Fredericks Peebles v. Assam , 915 N.W.2d 770 ( 2018 )


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  • Nebraska Supreme Court Online Library
    www.nebraska.gov/apps-courts-epub/
    08/03/2018 09:08 AM CDT
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    FREDERICKS PEEBLES v. ASSAM
    Cite as 
    300 Neb. 670
    Fredericks Peebles & Morgan LLP,                appellee,
    v. Fred Assam, appellant.
    ___ N.W.2d ___
    Filed August 3, 2018.    No. S-16-855.
    1.	 Declaratory Judgments. An action for declaratory judgment is sui
    generis; whether such action is to be treated as one at law or one in
    equity is to be determined by the nature of the dispute.
    2.	 Partnerships: Accounting: Appeal and Error. An action for a partner-
    ship dissolution and accounting between partners is one in equity and is
    reviewed de novo on the record.
    3.	 Declaratory Judgments: Equity: Appeal and Error. In reviewing
    an equity action for a declaratory judgment, an appellate court tries
    factual issues de novo on the record and reaches a conclusion inde-
    pendent of the findings of the trial court, subject to the rule that where
    credible evidence is in conflict on material issues of fact, the review-
    ing court may consider and give weight to the fact that the trial court
    observed the witnesses and accepted one version of the facts over
    another.
    4.	 Partnerships. The interpretation of a partnership agreement presents a
    question of law.
    5.	 Appeal and Error. An appellate court independently reviews a lower
    court’s rulings on questions of law.
    6.	 Courts: Jurisdiction: States. In answering any choice-of-law question,
    a court first asks whether there is any real conflict between the laws of
    the states.
    7.	 Jurisdiction: States. An actual conflict exists when a legal issue is
    resolved differently under the law of two states.
    8.	 Contracts. A contract written in clear and unambiguous language is not
    subject to interpretation or construction and must be enforced according
    to its terms.
    9.	 Actions: Appeal and Error. An appellate court determines the nature of
    an action from the relief sought.
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    10.	 Breach of Contract: Damages. A suit for damages arising from breach
    of a contract presents an action at law.
    11.	 Trial: Expert Witnesses. The trier of fact is not bound to accept expert
    opinion testimony.
    12.	 Trial: Evidence. Evidence not directly contradicted is not necessarily
    binding on the triers of fact, and may be given no weight where it is
    inherently improbable, unreasonable, self-contradictory, or inconsistent
    with facts or circumstances in evidence.
    13.	 Witnesses: Testimony. The credibility of a witness is a question for the
    trier of fact, and it is within its province to credit the whole of the wit-
    ness’ testimony, or any part of it, which seemed to it to be convincing,
    and reject so much of it as in its judgment is not entitled to credit.
    14.	 Options to Buy or Sell: Valuation: Words and Phrases. “Fair market
    value” is the price that a willing buyer would pay a willing seller, both
    persons having reasonable knowledge of all relevant facts and neither
    person being under compulsion to buy or to sell.
    15.	 Options to Buy or Sell: Presumptions. The willing buyer-willing seller
    rule presumes that a potential transaction is to be analyzed from the
    viewpoint of a hypothetical buyer whose only goal is to maximize his or
    her advantage.
    16.	 Options to Buy or Sell. The willing buyer-willing seller rule is applied
    using the viewpoint of an objective hypothetical buyer, rather than a
    subjective buyer.
    Appeal from the District Court for Douglas County: Shelly
    R. Stratman, Judge. Affirmed.
    David A. Domina, of Domina Law Group, P.C., L.L.O., for
    appellant.
    Daniel P. Chesire, Brian J. Brislen, and Cathy S. Trent-
    Vilim, of Lamson, Dugan & Murray, L.L.P., and James J.
    Banks, of Banks & Watson, for appellee.
    Heavican, C.J., Miller-Lerman, Cassel, Stacy, K elch, and
    Funke, JJ.
    Funke, J.
    This appeal concerns a determination of Fred Assam’s
    ownership interest in the law firm of Fredericks Peebles &
    Morgan LLP (FPM). After Assam voluntarily withdrew from
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    FREDERICKS PEEBLES v. ASSAM
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    the firm, FPM filed suit seeking a declaration of the rights of
    FPM and Assam under the governing partnership agreement
    (Partnership Agreement). Following a bench trial, the district
    court for Douglas County declared the fair market value of
    Assam’s interest in FPM to be $590,000. For the reasons
    stated herein, we affirm.
    I. BACKGROUND
    1. Partnership
    FPM is a limited liability partnership composed of legal pro-
    fessionals. FPM has a nationwide practice which specializes in
    handling legal issues impacting Native American tribes, includ-
    ing, but not limited to, facilitating interrelationships between
    Native American tribes and the federal government, state gov-
    ernments, and other tribes, as well as foreign governments and
    foreign companies. FPM represents Native American tribes,
    entities, and individuals, as well as banks and financial institu-
    tions which deal with Native American tribes.
    FPM was organized under the laws of the District of
    Columbia, and its principal place of business is located in
    Omaha, Nebraska. At the relevant time, FPM had dozens
    of attorneys throughout offices in Sacramento, California;
    Louisville, Colorado; Sioux Falls, South Dakota; Omaha,
    Nebraska; Winnebago, Nebraska; Peshawbestown, Michigan;
    and Washington, D.C.
