IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
April 21, 2010 Session
SHERRY TANNER v. WHITECO, L.P. and ORANGECO, L.P.
Direct Appeal from the Chancery Court for Shelby County
No. CH-04-1248-2 Arnold B. Goldin, Judge
No. W2009-01265-COA-R3-CV - Filed May 17, 2010
This case involves the question of whether Appellee entities are partnerships under
Tennessee law. Appellant appeals the trial court’s order, which found that Appellee entities
were not partnerships. Finding no error, we affirm.
Tenn. R. App. P. 3. Appeal as of Right; Judgment of the Chancery Court Affirmed
J. S TEVEN S TAFFORD, J., delivered the opinion of the Court, in which D AVID R. F ARMER, J.,
and H OLLY M. K IRBY, J., joined.
Kendra H. Armstrong, Cordova, Tennessee, for the appellant, Sherry Tanner.
James M. Hivner, Memphis, Tennessee, for the appellees, Whiteco, L.P. and Orangeco, L.P.
OPINION
On June 28, 2004, Appellant Sherry Tanner (“Ms. Tanner”) filed a complaint and
request for restraining order in the Shelby County Chancery Court.1 The defendants named
in the complaint were Norman Vann Thomas, Sr., Bill Koeneman, Bill Koeneman
Construction Company, L.L.C., Whiteco Limited Partnership, and Orangeco Limited
Partnership.2 By her complaint, Ms. Tanner sought enforcement of a partnership agreement
and a trust agreement. Specifically, Ms. Tanner averred:
1. On July 17, 1998, [Ms. Tanner] entered into a general
1
An amended complaint was filed on June 29, 2004.
2
By Order of September 29 2006, Bill Koeneman and Bill Koeneman Construction Company were
voluntarily nonsuited, and are no longer parties to this lawsuit, or this appeal.
partnership agreement with...Orangeco, under the name of
Destin Partnership....
2. Destin Partnership was organized to develop and market
residential real property. Pursuant to the Destin Partnership
Agreement, [Ms. Tanner] was to receive a percentage of income
which...Orangeco received from the sale of real property owned
jointly by Defendants....
3. On June 29, 1999...Whiteco entered into a trust agreement
with [Ms. Tanner], which transferred into a trust for the equal
benefit of [Ms. Tanner] and...Whiteco a fifty (50%) percent
interest in Brownsville-St. Elmo Shopping Center, L.L.C.....
* * *
5. Defendants, Norman Vann Thomas, Sr., Orangeco, and
Whiteco have failed and refused to fully perform under the
Destin Partnership Agreement and have only paid [Ms. Tanner]
a small portion of the money due to her under the Destin
Partnership Agreement. Specifically, [Ms. Tanner] has received
less than one hundred thousand dollars ($100,000.00) of the
money due and owing to her under the Destin Partnership
Agreement and the trust agreement. Plaintiff believes that she
is owed over one million dollars....
Norman Vann Thomas, Sr. was a resident of Shelby County, and had four children:
Norman Vann Thomas, Jr., Catherine Maness, Elizabeth Thomas, and Robert Thomas. On
July 16, 1998, Norman Vann Thomas, Sr. filed a certificate of limited partnership for
Orangeco, L.P. with the Tennessee Secretary of State. Sometime after the filing of the
certificate for Orangeco, Norman Vann Thomas, Sr. requested his daughter Catherine
Maness (who worked for her father) to place the Orangeco certificate in the file cabinet, and
advised her that he was doing estate planning and that she and her siblings had an interest in
the limited partnership. On December 30, 1998, Norman Vann Thomas, Sr. filed a certificate
of limited partnership for Whiteco, L.P. with the Tennessee Secretary of State. As with the
Orangeco certificate, Norman Vann Thomas, Sr. also asked his daughter to file the Whiteco,
certificate, and indicated to her that the children also had an interest in Whiteco.
Norman Vann Thomas, Sr. died on July 10, 2007. Prior to their father’s death, the
record indicates that none of Norman Vann Thomas, Sr.’s children had any dealings with
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Orangeco, or with Whiteco. However, after Norman Vann Thomas, Sr.’s death, a check for
$100,000.00 was written to attorney Steve Vescovo, as escrow agent for Orangeco. This
amount was drawn from the account of Tulip Creek, L.L.C., and each of the Thomas children
signed a receipt and waiver in which they acknowledged being interest holders in Orangeco,
and in Whiteco. Each of the children acknowledged that the funds would be used to
reimburse funeral expenses incurred by Robert Thomas for his father’s funeral. On or about
August 15, 2007, Robert Thomas received a check from the law firm of Steve Vescovo in
the amount of $15,000 as reimbursement.
