Indiana court on partnership

The Indiana Court of Appeals has affirmed a trial court finding that no partnership existed. In Copenhaver v. Lister, Copenhaver began working with a partnership that drilled water wells. Copenhaver’s primary duty was to rebuild a 1966 drilling rig. A few months later the original partners, Lister and Norris, split up and divided the assets of the partnership. Lister apparently continued to use the partnership’s name, Lister Well Drilling. Copenhaver continued to work and continued to be paid by Lister Well Drilling. About a year after Lister and Norris split up, Lister became ill and, upon recovery, believed Copenhaver was stealing from him. Lister filed an action for replevin and Copenhaver counterclaimed seeking a declaration that a partnership existed and for an accounting.

The court, per Baker, J., upheld the trial court’s finding of no partnership.

Indiana retains the UPA (1914) but the statutory definition of “partnership” is functionally identical to that of the current UPA, at least in this setting. Indiana overlays, as several other states do, pre-UPA criteria on the UPA definition of partnership. Thus, the court cited a ten year old Indiana Court of Appeals case that trotted out snippets from Indiana cases from the 1910s, ‘20s, ‘30s, ‘40s, and ‘50s. These criteria vary the UPA standards by imposing such requirements as,

[T]hat the parties must have joined together to carry on a trade or adventure for their common benefit, each contributing property or services, and having a community of interest in the profits.

(cites omitted)

In my view these sorts of overlays cloud the question, increase litigation, and defeat uniformity in an important area of law. The Indiana Supreme Court should make it clear that the test is the statutory one unencumbered by extraneous requirements.