*1 true, pre- as the Court if it were even INGRAM, Be Ph.D. and Jesse C. fully are
sumes, nearly physicians all Clinic, Psychology havioral statutory up to the every ease in insured P.C., Petitioners, (which easy it sounds as is not cap variability), insurers cap’s considering the v. special liability subject to remain DEERE, Hillvale Med D.O. and Louis negligent their damages that consequential Hillvale Group ical Association d/b/a insureds, caused their settle failure to Association, Respondents. Medical 11.02(c) is not makes clear section which No. 06-0815. 11.02(a) damage cap. subject to the section Guin, v. County Mut. Ins. Co. Ranger See of Texas. Supreme Court (Tex.1987) (noting 16, 2008. Argued Feb. action, the insurer is in Stowers agency its rela- have breached alleged to July Decided damages will be avail- tort tionship, so
able). if the fears are And even Court’s statutory cap makes insurers that the
true unreasonably refuse settle- likely
more little is at risk
ment offers because (which I action consid- Stowers
subsequent considering the costs involved unlikely
er a function litigation), protracted of the insurer- and not cap itself physicians who relationship, as
insured presumably uninsured would
might be Removing the predilection.
have the same to settle an insurer refuses
cap when a kind of reverse-Stowers
for more creates whereby encouraged are
problem insurers phy- than an uninsured
to settle for more view, my Legisla-
sician would. 11.02(c) likely enacting
ture’s intent than what complicated
much less imagines.
Court interpretation the Court’s
To extent 11.02(c) insurers to lia- exposes
of section that which Stowers
bility in excess of I respectfully I dissent. permit,
would on what the judgment based
would render allows: agree cap
parties seem
$1,585,365.85 plaintiff. in favor of the *5 Enoch, T. Lor- Craig take-nothing judgment Melissa Prentice Ingram favor of PC, ber, Valdes, and reverse the court of Alejandro appeals’ judg- Sin Winstead ment. Oddo, Nalle Llano Devel- Karen Estacado Co., Wilson, opment Roxanne T.L. Win- I. AND FACTUAL PROCEDURAL Minick, Austin, TX, P.C., stead Sechrest & BACKGROUND West, Gooden, P.C., B. & Royce West Ingram, a licensed psychologist, and TX,
Dallas, Armstrong, Richard L. Attor- Deere, psychiatrist, a board certified en- Law, Hercules, ney Larry at Kent Preston tered into oral Centre, Plano, TX, Petitioner. Pointe which provided that Deere would serve as Georganna L. Simpson, Law Offices of the medical director for a multidisciplinary L. Georganna Simpson, Jeff Forrest pain clinic. Deere they contends that Smith, Smith, P.C., Jeff John Forrest V. agreed he would receive one-third of McShane, Hance, McShane Dal- Davis & revenues, clinic’s would receive TX, las, for Respondent. one-third, remaining one-third pay would be used expenses. clinic’s Justice WAINWRIGHT delivered Deere also claims that when he and In- Court, opinion which Chief gram working began together, Ingram told JEFFERSON, HECHT, Justice Justice venture, him their work “was a MEDINA, GREEN, Justice Justice [they] partners, [they] were doing were joined, Justice WILLETT in which Justice together.” Ingram they contends that joined O’NEILL and Justice BRISTER agreed would receive one-third II.D.5.a, part as to which except and in *6 of the clinic’s revenues and that there was joined JOHNSON as to except Justice agreement no as to the other two-thirds. part II.D.2. that, acknowledges Deere time during his case, ap- we of review a court clinic, at the he never money contributed peals judgment a verdict reinstating jury clinic, to he the did not the participate in Deere, that Louis and finding D.O. Jesse hiring any employees, of he did know Ph.D. formed a Ingram, partnership C. any names, of clinic staffs he never pursuant to the Partnership Texas Revised any purchased of the equipment, clinic’s (TRPA). Act his not on bank name was the clinic’s account, and his name lease was not on the TRPA lists five factors to considered be space. for the clinic determining partnership whether a has began Fourteen months after formed. This Deere been determination should clinic, working Ingram at a by prepared examining totality be made written ar- agreement memorialize their case, single circumstances in each no with rangement. The document was entitled being necessary factor either or sufficient “Physician Contractual Employment prove the existence of a partnership. Agreement” and stated Ingram that was- Here, legally the evidence is insufficient the “sole re- owner” clinic. Deere that a partnership establish existed be- document, sign claiming fused to that Ingram tween and Deere. Because the it their arrangement. contradicted initial of the formation of a partnership after Deere doc- Immediately received the insufficient, legally is we not address do ument, ceased clinic. working he at the in Ingram’s cross-petition the issue raised challenging the court of decision appeals’ Ingram, asserting Deere later sued Ingram fraud, fiduciary duty. statutory that owed Deere a claims of common law fraud, inducement, Accordingly, we reinstate the court’s of trial fraudulent breach be- lenge the existence fiduciary duty, and de- contract, of breach in his he failed to raise the issue seeking specific cause claratory judgment judgment for n.o.v. 198 attorneys’ second motion damages, performance, discussing 100. Without that Deere and In- S.W.3d found jury The fees. Ingram part- Deere and created a whether partnership agree- a into gram entered there was nership, the court held agree- breached the Ingram ment and that support evidence to legally sufficient fiduciary duty to Deere. ment and his finding that the contin- jury jury’s judgment on entered trial court (1) $34,249.68 through the time of trial. Id. ued to exist damages of awarding verdict However, 101-02. the court affirmed through Deere at owed compensation for (2) ruling Ingram did not $2,525,437.00 for the trial court’s Deere’s March duty, as there was fiduciary Deere a revenue from owe partnership’s share of (3) trial, relationship no evidence a confidential the time of April through Ingram Deere and that would $2,500,000.00 Deere’s share of revenue between for (4) trial, $27,500.00 fiduciary duty. Id. give rise to an informal to accrue after Court, to this In- stage appeal the trial with at 102-03. On attorneys’ fees for for gram argues appeals in the event of a motion the court of fees additional reinstating judg- the trial court’s appeals. various erred new trial and judgment ment on the first motion judgment non a motion for Ingram filed n.o.v. because there is no evidence that n.o.v.). (judgment Af- veredicto obstante Ingram Deere and created signed David Evans hearing, Judge ter principally contends that eliminating portion judgment, new way in one alleged waived all of the errors by jury and reduc- damages awarded another at the trial court. Deere also attorneys’ fees. Follow- ing the award cross-petition appealing filed a the court decision, him- Judge Evans recused ing his ruling on his appeals’ adverse breach and the case was explanation, without self fiduciary duty claim.1 we con- Because Hartman. In- Judge Merrill assigned to evidence of a clude there judg- a second motion for gram then filed we do not reach the other issues raised alternative, or, in the a motion ment n.o.v. *7 Ingram. Deere or signed Hartman Judge trial. for new and rendered a take-noth- judgment n.o.v. II. AND LAW ANALYSIS favor. ing Ingram’s judgment Preservation of Error A. the trial appeals The of reversed court matter, on the sec- As an initial we must ad take-nothing judgment court’s Ingram Deere’s contention that n.o.v. and rein- dress judgment ond motion for argu his no judgment preserve on the failed to stated the trial court’s regarding partner the existence of a n.o.v. The court ment judgment first motion for First, argues Ingram failed to right ship. waived his to chal- Ingram held that 1998) (recognizing argument "as a matter of common only Deere makes to this 1. The relationship part ... Ingram between support of his claim that law that ‘[t]he Court in ”). fiduciary fiduciary duty ... in character' he owed to Deere is ners is breached a duty by part appeals of held there was no evidence arose virtue of their court that such a Ingram fiduciary relationship between nership. art. 6132b- See Stat. However, we need not address (recognizing the unwaivable duties of and Deere. 4.04 obligation good independent evi loyalty the issue of whether there is and the care and duty fiduciary we hold partners the Texas dence of a because required faith under Act); legally sufficient evidence that Partnership see also v. there is Revised Bohatch 543, Binion, (Tex. partners. Ingram and Deere were S.W.2d 545 Butler & 977 argument party, no evidence be need preserve only his he raise the issue did not file a denial in cause he verified whether existed as a cross- Tex.R.App. they 38.2(b). response to Deere’s claim that were point. P. trial When a which Texas Rule of Proce partners, Civil judgment court renders n.o.v. and the los- 98(5) requires. undisputed dure It is ing party appeals, party the prevailing requisite did not file the verified may appeal present also points However, by tried denial. this issue was any ground issues on that would either parties. parties consent of the When both preclude vitiate the verdict or affirming on an the issue present evidence issue and verdict, the judgment and reinstating the developed during objection, trial without including grounds not judg- raised the any pleadings defects the are cured at ment n.o.v. See id. (providing that when a trial, the defects are waived. Tex.R. n.o.v., trial renders a judgment court “the 67; Sage P. St. Assocs. v. Northdale appellee bring Civ. by cross-point must forward (Tex. Co., 868 S.W.2d Constr. 445-46 any point issue or that would have vitiated 1993). the verdict that would have prevented an affirmance of the judgment if the trial issue in We addressed a similar judgment court had rendered on ver- the case, Sage Street. discussed we added)). dict” (emphasis excep- This is an the trial court have whether should sub tion to rule general prerequi- that as a jury, a contract’s ambiguity mitted presenting site to a complaint for appellate neither it. although party pleaded Sage review, the record must show that St., S.W.2d at 444-46. We reiterated complaint was made to the trial court rule long-standing that an issue is “not that the court trial ruled or rule refused to merely by hearing testimony tried Tex.R.App. 33.1(a). on the See request. P. Id. at (citing Harkey thereon.” v. Tex. Ingram properly Because issue raised the Ass’n, Ins. Employers’ 146 Tex. appeals, to the court he did not waive (1948)). However, be by the issue for review either this Court parties presented conflicting cause both appeals. the court of testimony subject on the and allowed the charge, issue be raised in jury B. Standard of Review ambiguity contract’s was tried consent. reviewing ap When court of Here, parties present Id. did both peals judgment reversing the trial court’s evidence at trial to affirm or controvert n.o.v., judgment we conduct suffi legal Deere, of a existence but ciency of the evidence. analysis Guevara existed, arguing party (Tex.2007). Ferrer, v. jury also submitted the issue in the *8 presented We the evidence trial review at trial, charge. developed issue was at in most light favorable to the jury’s parties and both understood that it was verdict, crediting evidence to favorable Accordingly, contested. the failure to file party jurors that if reasonable and could a preclude Ingram verified denial did not contrary evidence rea disregarding unless raising from the issue on appeal. jurors sonable could not. Id. Second, argues that error preserved was not mo Ingram’s because Partnership C. Law a judgment assign tion for a n.o.v. did not 1. Texas Common Law point of error regarding law, jury’s to the partnership question. answer Under common However, Ingram prevailed motion partnership on his Court that a or recognized Thus, n.o.v. judgment prevailing joint “presupposes agree- as the enterprise an
