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

Citation: Wash. Court of Appeals published opinion — 323820.opn.pdf
Jurisdiction: Washington (state)
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Original Source: https://www.courts.wa.gov/opinions/pdf/323820.opn.pdf ↗

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law from other adopting states.

Under the RUP A, it is the attribute of co-ownership that distinguishes a

partnership from a mere agency relationship:

A business is a series of acts directed toward an end. Ownership involves
the power of ultimate control. To state that partners are co-owners of a
business is to state that they each have the power of ultimate control.

UNIF. P'SHIP ACT (1997) § 202 cmt.l, 6 pt. 1 U.L.A. 93 (2001). RCW 25.05.055(3)(c)

provides three rules of construction that apply in determining whether a partnership has

been formed. Relevanthere is the rule that "[aJ person who receives a share of the profits

of a business is presumed to be a partner in the business," subject to a few exceptions.

By its plain terms, and as reflected in the comments to the RUP A, profit sharing gives

rise to a rebuttable presumption of a partnership. Id. The presumption applies whether

the profit share is a single flat percentage or a ratio that varies. Id.

The association agreements offered in evidence by the department could be
terminated by a mutual oral agreement to begin operating as a partnership.
It was legal error to conclude otherwise.

Dr. Armand and Dr. Louise both testified that during the tax years covered by the

audit, the parties were operating as a partnership. Dr. Louise testified that the three

DeFelice v. Emp 't Sec. Dep't
No. 32382-0-111- dissent

dentists began operating as a partnership in or about 2008. The ALJ's finding that Ms.

Hughes asked the practice bookkeeper for "copies of any agreements to show the

relationship between Dr. Armand, Dr. Louise and Dr. Loretta" (AR at 294, finding 10), is