    As of October 1, 2014, FPM had five equity partners:
    Thomas W. Fredericks, John M. Peebles, Lance G. Morgan,
    Conly J. Schulte, and Assam. Fredericks, Peebles, Schulte, and
    Assam each held a 23.25 percent interest in FPM, and Morgan
    held the remaining 7 percent. FPM traditionally implemented
    a team approach in servicing its clients’ accounts, but nearly
    90 percent of FPM’s clients were brought in by Fredericks,
    Peebles, Morgan, and Schulte. Assam, a financial attorney,
    worked on accounts brought in by the other equity partners.
    Only three clients followed Assam when he left FPM, two of
    which maintained a relationship with FPM.
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    In early 2014, FPM undertook a thorough financial review
    in order to implement long-term planning. The partners
    began to discuss changes to their compensation structure in
    order to reward younger partners for bringing in new cli-
    ents. Fredericks proposed that compensation should be based
    on client generation, while others proposed that compensa-
    tion should be based upon equity ownership. The partners
    exchanged and refined proposals over a period of months,
    and FPM ultimately arrived at a hybrid of the two compensa-
    tion structures.
    According to the testimony of Peebles, Assam had not kept
    up to date on the various proposals and voiced concern about
    only Fredericks’ initial proposal, which Assam felt negatively
    impacted his compensation. As a result of his concerns, Assam
    hired the accounting firm Eide Bailly LLP to perform a valua-
    tion of his equity interest in FPM.
    On the evening of October 2, 2014, Assam sent an email to
    his partners in which he voluntarily resigned from FPM. In the
    email, Assam advised, “As you are all aware, over the course
    of the last few months, I have been under a personal attack
    by . . . Fredericks.” Assam stated the compensation structure
    Fredericks had proposed would “transfer complete control of
    [FPM] over to [Fredericks]. This means the life of my family
    and me will [sic] in complete control of a man who does not
    care for me and, in fact, will apparently act with intent to only
    to [sic] harm me.”
    The following morning, Assam, whose office is located
    in Sioux Falls, flew to Denver, Colorado, to attend a partner
    meeting at the Louisville office, which had been scheduled
    prior to Assam’s resignation email. During his flight, Assam
    reviewed some of the more recent compensation structure
    proposals and realized the documents he had relied on when
    deciding to resign had significantly changed. At the meeting,
    Assam told the partners he had made a mistake and wanted to
    rescind his resignation and rejoin FPM. The partners declined
    and formally voted to accept Assam’s resignation.
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    The FPM partners then continued their meeting and, as part
    of their ongoing financial review, addressed the agenda item
    of how to treat approximately $10 million in old accounts
    receivable. Many of FPM’s clients are sovereign under fed-
    eral law and therefore may not be sued to collect on past-due
    billing absent a waiver of sovereign immunity. FPM has a
    practice of not requesting such a waiver from its clients so as
    to not jeopardize client relationships. As a result, according to
    the testimony of Morgan, FPM has a lower-than-average col-
    lection rate.
    FPM carried a significant amount of outstanding accounts
    receivable for an extended period of time. At the partnership
    meeting, FPM decided to write off as uncollectable approxi-
    mately $10 million in old accounts receivable.
    After Assam’s resignation, the partners made him an offer
    of payment intended to represent the fair market value of
    his equity interest as set out in the Partnership Agreement.
    However, the two sides could not agree as to the value of
    Assam’s interest.
    In late 2014, FPM filed a declaratory judgment action
    to determine the value of Assam’s interest. Assam filed an
    answer and counterclaim for an accounting and fair valuation
    of his interest in FPM, based on the Partnership Agreement.
    Assam sought a money judgment and attorney fees. FPM filed
    an amended complaint which asserted claims for breach of
    contract, breach of fiduciary duty, fraud, constructive fraud,
    rescission, disgorgement, and an accounting. Assam filed
    an answer which denied such claims and stated affirma-
    tive defenses.
    At trial, FPM moved without objection to conform its plead-
    ings to the adduced evidence in order to clarify that its sole
    claim was for declaratory judgment as to the amount it owed
    Assam for the fair market value of his ownership interest, as
    provided under the Partnership Agreement. Assam clarified
    that he maintained his counterclaim for an accounting, fair
    valuation, and a money judgment, plus attorney fees.
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    FREDERICKS PEEBLES v. ASSAM
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    The Partnership Agreement is dated May 1, 2007, and was
    signed by Fredericks, Peebles, Morgan, Schulte, and Assam
    on August 9, 2008. The parties agree that the provision which
    governs the determination of Assam’s equitable interest in
    FPM is:
    In the event any Equity Partner gives a notice of voluntary
    withdrawal more than sixty months of July 1, 2003, such
    withdrawing Equity Partner will receive an amount equal
    to 100% of the fair market value of the Equity Partner’s
    interest in the Partnership as of the date of such notice of
    voluntary withdrawal, which amount will be paid out in
    six equal monthly installments without interest.
    2. Expert Testimony
    The court heard valuation testimony from several expert
    witnesses. FPM called William Brennan, a management con-
    sultant for the legal profession. Assam called Chad Flanagan
    and Jay Fullerton, of Eide Bailly. In addition, Assam called
    Matthew Stadler as an expert witness. Assam himself also
    opined as to valuation.
    (a) Brennan
    Brennan has worked for over a decade as a principal with
    a law firm management consulting group. He testified that
    in the past 25 years, he has consulted with over 500 firms of
    all types and sizes. Prior to becoming a management consult­
    ant, Brennan worked as an accountant and auditor. Brennan’s
    work experience includes serving as chief financial officer
    and executive director for two law firms, one of which had
    250 attorneys.