894 promulgated when Texas end,” ship could be either formation which ment to statutory regimes gov Phillips, v. 13 and later amended Donald implied. express or (Tex.1929). 74, explained erning partnerships. We 76 S.W.2d a parties to the “intention Statutory 2. Texas Law determining in element prime is a contract ven joint partnership not a Partnership Act whether The Texas Uniform Corp. Dev. (TUPA) Plains exists.”2 Coastal passed ture in 1961 and substan (Tex. 285, Inc., Micrea, 287 572 S.W.2d v. of the tially adopted major provisions 1978) v. Luling (UPA), & Gas Co. (citing Oil it Partnership Act which Uniform 475, Co., 144 Tex. 191 & every except Humble Oil in state adopted self was Ref. (“[A] (1946) 716, court would 722 approved by after it was Louisiana un partnership existed not declare on National Conference Commissioners clearly appeared....”)). intention Harry less that in 1914. State Laws See Uniform prof al., law also considered The common Haynsworth, et Should the Uni J. IV important Revised?, factor was the most sharing it 43 Bus. Partnership Act Be form P’Ship intention to establish shedding light 121, (1987); on the 121 Revised Law. Unif. (1997). v. Hill Friedlander a See Act, TUPA was re 6 U.L.A. (“A (Tex.1890) coat, 786, com TRPA, 1, 14 S.W. January effective placed by profits in the is an essential interest 1994,3 mon Part project the result of a partnership.”). constitute element to of the State Bar nership Law Committee into incorporated were elements These two Section on Business Law and the of Texas under the developed test that a five-factor Act of Texas Business Law Foundation. (1) 1993, S., 917, formation: partnership 31, law for May Leg., common 73rd R. ch. (2) 3887, 1, a commu § to form a Tex. Gen. Laws intent (3) venture, an in the nity of interest TRPA carried forward some of the com (4) agree profits, ways relevant to share mon law modifications (5) losses, promulgated a mutual case that were and this TUPA. ment to share management allegedly of the The in this case was control or right of Plains, at formed in 1997. It is uncontested that 572 S.W.2d enterprise. Coastal rather, Cole, 624, governs dispute; TRPA Brown v. 155 Tex. (citing (1956), Luling parties proven contest whether Deere has Oil 291 S.W.2d 722). Gas, factors the existence of under at These & 191 S.W.2d partner TRPA.4 guide question continued Although adopted portions Texas has law discusses differences be- 2. Prior case RUPA, partnerships. adopted the act in We it has not uniform joint tween ventures entirely. logical distinguish- Id. at 45. legal reason for its see no partnership on the ing joint venture from a statutory regimes governed part 4. Three have entity. Gray question See of formation TUPA, TRPA, nerships formed West, (Tex.Civ.App.- Texas— v. Organizations the Texas Business Code fact, n.r.e.). writ ref’d Amarillo TRPA, (TBOC). replaced enacted in the definition of venture that satisfies R.S., 31, 1993, Leg., May 73rd TUPA. Act of partnership subject “partnership” is a *9 3887, 917, 1,§ Tex. Gen. Laws ch. 6132b-2.02 Com- TRPA. Tex.Rev.Civ. Stat. art. governs partnerships formed on 3893. TRPA case, In counsel ment of Bar Committee. other, 1, 1994, existing January and or after and used the terms for both Deere governed by partnerships that elected to be it. interchangeably during trial. 11.03(a). In art. 6132b— Tex.Rev.Civ. Stat. 2003, May replaced TRPA. Act of the the TBOC 3. UPA revised in 1997 and renamed 182, 1, 2003, R.S., (RUPA). § Leg., ch. Partnership 78th Revised Uniform Act intro., (2001). gov- The TBOC Laws 592-93. U.L.A. 5 Tex. Gen. P’Ship Act, Unif. (B) “an liability that provides by TRPA association of for claims parties third against business; persons carry two or more to on a business the partner- profit for as owners creates a (5)contributing or to agreeing contrib- ship.” art. 6132b- Tex.Rev.Civ. Stat. or money property ute to the business.6 2.02(a). TUPA,5 TRPA Unlike articulates 6132b-2.03(a). Id. art. The common law factors, the five similar to common law of required proof all five factors to estab- factors, part- that of a indicate the creation See lish the of a partnership. existence They are: nership. Plains, 512 Coastal S.W.2d at 287. How- ever, TRPA contemplates a less formalistic
(1) receipt
right
or
to receive a share of
more practical
approach
recognizing
to
business;
of
profits
the
the
of a partnership.
formation
(2) expression of
part-
an intent
to be
First, TRPA
require
does not
business;
the
ners in
proof
parties’
direct
intent to form a
(3) participation
right
or
to participate
partnership.
art.
Stat.
business;
in
control
6132b-2.02 (stating that
two
per
or more
(4) sharing or
to
agreeing
share:
may
a partnership regardless
sons
form
of
(A)
business;
losses of the
or
persons
“whether
the
to
a
intend
create
January
partnerships
sharing
on or
gross
erns
formed
after
returns does
of
(3)
not
1, 2006,
partnerships
and other
that elect to
itself
a partnership,
establish
whether
Orgs
governed by
be
the
TBOC.
persons sharing
not
Tex.
the
them have a
Bus.
Code
addition,
§
the
402.001.
TRPA and
TBOC
right
any property
or common
or interest in
rules, providing
contain transition
the
the
from which
returns are derived.
preceding
apply
existing partner-
law will
to
(4)
by
The receipt
person
a
of a
share of
ships
period
years
for a
each
after
act's
profits
prima
of a business is
facie evidence
date,
partnership
effective
unless the
elects
business,
partner
that he
is a
but
governed by the
immediately.
be
new act
be
if
prof-
such inference shall
drawn
such
6132b-11.03;
Tex.Rev.Civ. Stat. art.
