Judgment rendered May 22, 2024. Application for rehearing may be filed within the delay allowed by Art. 2166, La. C.C.P.
No. 55,637-CA No. 55,638-CA (Consolidated Cases)
COURT OF APPEAL SECOND CIRCUIT STATE OF LOUISIANA
*****
No. 55,637-CA No. 55,638-CA
AMANDA MARTIN CHAD SEPULVADO, SEPULVADO AND ON INDIVIDUALLY AND ON BEHALF OF MINOR CHILD, BEHALF OF HIS MINOR OLIVIA SEPULVADO CHILD OLIVIA Plaintiffs-Appellants JANE SEPULVADO Plaintiffs-Appellants versus versus G-ROCK CLIMBING, LLC, ET AL HARTFORD Defendants-Appellees UNDERWRITERS INSURANCE COMPANY, ET AL Defendants-Appellees
Appealed from the First Judicial District Court for the Parish of Caddo, Louisiana Trial Court Nos. 632,076 and 635,049
Honorable Ramon Lafitte, Judge
***** GREGORIO, CHAFIN, LLC Counsel for Appellant, By: Scott Chafin, Jr. Amanda Martin Sepulvado, Individually and on Behalf of Minor Child, Olivia Sepulvado
THE PARKS FIRM, LLC By: Santi A. Parks
DUNAHOE LAW FIRM Counsel for Appellant, By: Jared R. Dunahoe Chad Sepulvado, Individually and on Behalf of Minor Child, Olivia Sepulvado
CHAD E. SEPULVADO In Proper Person
WIENER, WEISS & MADISON Counsel for Appellee, A PROFESSIONAL CORPORATION Shreveport Sports By: Layne A. Clark, Jr. Training, LLC d/b/a D1 Training Shreveport
PETTIETTE, ARMAND, DUNKELMAN, Counsel for Appellee, WOODLEY & CROMWELL, LLP Red River Range, LLC By: C. Cavett Feazel
GALLOWAY, JOHNSON, TOMPKINS, Counsel for Defendant, BURR, & SMITH, PLC G-Rock Climbing, LLC By: Mark R. Pharr, III
KEOGH, COX, & WILSON, LTD Counsel for Defendant, By: Martin Edward Golden Nationwide Mutual Insurance Company
BARRASO, USDIN, KUPPERMAN, Counsel for Defendant, FREEMAN, & SARVER, LLC Vantapro Specialty By: Alexandra L. Gjertson Insurance Company
Before COX, STEPHENS, and ROBINSON, JJ. STEPHENS, J.
This civil appeal arises out of the First Judicial District Court, Parish
of Caddo, State of Louisiana, the Honorable Ramon Lafitte, Judge,
presiding. In separate (now consolidated) lawsuits, plaintiffs, Amanda
Sepulvado and her former husband, Chad Sepulvado, filed suit individually
and on behalf of their minor daughter, Olivia Sepulvado, for injuries that
Olivia sustained on July 19, 2021, while participating in a summer camp
hosted by Shreveport Sports Training, LLC d/b/a D1 Training Shreveport
(“D1”), Red River Range, LLC (“Red River Range”), G-Rock Climbing,
LLC (“G-Rock”), and PinPoint Events, LLC (“PinPoint”) called “Summer
Camp 2.0.” Plaintiffs have appealed from a judgment granting motions for
summary judgment in favor of Red River Range and D1. For the reasons set
forth below, we reverse and remand the matter to the trial court for further
proceedings.
FACTS/PROCEDURAL HISTORY
In the Spring of 2021, the owners of D1, Red River Range, G-Rock,
and PinPoint entered into an agreement to operate a youth summer camp
named Summer Camp 2.0. D-1 is a sports training business, Red River
Range is a shooting range, G-Rock is an indoor rock-climbing business, and
PinPoint is a marketing company. D-1, Red River Range, and G-Rock are
three separate businesses with facilities within walking distance of each
other. PinPoint was to cover the costs of snacks, employees, marketing, and
shirts; D1, Red River Range, and G-Rock were to provide at least three
employees at their respective businesses to solely work with the camp
participants and provide any equipment for camp activities. The cost of the
camp for each child was $195. The parties agreed to divide the camp fees equally, with D1, Red River Range, G-Rock, and PinPoint each to receive
25% of the fee paid by each camper.1
D1, Red River Range, G-Rock, and PinPoint then began to advertise
Summer Camp 2.0 to the public and their existing customers through fliers
and social media ads. According to plaintiffs, in every advertisement, D1,
Red River Range, G-Rock, and PinPoint represented to the public that
Summer Camp 2.0 was a partnership between the four entities putting it on.