    As a consultant, Brennan developed a specialty in law
    firm mergers and acquisitions, which included performing firm
    valuations. Over his career, he had performed about 25 firm
    valuations. He previously testified in court seven times as an
    expert in law firm valuation. He is published in the area of
    valuation and is a frequent speaker on the issue of law firm
    financial management.
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    FREDERICKS PEEBLES v. ASSAM
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    Brennan spent over 100 hours on his valuation of FPM
    and drafted a 48-page report. Brennan’s report demonstrated
    several different business valuation approaches for compari-
    son. Brennan testified that although market-based, asset-based,
    and income-based approaches are each generally accepted, the
    income approach is best for valuing law firms. Brennan stated
    the market-based approach is not useful for valuing law firms,
    because such businesses are privately owned and therefore a
    firm’s private transaction data is not publicly available to be
    used to compare value with other businesses in the market. As
    for an asset-based approach, Brennan testified firm assets must
    be adjusted down to their cash value in order to determine the
    asset’s “net realizable value.” Without this adjustment, assets
    such as encumbered assets and uncollectible accounts receiv-
    able would be overvalued.
    Brennan testified that the income approach has several
    subsets, including the discounted cashflow approach and the
    “capitalization of economic income” approach. Brennan’s
    methodology focused on future cashflows and relied on 5
    years of historical income statements which were adjusted
    to normalize the income stream by removing nonrecurring
    expenses and adding liabilities not present on income tax
    forms. Brennan’s analysis considered economic environment
    risks, government regulation risks, and risks specific to FPM
    such as sustainability, infrastructure, and technological and
    data security risks. Brennan employed the “Ibbotson Build-Up
    Method” to determine an appropriate discount rate which
    considered a risk-free rate, an equity premium, systemic
    environmental risk unique to the legal industry, and spe-
    cific risks unique to FPM such as aging partners generating
    the majority of the client revenue and lower-than-average
    collection rates, coupled with an inability to pursue legal
    action against nonpaying clients. Brennan also emphasized
    that certain factors limit the control and marketability of a
    law firm, including that only attorneys can own law firms,
    that lawyers cannot ethically restrict their ability to serve
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    clients through the use of noncompete agreements, and that
    most firms have partnership agreements which control com-
    pensation and/or admission into the firm. In considering all
    of these factors, Brennan applied a 60-percent discount to
    Assam’s partnership interest. Brennan’s ultimate opinion was
    a valuation of $590,000.
    (b) Eide Bailly
    Flanagan, the director of Eide Bailly’s business valuation
    department, and Fullerton, a senior official in Eide Bailly’s
    business valuation department, coauthored two reports regard-
    ing the value of Assam’s interest. Their reports complied with
    industry standards outlined by the “Statements on Standards
    for Valuation Services” and the National Association of
    Certified Valuation and Analysts. The first report was a calcu-
    lation engagement in 2014, and the second report was a more
    detailed valuation engagement in 2016. Between Flanagan and
    Fullerton, approximately 50 hours were spent compiling the
    second report.
    Flanagan is a certified public accountant who is a member
    of the American Institute of Certified Public Accountants.
    Flanagan also holds the designation of being accredited in
    business valuation. Fullerton holds a juris doctorate degree, a
    master’s degree in business administration, and a bachelor of
    science degree in economics with a minor in accounting.
    In his practice, Flanagan performs between 150 and 200
    business valuations per year. Fullerton testified he had per-
    formed 300 business valuations in his career. Flanagan and
    Fullerton performed business valuations for various indus-
    tries including wholesale, retail, manufacturing, insurance,
    real estate holding companies, restaurants, dental practices,
    construction, and farming operations. Flanagan had performed
    one law firm valuation, and Fullerton had not performed a law
    firm valuation prior to this case. Neither had ever performed
    financial consulting services for a law firm or had published
    any scholarly articles in the area of law firm valuation.
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    Eide Bailly’s opinion also employed a buildup rate which
    included industry risk and firm risk to reach a discount rate
    of 4 percent. The opinion also incorporated a 10-percent
    discount for lack of control as to nonoperating assets and
    a 5-percent discount for lack of marketability, because the
    Partnership Agreement provides a market for the sale of
    those shares.
    Flanagan admitted his valuation assumed that in a fair mar-
    ket value analysis, FPM should be understood as the specific
    hypothetical buyer of Assam’s interest. Fullerton admitted
    this assumption was part of Eide Bailly’s scope of engage-
    ment. In addition, Fullerton testified that Assam suggested
    to Eide Bailly that the reference to fair market value in the
    Partnership Agreement should equate to fair value. Fullerton
    further testified that fair value is essentially the same thing as
    fair market value without any discounts for lack of control or
    lack of marketability.
    Prior to commencing the valuation engagement, Assam’s
    counsel sent a letter to Eide Bailly, dated April 28, 2016, which
    indicated:
    The District of Columbia statutes permit a partnership
    agreement or a limited partnership agreement to spec-
    ify buy-out terms. The [Partnership] Agreement in this
    case uses the phrase “fair market value”. However, the
    [Partnership] Agreement provides for a market within
    [FPM] and its Equity Partners. This means the transaction
    occurs at a fair price and on fair terms, not as if the sale
    were to a stranger. The internal market assures retention
    of client relationships, partnership identity, business con-
    tinuity, and avoidance of startup costs and cash flow limi-
    tations. It is . . . Assam’s view that these circumstances
    require that “fair market value” be understood as the fair
    value of the partner interest in the context of the market
    created by the [Partnership] Agreement itself. This is, we
    think, the same as “fair value” in model corporate and
    business entity statutes.
