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CalAttorney2, Attorney
Category: Legal
Satisfied Customers: 10244
Experience:  Civil litigation attorney for individuals and businesses.
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I am being sued by a fellow sales rep who is alleging that

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I am being sued by a fellow sales rep who is alleging that we are business partners. I have worked for the same manufacturer for over 20 years. I am a 1099 independent sales contractor. 6 years ago I asked the CEO of the manufacturing company if we could bring another independent rep to help with a large acct I opened. He agreed and after a falling out resulting from many issues including a alcohol problem, it was decided to terminate her. We worked jointly on the accountant and shared commissions. The manufacturer paid each of us every month directly. We had no joint bank accounts, did not file 1065s or K1 and she filed in the state of Washington as a sole proprietor. The manufacturer paid and invested millions in marketing and other expenses on the acct although she and I did split fuel and traveling expenses when traveling together. How can I prove that we never entered into any business partnership and were only paid wages in the form of commissions from the manufacturer?

William B. Esq. :

Dear Customer, thank you for choosing Just Answer. I would like to assist you with you legal question today.

William B. Esq. :

If I understand your situation properly, the burden is actually on the other person to prove that a partnership existed - not on you. This changes the way in which you need to approach the issue and the evidence.

William B. Esq. :

While partnership law allows for two individuals to create a partnership informally, or can even find a partnership where the parties never came up with any type of partnership agreement, it does not create a partnership in every situation where two people work together, even if they are working towards a common goal. The facts and evidence that you identify (or lack thereof) are the exact issues you should raise throughout litigation to show that no partnership was ever formed and to bring out the true nature of your relationship.

Customer: How would she be able to prove this
William B. Esq. :

She would need to prove that the two of you were using mutual funds, resources, or time to reach a common goal, with an intent to split the benefits of that goal. (Roughly). In your situation that is simply not the case. The two of you were working alongside one another, but the goal was for commission based sales from the manufacturer which were paid directly to each of you.

William B. Esq. :

While it is helpful to have an attorney to assist you, if you are unable to retain one, make sure you make full use of the civil litigation discovery process, and serve written interrogatories, document demands, and perhaps take the plaintiff's deposition. These demands will force the other side to show what facts and documents they are relying on to prove their case, and perhaps give you the information necessary to build your defense.

Customer: Have you ever heard of a case like this?
William B. Esq. :

Yes, unfortunately some individuals attempt to take advantage of others in new or creative ways. However, the Courts do have ways to deal with very distinct cases such as the facts you have posted. You may be able to deal with this in a motion to strike, a motion for judgment on the pleadings, or a motion for summary judgment (all ways to win your case before trial).

Customer: Really, is there a chance of that? We truly were just independent reps and I'm having a difficult time figuring out how she is thinking we were in some sort of legal business partnership. Is there anyway the courts will say that split commissions constitutes a partnership? The manufacturer paid the cost of marketing the products, spending millions over the last 6 years. They own the account and make all decisions reguarding it. We also had offices at their factories which they paid for.
William B. Esq. :

From what you describe, I don't see a partnership arrangement at all. But just because I don't believe there is a claim doesn't mean that she cannot file a lawsuit. The fact that your defense is so clear is why your chances of defending it in one of those motions that I mentioned is very high.

Customer: Have you heard of of 2 sales reps splitting commissions before?
William B. Esq. :

Yes, it happens quite regularly, even with independent contractors.

Customer: Lawsuits you mean?
William B. Esq. :

That is not what I was referring to, but yes, two sales reps suing one another over commissions does happen, although it happens less regularly, whether they do it under the guise of a partnership lawsuit, reimbursement for expenses, or some other form is sort of immaterial, they just try to find the best legal "cause of action" to get into court (assuming these cases are truly without merit, some are).

Customer: Can you think of anything else that might help? I appreciate your help and will rate you positively and tip you as well
William B. Esq. :

I would at least get a brief consultation from a local attorney - to have them review your papers and see if they can help you come up with a strategy (let them know what you are asking when you contact them, not all attorneys are willing to give an informative consultation, many are only willing to give intake ones). Also, if you have only just received your complaint, you may be able to consider a demurrer or a motion to strike (both of these procedural motions require quite a bit of legal experience (or the willingness to put in a lot of research time)) so an attorney would be especially helpful here. If you are past this stage - focus on your discovery, and make sure you make full use of your written interrogatories and request for production of documents (it is unlikely she has anything of substance to back up her claims in the complaint, and you can move for a motion for judgment on the pleadings).

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Customer: replied 4 years ago.
Thank you so much!!