Ms. Sepulvado first learned of Summer Camp 2.0 through a Facebook
advertisement touting a summer camp experience in which campers could
participate in sports training at D1, rock climbing at G-Rock, and hunting,
fishing, and archery at Red River Range. Plaintiffs enrolled their son
Charlie and daughter Olivia in Summer Camp 2.0.
On July 19, 2021, at approximately 8:00 a.m., Ms. Sepulvado dropped
her kids off at the camp. Within 15 minutes, Olivia had fallen from the top
of the rock climbing wall at G-Rock, approximately 25-30 feet, sustaining
serious injuries, including two fractured femurs. That morning, there were
approximately 20-30 children participating in the camp at G-Rock, with only
a 17-year-old high school student supervising all of them.
Plaintiffs filed suit against G-Rock, Red River Range, D1, PinPoint,
and their respective insurers. In her petition, Ms. Sepulvado claimed that
she and Olivia sustained personal injuries as a result of defendants’ fault and
alleged that Olivia’s fall was the result of the negligence of defendants in:
1 The plan for the camp was to have the campers divided into three groups. One group’s parents would drop them off at the G-Rock facility, while the other two groups would be dropped off by parents at either Red River Range or D1. The campers would take part in the activities of the facility where they were taken first. PinPoint would then provide employees to walk the campers to each of the other two facilities, which would allow campers to participate in activities at all three businesses. 2 • Failure to properly supervise camp attendees; • Failure to properly and adequately train employees; • Failure to properly and adequately train camp attendees on use of the equipment; • Failure to properly maintain and test equipment prior to use by camp attendees; • Failure to implement adequate safety precautions and equipment; • Failure to staff the summer camp with responsible individuals; • Failure to employ a proper number of employees commensurate with the number of camp attendees; • Failure to properly and adequately warn camp attendees, and their parents, of the dangers associated with the activities; • Failure to follow proper instructions for use of equipment and/or climbing apparatus; and • Other acts of negligence to be shown at trial of this matter.
In his petition, Mr. Sepulvado alleged that Olivia’s fall was the result
of the combined fault of the defendants, G-Rock, D-1, PinPoint, and/or Red
River Range, which negligence included:
• Failure to properly supervise Olivia; • Failure to properly and adequately train their employees; • Failure to properly instruct Olivia on the use and operation of the rock climbing equipment; • Failure to properly operate, maintain, and/or test the rock climbing equipment prior to Olivia’s use; • Failure to properly implement adequate safety precautions, equipment, and warnings; • Failure to adequately staff the summer camp; and • Failure to properly and adequately warn Olivia and her parents of the dangers associated with rock climbing.
Mr. Sepulvado further alleged that the summer camp was a joint venture
between the defendants and, on this basis, the defendants were solidarily
liable for the damages sustained by him and Olivia.
3 The various defendants filed answers, the two suits were consolidated,
the parties engaged in discovery, and a settlement was reached between the
parties and PinPoint. Thereafter, both D1 and Red River Range filed
motions for summary judgment. According to D1, there was no viable
negligence claim against it, and no partnership or joint venture existed
between it and the other business that put on the camp. According to Red
River Range, plaintiffs were unable to establish any independent negligence
on its part or the existence of a joint venture between it and the other
defendants. Plaintiffs opposed the motions for summary judgment, and a
hearing on the motions was held. The trial court found that the four entities
did not form either a partnership or a joint venture and granted both motions
for summary judgment. The trial court certified the judgment as a partial
final judgment, and it is from this judgment that plaintiffs have appealed.
DISCUSSION
The principal issue in this appeal is whether G-Rock, D1, Red River
Range, and PinPoint entered into a partnership or joint venture. Plaintiffs
urge that the trial court erred when it granted the summary judgment
motions filed by D1 and Red River Range based upon the court’s finding
that no partnership or joint venture existed between the four entities.
