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SUPREME COURT NEW YORK

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ELLIOT HUGHES Index No: 300698/09

Plaintiff, Date Filed 1/21/2014

-against-

PAUL PAPARAMA
Defendants

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MEMORANDUM OF LAW
ISSUES

1. Did Paparama and Hughes enter into a partnership?


2. Is Hughes entitled to an accounting and 20 percent of the

business inventory?

FACTS

In 1956 Elliot A. Hughes started working for Taylor R. Paparama

as an hourly wage employee on his garden nursery. From 1958 to

1960 Hughes was in the military but when he completed his services

he continue to work for Taylor R. Paparama. Taylor R. Paparama

decided to retire in 1963. Within that year Paul B. Paparama took over

his fathers business and renamed it Paparama Nursery, which was a

landscaping gardening business. Hughes was no longer receiving an

hourly wage his status changed he was supposed to receive a 20

percent share of the net profit of the business after all expenses was

paid that includes labor, supplies, plants and other expenses. Hughes

contributed no money to the business. The compensation was paid

every several weeks, Paparama and Hughes would sit down, computed

the income received and expenses paid, and Hughes would be issued a

check for 20 percent of the balance. Hughes and Paparama did not

enter into any written agreement and in addition to that no partnership

income tax return were filed by the business no social security or

income taxes were withheld from Hughes checks he paid self


employment social security taxes. Paparama handled all the finances

and books of the nursery and borrowed money from the bank in his

own name for the business. In addition to that Paparama made most of

the sales for the business. Hughes handled the physical aspects of the

business stock, and in addition he oversaw the performances of the

contracts for customers. In 1970 Hughes testified that Paparama told

him that He was going to take me in and that I wouldnt have to punch

a time clock anymore, that I would be on a commission basis and that I

would be more of an interest in the business if I had an interest in the

business. He referred to it as a piece of the action. Paparama

denied making this statement.

LAW

Paparama and Hughes did not enter into a partnership. According to

the N.Y. PTR. LAW 10: (1.)

A partnership is an association of two or more persons to carry on as


co-owners a business for profit.

Through there actions they did not show that they were

functioning as a partnership. There is no co-ownership of the business

at Paparama Nursery. There is no indication of profit sharing. Co-

ownership is indicated by profit sharing. Falkner v. Falkner, 24 Mich.

App. 633 (1970). Paparama launched the Paparama Nursery business

on his own when his father retired. Hughes did not supply any money

towards the business, so that means no investments. Hughes did not


take out loans on the behalf of the business but Paparama did take out

loans in his name to fund the business. In order to have a partnership

all partners not only share profits but bear losses as well. In addition to

that Hughes did not play any roles in the management aspect of the

business, Paparama handled all the finances and books. The duties

that Hughes did were all physical so that could be considered an

employee and employer relationship rather than a business partner

with Paparama. In the case of Miller v. City Bank, 266 N.W.2d 687

(1978). The courts found that Miller did not show any burden of proof

that she entered into a partnership with her deceased husband. The

courts found that there was no legal partnership formed for there was

no written agreement but only millers testimony to an oral one, Miller

did not contribute to the business, the duties that miller did was

considered employee and employer relationship rather than a business

partner and finally the business was registered as sole proprietor

business. There was no written agreement that indicates they had a

partnership. According to Hughes there was an oral agreement but

according to Paparama he denies making any oral agreement.

CONCLUSION

In all, Hughes did not establish a partnership with Paparama and

the nature of the relationship was more of an employee employer type

of relationship. Because the facts prove that he is not a partner he is


not entitled to 20 percent or an accounting.