J. KENNETH ORMS,FROM A DISTRICT COURT APPELLANT, v. JOHN A. HOWE AND EDP ASSOCIATES, INC., A TEXAS CORPORATION, APPELLEES

 
COURT OF APPEALS
FIFTH DISTRICT OF TEXAS
AT DALLAS
 
NO. 05-88-01054-CV
 
J. KENNETH ORMS,FROM A DISTRICT COURT
 
        APPELLANT,
 
v.
 
JOHN A. HOWE AND EDP
ASSOCIATES, INC.,
A TEXAS CORPORATION,
 
        APPELLEES.OF DALLAS COUNTY, TEXAS
 
 
BEFORE JUSTICES STEWART, ROWE AND OVARD
OPINION BY JUSTICE OVARD
AUGUST 4, 1989
 
        Appellant, J. Kenneth Orms, appeals a summary judgment in favor of appellees, John A. Howe and EDP Associates, Inc. (Howe/EDP). This suit arose out of an alleged oral partnership agreement between Orms and Howe/EDP. On appeal, Orms complains that the trial court erred in granting the Howe/EDP's separate summary judgment motions because: 1) Howe/EDP's summary judgment motions did not address Orms' claim of constructive trust; 2) material fact issues exist as to whether the oral partnership agreement came within the statute of frauds; and (3) genuine issues of material fact exist regarding issues of agency, fraud and the formation of a partnership between Orms and Howe/EDP. We agree with these contentions and reverse and remand this case for a trial on the merits.
        In 1986, Orms, an employee of Boeing Computer Services, a division of Boeing Company, approached Howe regarding the acquisition of a computer software package known as "RIM." Howe was president, sole shareholder, and sole director of EDP Associates, Inc., a newly formed shell corporation. Howe agreed that if Orms performed certain prerequisites, Howe/EDP would consider working with Orms to purchase and market RIM. Howe/EDP claim that Orms failed to perform the prerequisites and the business relationship failed. Orms claims that after introducing Howe/EDP to the RIM business opportunity and performing services to help the partnership acquire RIM, Howe/EDP repudiated the partnership and misappropriated partnership property consisting of the RIM software product.
        On May 27, 1987, Orms brought suit against Howe individually, alleging breach of the partnership agreement, constructive trust, and alter ego theories. The trial court entered a summary judgment against Orms on February 16, 1988, but granted Orms a new trial on April 11, 1988. Orms added EDP as a defendant to the suit by amendment. Both defendants, Howe and EDP, filed separate motions for summary judgment on April 18, 1988 and May 24, 1988, respectively, which the trial court granted. On July 13, 1988, the trial court entered a final judgment in favor of Howe/EDP, from which Orms appeals.
        Under rule 166-A of the rules of civil procedure, summary judgment may be rendered only if the pleadings, depositions, admissions, and affidavits, show 1) that there is no genuine issue as to any material fact and 2) that the moving party is entitled to judgment as a matter of law. Gibbs v. General Motors Corp., 450 S.W.2d 827, 828 (Tex. 1970). In a summary judgment case, the question on appeal is not whether the summary judgment proof raises a fact issue with reference to the essential elements of a cause of action, but whether the summary judgment proof establishes as a matter of law that there is no genuine issue of fact as to one or more of the essential elements of the cause of action or defense. Id. A defendant who moves for summary judgment has the burden of showing, as a matter of law, that no material issue of fact exists as to the plaintiff's cause of action. See Arnold v. National County Mutual Fire Ins. Co., 725 S.W.2d 165, 167 (Tex. 1987). A summary judgment for the defendant disposing of the entire case is proper only if, as a matter of law, plaintiff could not succeed upon any theories pleaded. Delgado v. Burns, 656 S.W.2d 428, 429 (Tex. 1983). A defendant moving for summary judgment must conclusively prove all elements of his defense as a matter of law. Odeneal v. Van Horn, 678 S.W.2d 941 (Tex. 1984). In reviewing the propriety of a summary judgment, this Court must accept as true the non-movant's version of the facts adduced through summary judgment proof and indulge every reasonable intendment in the non-movant's favor. Nelson v. Krusen, 678 S.W.2d 918, 919 (Tex. 1984); Williams v. Bennett, 610 S.W.2d 144, 145 (Tex. 1980). We address Orms' points of error using the above summary judgment standards.
A. CONSTRUCTIVE TRUST
        Orms contends, in his first point of error, that the trial court erred in granting the summary judgment motions in favor of Howe/EDP because the summary judgment motions did not address Orms' claim of constructive trust. Orms filed an amended petition against Howe/EDP on April 19, 1988, alleging a claim for a constructive trust. Howe/EDP filed separate motions for summary judgment.
        The grounds on which Howe/EDP's motions for summary judgment are based do not address the constructive trust claim or show, as a matter of law, that no material issue of fact exists as to Orms' constructive trust claim. In the absence of a showing by Howe/EDP that no material fact issue exists as to the constructive trust claims, Orms should be allowed to present evidence to prove the existence of a constructive trust.
        We hold Howe/EDP did not meet their burden of proof to entitle them to the granting of a summary judgment on the constructive trust issue. The trial court's grant of summary judgment in favor of Howe/EDP "on all claims of Plaintiff J. Kenneth Orms" was, therefore, erroneously granted. We affirm Orms' first point of error.
B. STATUTE OF FRAUDS
        In his fourth point of error, Orms contends the trial court erred in granting Howe/EDP's motions for summary judgment because genuine issues of material fact exist as to whether the oral partnership agreement came within the statute of frauds. Howe/EDP asserted, in their motions for summary judgment, that enforcement of the oral partnership agreement was barred by the statute of frauds, because the partnership could have lasted longer than one year. See TEX. BUS. & COM. CODE ANN. § 26.01 (Vernon 1987). The agreement contained no stipulation as to duration and Howe/EDP argue that a "reasonable duration" implies that the agreement would last for more than one year. Orms argues that the agreement could have been limited to six months or even dissolved within a matter of weeks.
        If an oral contract can be performed within one year under its terms, it is not within the statute of frauds. Miller v. Riata Cadillac Co., 517 S.W.2d 773, 775 (Tex. 1974). Even if the parties contemplated that an agreement was to extend beyond a year, unless there is a showing that the agreement itself provided for a period extending beyond a year, an oral partnership agreement for an indefinite period of time will not be within the statute of frauds. Boutell v. Hill, 498 S.W.2d 713, 714 (Tex. Civ. App.--El Paso 1973, no writ).
        Howe/EDP had the burden to prove that their statute of frauds defense entitled them to summary judgment as a matter of law. In reviewing the summary judgment evidence, we must accept as true Orms's version of the facts. Orms claims that the partnership agreement could have been performed in less that one year. To support a summary judgment, Howe/EDP had to prove to the trial court, as a matter of law, that the agreement would extend beyond one year and, thus, come under the statute of frauds. We hold that Howe/EDP did not meet their burden of proof. We affirm Orms' fourth point of error.
 