Applicable Legal Principles
Appellate courts review motions for summary judgment de novo,
using the same criteria that govern the trial court’s consideration of whether
summary judgment is appropriate. Leisure Recreation & Ent., Inc. v. First
Guaranty Bank, 21-00838 (La. 3/25/22), 339 So. 3d 508; Peironnet v.
Matador Res. Co., 12-2292 (La. 6/28/13), 144 So. 3d 791.
4 A motion for summary judgment is a procedural device used when
there is no genuine issue of material fact for all or part of the relief prayed
for by a litigant. Samaha v. Rau, 07-1726 (La. 2/26/08), 977 So. 2d 880;
Driver Pipeline Co. v. Cadeville Gas Storage, LLC, 49,375 (La. App. 2 Cir.
10/1/14), 150 So. 3d 492, writ denied, 14-2304 (La. 1/23/15), 159 So. 3d
1058. Summary judgment procedure is designed to secure the just, speedy,
and inexpensive determination of every action, except those disallowed by
La. C.C.P. art. 969(A)(2). The procedure is favored and shall be construed
to accomplish those ends. Id.
A motion for summary judgment shall be granted if the motion,
memorandum, and supporting documents show there is no genuine issue as
to material fact, and the mover is entitled to judgment as a matter of law.
La. C.C.P. art. 966(A)(3). If the mover will not bear the burden of proof at
trial on the issue that is before the court on the motion for summary
judgment, the mover’s burden on the motion does not require him to negate
all the essential elements of the adverse party’s claim, action, or defense, but
rather to point out to the court the absence of factual support for one or more
elements essential to the adverse party’s claim, action, or defense. La.
C.C.P. art. 966(D)(1). The burden is on the adverse party to produce factual
support sufficient to establish the existence of a genuine issue of material
fact or that the mover is not entitled to judgment as a matter of law. Id.
A genuine issue is a triable issue, one about which reasonable persons
could disagree. Suire v. Lafayette City-Parish Consol. Gov’t, 04-1459 (La.
4/12/05), 907 So. 2d 37; Smith v. Our Lady of the Lake Hosp., Inc., 93-2512
(La. 7/5/94), 639 So. 2d 730. In determining whether a fact is genuine for
purposes of summary judgment, courts cannot consider the merits, make 5 credibility determinations, evaluate testimony, or weigh the merits. Suire,
supra. A material fact is one that potentially ensures or precludes recovery,
affects the ultimate success of the litigant, or determines the outcome of the
dispute. Because it is the applicable substantive law that determines
materiality, whether a particular fact in dispute is material for summary
judgment purposes can be seen only in light of the substantive law
applicable to the case. Jackson v. City of New Orleans, 12-2742 (La.
1/28/14), 144 So. 3d 876; Richard v. Hall, 03-1488 (La. 4/23/04), 874 So. 2d
131.
A joint venture results from the undertaking by two or more persons
to combine their efforts, knowledge, property, or labor to engage in and carry
out a single business venture for joint profit. Dhaliwal v. Dhaliwal, 52,507
(La. App. 2 Cir. 2/27/19), 265 So. 3d 1188; Riddle v. Simmons, 589 So. 2d 89
(La. App. 2 Cir. 1991), writ denied, 592 So. 2d 1316 (La. 1992). The
existence of what constitutes a joint venture is a question of fact, although
what constitutes a joint venture is a question of law. Grand Isle Campsites,
Inc. v. Check, 262 So. 2d 350 (La. 1972); Cajun Electric Power Co-op, Inc.
v. McNamara, 452 So. 2d 212 (La. App. 1 Cir. 1984).
The essential elements of a joint venture and a partnership are the
same, and joint ventures are generally governed by partnership law.
Broadmoor, L.L.C. v. Ernest N. Morial New Orleans Exhibition Hall Auth.,
04-0211 (La. 3/18/04), 867 So. 2d 651; Dhaliwal, supra; Riddle v. Simmons,
40,000 (La. App. 2 Cir. 2/16/06), 922 So. 2d 1267, writ denied, 06-0793 (La.
6/2/06), 929 So. 2d 1259. A partnership is a juridical person, distinct from its
partners, created by a contract between two or more persons to combine their
6 efforts or resources in determined proportions and to collaborate at mutual
risk for their common profit or commercial benefit. La. C.C. art. 2801.
