964 F.3d 813
9th Cir.2020Background
- Michael and Renate DeMartini (counterclaimants/appellants) dispute with Timothy and Margie DeMartini over whether an oral partnership formed in the 1970s covered various parcels and businesses, and over management/loan obligations tied to the 12759 parcel.
- District court granted summary judgment to Timothy and Margie on the counterclaim seeking a declaration of a "global partnership," finding insufficient evidence that profits were shared or that Michael/Renate participated in management of all listed properties/businesses.
- Michael and Renate produced evidence suggesting the couples operated the 12759 parcel (commercial real estate management/leasing) as a partnership: shared profits, joint management, and holding out as partners.
- Michael and Renate also asserted a defamation claim alleging Timothy told a tenant that Michael embezzled $1,600, stole Timothy’s Social Security number, and impersonated Timothy; they pleaded both defamation per quod and per se.
- At trial the district court excluded evidence that the 12759 parcel was held in partnership and other partnership/mitigation evidence (based on its summary-judgment rulings), the jury found for Timothy and Margie on a breach-of-contract claim (Westamerica loan), and the district court rejected equitable accounting and partnership dissolution claims remanded to state court.
- The Ninth Circuit affirmed the denial of a global-partnership declaration, reversed summary judgment on the breach-of-partnership counterclaim and part of the defamation ruling, held exclusion of partnership evidence at trial was erroneous, vacated the breach-of-contract judgment, and remanded for a new trial.
Issues
| Issue | Michael & Renate's Argument | Timothy & Margie's Argument | Held |
|---|---|---|---|
| Whether a "global partnership" existed covering all listed properties/businesses | An oral partnership from the 1970s encompassed all parcels/businesses cited in the counterclaim | No evidence profits were shared or Michael/Renate managed those properties/businesses | Affirmed: summary judgment proper as to a global partnership (insufficient evidence) |
| Whether a partnership existed as to the 12759 parcel and whether Timothy breached that partnership | The couples operated the 12759 parcel as a partnership; Timothy made decisions without required partner consent, breaching the partnership and fiduciary duties | No enforceable partnership contract with specific terms; no contract breaches | Reversed: genuine disputes of material fact exist about a 12759-parcel partnership and breaches — summary judgment improper |
| Whether the defamation counterclaim survives summary judgment | Timothy made false, knowingly false statements accusing Michael of embezzlement, SSN theft, and impersonation — constituting defamation per se | No triable evidence of actual damages; some statements non-actionable or not provably false | Reversed in part: statements accusing criminal conduct support a defamation per se claim; other alleged statements fail or lack proof of falsity |
| Whether exclusion of partnership/mitigation evidence at trial was proper and whether verdict on breach of contract should stand | Partnership and accounting evidence was relevant to defenses (partnership loan, fiduciary breach, mitigation) and exclusion prejudiced their case | The summary-judgment rulings resolved partnership issues; exclusion was appropriate | Reversed: exclusion was erroneous and likely tainted the verdict; breach-of-contract judgment vacated and case remanded for new trial |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary-judgment burden rule for the party with the burden at trial)
- Spier v. Lang, 53 P.2d 138 (Cal. 1935) (principles for inferring partnership from conduct and sharing of profits)
- Holmes v. Lerner, 88 Cal. Rptr. 2d 130 (Ct. App. 1999) (partnership inference and management participation considerations)
- Bank of California v. Connolly, 111 Cal. Rptr. 468 (Ct. App. 1973) (partnership factors and evidence of holding out)
- Greene v. Brooks, 45 Cal. Rptr. 99 (Dist. Ct. App. 1965) (definition and formation of partnership under California law)
- Gherman v. Colburn, 140 Cal. Rptr. 330 (Ct. App. 1977) (breach of partnership as a contract action)
- Contento v. Mitchell, 104 Cal. Rptr. 591 (Ct. App. 1972) (defamation per se and per quod distinctions)
- Cunningham v. Simpson, 461 P.2d 39 (Cal. 1969) (accusation of crime as paradigmatic defamation per se)
- Barnes-Hind, Inc. v. Superior Court, 226 Cal. Rptr. 354 (Ct. App. 1986) (examples and scope of defamation per se)
- Regalia v. The Nethercutt Collection, 90 Cal. Rptr. 3d 882 (Ct. App. 2009) (statements that do not naturally tend to lessen business profits are not defamation per se)
- Guerin v. Winston Indus., Inc., 316 F.3d 879 (9th Cir. 2002) (erroneous exclusion of evidence likely tainting jury verdict warrants reversal)