On November 1, 2007, a suggestion of death was filed with the trial court. By consent
order of January 17, 2008, the Estate of Norman Vann Thomas, Sr. was substituted as a
party-defendant. Robert Thomas was named as the administrator of his father’s estate and,
on January 24, 2008, he filed an answer on behalf of the Estate. On the same day, Whiteco,
and Orangeco also filed a joint answer. On November 12, 2008, the Estate filed a motion to
dismiss for lack of subject-matter jurisdiction. Specifically, the Estate averred that the trial
court lacked jurisdiction due to Ms. Tanner’s alleged failure to revive the lawsuit in
accordance with Tenn. Code Ann. §30-2-320. By Order of December 5, 2008, the Estate of
Norman Vann Thomas, Sr. was voluntarily nonsuited. Subsequently, Orangeco and Whiteco
filed a motion to dismiss, which motion was denied by Order of March 16, 2009.3 On the
same day, the trial court held an evidentiary hearing to determine whether the remaining
defendants, Orangeco and Whiteco, were valid partnerships under Tennessee law and,
specifically, whether Norman Vann Thomas, Sr.’s children were partners in either of these
entities. Following this hearing, on March 28, 2009, the trial court entered its final order,
which order provides, in relevant part, as follows:
[Ms. Tanner] alleges that Norman Vann Thomas, Sr. was
in partnership with his children.... At the hearing on March 16,
2009, [Ms. Tanner] presented no testimony to this Court proving
a written partnership agreement or an oral partnership
agreement. [Ms. Tanner] asks this Court to imply the existence
of a partnership based on the factual evidence presented to the
Court. “[T]he existence of a partnership may be implied from
the circumstances where it appears that the individuals involved
have entered into a business relationship for profit, combining
their property, labor, skill, experience, or money.” Bass v. Bass,
814 S.W.2d 38, 41 (Tenn. 1991).
The parties do not dispute that Norman Vann Thomas, Sr.
3
Orangeco, L.P. and Whiteco, L.P. are the sole Appellees in this appeal.
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was a partner in Orangeco, L.P. and Whiteco, L.P. The only
question then is whether any of Mr. Thomas’ children were
partners in these ventures. The evidence is that during his
lifetime, the children of Norman Vann Thomas, Sr. took no
actions that would suggest that they were partners with their
father. Catherine Manness was advised by her father of the
existence of the partnerships and that he was doing estate
planning. After their father’s death, at which time the children
believed they were the beneficiaries of his estate, the children
signed a document which reflected that they were “interest
holders” in Orangeco, L.P. and Whiteco, L.P. Even the attorney
who drafted the document did not refer to them as partners.
This Court does not have authority to create a partnership
where one does not exist. Under the totality of the
circumstances, the Court finds that based on the evidence
presented at the evidentiary hearing on March 16, 2009, this
Court has no evidence to preponderate that the Defendants,
Orangeco Limited Partnership and Whiteco Limited Partnership
were Tennessee partnerships. The lawsuit is hereby dismissed.
On April 24, 2009, Ms. Tanner filed a motion, asking the court to make additional
findings of fact or to alter or amend its judgment. In response, the trial court entered an
amendment to its final order on May 11, 2009. The relevant portion of the amendment
provides:
Based upon the evidence presented, the Court finds that
none of the children of Norman Vann Thomas, Sr. were limited
partners in either Whiteco, L.P. or Orangeco, L.P., and that there
were no other partners in either of these alleged partnerships
besides Norman Vann Thomas, Sr. As such, neither Orangeco,
L.P. nor Whiteco, L.P. were limited partnerships pursuant to
Tennessee law, as there cannot be a partnership where only one
person is involved. Tenn. Code Ann. §61-2-101(8).
Ms. Tanner appeals and raises two issues for review as stated in her brief:
1. Whether the trial court erred in finding that no limited
partnership existed?
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2. Whether the trial court erred in finding that Robert Thomas,
Norman Vann Thomas, Jr., Elizabeth Thomas, and Catherine
Maness were not limited liability partners in Whiteco, L.P. or
Orangeco, L.P.?
