  a

bargain  sufficiently defined to be a contract  have  not  agreed

with  respect to a term which is essential to a determination  of

their  rights  and  duties, a term which  is  reasonable  in  the

circumstances is supplied by the court.13  Comment d  to  Section

204 instructs on how the court should supply an omitted term:

          The  process of supplying an omitted term has
          sometimes  been  disguised as  a  literal  or
          purposive   reading   of  contract   language
          directed  to  a  situation  other  than   the
          situation that arises.  Sometimes it is  said
          that  the search is for the term the  parties
          would have agreed to if the question had been
          brought to their attention.  Both the meaning
          of the words used and the probability that  a
          particular term would have been used  if  the
          question  had been raised may be  factors  in
          determining  what term is reasonable  in  the
          circumstances. But where there is in fact  no
          agreement,  the court should  supply  a  term
          which  comports with community  standards  of
          fairness  and  policy rather than  analyze  a
          hypothetical   model   of   the    bargaining
          In  considering what term is reasonable,  the  superior

court  should  consider  the  risks and  obligations  each  party

assumed.   In  exchange for Stiltners contribution of  the  hotel

property  to  the  partnership, Disotell agreed to  renovate  and

build  the  hotel.  The agreement obliged Disotell to supply  his

development  and  construction services  to  the  hotel  project.

          Those services were part of the consideration he offered for the

one-half  interest in the hotel property that he  purchased  from

Stiltner.   If Disotell had completed construction of  the  hotel

but  the  project had proven unprofitable, we doubt that fairness

would  demand  that  Disotell  nevertheless  repay  the  one-half

interest.  In reality, however, the partnership dissolved  before

Disotell  fulfilled  his obligations under  the  agreement.   The

superior court has discretion to decide, therefore, that fairness

requires  that  Disotell  only repay the difference  between  the

value of the services he contributed to the hotel property before

the  project  became  impossible and the value  of  what  he  was

supposed to contribute.

     E.   The  Superior  Court Did Not Err by Refusing  To  Award
          Damages for Wrongful Dissolution of the Partnership.
          Disotell claims that he is entitled to recover  damages

for  Stiltners wrongful dissolution of the partnership.  The  Act

provided  that  [w]hen dissolution is caused in contravention  of

the partnership agreement the rights of partners [include] . .  .

the right, as against each partner who has caused the dissolution

wrongfully,  to  damages  for breach  of  the  agreement.15   The

superior  court denied Disotells damages claim, determining  that

neither  party  was  at fault in causing the dissolution  of  the

partnership . . . .  It found that the partnership was terminated

by  the  inability of the partners to agree on  how  the  project

should  proceed.  We hold that the superior courts fact  findings

are not clearly erroneous and affirm its decision to deny damages

for dissolution of the partnership.

          The superior court found:

          [T]he  partnership dissolved in May of  1998.
          The  dissolution came about when the  parties
          disagreed on how the project should  proceed.
          Disotell wanted to put in the sewer line, but
          Stiltner disagreed and did not want the sewer
          line  put in before Disotell started  getting
          permits   and  began  the  actual  renovation
          We review for clear error fact findings determining the

          causes of dissolution.16  Per AS 32.05.240, dissolution indicated

the  point  in  time when the partners ceased  to  carry  on  the

business together.17

          The  courts  findings  are  supported  by  the  parties

stipulations.   The  parties agree that their  dispute  over  the

sewer   construction  caused  a  complete  breakdown  in  [their]

relationship.  Because they disagreed over the necessity  of  the

sewer  line,  the project could not go forward.  Trial  testimony

also  supports the finding that the impasse was not the fault  of

either  party; it resulted from a difference of opinion.  It  was

not  clear error, therefore, for the superior court to find  that

neither  party was at fault in causing the dissolution  and  that

the  dissolution arose out of disagreement on how the project was

to proceed.

     F.    It  Was  Error To Deny Disotell Damages for  Stiltners
Post-Dissolution         Use of the Property.

          Disotell also argues that it was error not to award him

damages  for Stiltners appropriation of the hotel property  after

the  dissolution.  He maintains that he should recover the  value

of  Stiltners  use of the property as determined  by  its  rental

value  for  the months Stiltner occupied it.  The superior  court

gave three reasons for rejecting Disotells damages claim: (1) the

partnership purpose for which Disotell ha[d] an equal right  with

the   partners  to  possess  specific  property  ended  when  the

partnership  terminated in May 1998; (2) any wrongful  possession

claims  were  premature because the superior  court  had  yet  to

determine the parties respective rights vis-a-vis the partnership

and its assets; and (3) no order had directed either party to put

the  property  to economic use.  The court relied  on  Parker  v.

Northern  Mixing Co. for support.18  We there affirmed a superior

court ruling that the appellee partners were not entitled to  the

rental  value  of  the partnership property as  damages  for  the

appellant partners post-dissolution possession of the property.19

          We  think  that  reliance on Parker is  misplaced.   In

Parker,  the  superior  court had issued a pre-trial  order  that

authorized  the partners continued possession of the  property.20

The order did not require the partner to operate the plant during

that period.21  No such order was issued here.

          The  determination that Disotell no longer had an equal

right  to  possess the partnership property after the partnership

terminated  in  May  1998  is erroneous.   Dissolution  does  not

terminate  a  partnership; it continues until the winding  up  of

partnership affairs is complete.22  Because a partner . . . has an

equal  right  with  the partners to possess specific  partnership

property for partnership purposes, it follows that a partner  has

no  right  to  exclude  other partners from  the  property  after

dissolution  but  before termination and distribution.23   As  of

December  2001, Stiltner continued to occupy the hotel  property.

