Disotell v. Stiltner

Carl Disotell (plaintiff) was a property developer and general contractor. Earl Stiltner (defendant) was a real estate agent and property manager. In 1997 Stiltner purchased a property for $275,000 to develop into a hotel. After Stiltner purchased the property, he and Disotell formed a partnership to develop, construct, and operate the hotel. Disotell agreed to purchase a 50 percent interest in the property for $137,500, half of the purchase price, to be paid through his share of the eventual profits. Once the hotel was profitable and the value of Disotell’s interest was paid to Stiltner, Stiltner and Disotell would share the profits. The hotel was developed but was never profitable. By May 1998, Stiltner exclusively possessed the hotel and lived inside the hotel. During proceedings to dissolve the partnership, the superior court gave Stiltner the option to purchase Disotell’s interest in the partnership, calculated by the court as being worth approximately $73,000. Given that the hotel was never profitable, the superior court classified the $137,500 that Disotell was supposed to pay for his interest in the partnership property as partnership liability and reduced the value of the partnership accordingly. Disotell argued that the Alaska Uniform Partnership Act gave a partner the right to demand that a partnership be liquidated and sold. The superior court interpreted the Alaska Uniform Partnership Act to allow, but not require, liquidation. Disotell appealed.