Joint ventures only arise where the parties intended the relationship to
exist, and they are ultimately predicated upon contract, either express or
implied. Broadmoor, L.L.C., supra; Turner v. Hoffoss, 52,507 (La. App. 2
Cir. 2/27/19), 265 So. 3d 1188; Riddle, supra. No formal or specific
agreement is required. Dhaliwal, 52,507 at p. 7, 265 So. 3d at 1192; Riddle,
589 So. 2d at 92. Generally the relationship may be formed by an oral
agreement, and the existence of a joint venture may be inferred from the
conduct of the parties and other circumstances. Id. There are no hard and
fast legal rules fixing the requisites for a joint venture; each case must be
considered sui generis, and care must be exercised that consideration is given
to the usages and practices characteristic of the particular commercial
undertaking sought to be labeled a “joint venture.” Cajun Electric. Power
Co-op., Inc., supra, citing Hero & Co. v. Farnsworth & Chambers Co., 236
La. 306, 107 So. 2d 650 (La. 1958).
Analysis
Intent to form a partnership or joint venture
It is plaintiffs’ position that, when analyzed under the prevailing test
for the existence of a joint venture or partnership, the evidence in this case
establishes, at a minimum, a genuine issue of material fact in dispute as to
whether defendants created such an entity to form, market, and operate
Summer Camp 2.0.
In support of their argument that Summer Camp 2.0 constituted a
partnership or joint venture between G-Rock, D1, Red River Range, and
PinPoint, plaintiffs note the following: 7 • Matt Snyder, owner of PinPoint, sent an email proposal outlining the terms and logistics of the camp, using bold font, and the outline was captioned “Partner Breakdown and Responsibilities.” • Each “partner” was to receive 25% of the money generated by the camp. • The understanding was that the parties would be working together to create, promote, and operate Summer Camp 2.0. • Marketing materials displayed by all parties at their respective places of business and on social media indicated that D1, Red River Range, G-Rock, and PinPoint were acting as “partners.” • Their internal communications explicitly used the language “partners.” • Each business would contribute its own resources—fishing, shooting, and archery from Red River Range; sports training from D1; rock climbing from G-Rock; and marketing, promotions, and logistics from PinPoint, towards a common goal—the hosting of a summer camp for mutual gain. • Each facility offered its own sporting event for campers to participate in during the camp, using that business’s equipment, and each business brought “to the table” its respective reputation and clientele, for the mutual benefit of all of the parties to the joint venture. Defendants D1 and Red River Range both benefitted by attracting new visitors to their facilities because of the camp. • The April 5, 2021, email from Snyder expressly set forth each partner’s contributions in determinate proportions. Because there were contributions by each partner of effort and resources, their contributions were in determinate proportions. Likewise, there was a joint effort to promote and host the camp.
Red River Range, D1, G-Rock, and PinPoint created “Summer Camp
2.0” by virtue of an implied contract, urge plaintiffs, as shown by Snyder’s
email and their behavior leading up to and throughout the camp. Plaintiffs
also note a statement by G-Rock’s sole employee working with the campers
the day of Olivia’s injury regarding her understanding of a partnership among
the four entities, and one by Brad Simon of Red River Range about a report
he made to his insurer regarding the incident because “it happened at a
neighbor’s business that [he was] doing a joint venture with.” Finally, there
is a statement by Polo Gonzalez of G-Rock in his deposition that Summer
8 Camp 2.0 was a partnership between D1, Red River Range, G-Rock, and
PinPoint. According to plaintiffs, Gonzalez’s testimony “alone” creates a
genuine issue of material fact as to the existence of a partnership or joint
venture, making summary judgment inappropriate.
Plaintiffs argue that the above, at a minimum, creates a genuine issue
of material fact as to the existence of a joint venture or partnership between
Red River Range, D1, G-Rock, and PinPoint, rendering summary judgment
improper.
According to D1 and Red River Range, Summer Camp 2.0 was
neither a partnership nor a joint venture undertaken by PinPoint, D1, Red
River Range, and G-Rock, but a “weeklong youth event promoted by
Pinpoint Events, marketed by Pinpoint Events, and conducted by Pinpoint
Events.”
First, there was no consent to form a partnership or joint venture.
Defendants rely on parts of the affidavits of Matt Merry of D1 and Brad
Simon of Red River Range, wherein both men specifically state just that—
neither one, on behalf of their respective entity, consented to the formation of
a partnership or joint venture with the other three businesses. D1 includes in
its brief the following from Merry’s affidavit:
6.