The superior court found:

          Although   it   is  a  commercial   property,
          Stiltner has spent most of his time  at  this
          12,500  square foot building, including  many
          nights,  and has done so as the sole building
          occupant.    Stiltner   testified   that   he
          occupies  the  premises as his residence  and
          has  stored  personal belongings  there,  and
          also  has,  since May 1998, stored the  goods
          from his former real estate business.
Stiltner  is  accountable to the partnership for any  benefit  he

derived  from  his  personal  use of partnership  property.   Per

Alaska Statute 32.05.160(a),

          Every   partner   shall   account   to    the
          partnership  for  any benefit,  and  hold  as
          trustee  for  it any profits derived  by  the
          partner  without  the consent  of  the  other
          partners from any transaction connected  with
          the formation, conduct, or liquidation of the
          partnership or from any use by the partner of
          its property.
We  therefore remand for determination of the value of  Stiltners

personal use of the property.


          Because the Act did not prohibit the buyout option,  it

was  not  error to grant Stiltner the option to buy out Disotells

partnership interest.  It was error, however, to permit a  buyout

without  finding the fair market value of the property, based  on

admissible evidence.  We therefore REMAND.  We also REMAND for  a

determination of what each partner contributed to  or  took  from

the partnership.  This determination should consider the value of

the  partnership assets and any difference between  the  services

Disotell  was to contribute to the project and those he  actually

contributed, but should not include the $137,500 loan obligation.

It  should also take into account the value of Stiltners personal

use of the hotel property during the windup period.

     1     Nearly  all relevant facts were stipulated to  by  the

     2     AS  32.05.040-.995.  References to the Act are  to  AS
32.05.040-.995.  Although the Act was repealed in 2000, effective
January 1, 2004, and replaced by AS 32.06.201-.997, it applies to
the Disotell-Stiltner partnership, which was formed in 1997.  Ch.
115,  7, 8, 10, SLA 2000.

     3    Pieper v. Musarra, 956 P.2d 444, 446 (Alaska 1998).

     4    Alaska R. Civ. P. 52(a).

     5    Pieper v. Musarra, 956 P.2d 444, 447 (Alaska 1998).

     6     Dreifuerst  v. Dreifuerst, 280 N.W.2d 335,  338  (Wis.
App. 1979).

     7     See,  e.g.,  Hyta v. Finley, 53 P.3d 338,  340  (Idaho
2002);  Doting v. Trunk, 856 P.2d 536, 541 (Mont. 1993); Gull  v.
Van Epps, 517 N.W.2d 531, 536 (Wis. App. 1994).

     8    Uniform Partnership Act  38 cmt. (1914).

     9     See,  e.g., Nicholes v. Hunt, 541 P.2d 820,  827  (Or.
1975)  (There is no express provision in [the Uniform Partnership
Act (UPA)] which establishes liquidation by sale as the exclusive
mode of distributing partnership assets after dissolution.);  see
also  Logoluso  v. Logoluso, 43 Cal. Rptr. 678,  682  (Cal.  App.
1965) (holding that court has authority to distribute partnership
property  in kind); Swann v. Mitchell, 435 So. 2d 797, 800  (Fla.
1983)  (stating that where circumstances exist which would render
distribution  in  kind, or another method of disposition,  to  be
more   favorable  to  the  interests  of  the  parties,  such   a
distribution  is permissible and desired); Creel  v.  Lilly,  729
A.2d 385, 399 (Md. 1999) (holding that nothing in Marylands UPA .
.   .  or  any  of  our  case law . . . supports  an  unequivocal
requirement of a forced sale); Rinke v. Rinke, 48 N.W.2d 201, 207
(Mich.  1951)  (stating  that it was not  the  intention  of  the
legislature  in the enactment of the [UPA] to impose a  mandatory
requirement  that,  under  all circumstances,  the  assets  of  a
dissolved  partnership shall be sold); Schoenborn v.  Schoenborn,
402  N.W.2d  212, 214 (Minn. App. 1987) (holding that partnership
statute does not create an absolute right to a sale).

     10    We have previously questioned the admissibility of tax
appraisals.   Bennett v. Artus, 20 P.3d 560, 565  (Alaska  2001);
Four  Separate Parcels of Land v. City of Kodiak, 938  P.2d  448,
454  (Alaska 1997) (quoting State v. 45,621 Square Feet of  Land,
475  P.2d  553, 557 (Alaska 1970) (reiterating rule that evidence
of   a   tax  assessment  to  establish  fair  market  value   is
inadmissible, since such an assessment is notoriously  unreliable
as a criterion of true value )).  Nonetheless, tax appraisals are
not necessarily inadmissible.  Harrower v. Harrower, 71 P.3d 854,
862  (Alaska 2003) (holding that superior courts reliance on tax-
assessed values was not clearly erroneous).

     11    Disotell also argues that the court erred by failing to
apply  the  partnership  assets  to  satisfy  the  $38,075  (plus
interest)  liability  owed  to  third-party  creditors  for   the
purchase  of  the parking lot.  AS 32.05.350 required  that  [i]n
settling  account  between the partners  after  dissolution,  the
assets  be  applied to the satisfaction of the  liabilities.  The
statute  required that liabilities owed to creditors  other  than
partners  be  paid  before  liabilities  owed  to  partners.   AS

     12    AS 32.05.350.

     13    Restatement (Second) of Contracts  204 (1981).

     14    Id. at cmt. d (emphasis added).

     15    AS 32.05.330(b)(1)(B).

     16    Wyller v. Madsen, 69 P.3d 482, 485 (Alaska 2003).

     17    AS 32.05.240.

     18     Parker  v. Northern Mixing Co., 756 P.2d 881  (Alaska

     19    Id. at 891.

     20    Id. at 890.

     21    Id. at 891.

     22    AS 32.05.250.

     23    AS 32.05.200.