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THE SUPREME COURT OF NEW HAMPSHIRE
___________________________
Rockingham
No. 98-616
SHELDON ROBBINS, M.D.
v.
SALEM RADIOLOGY & a.
November 20, 2000
Law Offices of Jack Bryan Little, P.C., of North Andover, Massachusetts (Jack Bryan Little on the brief and orally), for the plaintiff.
Gallagher, Callahan & Gartrell, P.A., of Concord (Michael R. Callahan on the brief and orally), for the defendants.
GROFF, J., superior court justice, specially assigned under RSA 490:3. The defendants, Salem Radiology, Robert C. Hannon, M.D., Robert S. Schall, M.D., and James R. Johnston, M.D., appeal from an order of the Superior Court (Abramson, J.) that the valuation of the plaintiff's, Sheldon Robbins, M.D., partnership interest in Salem Radiology partnership was controlled by the Uniform Partnership Act, RSA 304-A:40 (1995) (amended 1996). The defendants further contend that the Superior Court (Gray, J.) erred in not permitting them to challenge certain findings made by the appraiser who valued the plaintiff's partnership interest. We reverse and remand.
The record discloses the following pertinent facts. The plaintiff signed a two-year personal services contract to work as a radiologist for Salem Radiology on March 20, 1989. The contract provided that at the end of his employment period, the plaintiff would have the option of becoming a full partner in Salem Radiology in accordance with the terms of the existing partnership agreement. On July 1, 1991, the plaintiff became an equal partner in Salem Radiology. The plaintiff was not required to pay for his partnership interest.
On July 1, 1993, the plaintiff withdrew from Salem Radiology and requested that he receive his equal share of the accounts receivable. At that time, defendants Hannon, Schall, and Johnston were the remaining partners in Salem Radiology. Dr. Hannon disagreed with the plaintiff's valuation of his partnership interest, and paid the plaintiff three monthly installments of $18,000. On March 11, 1995, the plaintiff filed a petition with the superior court, seeking an accounting of his partnership interest.
At the hearing on the petition for an accounting, the plaintiff testified that he believed Article X of the partnership agreement applied to his withdrawal. Article X, titled "VOLUNTARY DISSOLUTION," provides in section (a) that "[o]n a voluntary dissolution, the Partnership shall immediately commence to wind up its affairs. The Partners shall continue to share profits." The plaintiff argued that because Article X was silent as to the valuation of a withdrawing partner's interest, the court was required to evaluate his interest in accordance with the Uniform Partnership Act, RSA 304-A:40. Accordingly, the plaintiff contended that he was entitled to his share of the accounts receivable that existed when he withdrew from the partnership.
Dr. Hannon testified that it was his and the other partners' understanding that the partnership was not required to provide anything to a partner who voluntarily withdrew, and that the partnership agreement did not specifically provide for the valuation of a withdrawing partner's interest. Nevertheless, he stated that the plaintiff's partnership interest was to be valued in accordance with Article IX of the partnership agreement. Article IX, titled "RETIREMENT, DEATH AND/OR DISABILITY OF A PARTNER," states, in pertinent part, that "[t]he Partners agree that the value of a given Partner's interest in the Partnership is limited to the accumulated and undistributed fees of the Partnership."
The trial court found that Article IX did not include a provision for the voluntary withdrawal of a partner, and that in the absence of such a provision, the plaintiff's withdrawal would be governed by the Uniform Partnership Act. See RSA 304-A:40. As a result, the trial court found that the plaintiff was entitled to his share of the profits that were generated while he was a partner, less any liabilities incurred up to the date of dissolution.
Pursuant to this order, an appraiser calculated the value of the plaintiff's partnership interest, and the parties submitted these findings to the trial court for a confirmation hearing scheduled for August 1998. The defendants, however, took issue with some of the appraiser's accounting procedures and moved to continue the confirmation hearing. The Trial Court (Gray, J.) denied the request and confirmed the appraiser's report, which valued the plaintiff's partnership interest at $178,997. This appeal followed.
On appeal, the defendants argue that the trial court's application of RSA 304-A:40 was erroneous because Article IX of the partnership agreement did provide for the valuation of a voluntarily withdrawing partner's interest.
Dissolution of a partnership is defined as "the change in relation of the partners caused by any partner ceasing to be associated in the carrying on as distinguished from the winding up of the business." RSA 304-A:29 (1995). RSA 304-A:40 provides specific rules for "settling accounts between the partners after dissolution, . . . subject to any agreement to the contrary." Therefore, that statute will not apply when there is an agreement to the contrary. See Coe v. Watson, 126 N.H. 456, 458, 493 A.2d 490, 491 (1985).
To properly address the issue before us, we begin by interpreting Salem Radiology's partnership agreement to determine whether the parties intended to provide for the valuation of a voluntarily withdrawing partner's interest.
Because the partnership agreement is a form of contract, see 59A Am. Jur. 2d Partnership