NO. 88-260 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1989 

ROBERT 11. ANTONICK, 

Plaintiff and Appellant, 

-vsGORDON R. JONES, 

Defendant and Respondent. 

APP EAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis & Clark, 

The Honorable Thomas Honzel, Judge presidinff. 

COUNSEL OF RECORD: 

For Appellant: 

Patrick F. Hooks; Hooks & Rudewitz, Townsend, Montana 

For Respondent: 

Cordell Johnson; Gough, Shanahan, Johnson & Waterman, 

Helena, Montana 

Submitted: Jan. 19, 1989 

l-- Decided. February 28, 1989 

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Mr. Justice Fred J. Weber delivered the Opinion of the Court. 

This is an appeal by plaintiff and appellant, Robert L. 

Antonick from a judgment in favor of defendant and respondent, Gordon R. Jones. The District Court for the First 

Judicial District, Lewis and Clark County, found that no 

partnership existed between Mr. Antonick and Mr. Jones. The 

court ruled in favor of Mr. Jones on his counterclaim alleging that Mr. Antonick must repay certain amounts of money 

which he had drawn from the checking account, and also money 

which he accepted from patients after the relationship was 

terminated. The District Court also found that Mr. Antonick 

did not fraudulently issue four "paid in full" receipts to 

certain patients. From this judgment Mr. Antonick appeals, 

and Mr. Jones cross-appeals on the issue of fraud. We 

affirm. 

The issues are: 

1. Did the District Court err in concluding that no 

partnership existed? 

2. Did the District Court err in concluding that Mr. 

Jones is entitled to reimbursement by Mr. Antonick? 

3. Did the District Court err in concluding that Mr. 

Antonick did not fraudulently issue paid in full receipts? 

Mr. Antonick and Mr. Jones are physical therapists who 

have known each other since high school. In 1959 Mr. 

Antonick began the physical therapy department at St. Peter's 

Hospital in Helena, Montana. Mr. Jones began his practice in 

Butte, Montana, at Butte Community Hospital. 

In the early 1960's Mr. Jones moved to Helena and the 

two men formed a partnership for a short time. Mr. Antonick 

operated the physical therapy department at St. Peter's 

Hospital and Mr. Jones operated the physical therapy department at St. John's Hospital. They paid. expenses, then split 
the profits. This partnership was amicably terminated after 

less than a year. 

Beginning in 1973 Mr. Jones operated the Shodair Hospital Physical Therapy Department (Shodair) in Helena, Montana, 

on a contract basis. He received 65% of the total business 

billed out of that department. Shodair furnished the space, 

most of the equipment, and office personnel. 

Mr. Antonick had been operating St. Peter's physical 

therapy department. In 1973 he bought a ranch near Townsend, 

Montana, and moved to Townsend. He commuted to Helena and 

worked at St. Peter's until 1980, when he quit, intending to 

retire. However, in less than a year he began doing parttime physical therapy work in Townsend. 

In the spring of 1982, Mr. Antonick began working for 

Plr. Jones at Shodair on a contract basis. Initially, he 

worked for Mr. Jones three afternoons a week, but increased 

this to five afternoons a week while maintaining a morning 

physical therapy practice in Townsend. Mr. Antonick was paid 

a base amount calculated at six patients times the charge for 

a patient visit. The amount he received varied from $2860 to 

$3660 per month. 

In the fall of 1983, Shodair decided to change the 

operation of its physical therapy department so that it would 

no longer be a department of Shodair. Mr. Jones separated 

from Shodair and began merely leasing space and equipment 

from Shodair. Mr. Jones signed a lease with Shodair, and 

became responsible for billing his own patients. On November 

1, 1983, the arrangement essentially became a private practice. Mr. Antonick continued to work at this office under 

the new arrangement. 

Following the change on November 1, 1983, Mr. Jones 

opened a new checking account for the business. None of the 

funds from his former checking account were transferred to 
the new account. While opening the account, a bank employee, 

Linda Opie, filled out a signature card. The card was for 

"Physical Therapy and Rehabilitative Services," and the 

square for partnership was marked with an "X". Linda Opie 

testified that she normally fills out a card based on information given by the customer, but she did not remember what 

occurred in this case. Mr. Jones testified that he did not 

tell Linda Opie to mark the partnership square. Ms. Opie 

testified that in opening an account for a partnership, a 

partnership form would be filled out; however, none was found 

in the bank files. Four people were authorized to sign 

checks on this new account: Mr. Jones and his wife, and Mr. 

Antonick and his wife. 

Mr. Jones also established a line of credit with the 

bank up to $25,000, upon which $17,000 was actually drawn. 