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    In their reports, Flanagan and Fullerton used an income
    approach which utilized FPM’s average normalized annual
    pretax revenue over a 4-year period. Eide Bailly also upwardly
    adjusted the value of the partnership due to its having a
    passthrough entity tax status. Flanagan testified that passthrough
    tax status is, in effect, a capitalization of taxes saved because
    FPM, as a limited liability partnership, is not subject to corpo-
    rate taxation.
    According to Flanagan’s testimony, Eide Bailly’s calcula-
    tion engagement in 2014 concluded the value of Assam’s
    interest in FPM to be $3,420,000. Eide Bailly’s valuation
    engagement in 2016, using more recent revenue streams,
    concluded the value of Assam’s interest to be $3,120,000.
    Eide Bailly’s valuation accounted for FPM’s nonoperating
    assets, such as an interest in real estate and dormant accounts
    receivable.
    (c) Stadler
    Stadler was engaged by Assam to review and compare the
    fair market value opinions of Brennan, Eide Bailly, and Assam.
    Stadler is a certified public accountant who holds a juris
    doctorate and a master’s degree in professional accountancy.
    Stadler also has an accreditation in business valuation. Stadler
    has never worked in a law firm and has valued only one other
    law firm.
    At Assam’s request, Stadler examined only Brennan’s valu-
    ation report, Eide Bailly’s calculation report, and Assam’s
    calculation report, and no other evidence. In doing so, Stadler
    did not develop an opinion as to value. Stadler identified defi-
    ciencies in each of the reports he reviewed. In the Eide Bailly
    report, Stadler opined that the failure to include 2010 data
    was a concern, that long-term growth rate was too high, and
    that the capitalization rate was too low. In regard to Brennan’s
    report, Stadler found fault in the capitalization rate as being
    too high and the discount for lack of control and lack of mar-
    ketability as being too high. Ultimately, Stadler concluded
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    that Brennan’s opinion was understated by $1,235,000 and
    that Eide Bailly’s opinion was overstated by $1,275,000.
    Stadler fundamentally disagreed with Assam’s approach and
    described Assam’s valuation as not being credible “in any
    respect” and “ridiculous.”
    (d) Assam
    Assam is a financial attorney whose practice includes busi-
    ness valuation matters. Assam valued his interest in FPM
    at $4,877,850. Assam testified his valuation included his
    23.25-percent share of the $10 million in written-off accounts
    receivable. Assam encouraged the court to reject his experts’
    valuations and adopt his own.
    3. Trial Court Judgment
    In its written order, the court found the proper remedy was
    declaratory judgment; it dismissed Assam’s counterclaim and
    declined to award attorney fees. In doing so, the court found
    FPM’s decision to write off approximately $10 million in old
    accounts receivable was not done in bad faith or with an intent
    to harm Assam, because the writeoff equally affected all equity
    partners and was set on the agenda for the partners’ meeting
    prior to Assam’s notice of resignation.
    The court also determined, based on the language of the
    Partnership Agreement, that Assam’s interest was the fair mar-
    ket value of his equity partnership interest in FPM as of the
    date of his notice of voluntary withdrawal, October 2, 2014.
    The court further found Assam’s valuation opinion was
    “unreliable and not credible.” The court accepted Assam’s
    testimony that the court should not adopt the opinions offered
    by Eide Bailly or Stadler and found that Assam attempted to
    “influence in an upward manner” Eide Bailly’s conclusion as to
    the fair market value of Assam’s interest. The court concluded
    that the April 28, 2016, letter from Assam’s counsel to Eide
    Bailly showed that Eide Bailly’s “calculation engagement”
    report included an incorrect assumption that FPM must be
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    the hypothetical buyer of Assam’s interest under a fair market
    value analysis.
    The court declined to adopt Eide Bailly’s opinion, because
    Flanagan and Fullerton collectively had valued a law firm on
    only one other occasion; neither had ever worked at a law firm,
    been a chief financial officer for a law firm, or provided finan-
    cial consulting services to a law firm; and neither had pub-
    lished any scholarly articles in the area of law firm valuation.
    The court noted that Stadler also lacked comparable expertise
    in law firm valuation for these same reasons.
    The court found that the testimony of Brennan was cred-
    ible; Brennan’s 60-percent lack-of-control and marketability
    discount was credible; Brennan’s discounts were appropriate
    as part of a “fair market value” analysis, because they helped
    replicate a public marketplace for a private entity; Brennan’s
    discount analysis was consistent with the fair market value
    standard of a hypothetical buyer’s ability to convert the owner-
    ship interest to cash and control the investment; and Brennan
    was the only expert to weigh risk factors which were credible
    and relevant to determining the fair market value test of a fully
    informed hypothetical willing buyer’s desire to maximize his
    economic interest.
    The court found that the Partnership Agreement was not
    ambiguous; the Partnership Agreement did not contain a
    choice-of-law provision; there was no conflict with Nebraska
    law and District of Columbia law with regard to interpreta-
    tion of a contract; if there were a conflict, Nebraska law
    would control due to Nebraska’s interest in and contacts with
    the dispute; and neither party had breached the Partnership
    Agreement.
