| Griffith Energy, Inc. v Evans |
| 2011 NY Slip Op 04847 [85 AD3d 1564] |
| June 10, 2011 |
| Appellate Division, Fourth Department |
| Griffith Energy, Inc., Respondent, v Joann Evans,Appellant. |
—[*1] Leclair Korona Giordano Cole LLP, Rochester (Steven E. Cole of counsel), forplaintiff-respondent.
Appeal from an order and judgment (one paper) of the Supreme Court, Monroe County(Harold L. Galloway, J.), entered February 11, 2010 in a breach of contract action. The order andjudgment awarded plaintiff money damages upon a nonjury verdict.
It is hereby ordered that the order and judgment so appealed from is unanimously affirmedwithout costs.
Memorandum: Plaintiff entered into a retailer-dealer agreement (agreement) and commerciallease (lease) with defendant's husband, Norman Evans, on July 1, 1997. Both contracts pertainedto the operation of a gasoline station and automobile repair shop (gas station) in Geneseo. Theagreement referred to defendant's husband as "Norm Evans d/b/a WINTON-HUMBOLDTSUNOCO) [sic] SOUTH" (hereafter, Winton South). After defendant's husband failed toadhere to his obligations under those contracts, plaintiff commenced an action against him withrespect to each contract and obtained default judgments totaling $101,043.20. Plaintiff wasunable to collect on its judgments against defendant's husband, and it subsequently commencedthis action seeking to collect on those judgments from defendant, alleging, inter alia, that the gasstation operated as a common-law partnership or joint venture between defendant and herhusband. Following a nonjury trial, Supreme Court concluded that the gas station was such apartnership or joint venture and awarded plaintiff, inter alia, damages in the amount of the priorjudgments against defendant's husband. We affirm.
Partnerships are governed by the law of agency (see Partnership Law § 4 [3])and, pursuant to Partnership Law § 26 (a) (2), "all partners are liable . . .[j]ointly for all . . . debts and obligations of the partnership . . . ." Asthe agent of a partnership, a partner's " 'acts may be adopted and enforced by the partnership as itsown' " (Beizer v Bunsis, 38 AD3d813, 814 [2007]; see Partnership Law § 20 [1]). Partnership Law § 10(1) defines a partnership as "an association of two or more persons to carry on as co-owners abusiness for profit"
Where, as here, "there is no written partnership agreement between the [individuals inquestion], the court must determine whether a partnership in fact existed from the conduct,intention[ ] and relationship between [them]" (Czernicki v Lawniczak, 74 AD3d 1121, 1124 [2010]). "In [*2]deciding whether a partnership exists, 'the factors to be consideredare the intent of [those individuals] (express or implied), whether there was joint control andmanagement of the business, whether there was a sharing of the profits as well as a sharing of thelosses[ ] and whether there was a combination of property, skill or knowledge' . . .No one factor is determinative; it is necessary to examine the . . . relationship as awhole" (Kyle v Ford, 184 AD2d 1036, 1036-1037 [1992]).
Viewing the evidence in the light most favorable to plaintiff, the prevailing party, weconclude that the court's determination is supported by a fair interpretation of the evidence (see generally Matter of City of SyracuseIndus. Dev. Agency [Alterm, Inc.], 20 AD3d 168, 170 [2005]). With respect to the firstfactor to be considered in determining whether a partnership existed, i.e., the intent of defendantand her husband, the evidence presented at trial included their tax returns and bankruptcy filings.Those documents repeatedly referred to defendant as the proprietor of Winton South.Indeed, defendant testified at trial that she filed a certificate of doing business under an assumedname in June 1997, reflecting her intent to conduct a business in Geneseo so that her husbandcould operate that business. Moreover, defendant's husband testified that he had significantfinancial problems that prevented him from acquiring assets in his own name. Consequently, headmitted that Winton South was created in defendant's name and that he contributed hisexperience and labor to that business.
With respect to the second factor, i.e., whether there was joint control and management ofthe business, the evidence presented at trial by plaintiff established that defendant was involvedin Winton South at least to the extent that she made the decision to close that business. Theevidence presented by defendant demonstrated that her husband either ran or oversaw WintonSouth's day-to-day affairs and that defendant participated in the financial side of that business tothe extent that her signature appeared on payroll and vendor checks.
With respect to the third factor, i.e., whether there was a sharing of the profits as well as asharing of the losses, the record is unclear concerning the extent to which income and expenseswere shared between defendant and her husband. Inasmuch as defendant and her husbandconcentrated their joint assets in defendant's name to avoid paying on the judgment entered in acivil action arising from an assault committed by her husband, we nevertheless conclude that theminimal evidence of profit and loss is not dispositive.
With respect to the fourth factor, i.e., whether there was a combination of property, skill orknowledge, we revisit our analysis with respect to the first factor. The explanation of defendant'sfinancial contribution to Winton South and her husband's input of expertise and labor offeredwith respect to the first factor applies equally to this factor and demonstrates that the businessfunctioned as a result of the combination of defendant's financial standing and the expertise ofher husband.
Defendant contends that the statute of frauds bars enforcement of the agreement and the lease(see General Obligations Law § 5-701 [a] [1]). The statute of frauds is anaffirmative defense (see CPLR 3018 [b]), and defendant waived that affirmative defenseby not pleading it in the amended answer (see generally Killeen v Crosson, 284 AD2d926 [2001]). In any event, it is of no moment whether the agreement and lease are barred by thestatute of frauds inasmuch as this action and appeal concern whether defendant and her husbandhad a partnership that bound defendant with respect to the agreement and the lease, not whetherplaintiff can enforce an oral agreement with defendant. Present—Scudder, P.J., Fahey,Lindley, Green and Gorski, JJ.