Mr. Jones was personally liable on this loan. Mr. Jones 

dealt with the bank president, Dan Johnson, who testified 

that he dealt with Mr. ,Tones as an individual and that the 

bank regarded the transaction as one with a sole proprietorship. Mr. Johnson testified that a partnership financial 

statement and financial statements from each partner would be 

required to transact business with a partnership. 

The physical therapy practice was renamed "Physical 

Therapy and Rehabilitative Services" (PTRS) and all of the 

paperwork, including checks, forms, office stamps, and stationary bore the title "Physical Therapy and Rehahilitati~re 

Services, Gordon B. Jones, L.P.T. - Robert J. Antonick, 

L.P.T." 

During the entire time that the two men worked together, 

from 1982 through February 1986, partnership income tax 

returns were never prepared nor filed. No partnership income 

was ever reported on a K-1 form. Mr. Antonick filed an 

indi~rfdual income tax return for these years, including a 
Schedule C, which is for a sole proprietor. Mr. Jones issued 

to Mr. Antonick a form 1099 for each of the years 1982, 1983, 

1984, and 1985. Form 1099 is issued to an independent contractor, showing the amounts paid in compensation on a contract basis. 

Workers' compensation insurance carried on PTRS employees listed both Mr. Jones and Mr. Antonick as insureds. In 

1985 Mr. Antonick filled out a professional liability insurance policy. He listed himself as self-employed, and did not 

mark the space for partnership. When Mr. Jones filled out a 

similar application he described himself as a self-employed 

individual. He listed four physiotherapists as employees and 

one physiotherapist as an independent contractor. 

Mr. Jones testified that he orally agreed to pay Mr. 

Antonick $3000 per month under the new arrangement. Mr. 

Antonick drew a total of $40,000 from PTRS in 1984. For the 

year of 1985, Mr. Antonick's compensation was $59,350. Mr. 

Jones testified that at the beginning of 1985, when Mr. 

Antonick requested a raise to $60,000 per year, he simply 

agreed. Mr. Antonick denies this conversation. In each of 

the years 1984 and 1985, the amounts drawn from month to 

month varied. 

In August, 1985, Mr. Jones incorporated, becoming a 

professional corporation. At that point he offered Mr. 

Antonick an employment agreement. Later, he had a similar 

agreement prepared by an attorney. In regard to these offers 

Mr. Jones testified that he wanted Mr. Antonick to join the 

practice full-time. However, Mr. Antonick did not sign 

either of these agreements. 

In January 1986, Mr. Antonick wrote four checks to 

himself for a total amount of $21,259. He filled out the 

check stubs calling the payments "contract payment," "bonus," 

and "honus." One check stub was left blank. When Mr. Jones 
learned of these checks in early February, the parties terminated their relationship. 

I 

Did the District Court err in concluding that no partnership existed? 

The standard of review on appeal is whether the district 

court findings are clearly erroneous. Rule 52(a), M.R.Civ.P. 

"If there is substantial credible evidence to support the 

findings, those findings are not clearly erroneous." Parker 

v. Elder (1988), 758 P.2d 292, 293, 45 St.Rep. 1305, 1307. 

We have examined the record and conclude that the determinations of the District Court are supported by substantial 

credible evidence. We therefore affirm each District Court 

ruling. 

A partnership is defined in S 35-10-201(1), MCA, as "an 

association of two or more persons to carry on as co-owners a 

business for profit." This Court previously stated the 

elements necessary to establish a partnership in Render T?. 

Render (1965), 144 Mont. 470, 480, 397 P.2d 957, 962: 

To establish joint venture or a partnership, it is 

necessary to determine the intent of the parties; 

such business relationships arise only when the 

parties intend to associate themselves as such. 

There must be some contribution by each 

co-adventurer or partner of something promotive of 

the enterprise. There must be a joint proprietary 

interest and a right of mutual control over the 

subject matter of the enterprise or over the property engaged therein, and there must be an agreement to share the profits. The intention of the 

parties has to be clearly manifested, and must be 

ascertained from all the facts and circumstances 

and the actions and conduct of the parties. (Citations omitted.) 
These elements were recently reiterated in In the Matter 

of the Estate of Wilbur Edward Smith (1988), 749 P.2d 512, 

515, 45 St.Rep. 93, 98. In that case we also stated: 

The burden of establishing a partnership is 

upon the person claiming a partnership exists. 

First National Bank of Twin Bridges v. Sant (1973), 

161 Mont. 376, 386, 506 P.2d 835, 841. No person 

can become a partner without the consent of all 

partners. Section 35-10-401(7), MCA; Pulliam v. 

Pulliam (Mont. 1987), 733 P.2d 1299, 1300, 44 

St.Rep. 483, 485. The existence of a partnership 

depends upon the intention of the parties. Intent 

must be ascertained from all the facts, circumstances, actions and conduct of the parties. 

