Facts: Boyfriend and Girlfriend dated off an on. While dating, Boyfriend purchased a home–titled in Boyfriend’s name–and Girlfriend lived with him in the home. When they broke up, Girlfriend moved out and Boyfriend lived in the home with another woman. Boyfriend and Girlfriend rekindled their relationship and Girlfriend moved into Boyfriend’s home a second time. The parties then resided in Boyfriend’s home for several years, both contributing to its improvement and appreciation in value. When their relationship ended, Girlfriend sued to dissolve the alleged partnership and distribute the partnership assets, which consisted mainly of the residence. The trial court found there was no partnership and dismissed Girlfriend’s lawsuit. Girlfriend appealed.
The Court of Appeals affirmed the trial court.
Because the parties never married, [Girlfriend] must rely upon the laws of partnership, not the laws of domestic relations, to establish her claim to an interest in the [Property]. “The legislature has defined a partnership as `an association of two (2) or more persons to carry on as co-owners of a business or other undertaking for profit.'” Our supreme court has explained:
In determining whether one is a partner, no one fact or circumstance may be pointed to as a conclusive test, but each case must be decided upon consideration of all relevant facts, actions, and conduct of the parties. If the parties’ business brings them within the scope of a joint business undertaking for mutual profit–that is to say if they place their money, assets, labor, or skill in commerce with the understanding that profits will be shared between them–the result is a partnership whether or not the parties understood that it would be so.
Moreover, the existence of a partnership depends upon the intention of the parties, and the controlling intention in this regard is that ascertainable from the acts of the parties. Although a contract of partnership, either express or implied, is essential to the creation of partnership status, it is not essential that the parties actually intend to become partners. The existence of a partnership is not a question of the parties’ undisclosed intention or even the terminology they use to describe their relationship, nor is it necessary that the parties have an understanding of the legal effect of their acts. It is the intent to do the things which constitute a partnership that determines whether individuals are partners, regardless if it is their purpose to create or avoid the relationship. Stated another way, the existence of a partnership may be implied from the circumstances where it appears that the individuals involved have entered into a business relationship for profit, combining their property, labor, skill, experience, or money.In her brief, [Girlfriend] acknowledges that the alleged partnership between the parties is more akin to a joint venture. “A joint venture is similar, but not identical, to a partnership, and has been described by our Supreme Court as `something like a partnership, for a more limited period of time, and a more limited purpose.'” More specifically,
“A joint venture is an association of persons with intent, by way of contract, express or implied, to engage in and carry out a single business adventure for joint profit, for which purpose they combine their efforts, property, money, skill, and knowledge, but without creating a partnership in the legal or technical sense of the term . . . .””Joint ventures are governed by the same rules of law as those governing partnerships.” Because the parties did not enter into a written agreement, the burden is on [Girlfriend] to prove the existence of an implied joint venture by clear and convincing evidence.
The Court rejected Girlfriend’s argument as follows:
The shortcoming in [Girlfriend’s] position is that she is unable to demonstrate that the parties engaged in the improvement of the property as a business venture for profit. Although Tennessee courts have found implied partnerships between unmarried couples, those partnerships arose out of the parties’ joint contributions to for-profit business ventures. The limited evidence before us reveals that the parties in this case cohabited and, during the pendency of their relationship, made certain improvements to [Boyfriend’s] property. It does not, however, suggest that the parties jointly purchased or held the property, that the parties made said improvements for the purpose of selling the property for profit, that [Girlfriend] expected to receive a return on her investment in the property beyond her personal use and enjoyment, or that the combination of their efforts, money, skill, et cetera was a business undertaking. Here, [Girlfriend] essentially seeks a division of residential real property similar to that which would be available to a married person. Although “[a] marriage would have created a form of “partnership” entitling each party to the benefits of the statute regulating the dissolution of marriage,” the parties in this case were not married. And to hold that the parties entered into a joint venture for profit solely because they lived together and jointly contributed to the appreciation of real property would pull the theory of implied partnership/joint venture too far from its moorings.
It is becoming increasingly common for unmarried or same-sex couples to turn to the judicial system for assistance in dividing property when a relationship ends. Without being married, however, the courts have to proceed under the law of partnerships, as this case illustrates. In the absence of evidence that “the parties jointly purchased or held the property, that the parties made said improvements for the purpose of selling the property for profit, that the [non-titled or non-owner party] expected to receive a return on [his or] her investment in the property beyond [his or] her personal use and enjoyment, or that the combination of their efforts, money, skill, et cetera was a business undertaking,” the case is likely to be dismissed. The successful litigant will have to prove one or more of those points.
Information provided by K.O. Herston, Tennessee Divorce Lawyer.