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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agree on a contrary rule; a few "nonwaiveable" provisions are identified by RCW

5 Conclusion 7 states in relevant part:

First, Dr. Louise and Dr. Loretta did not share in the profits .... They were
each paid exclusively a percentage of their own respective gross
production.... After payments to Dr. Louise and Dr. Loretta, Dr. Armand
earned only whatever was left each month.

ARat296.
16

DeFelice v. Emp '( Sec. Dep '(
No. 32382-0-III- dissent

25.05.015(2). How partners share profits and losses is one ofthe matters that partners are

free to decide. 6 It is only a default provision of the RUP A that provides for an equal

sharing of profits and equal charging of losses if the partners have no different

agreement. See RCW 25.05.150.

The dearth of Washington case law addressing partners' prerogatives under

modern partnership statutes might have contributed to the department's and the ALl's

error. Bright line rules that might be implied by old cases on which the department relies

have been rejected with the legislature's enactment, first, of the Uniform Partnership Act

(UPA), and then (and even more clearly) with RUPA. As the reporters for the RUPA

have explained:

Across all substantive areas, RUP A reflects the policy judgment that,
with rare exceptions, partners are permitted to govern relations among
themselves by agreement. Almost all ofRUPA's rules governing the
relations among partners are merely default rules rather than mandatory
rules. That is, the statutory rules apply only in the absence of a partnership
agreement to the contrary.

For federal tax purposes, the Internal Revenue Service also respects the parties'
6