Wash. Court of Appeals published opinion — 323820.opn.pdf

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ALJ adopted the department's position and, on that basis, relied upon association

agreements that it treated as continuing to control as a matter of law, not fact, for a dozen

findings. See AR at 292-94 (findings 1-12).

The department responded to testimony and financial record evidence that Drs.

Loretta and Louise indisputably collected a 40 percent profit from their production during

the audit period (an amount inconsistent with the association agreements) by taking the

position that it is not "profit sharing" ifpartners agree that some of them will take

distributions based on projected profit while others will assume the risk that the actual

profit might be higher or lower than projected. The ALJ implicitly adopted the

department's position. AR at 296 (conclusion 7).

The department also took the position that partners are required to share losses. It

took the position that partners are not sharing losses ifthere is a conceivable, even if

implausible scenario under which one partner alone could incur a loss. The ALJ

implicitly adopted that position. See id.

Finally, the department took the position that the sole proprietorship form in which

Dr. Armand had reported and registered with it and other agencies was sufficient,

standing alone, to support the conclusion that the dentists were not operating as a

partnership. The ALJ adopted that position. See id.

Each of these conclusions was wrong as a matter of law.

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DeFelice v. Emp 't Sec. Dep't

I No. 32382-0-111- dissent

Partner services are not employment.

I There is no employer-employee relationship when an owner provides services to a