    The court found and declared that the fair market value of
    Assam’s equity partner interest in FPM is $590,000; pursu-
    ant to the Partnership Agreement, FPM may pay Assam this
    amount; and Assam was not entitled to a money judgment or
    attorney fees.
    Assam appealed, and we moved the case to our docket.
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    II. ASSIGNMENTS OF ERROR
    Assam assigns, restated, that the district court erred by (1)
    failing to apply District of Columbia law; (2) finding FPM
    did not breach the Partnership Agreement; (3) adopting the
    opinion of FPM’s expert, Brennan, whose valuation opinion
    excluded approximately $10 million in old accounts receiv-
    able, as well as the value of real estate, automobiles, tenant
    improvements, and equipment; and (4) failing to award Assam
    a money judgment and attorney fees.
    III. STANDARD OF REVIEW
    [1-3] An action for declaratory judgment is sui generis;
    whether such action is to be treated as one at law or one in
    equity is to be determined by the nature of the dispute.1 An
    action for a partnership dissolution and accounting between
    partners is one in equity and is reviewed de novo on the
    record.2 In reviewing an equity action for a declaratory judg-
    ment, an appellate court tries factual issues de novo on the
    record and reaches a conclusion independent of the findings of
    the trial court, subject to the rule that where credible evidence
    is in conflict on material issues of fact, the reviewing court
    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
    1
    Christiansen v. County of Douglas, 
    288 Neb. 564
    , 
    849 N.W.2d 493
          (2014); Vlach v. Vlach, 
    286 Neb. 141
    , 
    835 N.W.2d 72
    (2013); Lone Cedar
    Ranches v. Jandebeur, 
    246 Neb. 769
    , 
    523 N.W.2d 364
    (1994).
    2
    Robertson v. Jacobs Cattle Co., 
    288 Neb. 846
    , 
    852 N.W.2d 325
    (2014); In
    re Dissolution & Winding Up of KeyTronics, 
    274 Neb. 936
    , 
    744 N.W.2d 425
    (2008); Bass v. Dalton, 
    213 Neb. 360
    , 
    329 N.W.2d 115
    (1983). See
    Darr v. D.R.S. Investments, 
    232 Neb. 507
    , 
    441 N.W.2d 197
    (1989).
    3
    Gast v. Peters, 
    267 Neb. 18
    , 
    671 N.W.2d 758
    (2003); Lake Arrowhead v.
    Jolliffe, 
    263 Neb. 354
    , 
    639 N.W.2d 905
    (2002). See Badran v. Bertrand,
    
    214 Neb. 413
    , 
    334 N.W.2d 184
    (1983).
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    [4,5] The interpretation of a partnership agreement presents
    a question of law.4 An appellate court independently reviews a
    lower court’s rulings on questions of law.5
    IV. ANALYSIS
    1. No Conflict of Laws
    In Assam’s first assignment of error, he claims that the dis-
    trict court erred by determining that no conflict in substantive
    law existed between District of Columbia law and Nebraska
    law, as pertaining to the governing effect of the Partnership
    Agreement. Assam argues the district court erred when it
    concluded that if there were a conflict of laws, Nebraska
    law would control over District of Columbia law, because of
    Nebraska’s pertinent interest in the subject matter. Assam fur-
    ther argues that the choice of law impacts three legal issues,
    including what constitutes a breach of duty by FPM to Assam,
    what is “fair market value,” and attorney fees.
    As we will discuss in more detail later, Assam did not
    properly raise a claim for breach of contract; as a result, any
    claim that the laws of the District of Columbia differ from
    the laws of the State of Nebraska on breach of contract is
    without merit. In addition, since we find that Assam was not
    entitled to attorney fees, any difference of law on that issue
    is irrelevant.
    The only remaining issue is the determination of fair mar-
    ket value of Assam’s partnership interest. The record indicates
    that FPM was organized as a Washington, D.C., limited liabil-
    ity partnership. In addition, the Partnership Agreement does
    not contain a specific choice-of-law provision, and District of
    Columbia law does not allow for such a provision.6
    4
    Robertson, supra note 2; Shoemaker v. Shoemaker, 
    275 Neb. 112
    , 
    745 N.W.2d 299
    (2008).
    5
    Id.
    6
    D.C. Code Ann. § 29-701.07(b)(2) (West, Westlaw through 2013
    legislation).
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    As our analysis will show, the determination of fair market
    value is controlled by the Partnership Agreement and no real
    conflict exists between the laws of the District of Columbia
    and the laws of the State of Nebraska with respect to the con-
    trolling effect of partnership agreements.
    [6,7] In answering any choice-of-law question, a court first
    asks whether there is any real conflict between the laws of the
    states.7 An actual conflict exists when a legal issue is resolved
    differently under the law of two states.8 We agree with the
    district court when it found there was no conflict between
    District of Columbia and Nebraska substantive law governing
    the determination of Assam’s equity interest.
    Under Nebraska’s Uniform Partnership Act of 1998,9 FPM
    is a “foreign limited liability partnership,” because FPM was
    formed under the laws of the District of Columbia.10 Section
    67-457 provides that the law under which a foreign limited
    liability partnership is formed governs relations among the
    partners and between the partners and the partnership.
    Under the laws of the District of Columbia, relations among
    the partners and between the partners and the partnership are
    governed under the controlling partnership agreement.11 In
    addition, under Nebraska law, relations among the partners
    and between the partners and the partnership are also governed
    by the partnership agreement.12 Thus, whether the laws of the
    District of Columbia or the laws of the State of Nebraska are
    applied, the terms of the partnership agreement are controlling.