Because this case was tried by the court sitting without a jury, we review the case de
novo upon the record with a presumption of correctness of the findings of fact by the trial
court. Unless the evidence preponderates against the findings, we must affirm, absent error
of law. See Tenn. R. App. P. 13(d). With respect to the trial court's conclusions on matters
of law or on mixed questions of fact and law, however, our review is de novo with no
presumption of correctness. See Bowden v. Ward, 275 S.W.3d 913, 916 (Tenn.2000);
Nash-Putnam v. McCloud, 921 S.W.2d 170, 174 (Tenn.1996); Tenn. R. App. P. 13(d).
It is also well settled that this Court's review is limited to the appellate record and it
is incumbent upon the appellant to provide a record that is adequate for a meaningful review.
Tenn. R. App. P. 24(b). Here, the record consists only of the technical record. There is
neither a transcript, nor a Tenn. R. App. P. 24(c) statement of the evidence. As this Court has
often stated, “in the absence of a transcript or statement of the evidence, we must
conclusively presume that every fact admissible under the pleadings was found or should
have been found favorably to the appellee.” In re: Rockwell, 673 S.W.2d 512, 516 (Tenn.
Ct. App.1983) (citing Wilson v. Hafley, 189 Tenn. 598, 226 S.W.2d 308 (1949); Kyritsis v.
Vieron, 53 Tenn. App. 336, 382 S.W.2d 553 (1964)).
Because there is no transcript, nor a Tenn. R. App. P. 24(c), this Court must
conclusively presume the following, relevant facts as found by the trial court in its final
order:
On July 16, 1998, Norman Vann Thomas, Sr. had filed
with the Secretary of State of Tennessee a Certificate of Limited
Partnership for Orangeco, L.P..... Sometime after the
filing...Norman Vann Thomas, Sr. requested Catherine Maness
to place the certificate in the filing cabinet and advised her that
he was doing estate planning and that she and her siblings had
an interest in the limited partnership. On December 30, 1998,
Norman Vann Thomas, Sr. had filed with the Secretary of State
of Tennessee a Certificate of Limited Partnership for Whiteco,
L.P. Norman Vann Thomas, Sr. requested Catherine Maness to
place the certificate in the filing cabinet and again advised her
that he was doing estate planning and that she and her siblings
had an interest in the limited partnership. She had no further
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discussions with her father concerning Orangeco, L.P. or
Whiteco, L.P.
Prior to the death of Norman Vann Thomas, Sr., [none of
his children] had any relationship to Orangeco, L.P. or Whiteco,
L.P. After the death of Norman Vann Thomas, Sr., a check was
written [to the] escrow agent for Orangeco, L.P..... [Each of
Norman Vann Thomas, Sr.’s children] signed a receipt and
waiver on or about July 31, 2007 in which they acknowledged
being interest holders in Orangeco, L.P. and Whiteco, L.P.
[Each of the children] understood that the funds would be used
to reimburse Robert Thomas for his father’s funeral. Robert
Thomas received a check...in the amount of $15,000 on August
15, 2007 as reimbursement for the funeral expenses. These
funds were deposited into his personal bank account.... No other
evidence was presented to the Court.
* * *
After their father’s death, at which time the children believed
they were the beneficiaries of his estate, the children signed a
document which reflected that they were “interest holders” in
Orangeco, L.P. and Whiteco, L.P. Even the attorney who
drafted the document did not refer to them as partners.
Based upon these findings of fact, the trial court reached the legal conclusion that
Norman Vann Thomas, Sr.’s children were not partners in either Orangeco, or in Whiteco.
In its amendment to the final order, the court specifically found that neither Orangeco, nor
Whiteco were actual partnerships. This conclusion of law was based upon the trial court’s
factual finding that “there were no other partners in either [Whiteco or Orangeco] besides
Norman Vann Thomas, Sr.
The Tennessee Revised Uniform Limited Partnership Act, Tenn. Code Ann. §61-2-
101 et seq. (the “Act”) sets out the requirements for formation of a limited partnership in
Tennessee. It is well settled that “people wanting to form a limited partnership cannot just
stumble into one. The statutory requirements for becoming a limited partner are significant;
the benefit of limited liability exacts a price. ‘Generally, limited partnerships are creatures
of statute, and statutory compliance establishes their existence.’” In Re Taylor & Assoc.,
L.P., 249 B.R. 431, 467 (E.D. Tenn.1997) (quoting Hayes v. FPI Nursery Partners 1984-I,
No. 90-15224, 1991 WL 103447, at *3 (9th Cir. June 11, 1991)). Pursuant to the statutory
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scheme, formation of a limited partnership requires several actions: (1) the filing of a
properly executed certificate with the Secretary of State, Tenn. Code Ann. §61-2-201; (2) the
existence of one or more general partners and one or more limited partners, Tenn. Code Ann.
