University of Vermont AAHS

Hill v. Harris

Delaware Superior Court
1998 WL 960763
October 27, 1998

 

Summary of Opinion

Plaintiff Hill was injured when she fell from her horse while riding with defendant Clyde Harris.  Harris’s riding stables was located on the separate property of his wife, Elizabeth, who ran a racehorse business on the property.  At trial, Elizabeth moved for summary judgment on the ground she was not liable for an injury that occurred in her husband’s business.  The trial court held there was enough evidence that both persons were partners in the stables business so that the question of whether Elizabeth could be held liable must be answered as a question of fact by a jury.  Accordingly, the trial court denied Elizabeth’s motion for summary judgment.
 

Text of Opinion

ORDER

RIDGELY, President J.

This 27th day of October, 1998, upon consideration of the parties' briefs and the record in this case, it appears that:

(1) Plaintiff Clare E. Hill ("Hill") was injured when she fell from a horse while she was a patron of C.D. Harris Riding Stables. Hill alleges that the fall was caused by the negligence of Defendant Clyde D. Harris ("Clyde"), the proprietor of the riding stables business. Hill further alleges that Defendant Elizabeth B. Harris ("Elizabeth"), Clyde's wife, is liable as a partner in the business and as the owner of the property on which the business is located. Elizabeth has moved for summary judgment claiming that she is not liable for Clyde's alleged negligence because she is not a partner in the riding stables business but merely the lessor of the property.

(2) On December 3, 1994, Hill sustained personal injuries after she fell from a horse provided to her by C.D. Harris Riding Stables. Hill claims that the fall occurred because Defendant Clyde D. Harris negligently saddled and cinched the horse. The riding stables business is located on property known as Penny Creek Farms, which Defendant Elizabeth B. Harris inherited from her parents. Hill's fall did not occur on Penny Creek Farms because, although the trails begin and end on the property, they also travel through property not owned by the defendants. At the time of the incident, Penny Creek Farms was utilized for the riding stables business, a racehorse business, growing hay, and as a residence for Elizabeth and Clyde. Although the racehorse business is generally run by Elizabeth and the riding stables business is generally run by Clyde, the two businesses often overlapped. For example, Clyde would often purchase supplies necessary for the racehorse business and Elizabeth would do the same for the riding stables business. The property was also maintained by both. Further, the hay grown on the property was used to feed the horses of both businesses. Although separate checking accounts were maintained for each business, both Elizabeth and Clyde made purchases and paid debts for one business with the other's checks as well as with checks from their personal account if necessary. Finally, although the couple filed joint tax returns, Clyde is listed on at least three of the returns as the proprietor of both businesses. Clyde also asserted on an application for a loan for the riding stables business that he is the owner of Penny Creek Farms.

(3) Elizabeth contends that she and Clyde are not partners but rather sole proprietors of separate businesses. She states that, although money is sometimes loaned to one business from the other, it is always paid back. Elizabeth asserts that she is the sole owner of Penny Creek Farms and that she leases a portion of her land to Clyde for his business. As payment for the lease, Clyde works on the land doing odd jobs and maintenance work. Therefore, Elizabeth asserts that she cannot be held liable for her tenant's alleged negligence. Plaintiffs contend that there is a genuine issue of material fact as to whether Elizabeth and Clyde are partners, and the matter should be decided by a jury.

(4) Summary judgment is appropriate if, after viewing the record in the light most favorable to the non moving party, the court finds no genuine issue of material fact. If the movant supports the motion with proper affidavits, the burden shifts to the non moving party to show, using support taken from the developed record or with opposing affidavits, that a material issue of fact exists. If there is a reasonable indication that a material fact is in dispute or if it seems desirable to inquire more thoroughly into the facts in order to clarify the application of the law, summary judgment will not be granted.

(5) Elizabeth is not liable if she is merely the owner/lessor of the property on which the riding stables business is operated. A landlord is not liable for the negligence of a tenant, even if the negligence occurs on the leased property. Further, a landlord is generally not liable for incidents occurring off the leased property, as in the present matter, unless the landlord knows about a dangerous condition which begins on the leased property and promises to correct that condition. Under the facts presented, Elizabeth could not be held liable merely as the owner of the property.

(6) Elizabeth may be liable if the facts indicate that she and Clyde are partners in the riding stables business. The existence of a partnership between husband and wife has been addressed in Delaware in Gannett Co. v. Irwin. The court in that case looked at three elements to determine if the husband and wife were partners in their respective endeavors: profit sharing, co ownership, and joint control.

(7) Profit sharing is prima facie evidence of a partnership relationship.  Where there is no intent to share profits and losses, there can be no partnership.  In the present matter, the facts show that the defendants manipulated money among several bank accounts in order to pay the bills and buy supplies for both businesses. For example, Elizabeth paid some of the bills for C.D. Harris Riding Stables out of both the Penny Creek Farms account and the couple's personal account. Purchases were also made in this manner. Although the gross receipts from C.D. Harris Riding Stables were deposited into its own account, no profits were realized from the business. However, there is evidence which indicates that the losses and expenses were shared equally, creating an issue of fact as to whether profits would have been shared as well. Further, an intent to share profits and losses, standing alone, is insufficient to determine a partnership relationship between husband and wife as this element is also consistent with a normal marriage relationship.  It is therefore necessary to examine the other elements of a partnership more closely.

(8) The second element of a partnership relationship is co ownership.  Although this element generally refers to ownership of the business itself, ownership of the property used in the business is also a factor.  In the present matter, although Elizabeth inherited Penny Creek Farms, Clyde referred to himself as the owner on a loan application for the riding stables business. He was also listed as the proprietor of both businesses located on Penny Creek Farms on at least three of the couple's joint tax returns. Further, the farm is used to grow hay, which is fed to the horses of both businesses. Also, both defendants help with the maintenance of the property. These facts, when viewed in the light most favorable to plaintiff, could indicate co ownership of the property rather than a lessor/lessee relationship. Finally, business goods were purchased by both defendants with funds from any of the three accounts available to them, indicating co ownership of the instrumentalities used in the businesses as well.

(9) The final element of a partnership is joint control.  As noted previously, decisions regarding purchases for the businesses were made by both defendants. Further, decisions regarding the payment of bills were also made by both defendants. For example, the bills for C.D. Harris Riding Stables were generally paid by Clyde, but if a problem arose, Elizabeth would make the decision as to whether the outstanding bill was paid out of the Penny Creek Farms account or the couple's personal account. Further, the defendants dealt with other businesses from whom they purchased goods as if they were agents for each other. Collectively, these facts indicate joint control over the management of the business.

(10) When viewed in the light most favorable to plaintiffs, there appears to be a genuine issue of fact as to whether the defendants were partners of C.D. Harris Riding Stables. Therefore, it is for a jury to determine whether a partnership relationship in fact existed, and summary judgment is inappropriate at this time.

NOW, THEREFORE, IT IS ORDERED that the motion for summary judgment of Defendant Elizabeth B. Harris is DENIED.
 


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