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Brothers Don and Harley Shoemaker formed a partnership, D & H Real Estate. After 18 years, Harley withdrew from the partnership and asked for payment of the value of his partnership interest in accordance with the following provision in the partnership agreement:
In the event that the remaining partner(s) and the … retiring partner are unable to agree upon the value to be assigned to the partnership shares, all interested individuals shall select an appraiser and in the event they are not able to agree upon an appraiser, the remaining partner(s) and the … retiring partner shall be entitled to select an appraiser with the appraisers separately submitting their appraisals. If the appraisals are within ten percent of each other[,] the value shall be an average of the two appraisals. If the difference in the appraisals exceeds ten percent[,] the two appraisers shall together attempt to reach agreement on the value and if unable to do so shall obtain a third appraiser with the three appraisers together agreeing upon the value. The appraisers shall determine the value of the partnership as a going concern with all assets to be valued at their fair market value…. The value of the partner’s interest as determined in the above section shall be paid without interest to the withdrawing or retiring partner … not later than 90 days after the effective date of the dissolution or termination.
When Don failed to pay the appraisal amount within 90 days of Harley’s withdrawal, Harley demanded that he receive not only the amount determined by the appraisal, but also a share of the profits earned by the partnership after his withdrawal, as well as interest on the late payment.
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