D1 did not consent to the formation of a partnership or joint venture with G-Rock, Red River Range, LLC or Pinpoint Events, LLC. It was the understanding of D1 that the camp was being conducted by Pinpoint and it was simply agreeing to provide its athletic training and sports services to Pinpoint’s campers.
9.
D1 did not consent to the formation of a partnership or joint venture pertaining to Pinpoint’s Summer Camp 2.0.
9 10.
D1 did not agree to become solidarily liable with Pinpoint nor any of the entities participating in Pinpoint’s Summer Camp 2.0.
11.
D1 did not enter into any agreement to share in profits, expenses, or losses with any of the entities participating in Pinpoint’s Summer Camp 2.0. The agreement was simply to equally split the revenue made from campers’ fees from Pinpoint’s Summer Camp 2.0.
12.
D1 was solely responsible for any expenses it incurred including the wages it paid its employees to properly supervise and train Pinpoint’s campers while at D1’s facility.
D1 notes that nowhere in his deposition does Merry mention an
agreement to “partner.” Instead, in response to questioning by plaintiffs’
counsel during his deposition, what Merry said was that D1 agreed to
“participate” in the camp.
Red River Range urges that it agreed to host camp attendees at its
business during Summer Camp 2.0. It did not consent to form a partnership
or joint venture with the other business defendants. Notwithstanding the use
of the word “partner” in advertising materials, the word “partners” by
PinPoint in an email to the other business defendants, and Brad Simon’s
“colloquial” reference to Summer Camp 2.0 as a “joint venture” in his
deposition, Red River Range points out that Louisiana courts have
recognized that such casual or “colloquial” usage does not alone result in the
formation of a partnership or joint venture. Zacher v. Harrah’s New
Orleans Mgmt. Co., 13-1237 (La. App. 4 Cir. 2/12/14), 136 So. 3d 132;
10 Marine Servs., Inc. v. A-1 Indus., Inc., 355 So. 2d 625 (La. App. 4 Cir.
1978); Fiesta Foods, Inc. v. Ogden, 159 So. 2d 577 (La. App. 1 Cir. 1964).
Red River Range also disputes that Simon’s report to its insurer of
Olivia’s fall at G-Rock in any way had a bearing on the legal requirements
for formation of a legal venture. As the owner of Red River Range, it is
Simon’s contractual obligation to report potential claims to its insurer. Red
River Range reiterates that what happened after Olivia’s accident does not
establish either control or sharing of profits and losses by the business
entities at the time of the accident. Plaintiffs have admitted that Red River
Range and the other businesses “agreed that each business was to operate
independently in its usual course.” Red River Range suggests that this
explicitly confirms its position that it never consented to the formation of a
joint venture.
Right of control
Next, plaintiffs assert that the requirement that each partner have
some right of control over the mutual endeavor is satisfied in this case. In the
April 5, 2021, email sent by Snyder to Simon, Gonzalez, and Matt Merry, he
indicated that his proposal was “open for discussion” and that he would not
move forward with planning until all parties “agree[d] on how [they] will
proceed.” Snyder further wrote that he would “talk to everyone, and make
any needed adjustments” prior to creating marketing materials and logistics.”
According to plaintiffs, it was the obvious intention from the beginning that
each business would have a say in the operation of the camp.
Also indicative of the mutual exercise of decision-making were the
parties’ actions following Olivia’s injury. Simon, on behalf of Red River
Range, suggested to the other parties, who decided together that the kids play 11 soccer instead of rock climb for the remainder of that week. In his
deposition, Simon stated that the lack of information regarding Olivia’s fall
and its causation “dictated the decision. Had it been something that could be
explained or negligence or anything that could explain it, then maybe we
would have [allowed the kids to keep rock climbing], … The prudent
decision was not to continue with G-Rock… Based on the [available]
information at that time[.]”
None of the separate business entities had any control over the other
ones participating in Summer Camp 2.0, asserts D1. Merry makes it clear in
his affidavit that D1 had no control over G-Rock’s business by specifying
that it was not owned, operated, or controlled by D1. Merry further asserted
that D1 had no control over G-Rock’s employees, equipment, safety
instructions, warnings, or hiring decisions. The following are from D1’s
“Statement of Uncontested Facts” in its motion for summary judgment.
