Keith Mogensen sued Steven Mogensen to force him to sell his partnership interest in Mogensen Bros. Land & Cattle Company (Mogensen Bros.). Keith sought to enforce a buyout provision in the partnership agreement. Steven counterclaimed against Keith, Sandra Mogensen, and Opal Mogensen, seeking a declaration that two real estate parcels, known as DeWulf Place and Mahoney Place, are partnership property. Opal is the titled owner of DeWulf Place, and Keith owns Mahoney Place.
In Keith’s claim, the district court found that under the partnership agreement, Keith failed to exercise the buyout within 90 days as provided in the partnership agreement. In Steven’s counterclaim, the court found that Opal’s DeWulf Place was partnership property, but denied Steven’s claim that Mahoney Place was partnership property.
We have two questions to consider: (1) when did the 90-day provision start and (2) whether the two red estate parcels titled in Opal’s and Keith’s names are partnership property.
I. BACKGROUND
1. The Parties
In 1982, brothers Brian Mogensen, Keith, and Steven entered a partnership agreement forming Mogensen Bros., a farming operation. Third-party defendant Opal is their mother, and third-party defendant Sandra is Keith’s wife. The brothers are also the shareholders in a family construction company called Ranch and Farm Agricultural Systems, Inc. (Ranch and Farm).
2. The Partnership’s Buyout Provision
The Mogensen Bros, partnership agreement contains a buyout option. Paragraph 19 of the partnership agreement provides that a partner who wishes to withdraw and dispose of his interest must give the other partners written notice of his intent and an opportunity to purchase his interest. This provision further requires that a partner electing to purchase must provide notice of his intent to the withdrawing partner within 90 days after the withdrawing partner gives notice that he intends to dispose of his interest. The withdrawing partner must then sell his interest to the purchasing partner at book value.
3. Steven’s Prior Lawsuit
For several years, tension had been building between Steven and his brothers. Brian, Keith, and Steven attempted to reach an agreement in dissolving and winding up the partnership, but those attempts failed. On October 3,2002, Steven sued Mogensen Bros., Keith, and Brian, seeking to have the partnership dissolved and its assets liquidated under the Uniform
4. Keith Sues Steven to Force the Buyout Provision
Keith alleges that Steven’s 2002 lawsuit to dissolve the partnership amounted to written notice that Steven intended to dispose of his interest in Mogensen Bros. Consequently, on August 25, 2003, Keith notified Steven that he intended to exercise the option to purchase Steven’s partnership interest. He sent another letter to Steven on October 15, 2003, with an accountant’s evaluation of Steven’s interest. Steven refused to sell his partnership interest to Keith.
On March 29, 2004, Keith sued Steven to specifically enforce the buyout provision. The district court found that when Steven filed his 2002 lawsuit for dissolution, he gave notice of his intent to dispose of his partnership interest. But the court also found that Keith did not exercise his option to purchase within 90 days. The court determined that Steven’s notice to sell his interest was effective the day he filed suit. Because Keith did not give notice of his intent to purchase until nearly 1 year later, the district court found that Keith failed to timely exercise the buyout option. The court dismissed Keith’s complaint. Keith appeals, arguing that the July 28, 2003, order granting summary judgment — not the date Steven filed his action — triggered the start of the 90-day notice period and that thus, his August 25 and October 15 letters were timely notice. Steven does not appeal the court’s finding that his lawsuit triggered the buyout provision.
5. Steven’s Counterclaim
In Steven’s counterclaim to Keith’s lawsuit, he requested a declaration that Mogensen Bros, owns two parcels of real estate known as DeWulf Place and Mahoney Place. Although neither property is titled in the partnership’s name, Steven claims that Mogensen Bros, owns both parcels.
(a) Evidence Regarding Ownership of DeWulf Place
Brian, Keith, and Steven decided to purchase DeWulf Place at auction. Opal, however, is the title owner of DeWulf Place. Opal testified she acquired title because “[t]he boys decided that they wanted to put it in my name and I agreed to it.” She testified they put the property in her name to benefit from a government farm subsidy program. She further testified Mogensen Bros, paid 10 percent of the purchase price, about $10,000 to $12,000, and she financed the remaining 90 percent through a loan from Ranch and Farm.
For about 8 years, from 1990 to 1998, the partnership paid no rent, but made improvements and paid the taxes on the property. Opal testified that Mogensen Bros, “developed the land, they put pivots on it, [and] they put wells down,” and the partnership listed the irrigation development at DeWulf Place as a partnership asset. Keith and Opal testified, however, that the improvements and taxes were
The district court determined that Mogensen Bros, owns DeWulf Place. It found that “the evidence clearly shows that. . . DeWulf [P]lace was acquired solely with partnership assets.” Keith and Opal appeal.
