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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AR at 163-64.
20

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

If the issue of whether the dentists were operating as a partnership during the audit

period had been treated as an issue of fact, taking into consideration the evidence of the

dentists' intent and the aspects of their actual operations between 2010 and 2012 that

would reflect on an intent to operate as co-owners, then we would review whether

substantial evidence supported the ALl's finding. One piece of that evidence would be

the dentists' profit-sharing understanding. But here, the ALJ was not examining all of the

evidence bearing on whether Drs. Armand, Loretta and Louise intended to operate as co

owners. Instead, the ALJ accepted the department's position that the distribution of

something other than exactly equal percentages of profits was another bright-line reason

for finding as a matter of law that there was no partnership. That implicit conclusion is

subject to de novo review.

The more a profit-sharing arrangement deviates from what is equal or what can

otherwise be defended as reasonable among partners, the more likely it will not be

viewed as consistent with the intent "to carry on as co-owners a business for profit."

RCW 25.05.055(1). But the RUPA expressly provides that how partners choose to divide

profits is a matter for their agreement. For the commissioner to conclude that anything

other than exactly equal profit-sharing prevented the formation of a partnership is

contrary to Washington statutes.

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