Chevalier v. Woempner

• Decision Date: 18 December 2012
• Docket Number: No. 41711–1–II.,41711–1–II.
• Court: Washington Court of Appeals
• Parties: Gary E. CHEVALIER, a single person, Respondent, v. Gary WOEMPNER and Jane Doe Woempner, husband and wife, and the marital community comprised thereof; and Alki International, Inc., a Washington corporation, Appellants.

290 P.3d 1031

Gary E. CHEVALIER, a single person, Respondent,

v.Gary WOEMPNER and Jane Doe Woempner, husband and wife, and the marital community comprised thereof; and Alki International, Inc., a Washington corporation, Appellants.

No. 41711–1–II.

Court of Appeals of Washington,

Division 2.

Dec. 18, 2012.

Charles Williamson Talbot, Attorney at Law, Peter Thomas Petrich, Attorney at Law, Rebecca Marie Larson, Davies Pearson PC, Tacoma, WA, for Appellants.

Timothy A. Reid, Attorney at Law, Issaquah, WA, for Respondent.

VAN DEREN, J.

¶ 1 Gary Woempner appeals the trial court's award of $96,122.75, plus $137,089.48 in prejudgment interest, to Gary Chevalier for a 49 percent interest in Alki International Inc., Woempner's solely-owned corporation. In his initial briefing, Woempner argued that (1) substantial evidence did not support the finding that Woempner and Ronald Bequette entered into a partnership agreement; (2) the corporate form of Alki precluded a finding that a partnership existed; and (3) any partnership agreement was void for illegality. After oral argument and our examination of the record, we asked the parties for additional briefing and evidence relating to Bequette's alleged ownership of an option interest in Alki that Chevalier claims was the basis of a partnership purchase from Bequette. Based on our review of the record, we hold that Bequette's sale to Chevalier of “49 Shares of Option for Alki Int'l” in 1996 did not convey any property interest to Chevalier because no evidence supports Bequette's ownership of 49 shares of an option in Alki. Ex. 24. We also hold that RCW 25.05.055 precludes a finding that Bequette had a partnership interest in Alki. Accordingly, we reverse the trial court's finding that Chevalier owns an interest in Alki and vacate the resulting judgment in Chevalier's favor.

FACTS

¶ 2 The facts of this case were highly contested at trial and testimony focused on whether Bequette and Woempner formed a partnership absent any written evidence of a partnership agreement and whether that alleged partnership superseded or somehow owned Woempner's solely-owned corporation, Alki International. At times, the witnesses contradicted their earlier testimony but at trial, Bequette maintained that he formed a partnership with Woempner and then sold his interest in the partnership to Chevalier for over $50,000, entitling Chevalier to one half of Woempner's corporation.

¶ 3 Chevalier admitted that he knew nothing about the formation of a partnership but maintained that his payment to Bequette entitled him to an ownership interest in Alki even though (1) he never saw any evidence that Bequette owned any interest in Alki, (2) Chevalier worked solely as an employee of Alki, (3) Chevalier claimed unemployment benefits from the company as an employee after April 1999, and (4) nothing changed in his work for Alki after he paid Bequette. Woempner denies that there was any partnership formed with Bequette at any time.

¶ 4 Woempner testified that he owned two moving and storage' companies: Perry Moving and Storage Company Inc. and Ace Van and Storage Co. Inc. His companies conducted the actual transportation for Bequette's freight forwarding businesses: Admiral Forwarders Inc., and Alderwood Freight Forwarders Inc. ¹ In the 1990s, Woempner began to consider entering the freight forwarding business.

¶ 5 Bequette has worked in the international freight forwarding business since 1985; and his freight forwarding companies work for the United States Armed Forces and arrange for the shipment of household goods and belongings when military personnel are transferred from one duty station to another.

¶ 6 In 1993, Admiral hired Chevalier. In 1994, Chevalier wanted to become involved in the international freight forwarding business as an owner and he discussed his desire to do so with Bequette. During their discussion, Bequette and Chevalier concluded that Chevalier would not be able to start his own business because he did not have enough assets to obtain a surety bond. ²

¶ 7 Bequette contacted Woempner and discussed Woempner's desire to start a freight forwarding company. Woempner, Chevalier, and Bequette had a lunchtime conversation wherein Bequette suggested that he and Woempner start a new freight forwarding business; According to Chevalier, Alki was not formed at that lunch, and Bequette stated that an agreement “didn't come to fruition in any single event” but in a series of subsequent telephone conversations. Report of Proceedings (RP) (Oct. 21, 2003 afternoon session) at 33. There were no other face-to-face meetings between Woempner and Bequette and no formal agreement was reached regarding Bequette's participation in Alki at the restaurant meeting. Chevalier was not involved in any other conversations with Bequette and Woempner about forming a partnership.