(b) Evidence Regarding Ownership of Mahoney Place
Keith is the title owner of Mahoney Place. Keith and Sandra borrowed the funds to purchase Mahoney Place, and they have made the annual loan payments. After acquiring the property, Keith and Sandra annually leased it to Mogensen Bros. Mogensen Bros, and Keith have both paid for irrigation developments on the property. The district court found that Keith and Sandra own Mahoney Place.
II. ASSIGNMENTS OF ERROR
Keith and Opal assign, restated and renumbered, that the district court erred in (1) holding that Keith did not timely exercise the buy-sell provision of the partnership agreement and (2) determining that DeWulf Place is a partnership asset.
On cross-appeal, Steven assigns, restated, that the court erred in determining that Mahoney Place is not a partnership asset.
III. STANDARD OF REVIEW
Regarding Keith’s claim to enforce the buyout provision, an action for specific performance sounds in equity, and on appeal, we decide factual questions de novo on the record. We will resolve questions of fact and law independently of the trial court’s conclusions. 2
Regarding Steven’s counterclaim, in reviewing an equity action for a declaratory judgment, we decide factual issues de novo on the record and reach conclusions independent of the trial court. But when credible evidence is in conflict on material issues of fact, we may consider and give weight to the fact that the trial court observed the witnesses and accepted one version of the facts over another. 3
IV. ANALYSIS
1. Buy-Sell Agreement
(a) Timeliness of Keith’s Election to Purchase Steven’s Interest
Keith contends that he timely exercised his option to purchase Steven’s partnership interest under the buyout provision. He argues that he complied with the timeframe because he gave notice of his intention to buy out Steven’s partnership interest within 90 days of July 28, 2003, the date of the summary judgment order in Steven’s prior lawsuit.
We conclude that service of the complaint on Keith, rather than either the summary judgment order or the filing of the lawsuit, provided notice of Steven’s intent to withdraw and dispose of his interest. Although the record does not show the date of service, it does show that Keith moved for summary judgment on May 20, 2003, which indicates he had at least received notice by that date. Keith’s first letter of intent to purchase Steven’s interest in the partnership, dated August 25, 2003, was outside the 90-day limitation period. We affirm the district court’s order denying specific performance.
(b) Equitable Relief
Keith also argues that Steven is equitably estopped from asserting the 90-day time period as a defense. Throughout this litigation, Steven has denied that he invoked the partnership agreement’s buy-sell provision when he sued to dissolve the partnership. Keith contends that it is inequitable for Steven to now gain protection from the same partnership provision he has attempted to avoid through this litigation.
The elements of equitable estoppel are, as to the party estopped: (1) conduct which amounts to a false representation or concealment of material facts, or at least which is calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (2) the intention, or at least the expectation, that such conduct shall be acted upon by, or influence, the other party or other persons; and (3) knowledge, actual or constructive, of the real facts.
As to the other party, the elements are: (1) lack of knowledge and of the means of knowledge of the truth as to the facts in question; (2) reliance, in good faith, upon the conduct or statements of
Equitable estoppel is not limited to circumstances of fraud but may also be applied to prevent an inequitable resort to a statute of limitations. And a defendant may, by his or her representations, promises, or conduct, be so estopped where the other elements of estoppel are present. 9
Keith asserts that Steven’s conduct in filing his lawsuit and denying that he provided notice of his intent to withdraw creates a basis for equitable estoppel. We disagree. Steven did not make any promise or representation, or engage in any conduct, that would have led Keith to delay sending notice of his intent to purchase Steven’s shares. Keith argues, “While Steven may not have ‘lulled’ Keith into a sense of security, thereby causing him to subject the instant suit to the bar of a time provision limitation, Steven’s prior suit for judicial dissolution is akin to the same when all of the facts of the matter are examined.” 10 It is unclear how filing a lawsuit or denying Keith’s claims could cause Keith to act to his detriment. If anything, the initiation of litigation against Keith should have alerted him of the need to diligently protect his interests. This argument is without merit.
2. DeWulf Place Is Partnership Property
Steven, in his counterclaim, alleged that DeWulf Place is partnership property despite being titled in Opal’s name. Nebraska’s Uniform Partnership Act of 1998 governs when property is considered partnership property. Section 67-412(3) of the act provides:
Property is presumed to be partnership property if purchased with partnership assets, even if not acquired in the name of the partnership or of one or more partners with an indication in the instrument transferring title to the property of the person’s capacity as a partner or of the existence of a partnership.
The district court found that “the evidence clearly shows that .. . DeWulf [PJlace was acquired solely with partnership assets.” The court therefore applied the presumption in finding that DeWulf Place is partnership property. Keith and Opal argue that Mogensen Bros, did not purchase DeWulf Place with partnership assets, so the district court should not have applied the presumption in § 67-412(3).
