Ashley Stephens, Special Administrator of the Estate of Randall D. Stephens, Appellant,
Cindy L. Ainsworth, Executrix of the Estate of William J. Lewis Jr., Appellee.
BY THE COURT
appellate court reviews a district court's findings of
fact to see whether they are supported by substantial
evidence, which we define as evidence that a reasonable
person might accept as sufficient to support a conclusion.
determining whether substantial competent evidence supports
the district court's findings, an appellate court must
accept as true the evidence and all the reasonable inferences
drawn from the evidence which support the district
court's findings and must disregard any conflicting
evidence or other inferences that might be drawn from it. An
appellate court does not reweigh the evidence or assess the
credibility of witnesses.
partnership is broadly defined as "an association of two
or more persons to carry on as co-owners a business for
profit." K.S.A. 56a-101(f). The 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.
Where no partnership agreement is shown the Kansas Revised
Uniform Partnership Act (RUPA) governs relations among the
partners and between partners and the partnership.
Property is partnership property if acquired in the name of
(1) the partnership; or (2) one or more partners with an
indication in the instruction transferring title to the
property of the person's capacity as partner or of the
existence of a partnership but without an indication of the
name of the partnership.
Property is presumed to be partnership property if purchased
with partnership assets, even if not acquired in the name of
the partnership or one or more partners with an indication in
the instrument transferring title to the property of the
person's capacity as a partner or of the existence of a
Property is presumed to be separate property, even if used
for partnership purposes, if acquired in the name of one or
more of the partners, without an indication in the instrument
transferring title to the property of the person's
capacity as partners or of the existence of a partnership,
and without use of partnership assets.
determining factor in these competing presumptions under the
facts of this case is whether the property was purchased with
partnership assets. The presumption that the property is
partnership property can apply even when the partnership
provides only a portion of the purchase price.
creates a rebuttable presumption that property acquired with
partnership funds is partnership property. Similarly,
RUPA's presumption of separate property is rebuttable. In
determining whether a party has rebutted either presumption
no single factor or combination of factors is dispositive.
Ultimately, the partners' intentions control whether
property belongs to the partnership.
court determines the intent of the parties by considering all
the pertinent facts and circumstances of record.
Factors to aid in determining the partners' intent
regarding a partnership's ownership of property include:
(1) the language of any partnership agreement; (2) the use of
the property in the partnership business; (3) the listing of
the property as an asset and of its mortgage as a liability
in the partnership books and tax returns; (4) the
construction of improvements on the property at partnership
expense; (5) the payment of taxes and insurance premiums on
the property out of partnership funds; (6) a party's
declaration of intent accompanying his act of entering the
partnership; (7) the parties' conduct with respect to the
property; (8) the attribution of profits or losses from the
property to the partnership; (9) the use of partnership funds
to maintain the property; (10) whether partnership books and
accounts treat property as partnership property; and (11) the
parties' statements, conduct, and writings when the
property was acquired.
joint tenancy may be terminated by a party's action
indicating his or her intent that the property no longer be
owned as joint tenants. When dealing with real property owned
by two individuals as joint tenants with rights of
survivorship, one of the joint tenants may sever the joint
tenancy by unilaterally executing a quitclaim deed to himself
from Elk District Court; Charles M. Hart, judge.
Knopp, of Ted E. Knopp, Chtd., of Wichita, for appellant.
D. Bogle, of Young, Bogle, McCausland, Wells & Blanchard,
P.A., of Wichita, for appellee.
Gardner, P.J., Atcheson and Powell, JJ.
case asks us to determine who owns a cabin and 120 acres of
land in Elk County. That property was purchased by Randall D.
Stephens and William J. Lewis Jr., both of whom are deceased.
The appellant is the administrator of Stephens' estate,
and the appellee is the executor of Lewis' estate but for
ease of reference we refer to the parties as Stephens and
Lewis. The district court ruled that the Elk County property
was never partnership property so it passed to Lewis under
the deed when Stephens died. Stephens appeals arguing that
the Elk County property was partnership property under
Kansas' partnership statutes and was awarded to him in
the partnership dissolution. Although the facts pose a close
question, we uphold the district court's decision.
and Procedural Summary
and Stephens became friends in the 1970s and later married
sisters. In the early 1990s, each had separate businesses.
Lewis created Cytech and Stephens started a business called
In-Tech. In-Tech moved into Cytech's building and
operated there until 2003. In 1994, Lewis and Stephens
started a general contracting business together for the
primary purpose of building metal structures and began doing
business as High Plains Construction. High Plains operated
out of Cytech's building. Lewis and Stephens'
partnership in High Plains, which is the focus of this case,
was oral-no partnership agreement existed.