C. MATERIAL FACT ISSUES
        
 
        Orms claims, in his third point of error, that genuine issues of material fact exist regarding the formation of a partnership between Orms and Howe/EDP. FN:1
        The Texas Uniform Partnership Act defines "partnership" as an association of two or more persons to carry on as co-owners of a business for profit. TEX. REV. CIV. STAT. ANN. art. 6132b §6(1) (Vernon 1970). Whether a particular association can be characterized as a partnership depends largely on the intention or understanding of the parties involved. Vaudouris v. Walter E. Heller & Company, 560 S.W.2d 202, 206 (Tex. Civ. App.--Houston [1st Dist.] 1977, no writ).
        The intention to do the things that constitute a partnership determines the relationship existing between the parties. Shindler v. Marr & Assocs., 695 S.W.2d 699, 704 (Tex. Civ. App.--Houston [1st Dist.] 1985, writ denied). The intentions are derived from the conduct of the parties and may be oral or written, express or implied. Id. The trial court record shows the following evidence regarding the parties' intent to form a partnership:
    --    Orms and Howe were engaged in an association from December 1986 to April 1987, to acquire and market the RIM product.
 
    --    In December, 1986, Howe expressly told Orms that he would like to be Orms' partner.
 
    --    Orms and Howe discussed a "50/50" partnership at length, including specific conditions of the partnership and what would happen if one of the parties died.
 
    --    On April 1, 1987, Orms resigned his job at Boeing as conditioned by his alleged partnership with Howe.
 
    --    Several employees at Boeing, including Orms' boss, were under the impression that Orms and Howe intended to become partners.
 
    --    Documents were produced by both parties that required the signature of both Orms and Howe as "partners."
 
    --    Both parties produced various memos and personal notations referring to the alleged partnership.
 
    --    Orms tape recorded, without Howe's knowledge, a conversation between the two parties pertaining to the termination of the alleged partnership.
 
    --    Both parties prepared market reports on the RIM product, as well as documents planning a sales staff for the "firm" and setting out the salaries of both Orms and Howe.
 
    --    Orms prepared a mailing list of potential clients which Howe paid to have typed.
 
    --    The parties designed business cards and had them produced.
 
    --    The parties made separate business trips conducting preliminary inquiries and soliciting business for the alleged partnership.
 
    --    In April, 1987, Howe called the partnership off, admitted to Orms that he "owed" Orms something and negotiated with Orms a stock purchase agreement. In addition, a promissory note for $100,000 payable to Howe by Orms was produced.
        In deciding whether a material fact issue exists in this case, we must view the evidence in a light most favorable to Orms, as non-movant. We hold that a genuine issue of material fact existed as to the formation of a partnership and Orms was entitled to a trial on the merits. We affirm Orms's first, third and fourth points of error. Accordingly, we reverse and remand.
                                                  
                                                  JOHN OVARD
                                                  JUSTICE
 
DO NOT PUBLISH
TEX. R. APP. P. 90
88-01054.F
 
 
FN:1 Orms asserts, in his second and fifth points of error, that genuine issues of material fact exist as to issues of agency and fraud. We need not address these points, on appeal, because the other three points constitute reversible error. A proper trial in this case will consider all the issues.
File Date[01-02-89]
File Name[881054F]