    As a result, no actual conflict of laws exists.
    7
    O’Brien v. Cessna Aircraft Co., 
    298 Neb. 109
    , 
    903 N.W.2d 432
    (2017).
    8
    Id.
    9
    Neb. Rev. Stat. §§ 67-401 to 67-467 (Reissue 2009 & Cum. Supp. 2014).
    10
    See, § 67-402(4); D.C. Code Ann. § 29-701.06 (West, Westlaw through
    2013 legislation).
    11
    D.C. Code Ann. § 29-701.07(a).
    12
    § 67-404.
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    Assuming without deciding that the district court erred
    when it determined that if there were a difference in the
    law of the State of Nebraska and the law of the District of
    Columbia, Nebraska law would apply exclusively, any such
    error was harmless.
    [8] The Partnership Agreement is clear and unambigu-
    ous. A contract written in clear and unambiguous language
    is not subject to interpretation or construction and must be
    enforced according to its terms.13 Therefore, the terms of the
    Partnership Agreement provide the legal framework for our
    analysis.
    2. No Breach of Contract
    In Assam’s second assignment of error, he claims that
    the district court erred by failing to find FPM breached the
    Partnership Agreement. We find no merit to this assignment
    of error.
    [9,10] Assam did not assert an independent claim for breach
    of contract, but merely asserted a breach of contract claim as
    an affirmative defense to FPM’s amended complaint. At the
    commencement of trial, Assam clarified that he was seeking
    only an accounting and a fair valuation of his interest in FPM.
    We determine the nature of an action from the relief sought.14
    Even though Assam’s first two assignments of error advance
    breach of contract arguments, at oral argument, Assam empha-
    sized to this court that this is a proceeding in equity. A suit for
    damages arising from breach of a contract presents an action
    at law.15
    We agree with the district court that this is a declaration of
    rights proceeding. The Partnership Agreement does not specify
    a particular amount due to Assam or a time period for payment.
    13
    Frohberg Elec. Co. v. Grossenburg Implement, 
    297 Neb. 356
    , 
    900 N.W.2d 32
    (2017).
    14
    See Elting v. Elting, 
    288 Neb. 404
    , 
    849 N.W.2d 444
    (2014).
    15
    
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    Instead, the Partnership Agreement requires that FPM pay
    Assam “an amount equal to 100% of the fair market value” of
    his 23.25-percent interest. The relief sought by both parties is
    the determination of the “fair market value” of Assam’s inter-
    est. Consistent with Assam’s view, we find the nature of the
    dispute to be one in equity, and as a result, this assignment of
    error is without merit.
    3. District Court Did Not Err
    In Determining Assam’s
    Equity Interest
    In Assam’s third assignment of error, he claims the district
    court erred when it adopted the opinion of Brennan, because
    Brennan’s opinion did not account for FPM’s nonoperating
    assets. Assam claims the court erred by assigning no value to
    approximately $10 million in uncollectable accounts receivable
    and FPM’s real estate investments. We find no merit to this
    assignment of error.
    (a) Conclusions of Law
    [11,12] The trier of fact is not bound to accept expert
    opinion testimony.16 The determination of the weight that
    should be given expert testimony is uniquely the province
    of the fact finder.17 Evidence not directly contradicted is not
    necessarily binding on the triers of fact, and may be given
    no weight where it is inherently improbable, unreasonable,
    self-contradictory, or inconsistent with facts or circumstances
    in evidence.18
    [13] The credibility of a witness is a question for the trier
    of fact, and it is within its province to credit the whole of the
    16
    Green v. Box Butte General Hosp., 
    284 Neb. 243
    , 
    818 N.W.2d 589
    (2012).
    See Lewison v. Renner, 
    298 Neb. 654
    , 
    905 N.W.2d 540
    (2018).
    17
    Pohlmann v. Pohlmann, 
    20 Neb. Ct. App. 290
    , 
    824 N.W.2d 63
    (2012).
    18
    Marston v. Drobny, 
    166 Neb. 747
    , 
    90 N.W.2d 408
    (1958). See Maloney v.
    Kaminski, 
    220 Neb. 55
    , 
    368 N.W.2d 447
    (1985).
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    witness’ testimony, or any part of it, which seemed to it to be
    convincing, and reject so much of it as in its judgment is not
    entitled to credit.19
    [14-16] Under the laws of the District of Columbia, “fair
    market value” is the price that a willing buyer would pay a
    willing seller, both persons having reasonable knowledge of
    all relevant facts and neither person being under compulsion to
    buy or to sell.20 The willing buyer-willing seller rule presumes
    that a potential transaction is to be analyzed from the view-
    point of a hypothetical buyer whose only goal is to maximize
    his or her advantage.21 The willing buyer-willing seller rule is
    applied using the viewpoint of an objective hypothetical buyer,
    rather than a subjective buyer.22
    (b) Analysis
    The evidence of fair market value included the opinions of
    Brennan, Assam, Flanagan, Fullerton, and Stadler. Each expert
    posited a different fair market value, and each based his opin-
    ion on different factors. Just as the trial court did, we too find
    that there is evidence in conflict on material issues of fact con-
    cerning the appropriate considerations in valuing Assam’s fair
    market value interest. As a result, under our de novo review,
    we consider and give weight to the fact that the trial court
    observed the witnesses and accepted one version of the facts
    over another.23
    In reaching his opinion that the fair market value of his own-
    ership interest was $4,877,850, Assam used the asset approach,
    the income approach, and the market approach. Assam testified
    19
    General Fiberglass Supply v. Roemer, 
    256 Neb. 810
    , 
    594 N.W.2d 283
          (1999); In re Estate of Ross, 
    19 Neb. Ct. App. 355
    , 
    810 N.W.2d 435
    (2011).
