Opinion ID: 212383
Heading Depth: 2
Heading Rank: 3

Heading: Existence of a Joint Venture

Text: We turn now to Defendants' argument that the evidence introduced at trial does not support the jury's finding that the parties entered into a joint venture agreement together. This argument was appropriately raised in Defendants' Rule 50(a) motion, and we thus review it de novo. See Bristol v. Bd. of Cnty. Comm'rs, 312 F.3d 1213, 1216 (10th Cir.2002). Defendants argue that we must find there to be insufficient evidence of a joint venture based on our interpretation of Kansas law in Terra Venture, Inc. v. JDN Real Estate Overland Park, L.P., 443 F.3d 1240 (10th Cir.2006). In Terra Venture, we listed five factors for determining whether a joint venture exists: (1) the joint ownership and control of property; (2) the sharing of expenses, profits, and losses, and having and exercising some voice in determining the division of net earnings; (3) a community of control over and active participation in the management and direction of the business enterprise; (4) the intention of the parties, express or implied; and (5) the fixing of salaries by joint agreement. Id. at 1245 (quoting Modern Air Conditioning, Inc. v. Cinderella Homes, Inc., 226 Kan. 70, 596 P.2d 816, 823 (1979)). We then concluded there was no evidence in that case as to four of the five factors while the evidence as to the fourth factor, the intention of the parties, was insufficient to demonstrate the existence of a joint venture. Id. at 1246. Defendants argue that this holding should control in the instant case: because there is only inconclusive evidence bearing on this single factor and no evidence of the other factors, there is insufficient evidence to establish a joint venture. We are not persuaded. Firstly, we note that these five factors are not exclusive or outcome-determinative. See Modern Air Conditioning, 596 P.2d at 823 (describing these factors as being among the acts or conduct which is indicative of a joint venture); see also George v. Capital S. Mortg. Invs., Inc., 265 Kan. 431, 961 P.2d 32, 47-48 (1998) (finding no abuse of discretion in the trial court's giving of a joint venture jury instruction that did not include the Modern Air Conditioning factors). Moreover, the evidence regarding these factors is much stronger in the instant case than in Terra Venture. In Terra Venture, the only evidence suggesting the parties intended to form a joint venture was their agreement that they would refer to their project as a joint venture in press releases. In this case, by contrast, the evidence was that the parties agreed they would in fact form a joint venture, not just that they would refer to their project as such. The evidence also indicated that Plaintiffs and Defendants informed not just the public but also their employees and attorneys that they were jointly working on the project. Furthermore, although it is undisputed the parties did not actually share expenses, profits, and losses, the evidence introduced at trial was that they agreed they would share future profits and losses and would true-up expenses when the corporation paperwork had been completed. (Joint App. at 973); see Goben v. Barry, 234 Kan. 721, 676 P.2d 90, 96 (1984) (upholding the trial court's finding of a joint venture based in part on evidence the agreement provided for a sharing of profits equally between Goben and Barry); Potucek v. Blair, 176 Kan. 263, 270 P.2d 240, 245 (1954) (indicating that the relevant factor is whether the parties have agreed to split profits, not whether profits have actually been shared). And finally, there was evidence of at least some joint control over the project based on the parties' consultation with each other as equals on various aspects of the project, particularly in their negotiations with city officials. See Shoemake v. Davis, 146 Kan. 909, 73 P.2d 1043, 1047 (1937) (finding evidence of joint control based on the parties' consultation with each other about the advisability of taking certain actions). We likewise reject Defendants' argument that the evidence showed only an anticipatory agreement to form a joint venture in the future, not the actual formation of a joint venture. The jury was presented with ample evidence from which it could reasonably conclude the parties actually entered into a joint venture agreement in March of 2005, and the mere existence of contrary evidence does not itself undermine the jury's findings. Thunder Basin Coal Co. v. Sw. Pub. Serv., 104 F.3d 1205, 1213 (10th Cir.1997).