This opinion is subject to further editing. If published, theofficia l version will appear in the bound volume of the OfficialReports.
A party may file with the Supreme Court a petition to review anadverse d ecision by the Court of Appeals. See Wis. Stat. § 808.10and Rule 809. 62.
Appeal No. 01-2837
Cir. Ct. No. 00-CV-158
STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT III
Duane Gurtner and Marilyn Gurtner, Plaintiffs-Appellants,
v.
Wayne Gurtner, Defendant-Respondent.
APPEAL from judgment of the circuit court for Polk County:J ames R. Erickson, Judge. Reversed and cause remanded withdirections.
Before Cane, C.J., Hoover, P.J., and Peterson, J.
¶1 PER CURIAM. Duane and Marilyn Gurtner appeal a judgmentthat d etermined they entered into a partnership with Wayne Gurtnerand orderi ng their real estate sold and proceeds divided, after thepayment of ce rtain debts. Duane and Marilyn argue that the recordshows that no par tnership existed, the real estate was notpartnership property, and Way ne is obligated for double rent pursuantto Wis. Stat. § 704.27.[1] We r everse the judgment and remand forfurther proceedings consistent with t his opinion.
BACKGROUND
¶2 In 1998, Wayne and Duane Gurtner, who are brothers,discussed f orming a partnership to build three rental vacation cabinson 3.1 acres o f land owned by Duane. Initially they planned to beequal partners, wi th each making contributions to the cabinconstruction. Duane, who own ed a lumber company, agreed tocontribute materials. Wayne, who owned a s tucco company, planned tocontribute labor and stucco. The brothers na med their business D&ZCondos and opened a checking account in that nam e.
¶3 Duane testified that after construction began in April of199 8, they had secured no financing for the project. After a numberof mo nths, he had $20,000 in judgments against him personally forsewer and e lectric work, because “I was the only one … liable forthe property out t here.” In order to pay for the costs ofconstruction, Duane and his wi fe Marilyn obtained two loans, totaling$90,000.
¶4 In 1999, Wayne became liable for unsatisfied federal taxlien s unrelated to the project. Duane testified that as a result, heand W ayne decided not to maintain a partnership that would own andmanage re al estate. During their first business year, theiraccountant filed a f irst-year and final return with the IRS, with noactivity being reporte d because the partnership “never gotstarted.”
¶5 Duane and Marilyn paid Wayne $16,000 for labor andmaterials h e put into the property. Duane also paid other bills forlabor and mat erials. Initially payments were made from the D&ZCondos checking acco unt, but after the partnership plan ended,Marilyn issued payments from h er personal account. During December1998, Duane deeded the property t o Marilyn to protect it fromcreditors of another business he owned.
¶6 Wayne claimed that he incurred $50,000 expenses in buildingt he cabins but, because he was paid $16,000, he claimed he was owed$34, 000. Duane and Marilyn claimed to have spent more than $90,000on the p roject.
¶7 The cabins were rented to vacationers. In February 1999,Way ne moved into one of the cabins and agreed to pay $450 per monthrent t o Duane and Marilyn. The rents received were used to servicedebts inc urred in constructing the cabins. In February 2000, Wayneclaimed he w as owed money and stopped paying rent, but did not moveout until April 2 001.
¶8 Duane and Marilyn initiated a small claims action seekingpas t due rent against Wayne. They also claimed Wayne owed doublerent for h olding over after notice to vacate. Wayne answered that hedid not owe r ent because he was Duane’s partner. He alleged he hada lien against t he realty for materials and labor furnished on behalfof the partnershi p. He also filed a counterclaim, alleging thatDuane and Marilyn had b een unjustly enriched by more than $50,000 asa result of his efforts.
¶9 Following a bench trial, the court entered judgment findingt hat Wayne and Duane were equal partners in the construction of thecabi ns and ordered that the cabins and realty be sold and, aftercertain de bts were paid, any proceeds be divided equally. The courtruled that be cause the parties were partners, pursuant to Wis. Stat.§ 704.27, doubl e rent provisions did not apply. Duane and Marilynnow appeal.
