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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a commission based on a percentage of production, call it "profit sharing," and thereby

claim partnership status for purposes of the Employment Security Act. The facts in this

case are distinguishable from that scenario in two respects. The first is that the

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

department never challenged that the flat 40 percent paid to Drs. Loretta and Louise was

the parties' reasonable, good faith projection of net profits, supported by the income

statements, with the objective that all three partners receive a fair share but without

requiring more complete accounting. The second is that Drs. Armand, Loretta and

Louise were prepared to argue that they operated in other respects as co-owners. If the

substance of their relationship during the audit period was not more fully investigated and

debated at the hearing, it was because the department, and ultimately the commissioner,

concluded that what the dentists were doing in/act didn't matter.

By way of example, the commissioner adopted the finding that Dr. Louise and Dr.

Loretta were "likely" subject to at least some direction and control by their father during

the audit period, based on the 1990 and 2004 association agreements. The finding is not

supported by any evidence of actual operations. Dr. Louise, the newest dentist in the

practice, testified:

Q. [D]oes he ever kind of tell you-I know he is your father-as part as
your dental practice, as fathers would do, does he ever tell you how to do
things?

A. No.

Q. Okay. You are kind of on your own, you have total discretion with
your patients?

A. Yes. 100 percent.