Tex Bus.
payment:
its were
received
Orgs.Code
§
January
402.001. On
(a)
otherwise,
by
As a debt
installments or
expire,
apply
TRPA will
and the TBOC will
(b)
wages
employee
As
of an
or rent
ato
regai-dless
partnerships,
all
of their formation
landlord,
date. Tex.Rev.Civ
art. 6132b-11.03.
Stat.
(c)
annuity
representa-
a
As an
to widow or
determining
TRPA and the
TBOC’s rules
partner,
tive of a deceased
substantially
formation are
(d)
loan,
though
As
on a
interest
Orgs.Code
Compare
same.
Tex.
Bus.
payment vary
prof-
amount
with the
152.052,
§
with TexRevCiv
Stat art. 6132b-
business,
its of the
2.03.
(e) As the
a
consideration for
sale of
good-will
proper-
of a
other
provide
TUPA did
business or
not
list of consider-
ty by
important
ations or factors that were
installments
otherwise.
or nec-
(5)
essary
Operation
partnership.
the establishment of a
of a
property
mineral
under
exception,
only provides
joint operating agreement
With one
TUPA
rules
does not of itself
indicating
give
partnership.
circumstances
did not
rise
establish a
to a
TUPA reads as follows:
§
6132b,
Tex.Rev.Civ. Stat. art.
(1) Except
provided] persons
as [otherwise
enacted, Oregon
years
6. Four
after TRPA was
partners
who are not
other
as to each
are
adopted
almost verbatim to the factors
factors
partners
persons.
not
as to third
determining
(2)
common,
listed
TRPA for
whether
tenancy, tenancy in
Joint
tenan-
entireties,
cy
exists. Or.Rev.Stat.
by
joint property,
common
§
67.055
part
Oregon
Texas are
property,
ownership
states
(2008).
does
to enact a
from the UPA's
itself establish
statute
deviates
whether such
any profits
determining
part-
co-owners do or do not share
rules for
existence
property.
nership.
made
the use
*10
by
in
that do not
intent
be
circumstances
TUPA
Formerly, the
to
partnership”).
person
part-
is a
although not con-
themselves indicate
a “prime,”
partners
6132b-2.03(b).
of a part-
the creation
ner.7 Id. art.
trolling, element
Plains,
at
nership. Coastal
many
of how
question
Instead,
“expression
lists the
TRPA
287.
required
part
are
to form
TRPA factors
a
as a
partnership
factor
form a
of intent” to
impression
of
for
nership is a matter
first
Stat. art. 6132b-
to consider.
Tex.Rev.Civ.
to
The TRPA factors seem
this Court.
2.03(a)(2). Second, unlike the common
proxy
a
common law re
serve as
law,
require
of all of
proof
not
TRPA does
partnership
a
quirement of intent to form
for a partnership
in order
the listed factors
sug
by
logically
conduct that
identifying
Third,
profits—
sharing of
to exist.
pur
a
gests a collaboration of
business’s
a
establishing
part-
essential for
deemed
a
as
pose
profit
to make
resources
nership
common law—is treated
under the
statutory
examining
After
partners.
sharing
because
differently under TRPA
considering that TRPA abro
language and
Friedlander,
profits
required.
of
is
Cf.
requirement of
gated the common law’s
(“A
in the
common interest
897
particu-
press provision obligating
parties
on its own
must rest
Each case
important
share in the losses is also
and
presence
absence
lar facts and
partnership
indicates
that no
existed.
a
re-
partnership
attributes of
the usual
controlling.
But
this feature too is not
Texas rule indicated
lation. The earlier
controlling
was the
Gilmore,
profit sharing
that
v.
671,
Davis
244
673-74
held
generally
1951,
think it is now
test. We
(Tex.Civ.App.-San Antonio
writ
refd)
(citations omitted).
is not all-inclusive and
Many
ap-
that such a test
states
ply
totality-of-the-cireumstances
of an ex-
test.8
controlling_
absence
736,
Redd,
Butler,
(Ala.
purpose
joint profit”);
McCrary
So.2d
739
v.
593
v.
540
Smith
989,
(Miss. 1992)
1989)
arbitrary
(stating
(stating
is no
test
So.2d
994
that
‘‘[t]here
”[a]n
that
exists,
expressed agreement
required;
partnership
but such a
is not
intent
as to whether a
may
implied,
upon
made
all of the
be
or established from the sur
determination will be
Chubb,
Temm,
circumstances”);
circumstances”);
Tripp
rounding
v.
Temm v.
attendant
814,
629,
31,
312,
(1949)
(1945)
(stating
P.2d
314
354 Mo.
632
69 Ariz.
208
(stating
question
part
partnership
that
”[s]ince
of the existence of a
rests on
that "the
upon
parties
each case must be
nership depends
the intention of the
intention
facts”);
upon
particular
all
its own
parties,” which "must be ascertained from
determined
936,
KeyTronics,
circumstances and the action
In re
274 Neb.
744 N.W.2d
of the facts and
Ervin,
425,
(2008) (stating
parties”); Moon v.