DISCUSSION
¶10 Duane and Marilyn argue that the trial court erroneouslydeter mined that the parties owned and operated a partnership.[2] Weagree. I n Heck & Paetow Claim Serv. v. Heck, 93 Wis. 2d 349, 359-60,286 N.W.2d 8 31 (1980), the Wisconsin Supreme Court set forth the testfor determini ng the existence of a partnership: (1) The contractingparties must in tend to form a bona fide partnership and accept thelegal requirements a nd duties necessary to such a relationship; (2)there must exist a comm unity of interest in the capital employed bythe partnership; (3) each p artner must have an equal voice in themanagement of the partnership op eration; and (4) the profits andlosses of the corporation must be shar ed and distributed. “Theultimate and controlling test as to the exist ence of a partnership isthe parties’ intention of carrying on a defini te business asco-owners.” Id. at 360. The burden of proving a partne rship is onthe party asserting its existence. Id.
¶11 Here, although the parties at one time considered forming apa rtnership, it is undisputed that they agreed not to operate as apartne rship after considering the effect of Wayne’s tax liens onpartnership p roperty. Also, the record fails to disclose anyagreement with respect t o financing and payment of variouscontractors, overdue taxes and mortg age payments. It shows thatMarilyn handled the books without input fr om Wayne. As Waynetestified: “I know at the time of construction Mar ilyn did hisbook work and his paperwork, but she did none of mine.” A partnership depends on a meeting of the minds of the parties. Id. at59 . There was no evidence of a meeting of the minds regardingcrucial te rms of management and no evidence that a partnership wascreated.
¶12 Next, Duane and Marilyn contend that the trial courterroneous ly included their real estate as partnership property.Because it was u ndisputed that the parties did not intend the realtyto be partnership p roperty, we agree. “When title to property isheld in the name of a pa rtner, the question of whether it ispartnership property hinges … on t he intention of the parties.”Estate of Schreiber, 68 Wis. 2d 135, 149 -50, 227 N.W.2d 917 (1975).Both parties disavowed any intent to make t he land partnershipproperty due to Wayne’s tax liens. In light of thi s undisputedtestimony, we conclude that the trial court erroneously ru led thatthe realty was partnership property. Therefore, we reverse th ejudgment and remand the matter for the trial court to determine whether to grant relief on Wayne’s counterclaim under an alternativelegal t heory.
¶13 Finally, Duane and Marilyn argue that the trial courterroneou sly denied them damages of double rent from Wayne, pursuantWis. Stat. § 7 04.27.[3] By the time of trial, Wayne had vacated thepremises and the c ourt found that he owed sixteen months’ back rentat $450 per month. T he trial court denied relief under § 704.27 onthe ground that Wayne wa s a partner, not a tenant. Because we haveconcluded that the record f ails to support the determination ofpartnership, the court’s reasoning c annot be sustained. On remand,the trial court may consider whether Du ane and Marilyn are entitledto relief under § 704.27.
By the Court.—Judgment reversed and cause remanded withdir ections.
03/25/04, DUANE GURTNER, Balsam Lake, reported vandalism to the DIRECTF OREST PRODUCTS building in Milltown Township.
Was this him or a son in Polk Co, WI?
07/30/04, 12:10 AM, Milltown Township, STH 46, .25 mi. E. of 160thStre et, DUANE GURTNER, 39, Balsam Lake, was westbound on Highway 46,approa ching the intersection with 160th Street. The front of unit 1struck a h orse that was standing in the westbound lane. The horse wasseriously i njured and had to be destroyed. The horse was owned bySHANNON M. EVENS ON of Milltown. MR. GURTNER received minor injuries(no EMS) and was ci ted for a seat belt violation. PassengerCHRISTOPHER M. CHRISTIANSON, 2 8, Stillwater, MN, received minorinjuries (no EMS), was not wearing a s eat belt.
