Robertson v. Jacobs Cattle Co.
292 Neb. 195
Neb.2015Background
- Jacobs Cattle Company was a family partnership owning 1,525 acres of farmland (appraised at $5,135,000 as of Sept. 2011) and other assets; seven partners included four dissociating partners (Duane, Carolyn, James, Patricia Robertson).
- The four partners sought dissolution in 2007; the district court found no statutory ground for dissolution but ordered judicial dissociation/expulsion of the four partners.
- Statutory scheme: Neb. Rev. Stat. § 67-434(2) requires buyout price to assume partnership assets were sold at liquidation or going-concern value; § 67-445(2) requires profits and losses from liquidation be credited/charged to partners’ accounts.
- Lower court initially allocated buyout based on capital-account ownership (5.33% each). Nebraska Supreme Court (Robertson I and II) held capital gain from a hypothetical sale constitutes "net profits" and must be distributed according to the partnership’s profit-sharing (12.5% to each dissociating partner).
- On remand the district court computed net liquidation value $5,212,015, subtracted total capital-account balances $1,159,814, treated the $4,052,201 residual as liquidation profit, awarded each dissociating partner 12.5% of that profit plus their capital-account balance, and ordered payment to the district court clerk.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper base for computing buyout profit | Use capital gain on farmland only (market value minus original cost); award 12.5% of that gain plus capital-account balances | Buyout must assume liquidation of all partnership assets; profits = net liquidation value minus capital-account balances | Court affirmed remand calculation: profits = net liquidation value ($5,212,015) minus total capital accounts ($1,159,814) = $4,052,201; each dissociating partner gets 12.5% of that plus capital-account balance. |
| Whether capital gain from land is "net profits" subject to 12.5% allocation | Yes, capital gain should be distributed as net profits to partners at 12.5% | Argued capital gain cannot be recognized absent actual sale and should follow capital-account ownership | Court held capital gain is part of "net profits" from the hypothetical liquidation per statute and prior remand; distribution must reflect profit-sharing (12.5%). |
| District court’s authority to order payment to clerk of court | Payment should be to partners or as otherwise specified; no prior mandate required payment to clerk | Clerk is proper place to pay a judgment under court authority and statute; clerk acts under court direction | Court affirmed ordering payment to the clerk as proper (citing clerk duties/common law). |
| Admissibility of additional evidence on remand | Proffered exhibits and evidence should be admitted to support plaintiff’s computation | Remand was limited by Supreme Court; record was sufficient per Robertson II and further evidence not permitted | Court held district court properly excluded additional evidence because remand permitted only implementation of the Supreme Court’s mandate. |
Key Cases Cited
- Robertson v. Jacobs Cattle Co., 285 Neb. 859, 830 N.W.2d 191 (Neb. 2013) (affirmed dissociation and interpreted statutory framework for valuation and distribution)
- Robertson v. Jacobs Cattle Co., 288 Neb. 846, 852 N.W.2d 325 (Neb. 2014) (held capital gain from hypothetical sale is a "net profit" to be distributed per profit-sharing; remanded with directive to add 12.5% of liquidation profit to each dissociated partner’s capital account)
- Myers v. Miller, 134 Neb. 824, 279 N.W. 778 (Neb. 1938) (proper place to pay a judgment is the clerk of the court obtaining the judgment)
- VanHorn v. Nebraska State Racing Comm., 273 Neb. 737, 732 N.W.2d 651 (Neb. 2007) (on remand a district court must proceed strictly within the Supreme Court’s mandate).