7. All parents and guardians of Pinpoint’s campers signed separate waivers for each entity.
8. The accident involving Olivia Sepulvado occurred at G-Rock. G-Rock was not owned, operated, or controlled by D1.
9. D1 did not have any employees who were responsible for the operation or control of any of the activities involved in the accident giving rise to this suit.
10. D1 did not train Pinpoint’s campers on the use of G-Rock’s equipment.
11. D1 did not maintain or test equipment used by Pinpoint’s campers at G-Rock.
12. D1 did not implement safety precautions or safety equipment at G-Rock.
13. D1 did not make any staffing decisions concerning G-Rock.
12 14. D1 did not make any determinations concerning the number of employees commensurate with the number of campers needed at G-Rock.
15. D1 had no role in warning Pinpoint’s campers or their parents of any alleged dangers associated with the activities in which the campers were participating at G-Rock.
16. D1 did not fail to adhere to standards and/or policies utilized in the rock-climbing and/or summer camp industries at G-Rock.
17. D1 did not participate in any way in the use of equipment and/or climbing apparatus used at G-Rock.
18. D1 provided its facility and its employees to properly train and supervise Pinpoint’s campers while they were at the D1 location only.
According to D1, plaintiffs admitted and did not contest any of the above
statements of fact. As such, there can be no argument that D1 exercised any
control whatsoever over G-Rock. For example, that there was only one
employee present with the campers at G-Rock when Olivia Sepulvado
sustained her injuries was a decision made by G-Rock and its owner, Polo
Gonzalez.
Plaintiffs have argued that the businesses’ decision to have the
campers play soccer rather than climb the rock wall after Olivia Sepulvado
fell indicates that a partnership existed as it shows that each party had the
right of control over G-Rock’s business. D1 urges that it shows no such
thing. Instead, a decision made by the business participants in the camp after
an injury occurs is no indication of the control those participants have at the
time the accident occurred. What the evidence presented shows is that, at the
time of the accident, D1 had absolutely no control over any aspect of G-
Rock.
13 Red River Range emphasizes that plaintiffs admitted to the following
“Statements of Undisputed Material Facts” by Red River Range:
Statement No. 5: PinPoint, G-Rock, and Red River Range agreed that each business was to operate independently in its usual course while PinPoint’s employees and volunteers would assist in transporting the children between the three businesses over the course of five days.
....
Statement No. 7: G-Rock’s climbing facilities involved in the accident giving rise to this suit were not owned, operated, or controlled by Red River Range.
Statement No. 8: Red River Range did not have any employees who were responsible for the operation or control of the rock climbing activities involved in the accident giving rise to this suit. Nor did Red River Range hire, train, or pay any G-Rock employee.
It is Red River Range’s contention that plaintiffs’ admissions that it had no
control over G-Rock’s climbing facilities, the thing that caused Olivia’s
accident and injuries, is dispositive of the control issue, and therefore
warranted the trial court’s dismissal of the claims against it via summary
judgment.
Defendants urge that plaintiffs have failed to establish that either D-1
or Red River Range had any control over G-Rock’s climbing equipment at
the time of Olivia’s fall, and in fact, have admitted to the contrary.
Sharing of profits or losses
Defendants, D1 and Red River Range, deny that the requirement of a
mutual risk of losses and sharing of profits needed to establish a joint venture
or partnership is present in this case. Plaintiffs take the opposite position,
urging that there clearly was a mutual risk of loss among the entities that put
14 on Summer Camp 2.0, as the total amount of money they each would receive
from the camp was based on the number of participants—fewer campers
meant a risk of lost profits for each partner.
Plaintiffs assert that there is neither merit nor legal authority to
support defendants’ main argument, which is that they did not equally share
in the profits of Summer Camp 2.0 because each of the businesses who put
on the camp had varied expenses in doing so. Under D1 and Red River
Range’s reasoning, what was shared was the revenue, not the profits. Thus,
no joint venture or partnership. According to plaintiffs, this argument
ignores La. C.C. art. 2803, which provides in part that each partner equally
participates in profits, commercial benefits, and losses of the partnership,
unless the partners have agreed otherwise. Partners have the freedom to
agree among themselves the manner and extent of each partner’s
participation in the partnership, including how they will share in the profits
and losses. Mutuality is not required, urge plaintiffs.
