On March 8, 1999, Gary Martz and Herman Gaily entered into a partnership agreement (the Agreement) for the purpose of practicing law in Pennsylvania. A limited liability partnership called Martz & Gailey, LLP, was formed with each partner owning 50 percent interest in the partnership. Gary Martz’s wife, Holly Martz, was the office administrator of the firm. 

On May 19, 2008, Gary Martz died and Holly Martz became the executrix of Gary Martz’s estate. The firm continued past 2011 and Holly Martz filed a suit against Martz & Gailey, claiming that under Section 13.1 of the Agreement, Gary Martz’s death constituted a “liquidating event” because there was only one partner left and therefore that the partnership should be dissolved and liquidated and that half of the proceeds should go to Gary Martz’s estate. 

Martz & Gailey filed a counterclaim, asserting that under Sections 12.1 and 12.2 of the Agreement, Gary Martz’s death was a “retirement event” and that the partnership would not be dissolved. Furthermore, Gary Martz’s estate was only entitled to “an amount equal to the Net Equity of the Retiring Partner’s interest as of the last day of the month preceding the month during which the Retiring Event occurs, less any Partnership distributions to the Retiring Partner after such day.” 

On January 5, 2012, the trial court granted Holly Martz partial judgment on the pleadings, finding that the death of Gary Martz constituted a “liquidating event.” Marts & Gailey appealed. 

How did the appeals court rule? The Agreement was created pursuant to the Pennsylvania Uniform Partnership Act. Based on this information, would the existence or lack of existence of Section 13.1 affect whether or not the partnership would be dissolved because of Gary Martz’s death?