Although the record reflects that DeWulf Place was not acquired solely with partnership assets, we find that the presumption in § 67-412(3) applies because Mogensen Bros, supplied at least part of the purchase price. Although Keith and Opal argued that Mogensen Bros, contributed funds either as rent or as a loan to Opal, the record does not support this argument. Further, the presumption can apply even when the partnership provides
In determining whether a party has rebutted the presumption, no single factor or combination of factors is dispositive. 13 Ultimately, the partners’ intentions control whether property belongs to the partnership, at least among the partners themselves. 14 Common factors in considering partners’ intent include the partnership’s use of the property for partnership purposes, the erection of buildings and other improvements at partnership expense, whether partnership books and accounts treat property as partnership property, whether the property is listed in credit applications and tax returns as a partnership asset, and whether the partnership is involved in the payment of taxes. 15 However, a presumption of “prima facie individual ownership of real property” also exists in the titleholder. 16 But “[t]he inference concerning the partners’ intent from the use of partnership funds outweighs any inference from the State of the title . . . .” 17
We addressed some of these factors in Von Seggern v. Von Seggern. 18 There, farm property was titled in the name of John Von Seggern, a partner in a farming partnership. Another partner, however, claimed the partnership made some of the payments, making the farm partnership property. We determined that the partnership had not purchased the farm with partnership funds. Further, the evidence reflected that the other partners did not want the farm and that John should have it as his own. We also considered that John paid the taxes in concluding that the farm did not belong to the partnership.
The South Dakota Supreme Court also considered several factors that rebutted the presumption. In Bachand v. Walker, 19 land was titled in the name of Bruce Walker and his wife, and Walker made most of the payments individually. The partnership, however, made two payments with partnership funds. The court recognized the rebuttable presumption that property purchased with partnership funds becomes partnership property. But the court also considered several other factors. Walker and his wife had purchased the property before the partnership was formed. He paid for the property taxes, insurance, and improvements in excess of $500. Further, the partnership never listed the property as an asset in any partnership documents. The court determined that the parties did not intend the property to be partnership property.
Here, although some evidence does indicate an ownership interest in Opal, it is not enough to overcome the presumption in
§ 67-412(3). We conclude that the brothers purchased the property for the partnership. The most
The use of partnership funds in the purchase and the other evidence suggest that Opal owns DeWulf Place in name only. However, equity dictates that Opal should not be liable for the debt on DeWulf Place — real estate she no longer owns. Once we acquire equity jurisdiction, we can adjudicate all matters properly presented and grant complete relief to the parties. 22 We hold that DeWulf Place is partnership property, subject, however, to Mogensen Bros.’ paying the balance of the indebtedness owed to Ranch and Farm.
3. Steven’s Cross-Appeal; Mahoney Place Is Not Partnership Property
Steven contends that Mahoney Place is partnership property. The evidence, however, shows that the presumption in § 67-412(3) does not apply. Instead, the opposite presumption applies. Section 67-412(4) provides:
Property acquired in the name of one or more of the partners, without an indication in the instrument transferring title to the property of the person’s capacity as a partner or of the existence of a partnership and without use of partnership assets, is presumed to be separate property, even if used for partnership purposes.
(Emphasis supplied.)
Here, Keith is the title owner of Mahoney Place, with no indication in the deed that he owns it in his capacity as a partner. Keith purchased it solely with his funds, and he is liable for the loan payments. Thus, the presumption in § 67-412(4) applies. Further, no significant evidence exists that would overcome the presumption. The district court did not err in finding that Mahoney Place is not partnership property.
V. CONCLUSION
We conclude that Keith did not timely exercise the buy-sell provision of the partnership agreement. DeWulf Place is partnership property subject to Mogensen Bros.’ paying the balance of the indebtedness owed to Ranch and Farm, and Mahoney Place is not partnership property. Accordingly, we affirm as modified the district court’s decision.
Affirmed as modified.
Notes
See Neb. Rev. Stat. §§ 67-401 to 67-467 (Reissue 2003 & Cum. Supp. 2006).
See
Langemeier v. Urwiler Oil & Fertilizer,
See
City of Ashland v. Ashland Salvage,
Logan
v.
Logan,
Id.
at 423,
Maus
v. Galic,
Id. at 45 (emphasis supplied).
Olsen
v.
Olsen,
Olsen v. Olsen, supra note 8.
Brief for appellants at 21.
See,
Bachand
v.
Walker,
See,
In re Wilson’s Estate,
See Bachand v. Walker, supra note 11.
See Unif. Partnership Act (1997), § 204, comment 3, 6 U.L.A. 97 (2001).
See 59A Am. Jur. 2d, supra note 11, §§ 252 and 253.
Id., § 254 at 364.
Unif. Partnership Act (1997), supra note 14, comment 4 at 98.
Von Seggern v. Von Seggern,
See Bachand v. Walker, supra note 11.
Cf. Von Seggern v. Von Seggern, supra note 18.
Cf. Bachand v. Walker, supra note 11.
See
Denny Wiekhorst Equip. v. Tri-State Outdoor Media,