D1 asserts that in this case, each business entity was responsible for
its own expenses, hiring and paying wages to its own employees, and paying
for its own supplies and equipment. D1 concedes that the overall revenue of
the camp was shared, but that “what may have resulted in profit for one
business entity could have resulted in a loss for another depending on their
expenses.” As expenses were not even considered, there was no sharing of
profits. What the parties did was share revenue among themselves. Because
the businesses did not agree to share profits and losses, there was no
partnership or joint venture.
Red River Range points out that profit (or loss) equals revenue less
expenses. Revenue, which is what the defendant businesses agreed to share, 15 is a distinctly different legal and accounting term than profit or loss. For
there to be a sharing of profits and losses, there must be, by definition, a
sharing of the expenses of the alleged joint venture.
Red River Range argues that there was no agreement to share profits
or losses. The businesses shared the revenue which came from camp
participation fees. Each entity was responsible for its own expenses.
Deposition testimony from each business owner established these facts—
revenue was shared, but expenses were not.
Under a revenue sharing agreement, because revenue is shared, it is
possible that one or more entity could profit while another (or more) could
lose. This possibility is contrary to what occurs under a profit/loss sharing
agreement. In such a set-up, all partners will profit or incur a loss. Red
River Range contends that plaintiffs’ argument regarding the ability of a
partnership or joint venture to decide on an “other-than-equal” profit/loss
percentage is irrelevant, since all that matters in this case is whether there
was a sharing of profits or losses in the first place. There was not, asserts
Red River Range. Again, without an agreement to share profits and losses,
plaintiffs cannot establish the existence of a joint venture. Thus, dismissal
of plaintiffs’ claims against Red River Range via summary judgment was
proper.
The initial burden was on defendants to establish that there is no
genuine issue as to material fact, and they were entitled to judgment as a
matter of law declaring that no partnership or joint venture existed between
them, G-Rock, and PinPoint. Most of the evidence submitted by defendants
in support of summary judgment focused on the fact that they did not intend
or agree to be partners or in a joint venture with each other. The legal 16 relationship of parties is not conclusively controlled by the terms which the
parties use to designate their relationship, especially with regard to third
parties. Courts look to the totality of the evidence, not just the agreement
between the parties to determine whether a partnership or joint venture was
entered into. See Cajun Elec. Power Co-op., Inc., supra at 216; Guilbeau v.
Liberty Mutual Ins. Co., 324 So. 2d 571 (La. App. 1 Cir. 1975).
Furthermore, the evidence submitted by defendants arguing that there
was no partnership because they did not have “control” over G-Rock’s rock-
climbing facilities or that there was no sharing of profits or losses misses
the forest for the trees. There is clearly evidence that all of the businesses
took part in making decisions regarding Summer Camp 2.0, which was the
endeavor they undertook together, and that they agreed to share equally in
the revenue of the camp but each bear the expenses incurred by its respective
entity in conjunction with the endeavor.
We find competing and conflicting evidence in the record that
sufficiently raises an issue of material fact concerning the nature of the
business relationship between PinPoint, G-Rock, D-1, and Red River
Range—specifically, whether there was a joint venture or partnership. On
summary judgment, all doubts must be resolved in the nonmoving party’s
favor. Lanson v. XYZ Ins. Co., 16-0745, p. 6 (La. 5/3/17), 226 So. 3d 412,
416. The evidence submitted by the defendants, D-1 and Red River Range,
was insufficient at this juncture to establish that they were not engaged in a
joint venture or had not entered into a partnership with the other businesses
when they collectively put on Summer Camp 2.0. We thus reverse the trial
17 court’s judgment, and remand the matter for further proceedings in
accordance with this opinion.2
CONCLUSION
For the reasons set forth above, the judgment of the trial court
granting the motions for summary judgment filed by defendants, Shreveport
Sports Training, LLC d/b/a D1 Training Shreveport, and Red River Range,
LLC, is reversed, and this matter is remanded. Costs of this appeal are
assessed to defendants, Shreveport Sports Training, LLC d/b/a D1 Training
Shreveport, and Red River Range, LLC.
REVERSED; REMANDED.
2 Based upon our finding that defendants are not entitled to summary judgment, we do not reach the alternative theory of partnership by estoppel raised by plaintiffs. 18