1. What was Waddell’s theory of the case as to why an implied partnership existed?

2. Could a personal relationship ever be considered a partnership? At what point does a personal relationship create an implied partnership?

3. Given the court’s ruling, what could Waddell have done differently to ensure that she would have had partner status?

Waddell and Rustin entered into a romantic relationship soon after meeting in 1999. Waddell maintained that their association started as personal and also grew into a busi-ness partnership. Rustin denied that they were ever express or implied business partners. At the time the two met, Rustin and his brother owned and operated a store called “Lots of Christmas,” and Waddell began working at the store in 2000. One year later, Rustin started a construction and excavation business. Both at the Lots of Christmas store and at the construction company, Waddell claimed that she had management and oversight over business projects, had access to the company checkbook, paid company bills, helped Rustin choose construction projects, and even changed the store’s name from “Lots of Christmas” to “Alu-minum Decor and More” to improve sales. Wad-dell testified that she did not receive any paychecks for her work, but that the couple ran the businesses as partners. When the personal relationship ended, Waddell brought suit claiming that she was entitled to a percentage of the profits because the relationship had been an implied partnership. The trial court ruled that no implied partnership was created.

The Court of Appeals of Tennessee affirmed the trial court and held in favor of Rustin. The court ruled that because there was no written partnership agreement between Waddell and Rustin, Waddell bore the burden of proving the existence of a partnership by clear and convincing evidence. Given that Wad-dell had no experience in construction or excavation when they met and that Rustin had engaged in con-struction work for years, it was clear that his efforts had made the business viable. Waddell did not con-tribute equipment, experience, or capital. Therefore, the court held that one cannot reasonably conclude that Waddell’s relationship with Rustin rose to the level of an implied partnership.

“Rustin acknowledges, as do we, that Waddell performed certain work related to Rustin’s  business enterprises. However, it cannot be said of this case that the parties’ prosperity was due in equal part to Waddell’s efforts. Rustin and his brother ran the store prior to Waddell’s relationship with  Rustin. Waddell’s work at the Store is better characterized as helping out rather than the contribution of an equal partner. Notwithstanding Wad-dell’s activities related to certain houses or cabins, the record shows that Rustin, with his experience in construction and excavation, clearly was the primary driver of the construction enterprise. Waddell testified that she contributed no real property; personal property; money; formal training in interior design; excavation experience; or construction experience to any partnership.”