441
that
five indi-
”[t]he
and conduct of the
that;
464,
933,
(1943) (stat
co-ownership
they
cia of
are
are
64 Idaho
133 P.2d
937
exists,
necessary
partnership
a
ing
partnership
a
there
not all
to establish
that to show
facts,
single
showing
relationship,
that
and no
indicium of co-
"must be other
relation
ownership
necessary
par
is either
or sufficient to
ship to have been the intention
Bainum,
618,
ties”);
prove co-ownership”); Eggleston Eggleston,
v.
v.
306 Ill.
138
Parish
"
668,
243,
(1948)
147,
(1923) (stating
req
47 S.E.2d
247
N.E.
149
that
228 N.C.
‘[t]he
(stating
legal
partnership
parties
”[p]artnership
that the
that a
is a
con
uisites of a
are
joined together
carry
cept,
a
the determination of the existence or
have
on trade
but
must
benefit,
...
partnership
involves inferences
or venture for their common
each
having
analysis
'all
contributing property
and
drawn from an
the circum
or services
”
opera
community
profits’
attendant on its creation and
a
of interests
stances
”
Valentine,
611,
Clifford,
(quoting Helvering v.
309 U.S.
(quoting
v.
145 U.S.
tion'
331,
Meehan
335,
554,
618,
972,
(1892)));
(1940)));
L.Ed.
60 S.Ct.
We note a formly totality-of-the-circum applying spring surprise cate that it intended to or Cull, test, Perry Homes v. 258 stances see on partnerships independent accidental (Tex.2008) 580, (explaining the S.W.3d 592 if, persons, example, an business for em a difficulty applying totality-of-the-cir of paid ployee profits is out of business with a determining cumstances whether test no other indicia of a facto partnership de party arbitration in a waived an clause TRPA. On the other end under of the contract), ignore Legis cannot the but we of all spectrum, conclusive evidence of the codify lature’s to essential decision TRPA factors will establish existence TRPA partnership common law factors in of a of law. partnership as a matter proof without all or som specifying of challenge totality-of-the-circum of e required of the factors to establish test stances will be between application its See Tex.Rev.Civ. Stat. art. points these two on the continuum. 6132b-2.03; M.N., 799, In re 262 S.W.3d (Tex.2008) pre 802 (explaining that courts Partnership D. Existence of a Legislature sume that each included case, In this we whether more consider purpose in the for a and that word statute any than a scintilla of of evidence were purposefully words not included indicative partnership factors was in- omitted). Yet, can provide we additional at trial. troduced course, guidelines analysis. for this Of an any absence of evidence of the factors will Sharing 1. Profit preclude recognition of a partnership he argues that received or under Schlumberger Texas law. Tech. Cf. right had receive share of the Swanson, 171, Corp. v. 176 profits clinic’s because he and had (Tex.1997) TUPA). (applying Even con an which of them each would clusive of only one factor normal “gross receive one-third of the clinic’s rev ly will be insufficient to establish the exis enue” and the remainder would be used tence a partnership.9 of To hold otherwise expenses. It is true that the “receipt would create a probability that some busi right profits or to receive a of share ness be legally owners would required may be of business” indicative the exis profits share with individuals be held or TRPA, a partnership tence of under but a liable for the actions of individuals who profits “wages share paid as or other were neither treated as nor intended be compensation to employee or partners. indepen See art. Stat. 6132b-3.03(a) dent part contractor” is not indicative of a (explaining that partner interest ship nership in the business. partner is liable for acts of a done Tex.Rev. 6132b-2.03(b)(1)(B); with authority in the art. ordinary course of Civ. Stat. see Friedlander, business); 788; the partnership’s 14 see also Kao S.W. Strawn at Nat’l Holdings, Marchbanks, Young, L.P. v. 63 Bank v. S.W.2d Holler, cumstances”); & M finding proof P Cattle Co. v. lished one factor. He (Wyo.1977) (stating P.2d too, that "the argued, “A venture is question [partnership] ... a whether exists you judge] put [The know. ‘ors’ after all conduct, gathered must be from the surround- elements. have to these You don’t have all of ing circumstances and the be- transactions you gentlemen, can any them ladies and have parties”). tween the them, them, you one can have two of you can have three them....” There closing argument, Deere’s counsel told objection charge point. to the on this jury could estab- be refd) (Tex.Civ.App.-Eastland writ checks referred to Deere as a “medical (saying “oft-repeated quotation consultant” and the payments as “contract ‘profits profits’ jargon” ”... “is to utter Therefore, labor.” they contradict his ar- *13 they profits paid because are not when as gument that he profits received as a part- services). compensation for ner in TRPA, the clinic. Under receipt of profits compensation as for an employee’s The evidence does not establish that services or an independent contractor’s Deere received a share of con profits as work is not evidence parties templated under TRPA were for two reasons. First, partners. Ingram between art. 6132b- Tex.Rev.Civ. Stat. 2.03(b)(1)(B); Bank, Deere cannot constitute receipt Deere’s of Strawn Nat’l 74 “profits,” but rather gross revenue. Be S.W.2d at 449. Because Deere cashed the TRPA cause does not define the term checks without challenging the character- “profits,” we it using ordinary define its izations, this fact also does support not his 312.002; meaning. § Heri argument. Tex. Gov’t Code Res., NationsBank,
tage Inc. v. (Tex.1996); Expression 121-22 Ramsay v. Md. of Intent to Be Partners Co., Am. Ins. 533 Gen. S.W.2d 346 “[Expression anof intent to partners be (Tex.1976). ordinary meaning of in the business” is one of five factors “profits” is excess of revenues over “[t]he courts use in determining part whether a expenditures in a business transaction.” nership exists. art. Tex.Rev.Civ. Stat. (8th ed.2004). DictionaRY Law Black’s 6132b-2.03(a)(2). This is different from Furthermore, Court, interpreting sim the common law definition of a partnership TUPA, language ilar established that that required proof that parties intend receipt gross profit revenue is not ed to form a partnership at the outset of sharing. See Schlumberger Chip., Tech. Plains, their agreement. Coastal TUPA, at (interpreting S.W.2d at (citing Gas, Luling &Oil 6132b, 7(3), § Stat. art. Tex.Rev.Civ. 722); 191 S.W.2d at cf. Tex.Rev.Civ. Stat. “[ejntitlement explaining that royalty to a (“An art. 6132b-2.02 association of two or gross based on receipts profit is not shar persons more carry on a business for ing.”). There is no evidence that the allo profit as owners creates a expenses cation for satisfy sufficient to persons whether the intend to create a all expenses, the clinic’s leaving only prof ” added)). .... (emphasis split. its to be Even if may some funds Conversely, TRPA parties’ evaluates the have been expenses, reserved for as Deere expression of intent to partners be as one claims, there is no evidence that Deere’s factor, Tex.Rev.Civ. art. 6132b- Stat. share would expenses have decreased if 2.03(a)(2), and it does give not its terms grew expenses or increased if shrank. the parties’ intent or expression of intent Simply put, depended Deere’s share on the any greater factors, weight than the other receipts, clinic’s not its excess of revenues 6132b-2.03(a). see art. Stat. expenditures. Therefore, over the evi dence in this case leads to one conclusion: analyzing expression When did share the profits clinic’s but TRPA, intent under courts should review agreed to and percentage received a of the the putative partners’ speech, writings, gross clinic’s revenues. and conduct. While under the common Second, law, probative twenty wrote on other factors is “intent,” checks to Deere compensation from considered evidence of under January TRPA, 1997 until March 1999. “expression These of intent” factor is 6132b-2.02(a) (“An apart from the Civ. Stat. art. associa- separate
