## Facts

- Century Park, Ltd., a limited partnership, owned a 62-unit Tucson apartment complex.
- G & S Investments and Thomas N. Nordale were general partners; other investors were limited partners.
- Beginning in 1979, Nordale’s drug use and behavior disrupted partnership operations and tenant relations, including threats, tenant disturbances, and refusal to pay rent on a unit he occupied.
- Nordale failed to pay his share of partnership expenses and exercised poor business judgment affecting the partnership.
- The partnership agreement included a continuation/buyout provision allowing the surviving general partner to continue the business and purchase a withdrawing or deceased general partner’s interest for the amount of that partner’s “capital account.”
- G & S filed an action seeking judicial dissolution and removal of Nordale as a general partner; before any decree issued, Nordale died.
- After Nordale’s death, G & S sought to proceed under the agreement’s continuation/buyout provision and to value the estate’s interest by Nordale’s capital account rather than fair market value.

## Issues

1. Whether the surviving general partner could continue the partnership under the agreement after Nordale’s death despite the pending dissolution lawsuit.
2. Whether the estate’s payout was governed by the agreement’s “capital account” formula or by a fair-market-value measure.
3. Whether equitable estoppel barred G & S from invoking the continuation/buyout provision based on its earlier dissolution filing.
4. Whether the trial court abused its discretion by denying attorney’s fees under A.R.S. § 12-341.01.

## Decision

- The Court of Appeals affirmed the judgment allowing G & S to continue the partnership and buy out the estate under the agreement.
- The court held that the pending dissolution action did not terminate the partnership because no judicial dissolution had been decreed before Nordale’s death.
- The court upheld valuation by the agreement’s capital-account method (cost-based accounting), affirming the award of $4,867.57 to the estate.
- The court rejected equitable estoppel, finding no reasonable reliance on an unadjudicated dissolution filing.
- The court affirmed the denial of attorney’s fees, concluding there was no abuse of discretion under A.R.S. § 12-341.01.

## Legal Principles

- A filed request for judicial dissolution does not itself effect dissolution when dissolution requires a court decree; until a decree issues, contractual continuation and buyout provisions remain available.
- Clear partnership buyout terms are enforced as written; “capital account” is measured by accounting on a cost basis (capital contributions plus profits minus losses), not by fair market value, absent contractual language to the contrary.
- Equitable estoppel requires reasonable reliance and resulting prejudice; reliance on a legal position not adopted by a court may be unreasonable.
- Attorney’s fees under A.R.S. § 12-341.01 are discretionary; denial will be affirmed absent a showing of abuse of discretion.

## Conclusion

The court enforced a limited partnership agreement that permitted continuation after a general partner’s death and required buyout at the deceased partner’s capital-account balance, holding that a pending dissolution suit did not foreclose the contractual remedy without a dissolution decree and affirming the discretionary denial of attorney’s fees.


G & S Invs. v. Belman, 145 Ariz. 258, 700 P.2d 1358 (Ct. App. 1985)