    20
    Adkins Ltd. Ptp. v. O Street Management, 
    56 A.3d 1159
    (D.C. 2012).
    21
    Eisenberg v. C.I.R., 
    155 F.3d 50
    (2d Cir. 1998); Estate of Curry v. United
    States, 
    706 F.2d 1424
    (7th Cir. 1983).
    22
    See Estate of Bright v. United States, 
    658 F.2d 999
    (5th Cir. 1981).
    23
    See cases cited supra note 3.
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    that in his practice, he routinely used business valuations to
    assist his clients in obtaining financing and would retain indi-
    viduals to perform the business valuations. In determining how
    to prepare his valuation, Assam testified that he relied upon
    “some articles” that he read, including one by the American
    Bar Association and one from “Inc. Magazine.”
    In preparing his valuation, Assam included in the asset
    approach real estate, automobiles, tenant improvements, equip-
    ment, and $10 million of old accounts receivable. For the
    income approach, he simply added 2013 income figures together
    with estimated 2014 income figures and divided the sum by
    two. For the market approach, he determined an average annual
    gross revenue (the amount determined in the income approach)
    and multiplied it by two. Ultimately, he determined amounts
    for each valuation method, added the values together, divided
    the total by three, and multiplied the amount by his partnership
    interest. Nothing in the record supports the valuation process
    used by Assam. In fact, Assam’s own expert, Stadler, testified
    that Assam’s valuation was “ridiculous.”
    In regard to Eide Bailly’s opinion as to fair market value,
    both Flanagan and Fullerton testified that it was premised
    upon FPM’s being the hypothetical buyer. However, as men-
    tioned above, fair market value is the price that a willing buyer
    would pay a willing seller. A willing buyer is presumed to be a
    hypothetical buyer whose only goal is to maximize his or her
    advantage. The willing buyer is considered from the viewpoint
    of an objective hypothetical buyer, rather than a subjective
    buyer. In using FPM as the willing buyer, Eide Bailly’s opinion
    failed to fully consider discounts for lack of control and lack
    of marketability.
    In addition, Eide Bailly employed 4 years of income instead
    of 5 years of income. In doing so, Eide Bailly disregarded
    2010 income based on the determination that 2010 income
    was lower than the other years and was nonrepresentative of
    FPM’s regular annual income. However, both Brennan and
    Stadler testified that using the income figures over a 5-year
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    period was preferred over using income figures over a 4-year
    period. Even Flanagan testified that, typically, they use a sam-
    ple of 5 years of income. Additionally, Eide Bailly annualized
    2014 income, because they did not have final figures for that
    year when preparing the report in May 2016. However, the
    record indicates that the 2014 income figures were finalized
    in March 2015.
    Eide Bailly also adjusted the value of FPM due to having a
    “pass-through entity tax status.” However, Flanagan testified
    that this passthrough status had not been accepted by the U.S.
    Tax Court.
    Further, though Flanagan and Fullerton are in the profession
    of preparing business valuation, neither had significant experi-
    ence in valuating law firms. Prior to their engagement with
    Assam, Flanagan had performed only one law firm valuation
    and Fullerton had performed no law firm valuations.
    Each of these decisions by Eide Bailly upwardly impacted
    its valuation. As a result, we agree with the district court that
    the valuation determined by Eide Bailly of $3,120,000 does
    not accurately reflect the value of FPM as of October 2, 2014.
    Albeit for different reasons, Assam also testified that Eide
    Bailly’s opinion should not be followed by the court.
    In regard to Stadler’s testimony that Brennan’s opinion
    was understated by $1,235,000 and that Eide Bailly’s opinion
    was overstated by $1,275,000, Assam testified that the court
    should not adopt Stadler’s analysis. In addition, the record
    indicates that Stadler has limited experience in valuating law
    firms, Stadler testified that Brennan was more experienced in
    that particular field, and Stadler examined only the reports of
    the other experts and no other evidence. Further, Stadler used
    an industry risk premium for companies having much larger
    revenues than FPM; he used a lower specific company risk
    premium without reviewing the Partnership Agreement or any
    financial documents of FPM; and he used the passthrough
    entity tax status, which has not been widely adopted by the
    U.S. Tax Court. All of these decisions increased his “opinion”
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    of FPM’s fair market value. Lastly, Stadler included approxi-
    mately $2.5 million of goodwill, which from the evidence is
    attributable to personal goodwill of the remaining partners as
    opposed to goodwill of FPM, resulting in an overstating of
    the fair market value by $573,000. As a result, we agree that
    Stadler’s determination of value was not accurate.
    In regard to Brennan’s opinion, the trial court noted his
    vast experience in valuating law firms, including working
    for a law firm management consulting group dealing with
    over 500 law firms, working as an accountant and auditor,
    and serving as chief financial officer and executive direc-
    tor for two law firms. At the time of trial, Brennan had also
    performed approximately 25 law firm valuations and had
    testified in court seven times as an expert in law firm valu-
    ation. Ultimately, the trial court expressly based its findings
    on a credibility determination which accepted Brennan’s ver-
    sion of the facts over Assam’s and Eide Bailly’s. The court
    found Brennan’s testimony credible and controlling, because
    he implemented an approach which valued Assam’s inter-
    est in the context of a market. The court therefore found the
    60-­percent discount for lack of control and marketability
    assigned by Brennan to be credible, because of the limitations
    presented by Assam’s minority interest in a law firm with
    a specialized practice area and equity partnership makeup
    such as FPM. The court found that Assam and Eide Bailly
    sought to remove the need for a market from the fair market
    value analysis dictated by the Partnership Agreement and that,
    therefore, their small discounts for lack of control and market-
    ability were not credible.
