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

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

Related Parts of This Source

Full Text

1,784 chars

In Stuart v. Overland Medical Center, 510 S.W.2d 494,497-98 (Mo. Ct. App.

1974), a court applying the Uniform Partnership Act (UPA), the predecessor to the

RUPA (the UPA was in effect in Washington from 1945 until its repeal in 1998 7) held

Former chapter 25.04 RCW, adopted by LAWS OF 1945, ch. 137, §§ 1-43;
7

repealed by LAWS OF 1997, ch. 103, § 1308.
18
             

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

that an economic arrangement under which professionals received an amount equal to the

revenues they produced less a percentage determined by their shared expenses was profit-

sharing, explaining that "because the expenses each doctor had to pay bore no

relationship to the actual expenses of each doctor, some doctors were receiving profits

that otherwise might have been distributed to the doctor or doctors whose actual expenses

were slight when compared to the actual expenses of other doctors." Stuart's holding

that individuals who share expenses indirectly accomplish profit-sharing and thereby

function as a partnership has been followed under RUPA by the District of Columbia

Court of Appeals. Brown v. 1401 New York Ave., Inc., 25 A.3d 912,916 n.8 (2011).

In a dental practice that the partners evidently believed had a reasonable

predictable overhead burden it was reasonable that, rather than close out the books each

pay period or take draws subject to a later accounting, Dr. Armand agreed that his

daughters would be paid the projected net profit on their production and he would enjoy

the benefit or bear the burden of any discrepancy between the projected and actual

overhead.

This is not tantamount to saying that any owner of a business could pay employees