an inquiry should consider persons carry factors. Courts tion of two or more on other specifically probative profit evidence not business for as owners creates a words, other evidence of other factors. ... partnership, whether the association is control, sharing, or contribu- profit or loss ‘joint ‘partnership,’ called a venture’ or not be money property should name.”). tion of “partner” reg- other The term expression evidence of considered ularly may used eommon vernacular and Otherwise, all evi- partners. intent to be variety ways. be used in a Webster’s par- “expression” dence could be an Unabridged Dictionary New Universal intent, the intent factor a making ties’ (1st ed.1996) (defining “partner” *14 as factors, any of the catch-all for evidence possession enjoy- one who shares in the separate “expression of intent” and the another, ment of something with one of be Such an inquiry would eviscerated. persons play together two or more who would undermine the lan- interpretation side, game against opposing a hus- TRPA, five guage sep- which establishes wife, band and either a couple who when deter- arate factors to be considered friend, together). Referring dances to a partnership. See mining the existence teammate, employee, spouse, or fishing 6132b-2.03. Stat. art. companion “partner” as a in a colloquial legally sense is not sufficient evidence of expressions Evidence of of intent expression of intent to form a business include, example, parties’ could the v. Murphy See McDermott they partners, are statements that one Inc., 606, (Tex.App.-Hous- 807 S.W.2d holding party the other out as a party denied) 1991, ton pet. (explain- Dist.] [14th partner on the business’s letterhead ing although that party one referred to the signed partnership name or in a plate, party partner, other as his this alone did Reagan v. agreement. Lyberger, See However, partnership). not create a 2005, (Tex.App.-Dallas no same legally signifi- terms could constitute pet.) (interpreting holding TRPA and expression cant evidence of of intent when support jury evidence was sufficient to in a sig- made circumstance that indicates of the existence of a finding where, evidence, Thus, plaintiff nificance to the business endeavor. among other courts should look to terminology that he referred to the defendant used testified partner by putative as and other partners, his business wit the context in made, nesses stated that the defendant identified which the statements were and the plaintiffs partner); identity speaker himself as the Brewer and listener. Bank, Big v. Lake State argues Deere expressed that he his in- writ) (Tex.Civ.App.-El Paso partner Ingram by tent to be a with shar- (explaining party introducing per ing profits the clinic’s and losses and hav- son the party’s partner to the bank as is ing access to the clinic’s records. His partnership). evidence of the existence of a factors, sharing evidence of other of prof- business, its and losses control of the parties The terms used is to expression insufficient establish of in- in referring arrangement to the do not tent. Deere’s evidence is also insufficient control, Plains, 572 S.W.2d at Coastal because there must be evidence that both referring merely person to another parties expressed their part- intent be “partner” recipi in a situation where the 6132b-2.03(a) ners. art. message expect ent of would Tex.Rev.Civ. Stat. “[fjactors legal (explaining declarant to make a statement of indicating that significance enough. persons is not See Tex.Rev. have created a in- expression ... of an elude their intent to taxes representing that he was co-owner of (emphasis in the business” partners be the clinic. Additionally, paid Deere his added)). Ingram the party Because is de- own malpractice insurance, medical which nying the existence of a an he acknowledged was his common practice expression partners by of intent to be In- when he did contract work. Deere cannot gram particular would be of interest. provide content, context, or circum- give stances to any alleged expres- Ingram’s expres The evidence of sions of legal intent significance as evi- partners sion of intent to be business dence of a partnership. following exchange during Deere’s trial testimony: 3. Control Q. representations [Ingram] What did argues he equal right had an you you make to when were forming this control manage the clinic’s business that later idea turned out to be not true? because, although he was never allowed to Well, one, A. that number [Deere] records, see the books and he repeatedly venture, awas or that we were requested to see them. He points also *15 partners, doing or we were this togeth- Ingram’s testimony “maybe” Deere er. viewed the clinic’s on books one occasion.10 testimony Deere’s is unclear gives and Furthermore, argues Deere that he had alleged arrangement with Ingram three control Ingram because discussed with him different they characterizations —that were made, how much the clinic the amounts venturers, partners, doing or “were staff, paid to the and the need to hire together.” It is unclear from this Ingram’s personnel wife as director. No testimony Ingram what believed to be the other supports evidence these statements nature of their relationship. Any signifi- proves he participated in or had the cance of Deere’s testimony is further obvi- right to control the clinic’sbusiness. ated because he testified that partner people working “means some together.” The right to control a business Accordingly, Deere called the employees right is the to make executive decisions. supervised he at his clinic “partners.” Af- Cole, 624, See Brown v. 155 Tex. 291 ter explained Deere’s counsel to him the (1956) 704, S.W.2d (noting that evi legal definition of a during his dence of control of the business could be testimony, Deere referred to his trial at- exercising authority over the business’s torney “partner” as his because he was Salinas, operations); Guerrero v. No. 13- “depending on [him].” 05-323-CV, (Tex. 2294578, at WL *11 10, 2006, App.-Corpus Aug. Christi pet.)
