In August 2003, Tammy Duncan began working as a waitress at Bynums Diner, which was owned by
Question:
In August 2003, Tammy Duncan began working as a waitress at Bynum’s Diner, which was owned by her mother, Hazel Bynum, and stepfather, Eddie Bynum. Tammy, Hazel, and Eddie signed an agreement stating the following:
"As of September 6, 2003, I, Eddie Bynum, lease Bynum’s Diner to Hazel Bynum and Tammy Duncan for $800 a month. I am completely out of it for 6 months, at which time they (Hazel Bynum and Tammy) have the option of renewing this contract for another 6 months. They are responsible for all repairs, taxes, and expenses for Bynum’s Diner."
Tammy began doing paperwork and bookkeeping for the diner in addition to occasionally waiting tables and performing other duties. Tammy and Hazel’s intention in their agreement was to make Tammy a comanager and not a co-owner of the business. Tammy understood that she would take over her stepfather’s duties as manager. She received wages for the performance of her duties. Although Tammy had no agreement to share in the diner’s profits, Hazel believed that she and Tammy were to split half of any profit. Hazel’s intent, however, was not to transfer ownership of the business to Tammy until Hazel retired, whenever that might be. On October 30, 2003, Tammy was injured when she slipped off a ladder and fell onto both knees. The diner’s insurer, Cypress Insurance Company, paid Tammy temporary total disability benefits beginning in November 2003. On April 2, 2004, however, Cypress notified Tammy that it would refuse to pay her disability claim on the grounds that she was not an employee of the diner, but a co-owner. Under the diner’s insurance policy with Cypress, if Tammy were an owner of the diner, she would not have been entitled to workers’ compensation benefits because she did not notify Cypress that she elected to be included under the policy’s coverage as a partner. Was Tammy a partner in the diner?
Step by Step Answer:
Business Law The Ethical Global and E-Commerce Environment
ISBN: 978-1259917110
17th edition
Authors: Arlen Langvardt, A. James Barnes, Jamie Darin Prenkert, Martin A. McCrory