law-partnership-disputes | partnership and joint venture | partnership formation and existence | common law
partnership vs. statutory factors under the Texas Revised Partnership Act (TRPA) |
EXISTENCE OF PARTNERSHIP
Under article 2.03 of the Texas Revised Partnership Act ("TRPA"), there are five factors to consider in
determining whether a partnership has been created. TEX.REV.CIV. STAT. ANN. art. 6132b-2.03(a) (Vernon
Supp.2008); Brown v. Swett & Crawford of Tex., Inc., 178 S.W.3d 373, 378 (Tex.App.-Houston [1st Dist.]
2005, no pet.). The factors include (1) the receipt or right to receive a share of profits of a business; (2) the
expression of an intent to be partners of the business; (3) the participation or right to participate in control of
the business; (4) the sharing of or agreement to share losses of the business or liability for claims by third
parties against the business; and (5) the contribution of or an agreement to contribute money or property to
the business. TEX.REV.CIV. 147*147 STAT. ANN. art. 6132b-2.03(a). The Texas Supreme Court has held
that, to establish a partnership or joint venture, a plaintiff must show (1) a community of interest in the
venture, (2) an agreement to share profits, (3) an agreement to share losses, and (4) a mutual right of
control or management of the enterprise. Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 176 (Tex.
1997); Brown, 178 S.W.3d at 378. However, the Texas Revised Partnership Act provides that an agreement
to share losses by the owners of a business is not necessary to create a partnership. TEX. REV.CIV. STAT.
ANN. art. 6132b-2.03(c).
NO PARTNERSHIP FORMED UNDER TRPA
Ingram v. Deere,
No. 06-0815 (Tex. Jul 3, 2009)(Wainwright)(dispute over existence of partnership under TRPA, partnership
criteria/factors, fiduciary duty) (existence of partnership not proven, take-nothing judgment reinstated)
JESSE C. INGRAM, PH.D. AND BEHAVIORAL PSYCHOLOGY CLINIC, P.C. v. LOUIS DEERE, D.O. AND
HILLVALE MEDICAL GROUP ASSOCIATION D/B/A HILLVALE MEDICAL ASSOCIATION; from Dallas County;
5th district (05-05-00063-CV, 198 SW3d 96, 04-27-06 Opinion of the Dallas court of Appeals)
The Court reverses the court of appeals' judgment and reinstates the trial court's judgment.
Justice Wainwright delivered the opinion of the Court, in which Chief Justice Jefferson, Justice Hecht, Justice
Medina, Justice Green, and Justice Willett joined, in which Justice O'Neill and Justice Brister joined except as
to part II.D.5.a, and in which Justice Johnson joined except as to part II.D.2. [pdf]
Justice Johnson delivered a concurring opinion. [pdf]
In this case, we review a court of appeals judgment reinstating a jury verdict finding that Louis Deere, D.O.
and Jesse C. Ingram, Ph.D. formed a partnership pursuant to the Texas Revised Partnership Act (TRPA).
TRPA lists five factors to be considered in determining whether a partnership has been formed. This
determination should be made by examining the totality of the circumstances in each case, with no single
factor being either necessary or sufficient to prove the existence of a partnership. Here, the evidence is
legally insufficient to establish that a partnership existed between Ingram and Deere. Because the evidence
of the formation of a partnership is legally insufficient, we do not address the issue raised in Ingram’s cross-
petition challenging the court of appeals’ decision that Ingram owed Deere a fiduciary duty. Accordingly, we
reinstate the trial court’s take-nothing judgment in favor of Ingram and reverse the court of appeals’ judgment.
Whether a partnership exists must be determined by an examination of the totality of the circumstances.
Evidence of none of the factors under the Texas Revised Partnership Act will preclude the recognition of a
partnership, and even conclusive evidence of only one factor will also normally be insufficient to establish the
existence of a partnership under TRPA. However, conclusive evidence of all five factors establishes a
partnership as a matter of law. In this case, Deere has not provided legally sufficient evidence of any of the
five TRPA factors to prove the existence of a partnership. Accordingly, we reverse the court of appeals’
judgment and reinstate the trial court’s take-nothing judgment.
PARTNERSHIP LAW AND LITIGATION - COURT OF APPEALS DECISIONS
ESTATE OF BRANCH ARCHER, BY RICHARD K. ARCHER AS PERSONAL REPRESENTATIVE AND
RICHARD K. ARCHER, INDIVIDUALLY AND AS TRUSTEE OF THE RICHARD K. ARCHER, M.D., P.A. PROFIT
SHARING PLAN & TRUST v. RICHARD O. HARRIS, INDIVIDUALLY AND AS TRUSTEE OF THE RICHARD O.
HARRIS PROFIT SHARING TRUST; from Wichita County; 2nd district (02-07-00243-CV, ___ SW3d ___, 12-
04-08)(Justice Johnson not sitting)(partnership dispute, collateral estoppel, judicial estoppel)
money had and received)
R2 ENTERPRISES, INC. AND TED REEVES v. VERNON WHIPPLE; from Denton County; 2nd district
(02-07-00257-CV, ___ SW3d ___, 06-26-08, pet. denied Sep 2008)(JNOV, partnership dispute, no standing)