1995, Lewis and Stephens decided to build a cabin on land in
Elk County owned by a mutual friend, Brian Schreck, after a
previous farmhouse on Schreck's property burned down. The
parties had used that property for hunting and recreation, as
had their fathers before them. The new cabin was used for the
mutual recreational use of the three friends and their
guests. Lewis and Stephens bought 80 acres adjacent to the
cabin in 1997, then purchased the 40-acre parcel that
included the cabin in 2000.
and Stephens titled both parcels of land in their names
personally as joint tenants with rights of survivorship
without any mention of High Plains or any partnership and
without any reference to themselves as partners. O'Rourke
Title in Wichita prepared the deeds. The title agent for both
closings advised Lewis and Stephens at closing that they were
taking title as joint tenants with rights of survivorship and
not as tenants in common. Lewis testified that he and
Stephens wanted to take title to the land personally because
they had no business or profit purpose in the property and it
was intended for their personal recreational enjoyment.
record does not reflect a specific date of dissolution of the
partnership, but Lewis appears to have withdrawn from the
partnership sometime between 2000 and 2003. Lewis testified
that he ended his involvement in High Plains in 2000 or 2001
but that High Plains did business until around 2003. High
Plains' last tax return was filed in 2003. Stephens
concedes that the partnership was liquidated as early as 2001
and was wound up by 2004. Stephens' daughter testified
that Lewis and Stephens were "severely acrimonious"
by 2002 and High Plains dissolved then. She is likely
correct. A partnership is dissolved where, among other
circumstances, it is not reasonably practicable to carry on
the partnership in conformity with the partnership agreement
or with the business relationship between the partners.
Dissolution in such a case is an equitable solution to the
situation where "bitter and antagonistic feeling between
partners has developed to the point that the partners cannot
continue the partnership to their mutual advantage."
Wallace v. Sinclair, 114 Cal.App. 2d 220, 228, 250
P.2d 154 (1952).
dissolution, Lewis or Cytech owed High Plains, Stephens, and
In-Tech $140, 000 or more. All High Plains assets were
divided and distributed by acquiescence of the partners, and
all of High Plains' liabilities were settled. The record
does not reflect the date at which all partnership affairs
were wound up, but it was likely within a reasonable time
Stephens died in 2013 the Elk County property soon became the
subject of litigation, with Stephens' family and Lewis
both claiming exclusive ownership. Lewis sought possession of
the property in accordance with his right as survivor under
the deeds to the land since both deeds named Lewis and
Stephens as joint tenants with the right of survivorship and
made no reference to any partners or partnership.
Stephens' family sought possession of the property as
partnership property which had previously been distributed
solely to Stephens, who had been residing on the property.
bench trial, the district court found that the Elk County
property was never partnership property but was instead
governed by the deed to the land, thus it had been owned
individually by Lewis and Stephens as joint tenants with
right of survivorship. As a result, the district court
awarded the property to Lewis in 2016 as the surviving joint
tenant. Lewis died in 2017. The administrator of
Stephens' estate appeals.
contends that the district court failed to consider the
proper characteristics of partnership property from the
Uniform Partnership Act (UPA) of 1914 and the Revised Uniform
Partnership Act of 1997 (RUPA)-both of which were effective
at different times during the property transactions. He also
contends that the court erred by focusing too much on whether
the property served a business purpose and that the statute
of limitations bars Lewis from relitigating the partnership
debt and distribution of partnership property to Stephens.
review the district's court's findings of law de
novo, meaning we give them no deference. Gannon v.
State, 298 Kan. 1107, 1176, 1182, 319 P.3d 1196 (2014).
But the district court's determination that the property
was not partnership property is a finding of fact, made after
an evidentiary bench trial. On appeal, we ask whether the
district court's findings of fact are supported by
substantial evidence, which we define as evidence that a
reasonable person might accept as sufficient to support a
conclusion. Gannon, 298 Kan. at 1175. "Findings
that are supported by substantial evidence will be upheld by
an appellate court even though evidence in the record would
have supported contrary findings." Chowning v.
Cannon Valley Woodwork, Inc., 32 Kan.App.2d 982, 987, 93
P.3d 1210 (2004):
"'In determining whether substantial competent
evidence supports the district court's findings,
appellate courts must accept as true the evidence and all the
reasonable inferences drawn from the evidence which support
the district court's findings and must disregard any
conflicting evidence or other inferences that might be drawn
from it. Accordingly, appellate courts do not reweigh the
evidence or assess the credibility of witnesses. [Citations
omitted.]'" Gannon v. State, 308 Kan. 372,
382, 420 P.3d 477 (2018).
this court refrains from weighing conflicting evidence,
assessing witness credibility, or redetermining questions of
fact, this standard of review can be outcome-determinative
where, as here, the record contains conflicting evidence.
partnership statutes apply here?
and Lewis had no written partnership agreement and loosely
operated High Plains as a d/b/a. But the facts show they
nonetheless established a partnership, broadly defined as
"an association of two or more persons to carry on as
co-owners a business for profit." K.S.A. 56a-101(f). The
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). Such
is the case here. Lewis and Stephens entered a business
relationship to construct metal structures for profit,
combining their property, experience, or money in High
inquiry focuses on whether the Elk County property was
partnership property. Because the parties had no partnership
agreement to govern this determination, the RUPA governs:
"To the extent the partnership agreement does not
otherwise provide, this act governs relations among the
partners and between partners and the partnership."
defines partnership property in four subsections of K.S.A.
56a-204. The first two provide:
"(a) Property is partnership property if acquired in the
(1) The partnership; or
(2) One or more partners with an indication in the
instruction transferring title to the property of the
person's capacity as partner or of the existence of a
partnership but without an ...