Gaspar v. Buckingham (1944), 116 Mont. 236, 246, 

153 P.2d 892, 896. 

The initial test of whether a partnership exists is the 

intent of the parties. Bender, 397 P.2d at 962. This inherently implies a mutual agreement or meeting of the minds. In 

this case there was never a written partnership agreement, 

and there was conflicting testimony on whether there was ever 

an oral agreement to form a partnership. Mr. Antonick testified that on or about November 1, 1983, they agreed to form a 

partnership wherein Mr. Antonick would be paid $36,000 a year 

and Mr. Jones would be paid $72,000 per year, and that after 

all expenses were paid, whatever profit remained would he 

split 50/50. The difference in salaries reflected the fact 

that Mr. Antonick worked half days. Mr. Jones acknowledges 

that Mr. Antonick made this proposal hut denies that he 

agreed to it. It is the task of the trial court to resolve 

any conflicts Fn testimony. Render, 397 P.2d at 962. In 

this case there is substantial credible evidence to support a 

finding that there was no mutual agreement to form a 

partnership. 
However, this does not end the inquiry since a court may 

find that a partnership was formed, although both parties 

deny that they intended such a relationship. In Truck Ins. 

Exchange v. Industrial Indemnity Co. (19841, 212 Mont. 297, 

300, 688 P.2d 1243, 1244-45, this Court found that a partnership existed, stating: 

"[ilf the facts bring the arrangement within the 

definition of a partnership, the parties cannot 

escape liability incident to that relationship 

merely by saying that no such thing exists." Simons 

v. Northern Pac, Ry. Co. (1933), 94 Mont. 355, 369, 

22 P.2d 609, 614. If the intended action of the 

parties creates a partnership in fact, what the 

parties call their arrangement or intend their 

arrangement to be is irrelevant. 

Thus we must examine the intended action of the parties to 

determine if the elements of the Bender test are fulfilled. 

Mr. Antonick contends that a partnership came into 

existence on November 1, 1983. He bases this contention on 

several changes which occurred at that time. A new bank 

account was opened on which Mr. Antonick was authorized to 

sign. The bank card designated the account as a partnership. 

The name of the business was changed to "Physical Therapy and 

Rehabilitative Services, Gordon R. Jones, L.P.T. - Robert L. 

Antonick, L.P.T. " All paperwork generated by the business 

bore this designation. 

Mr. Antonick contends that the element of mutual control 

was met, citing various instances in which he participated in 

hiring discussions and other business decisions. Mr. 

Antonick specifically calls attention to his participation in 

discussions involving a business records system, and his 

unilateral decision to purchase an office computer. He 

refers to his involvement in having a therapy pool modifj ed.. 
He points out that he helped Mr. Jones search for new office 

space when expansion was being considered. 

There is, however, conflicting evidence on the issue of 

joint proprietary interest and right of mutual control. The 

evidence demonstrated that Shodair dealt exclusively with Mr. 

Jones. Mr. Jones alone negotiated and signed the lease for 

the facility. Mr. Jones was purchasing equipment from 

Shodair. Additionally, First Bank dealt exclusively with Mr. 

Jones. The bank president, Dan Johnson, testified that he 

dealt with and loaned money to Mr. Jones as a sole proprietor. He testified that if he had considered the business a 

partnership he would have required a financial statement from 

each partner and from the partnership. Testimony from PTRS 

employees revealed that without exception they considered Mr. 

Jones to be the owner of the business. There was evidence 

presented indicating that Mr. Antonick did not have mutual 

control over hiring and firing decisions. 

While Mr. Antonick did participate in some discussions 

and decisions regarding the physical therapy practice, the 

District Court found that the evidence as a whole did not 

establish a mutual proprietary interest or a right of mutual. 

control. We conclude that. there is substantial. credible 

evidence to support this finding. 

Mr. Antonick also contends that while he did not make a 

monetary contribution to the partnership, he did contribute 

something "promotive of the enterprise" in that he contributed his reputation and experience to the enterprise. While 

we note that a contribution to the enterprise need not he 

monetary, the District Court properly considered this factor 

and found that this element of the Render test was not 

satisfied. 
Mr. Antonick contends that the compensation he received 

is prima facie evidence that a partnership existed. He bases 

this contention on § 35-10-202(4), MCA: 

The receipt by a person of a share of the 

profits of a business is prima facie evidence that 

such person is a partner in the business, but no 

such inference shall be drawn if such profits were 

received in payment: 

(b) as wages of an employee or rent to a 

landlord; 

Mr. Antonick contends first, that there was a sharing of 

profits, and second, that unless these monies were paid as 

"wages of an employee," that it is prima facie evidence of a 

partnership. Mr. Antonick contends that payments made to an 

independent contractor cannot fall under this exception. 

Because of our following discussion on the significance of 

sharing of profits, we do not find it necessary to rule on 

this contention. 