§61-2-101(8); and (3) an agreement between the partners, In Re: Estate of Threefoot, No.
W2005-02942, 2006 WL 3114147, *4(Tenn. Ct. App. Nov. 3, 2006). In the instant case, it
is undisputed that Norman Vann Thomas, Sr. filed certificates of limited partnership for both
Orangeco and Whiteco with the Secretary of State. However, as set out above, filing is only
one of the criteria for creating a partnership. Here, it is the second and third criteria that were
not met.
The Existence of One or More Limited Partners
Tenn. Code Ann. §61-1-101(6) defines a “partnership” as “[a]n association of two (2)
or more persons to carry on as co-owners of a business or other undertaking for profit....”
Likewise, Tenn. Code Ann. §61-2-101(8) defines “limited partnership” and “domestic
limited partnership” as “a partnership formed by two (2) or more persons under the laws of
the state of Tennessee, and having one (1) or more general partners and one (1) or more
limited partners....” By its definition, therefore, a partnership requires two or more persons
(or entities). From the trial court’s findings, it appears that Ms. Tanner did not present
evidence to establish that anyone, other than Norman Vann Thomas, Sr. or his children, were
partners in either Orangeco or Whiteco. As set out in its order, the trial court found that
neither Orangeco, nor Whiteco were partnerships because no one other than Norman Vann
Thomas, Sr. was involved in either entity.
Agreement Between the Parties
A partnership agreement is “... any agreement, written or oral, of the partners as to the
affairs of a limited partnership and the conduct of its business.” Tenn Code Ann. §
61-2-101(11). “Although [the Act ]does not require a written partnership agreement, see
Tenn. Code Ann. § 61-2-201(b), ‘[the Act] does implicitly presume that a limited partnership
will operate from some kind of agreement or understanding between the partners.’” In re
Estate of Threefoot, No. W2005-02942-COA-R3-CV, 2006 WL 3114147, *4 (Tenn. Ct.
App., Nov. 3, 2006) (quoting In Re Taylor & Assoc., L.P., 249 B.R. 431, 443 (E.D.
Tenn.1997)). While a partnership may be established by showing evidence of a written
partnership agreement or of an oral partnership agreement, where neither exists, a court may
imply the existence of a partnership. Bass v. Bass, 814 S.W.2d 38, 41 n. 3 (quoting 59A Am.
Jur. 2d, Partnership, §152 (1987)). As noted by the Taylor Court:
It is axiomatic that business associates, whether joint venturers,
partners, or limited partners, to a minimum degree jointly agree
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to and understand the purpose, intent, and goal of their business
relationship. Indeed, the partners of a limited partnership must
agree “as to the affairs of a limited partnership and the conduct
of its business.” See [T.C.A.] § 61-2-101(11) (defining a
partnership agreement).
In Re Taylor & Assoc., L.P ., 249 B.R. 431, at 443.
In the instant case, Ms. Tanner provided no evidence of a written or oral partnership
agreement, and the court found no evidence of a written or oral partnership agreement for
Orangeco or Whiteco. These findings are conclusive; therefore, if a partnership exists in this
case, it must be found by inference. “[T]he existence of a partnership may be implied from
the circumstances where it appears that the individuals have entered into a business
relationship for profit, combining their property, labor, skill, experience, or money.” Bass,
814 S.W.2d at 41. The burden of proof of the existence of a partnership is on the party who
alleges the partnership. Mullins v. Evans, 308 S.W.2d 494, 498 (Tenn. Ct. App.1957).
Moreover, clear and convincing evidence is required to establish an implied partnership.
Montgomery v. Montgomery, 181 S.W.3d 720, 726 (Tenn. Ct. App. 2005).
Ms. Tanner asked the trial court to imply that Orangeco and Whiteco were
partnerships between Norman Vann Thomas, Sr. and his children based solely upon the
evidence previously stated. The trial court refused to make such an inference, and Ms.
Tanner now asks this Court to reverse the trial court’s decision based upon these same facts.