Deere also testified that the clinic kept (concluding management its established that evidence of joined name after he director, medical control of the business was the Ingram right and he and never discussed a name write checks on the change. checking He never business’s account); signed a lease building City Tierra Sol Joint Venture v. Paso, by Ingram owned where the El (Tex.App.- clinic was housed, denied) was not El (noting named on the clinic’sbank Paso pet. account, never signed signature party card for not does have control of the business account, the clinic’s bank and never if party filed does not have control over and argument 10. This contradicts Deere’s trial at the books. testimony that he was never allowed to look shared, books); how would be but he testi Price v. losses the business’s access to (Tex.Civ. Wrather, 351-52 that there was never a discussion of fied n.r.e.) (noting writ refd in excess of one-third of the App.-Dallas expenses how re business could be that control revenue would be divided gross clinic’s all of the business’s managing ceiving and Ingram. The meaning between him and monies). However, being spo assets and operating “net losses” is “the excess regarding information radically provided revenues, operating expenses over not indicate that Deere the business does amount of which can be deducted from right to control the had control of or if other deductions do not gross income most, At Deere’s evidence dem business. gross exceed income.” Black’s Law Dic with Deere Ingram talked onstrates (8th ed.2004). Here, Ingram tionary owners talk with about the business. But Deere never discussed what would accountants, consultants, employees, attor expenses to the allocation if ex happen spouses, many others about their neys, gross ceeded one-third revenue or businesses, and these conversations do not losses, They income. never discussed have control of people establish that these expenses. legally cognizable There is no Likewise, those same the businesses. support contention opportunity people may classes of have agreed and Deere to share losses. books, but once to look at the businesses’ again, a review of the books itself Money Property 5. Contribution Deere submitted no evidence of control. there is no evidence that Finally, evidence that he made executive decisions agree[d] to contribute “contribut[ed] *16 right or the to make executive deci had money property” part or to the clinic as a sions and has shown no evidence of this ner. art. 6132b- Stat. factor. 2.03(a)(5). argue Deere does not that any agreement there was that he contrib Liability Sharing of Losses and for money property ute either or to the enter Party Third Claims Furthermore, prise. See Id. Deere does law, Contrary the under common actually not contend that he contributed TRPA losses not agreement an to share fact, the clinic. ac money to Deere necessary partnership. to create a Tex. knowledged at trial that he did not contrib 6132b-2.03(c); art. see Stat. Rev.Civ. or the purchase ute to clinic renovations Plains, at 287. There- Coastal equipment supplies medical and and that fore, while TRPA the absence of an under to use his re agree personal he did not agreement disposi- to share losses is not pay any expenses for in the sources to tive of the existence of a Rather, operation of the clinic. Deere’s agreement sup- could existence such only argument regarding this factor is that port argument Deere’s reputation property he contributed his Ingram. existed between him and Tex. alleged partnership. to the 6132b-2.03(a)(4)(A). art. Rev.Civ. Stat. “property” TRPA defines as “all Deere, According to he and In real, mixed, property, personal, tangible or gram agreed that Deere would receive intangible, proper or an interest in that revenue, gross one-third of the clinic’s In 6132b-1.01(15). Reputation art. ty.” Id. gram would receive one-third of the clinic’s revenue, type goodwill may is a and be valuable gross and the remainder would intangible property. Ry. Tex. & Pac. expenses. be used to clinic Deere Co. pay Mercer, argues Tex. 90 560 that this determined v. S.W.2d (1936). Therefore, matter, reputa- an individual’s on testimony his is devoid of property tion can be is contributed to support for that conclusion. Deere testi- However, per- even if fied that he did not many know how clients business, son to a good lends her name she came to the clinic specifically because of automatically does not become facto a de presence his and that the clinic’s name minimum, partner. putative part- At a changed never highlight his addition to prove ner would have to such any Moreover, venture. alleged the pain value distinguished can be from services clinic not using was marketed his name. employ- rendered property given as an Neither Deere nor ever McClellan ex- ee. plained how Deere’s reputation contribut- Mercer, ed to the clinic’s success. See Property a. Contribution of Valuable (to damages S.W.2d at recover reputa Deere Although claims his goodwill, issues must be submitted to the tion was a valuable contribution jury to findings change obtain on the alleged partnership, the evidence does business); Taormina, value support this Deere argues assertion. S.W.2d at 574 (noting that witness testimony Ingram’s expert, Ron arrived at a sum for goodwill after an McClellan, reputa who stated that Deere’s business, investigation of the observation tion to the was “benefit clinic” “add operations, of its and examination of its clinic, ed value” to claim. supports his books). However, only general McClellan testified b. Contribution as a Partner ly that reputation Deere’s could value add clinic, to the he acknowledged