The evidence is conflicting and close as to whether 

there actually was a sharing of profits. Mr. Jones testified 

that Mr. Antonick was entitled to a certain sum each month 

and that he had never agreed to split the profits with Mr. 

Antonick. However, Julie Curd, a Helena CPA, testified that 

in her opinion Mr. Antonick and Mr. Jones were sharing the 

profits of the business. Ms. Curd based this opinion on her 

study of the financial records of PTRS in which she summarized and compared Mr. Antonick's monthly draws and the 

monthly bank balances. She found that Mr. Antonick's draws 

were made in relation to the balance in the bank account. 

There was also testimony by Mr. Jones that the normal practice at month's end was to pay all employees and part-time 
therapists before either Mr. Jones or Mr. Antonick took their 

draws. 

At the end of 1984, Mr. Antonick showed Mr. Jones the 

amounts each had drawn for the year and proposed settling 

their accounts according to the proposed salaries of $36,000 

and $72,000, and a splitting of the remaining profits. Mr. 

Jones did not agree with Mr. Antonick's proposal or figures, 

but said he would get back to him. Mr. Jones testified that 

he did not get back to him. 

The amounts of each party's draws cannot be reconciled 

with either party's theory. In 1984 Mr. Antonick drew a 

total of $40,000 from the business account, and Mr. Jones 

took $98,648. In 1985 their total amounts drawn for the year 

were $59,350 and $156,643, respectively. The record indicates no attempt to pay Mr. Jones twice the amount paid to 

Mr. Antonick. There were irregular monthly payments to Mr. 

Antonick, not identical in amount, and a year-end total not 

consistent with the claimed agreement. However, Mr. 

Antonick's total annual draws for each year are not exactly 

the $36,000 or $60,000 which he should have received as an 

independent contractor. The monthly payments and year-end 

totals do not clearly reveal any definite compensation 

arrangement. 

The record also indicates that the way in which Mr. 

Antonick was compensated did not change after November 1, 

1983. it is undisputed that Mr. Antonick was compensated as 

an independent contractor prior to November 1, 1983. That 

history is relevant to a determination of whether he was an 

independent contractor. 

The evidence on whether the parties were actually sharing profits is therefore conflicting, and the trial court did 

not make a specific finding on this issue. However, even if 

the parties were sharing profits, this js not. conclusive 
evidence of a partnership relationship. Prima facie evidence 

only means that a party has met an initial burd.en; that 

evidence would not be dispositive of the partnership issue. 

Resolution of the present case required a review of all the 

facts and circumstances surrounding the disputed relationship. The District Court considered detailed and comprehensive evidence on all aspects of the business arrangement. 

The ultimate finding was that Mr. Antonick failed to establish by a preponderance of the evidence that a partnership 

existed. 

We hold that there was substantial credible evidence to 

support the District Court's finding that no partnership was 

created. Mr. Antonick concedes that if this Court affirms 

the finding that no partnership existed, then he is not 

entitled to keep the money which he received from patients 

after the relationship was terminated. We affirm the District Court on these two judgments. 

I1 

Did the District Court err in concluding that Mr. Jones 

is entitled to reimbursement by Mr. Antonick? 

Mr. Antonick contends that the District Court erred in 

finding that Mr. Jones is entitled to reimbursement from Mr. 

Antonick in the sum of $16,259. Mr. Antonick wrote four 

checks to himself in January 1985, totaling $21,259. The 

court found that as an independent contractor, Mr. Antonick 

was entitled to keep $5000 of that sum for services rendered 

in January. Because we agree with the lower court's finding 

that no partnership existed, and because there is substantial 

credible evidence to support the finding that Mr. Antonick 

was to be paid $5000 per month, we affirm the District 

Court's judgment on this issue. 
111 

Did the District Court err in concluding that Mr. 

Antonick did not fraudulently issue paid in full receipts? 

In May, 1986, Mr. Antonick wrote "paid in full" on the 

billing statements of four patients whom he had treated while 

he was associated with Mr. Jones. Mr. Jones contends that 

Mr. Antonick did this fraudulently and d.eceitfully, citing 

VanEttinger v. Pappin (1978), 180 Mont. 1, 588 P.2d 988 and S 

27-1-712, MCA. 

Both Mr. Jones and Mr. Antonick testified that at times 

each had done "pro bono" work for certain patients. Mr. 

Antonick testified that when he wrote "paid in full" on the 

statements, he received no money. He testified that he had a 

prior arrangement with one patient to accept insurance only 

in payment. He testified that the other patients were unable 

to pay their accounts and that it had always been his practice to "absorb" bills which patients were unable to pay. 

The District Court found that the giving of these receipts failed to fulfill the elements of fraud. Substantial 

evidence supports that finding. FJe hold that the District 

Court did not err in this determination. Affirmed. 

Chief Justice 
Qde. Justices