Turning to the facts, it appears that Ms. Tanner’s argument for a partnership between
Norman Vann Thomas, Sr. and his children is based upon three actions: (1) the filing of the
certificates of limited partnership for Orangeco and Whiteco; (2) Norman Vann Thomas,
Sr.’s giving the certificates to his daughter, Catherine Maness, for filing and his statements
that the children had an “interest” in the partnerships; and (3) the children signing the receipt
and waiver acknowledging an interest in Orangeco and Whiteco, following their father’s
death. The trial court found, as a matter of fact, that each of the foregoing events occurred.
Given the absence of a transcript or statement of the evidence, we are bound by these
findings. Consequently, our task on appeal is to determine whether the trial court erred, as
a matter of law, in declining to infer a partnership based upon any, or all, of the facts as
stated in the final order.
Filing the Certificates of Limited Partnership
In her brief, Ms. Tanner seems to suggest that, because Orangeco and Whiteco
admitted, in their answer, that the alleged partnerships were organized under the Tennessee
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Limited Partnership Act, this statement in the answer somehow constitutes an admission that
both Orangeco and Whiteco are, in fact, partnerships. We disagree. In the first instance, it
is well settled that pleadings are not evidence. See, e.g., State v. Roberts, 755 S.W.2d 833,
836 (Tenn. Crim. App.1988). Regardless, from our review of Orangeco and Whiteco’s
answer, it appears that, at best, there was only an admission that the certificates were filed
with the State–a fact that the trial court found to be true. However, the trial court did not go
so far as to find that the filing of the certificates, ipso facto, resulted in the formation of a
partnership. The trial court’s conclusion was correct. As noted above, a partnership requires
at least two parties. The filing of a certificate of limited partnership, standing alone, is not
sufficient to establish a partnership absent compliance with the other statutory requirements.
See In re Estate of Threefoot, No. W2005-02942-COA-R3-CV, 2006 WL 3114147 (Tenn.
Ct. App. Nov. 3, 2006) Although Norman Vann Thomas, Sr. attempted to create a
partnership by filing the certificates, based upon the trial court’s finding that Norman Vann
Thomas, Sr. was the sole party involved, Mr. Thomas failed to create an actual partnership.
Catherine Maness’ Receiving and Filing the Certificates
The fact that Norman Vann Thomas, Sr. gave the certificates for Orangeco and
Whiteco to his daughter for filing is simply not sufficient to find a partnership. Moreover,
the fact that Norman Vann Thomas, Sr. informed his daughter that the children had an
“interest” in the alleged partnerships is also insufficient to form a partnership. As noted
above, Tenn. Code Ann. §61-1-101(6) defines a “partnership” as “[a]n association of two (2)
or more persons to carry on as co-owners of a business or other undertaking for profit....”
Under this definition, a partner must be a “co-owner” of the partnership. The Bass Court
clarified this requirement, stating that, in order for a partnership to exist in Tennessee, the
parties involved must have “entered into a business relationship for profit, combining their
property, labor, skill, experience, or money.” Bass v. Bass, 814 S.W.2d at 41. Under this
definition, the fact that Norman Vann Thomas, Sr.’s children had an “interest” in the alleged
partnerships is simply not sufficient to prove that they were in partnership with their father.
There is no evidence that any of the children took any action to combine their property, skills,
experience, or money with their father’s from the date that the certificates were filed in 1998
until the time of Norman Vann Thomas, Sr.’s death in July of 2007.
Receipt and Acknowledgment
Following their father’s death, the Thomas children signed a receipt and
acknowledgment concerning the reimbursement of funds to Robert Thomas for funeral
expenses. Ms. Tanner asserts that the children’s admission that they had an “interest” in
Whiteco and Orangeco indicates a partnership between themselves and Norman Vann
Thomas, Sr. We disagree. In the first instance, it is clear that any action by the children after
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their father’s death cannot form the basis of a partnership. Further, the fact that Robert
Thomas was reimbursed for his father’s funeral expenses from funds that were designated
for Orangeco was not evidence that Robert Thomas was a partner in that entity. Moreover,
the children became interest holders in the alleged partnerships upon the death of their father,
as the beneficiaries of his Estate. An interest holder, however, is not the same as a partner.
Based upon the foregoing, we conclude that the trial court was correct in finding that
there was not clear and convincing evidence in the record from which to infer the existence
of a partnership between Norman Vann Thomas, Sr. and any of his children. Therefore, we
affirm the order of the trial court. Costs of this appeal are assessed against the Appellant,
Sherry Tanner, and her surety.
_________________________________
J. STEVEN STAFFORD, JUDGE
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