that his Furthermore, there is no evidence unsupported statements were mere that Deere added value to the clinic as a assumptions, stating: knowing “Not Dr. partner employee. and not an Even if we reputation, and his I can as were to assume that Deere contributed therefore, sume.” opinion, merely His quantifiable value and enjoyed good rep speculation. Transp. Coastal Co. v. Crown the psychiatric pain utation in manage Corp., Cent. Petroleum fields, ment he cannot establish this factor *17 (Tex.2004) 232-33 (quoting Tex.R. Evid. without evidence that the contribution is 401). In show repu order to that Deere’s distinguishable from the contributions of clinic, tation the improved goodwill of the an employee. Employees may contribute McClellan, minimum, at a know had to to by lending business their endeavors reputation Deere’s psychiatric the reputation, time and but that is not a pain management fields. McClellan ad to contribution the venture indicative of a mitted he had no such knowledge. See partnership assuming interest. Even Culicchia, Taormina v. reputation Deere’s noth impeccable, was 574 (Tex.Civ.App.-El Paso ref d writ ing that indicates Deere contributed or n.r.e.) (explaining that the measure of agreed contribute clinic to to the as a goodwill is “the fixed and favorable consid sum, partner not an In employee. as eration of arising customers from an estab legally there is no evidence sufficient that lished and well-known and well-conducted Deere contributed to the property multi business”). disciplinary pain clinic that would establish a partnership The other interest. support evidence ing Deere’s claim is his unsubstantiated III. CONCLUSION given during testimony
statements his reputation his added value to clinic. a partnership the Whether exists must be Assuming opinion he to qualified give is an determined examination total- The also instructed to consider jury of was circumstances. Evidence
ity of the the Re- under Texas the enumerated in the Texas Re- the factors factors none of preclude will the Act Partnership Partnership Act determine wheth- vised vised to a even con- of recognition id. joint er a was created. See It venture factor only one will also evidence of clusive joint venture was found that a created. the to establish normally be insufficient Ingram challenges legal sufficiency the of under TRPA. partnership existence support jury’s to the answer. evidence However, five evidence all conclusive agree I evidence of one factor nor- a mat- partnership a as establishes factors mally, necessarily always, will be but not case, In Deere has not law. this ter of partner- to a legally support insufficient any evidence of legally sufficient provided ship says The even consid- finding. Court prove TRPA factors the five testimony ering Ingram said Deere’s we partnership. Accordingly, existence of venture, joint “this or that we were was judgment and appeals’ the court of reverse together,” were partners, doing or we this take-nothing court’s the trial reinstate legally insufficient judgment. factor, any including factor of intent I disagree form a evi- a concurring filed Justice JOHNSON legally support dence insufficient to was opinion. all, jury intent. After finding of did JOHNSON, concurring. Justice testimony determine Deere’s was credible. they Ingram, claiming sued Deere Otherwise, joint found a it could have purpose for the formed existed. venture pain interdisciplinary clinic. creating an However, need over we not labor wheth- court, The they did. trial jury found testimony legally er Deere’s was sufficient however, Ingram’s eventually mo granted partner- to intent to form a evidence as notwithstanding the ver judgment tion for ship. testimony, Regardless such there take-nothing judgment. dict and entered a specific was to support no evidence reversed in appeals part, The court of ownership term included in percentage jury verdict. 198 reinstating Question One. 96, 104-05. charge, to the one of the According Court, claims of- Ingram terms Deere had of proving burden was no evidence fered each that he and “would own formed. See art. 6132b- Stat. 50% of the unnamed venture.” 2.03(a). *18 One, object Question Deere did not so jury charge ques- contained seven sufficiency of evidence is measured Question asked tions. One against charge as it was Oster given. joint form [Ingram] [Deere] Did Peca, (Tex.2000) berg 12 S.W.3d v. it a giving venture1 name for without (“[I]t charge, the court’s not some other interdisciplinary purpose pain law, that the suffi unidentified measures the following clinic that included terms: ciency when the opposing of the evidence party object charge.”). to the fails [Ingram] each That would [Deere] venture; joint unnamed equal own 50% of the Deere offered ever
ownership of business was de- joint "joint relationship jury question inquired about a reference the both as ven- 1. The notes, 2. parties ture and a At 894 n. venture.” As the Court Certainly there is no evidence cussed. reached for the
that an equally. to be owned Because
business that Deere and In-
there is no evidence fifty percent own
gram agreed to each venture, formed allegedly carry proof his burden of under the
did not
jury charge. See Sw. Bell Tel. Co. v.
Garza, (Tex.2004) 164 S.W.3d 618-19 Stores, v.
(citing Sturges, Wal-Mart Inc. (Tex.2001)). reasons, foregoing join
For the I 2. opinion except for Part II-D I
Court’s join
also that the evi- holding Court’s insufficient legally support
dence is
judgment join for Deere and the Court’s
judgment.
EMPLOYEES RETIREMENT TEXAS, OF
SYSTEM
Petitioner,
v.
Xavier DUENEZ and Irene
Duenez, Respondents.
No. 07-0410.
Supreme of Texas. Court
July