    The record indicates that Brennan considered several dif-
    ferent business valuation approaches for comparison, includ-
    ing market-based, asset-based, and income-based approaches.
    Brennan was able to articulate why the income approach was
    the most suitable valuation method. Brennan used income fig-
    ures for 5 years as opposed to 4 years, and he did not apply the
    passthrough entity tax status calculation. Brennan employed
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    the “Ibbotson Build-Up Method” to determine an appropriate
    discount rate, and his analysis considered economic environ-
    ment risks, government regulation risks, and risks specific to
    FPM such as sustainability, infrastructure, and technological
    and data security risks. Though Brennan’s capitalization and
    discount rates were significantly higher than those propounded
    by the other experts, Brennan was able to articulate why law
    firms should be valued differently from other professional
    serv­ices industries. We therefore agree with the district court
    that Brennan’s opinion of value as to FPM is the most appro-
    priate value.
    In regard to FPM’s decision to write off approximately
    $10 million in old accounts receivable, the trial court found
    that it was not done in bad faith or with an intent to harm
    Assam. Specifically, the court noted that the writeoff equally
    affected all equity partners.
    At trial, Peebles testified that the accounts receivable were
    “years old” and that the decision to write off the receivables
    was not made suddenly but was part of an ongoing analysis
    of compensation, partner continuity, personnel, and finances.
    He further testified that each of the partners was charged with
    the responsibility to review the accounts he was associated
    with and to make a determination as to collectability. Morgan
    testified that FPM’s collection rate was close to 70 percent.
    Assam testified that the aggregate of the accounts receivable
    was in excess of $15 million, of which $10.8 million was over
    120 days old.
    Assam also testified that he was not part of any decision
    to write off the accounts receivable. Brennan testified that the
    longer a receivable ages, the less likely it will be collected
    in full, and that as they continue to age, especially beyond a
    year, it is unlikely that a firm would collect any such receiv-
    able. Brennan also testified that the partners made a specific
    determination for each of the receivables to be written off,
    that some of the accounts were 4 to 5 years old, and that
    the partners determined that nothing more could be done to
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    collect the accounts. As a result, Brennan opined that the
    uncollectable accounts receivable were appropriately written
    off, because that was a correct reflection of the “net realiz-
    able value” of the assets. Even Eide Bailly’s valuation report
    indicated that nearly $9 million in accounts receivable was
    likely uncollectable.
    Despite Assam’s testimony that the writing off of accounts
    receivable was not discussed in 2014, he also testified that
    the subject of the writeoff was on the agenda for the partners’
    meeting prior to the night he sent his notice of withdrawal. In
    addition, the majority of FPM’s clients were Native American
    tribes and therefore entitled to sovereign immunity, prevent-
    ing FPM from bringing suit to collect on unpaid legal fees. As
    a result, we agree with the district court that the writeoff of
    accounts receivable was not improper.
    Finally, Assam contends that the trial court failed to apply
    any value for the assets of FPM, including the building and
    the vehicles. However, all of the experts, with the exception
    of Assam, testified that the asset approach was not the best
    method to value FPM, due to the absence of significant capital.
    The income approach adopted by the trial court took into con-
    sideration FPM’s past and present revenue stream and deter-
    mined an appropriate fair market value for it.
    We agree with the trial court that Brennan’s testimony is
    persuasive and controlling. Based upon our de novo review, we
    find no merit to this assignment of error.
    4. Failure
    Award Money Judgment
    to
    Attorney Fees
    and
    Because we find no error in the district court’s ruling that
    FPM did not breach the Partnership Agreement, Assam is not
    entitled to a money judgment. Though a court may grant a
    money judgment as consequential relief in a declaratory judg-
    ment action,24 FPM was the entity seeking the declaratory
    24
    See Hoiengs v. County of Adams, 
    245 Neb. 877
    , 
    516 N.W.2d 223
    (1994).
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    relief. In its pleadings, FPM did not seek a money judgment.
    Only Assam sought a money judgment, which was part of his
    claim for breach of contract. Having failed to prove the ele-
    ments of a breach of contract, Assam is not entitled to a money
    judgment. Consequently, the district court did not err in declin-
    ing to award him a money judgment.
    In regard to Assam’s request for attorney fees, the Partnership
    Agreement allows for attorney fees for any prevailing party
    who was required to institute an action or proceeding to
    enforce any term or provision of the Partnership Agreement.
    However, because we find no merit to Assam’s claim that FPM
    breached the Partnership Agreement or that the district court
    erred by adopting the valuation opinion of Brennan, Assam
    was not a prevailing party. The district court did not err in
    refusing to award Assam attorney fees.
    V. CONCLUSION
    For the foregoing reasons, we affirm the order of the
    district court which declared Assam’s interest in FPM to be
    $590,000, and that FPM should pay Assam such sum accord-
    ing to the terms of the Partnership Agreement.
    A ffirmed.
    K elch, J., not participating in the decision.
    Wright, J., not participating.