¶ 8 Woempner denied any discussion that suggested that he would be a partner with Bequette or Chevalier, and he emphasized that if Bequette were to have an interest in another freight forwarding company, it would violate the rules applicable to these companies shipping for military families.³ He agreed to have Chevalier be the office person for the new company he started.

¶ 9 Bequette testified that he proposed that the business be in Woempner's name with Bequette as a silent partner, advising Woempner who to contact and how to comply with license requirements. Bequette's name was not to appear on any documents relating to the business. Chevalier would run the day-to-day operations and, eventually, buy Bequette's share of the company. Bequette first testified that there was no discussion about the division of profits, but later said that Alki's profits were to be split 50/50 until his sale. There is no written documentation of an agreement between or among Chevalier, Bequette, or Woempner. There is no evidence that Woempner ever split profits with Bequette.⁴

¶ 10 Woempner hired legal counsel in Washington, D.C., to assist in filling out the application to obtain a license for the freight forwarding business; he also paid $7,500 in license fees. Bequette's companies, Alderwood and Admiral, contributed money to assist in the formation of Alki and Woempner repaid Admiral and Bequette for the costs advanced.

¶ 11 Woempner drafted the articles of incorporation for Alki, and on March 25, 1994, he filed the articles of incorporation with the secretary of state for the State of Washington. The principal office of the corporation was listed as Tacoma, Washington, but the Alki office operated out of Bothell, in the same building as Bequette's companies. Woempner's name is the only name that appears on Alki's articles of incorporation. The bylaws, dated May 20, 1994, listed Woempner as president and secretary of Alki. The corporate tax returns show only Woempner as the owner and the Alki bank accounts, as well as an A.G. Edwards account, were in only Woempner's name. Woempner never issued share certificates in Alki.

¶ 12 Bequette agreed to sell Chevalier his interest in Alki for $50,750. Bequette and Chevalier executed a written contract in 1996 entitled “49 Shares of Option for Alki Int'l” under which Chevalier and Bequette maintain Chevalier purchased 49 percent of Alki for $50,750, plus interest. Ex. 24 (emphasis added). No money from this sale went to the corporation or. Woempner and Woempner never signed any acknowledgement, nor did the corporate documents reflect the addition of another owner. The record does not reveal any testimony or evidence relating to Bequette's ownership or interest in any shares or an option for any shares in Alki.

¶ 13 In April 1999, Chevalier sued Woempner and Alki, seeking a declaratory judgment as to his rights and status with regard to his claimed ownership in Alki and alleging breach of contract and breach of fiduciary duties. The trial court concluded that Bequette's and Woempner's association created a partnership at will; that the written agreement conveying “49 Shares of Option for Alki Int'l” to Chevalier “reflected the parties' intent that Chevalier would purchase a 49% interest in Alki”; and that from April 1, 1996 to February 1999, Chevalier was entitled to 49 percent of the profits of Alki. Ex. 24 (emphasis added); Clerk's Papers at 177 (emphasis added). The trial court concluded that (1) Woempner exercised his right to dissociate himself from the partnership when he told Chevalier that he did not have an interest in Alki and (2) Woempner's exercise of his right to dissociate himself required dissolution of the partnership and a winding up of its business affairs under RCW 25.05.300. The trial court dismissed all claims against Bequette.

¶ 14 On August 9, 2010, a second trial was held to determine the value of Chevalier's interest in Alki from April 1, 1996, through February 1999. On January 14, 2011, the trial court awarded Chevalier $96,122.75 for his share of the Alki partnership and $137,089.48 in pre-judgment interest. Woempner appeals.⁵

ANALYSIS

I. Standard of Review

¶ 15 We review a trial court's findings of fact and conclusions of law to determine whether substantial evidence supports the findings and, if so, whether the findings support the trial court's conclusions of law. Scott v. Trans–Sys., Inc., 148 Wash.2d 701, 707–08, 64 P.3d 1 (2003). Substantial evidence is the “quantum of evidence sufficient to persuade a rational fair-minded person the premise is true.” Sunnyside Valley Irrigation Dist. v. Dickie, 149 Wash.2d 873, 879, 73 P.3d 369 (2003). We review conclusions of law de novo. Sunnyside Valley, 149 Wash.2d at 880, 73 P.3d 369. “Appellate courts do not hear or weigh evidence, find facts, or substitute their opinions for those of the trier-of-fact. Instead, they must defer to the factual findings made by the trier-of-fact.” Quinn v. Cherry Lane Auto Plaza, Inc., 153 Wash.App. 710, 717, 225 P.3d 266 (2009).

II. The Operative Document

¶ 16 The parties focus their arguments on the...