Voltz v. Dudgeon, 10317

• Decision Date: 26 May 1983
• Docket Number: No. 10317,10317
• Citation: 334 N.W.2d 204
• Parties: Jeffrey A. VOLTZ, Plaintiff and Appellee, v. James DUDGEON, Defendant and Appellant. Civ.
• Court: North Dakota Supreme Court

Page 204

334 N.W.2d 204

Jeffrey A. VOLTZ, Plaintiff and Appellee, v. James DUDGEON, Defendant and Appellant.

Civ. No. 10317.

Supreme Court of North Dakota.

May 26, 1983.

Submitted by Dan Plambeck, Fargo, of Stefanson, Landberg & Alm, Moorhead, Minn., for defendant and appellant.

Scott A. Griffeth (argued), of Fay & Griffeth, West Fargo, for plaintiff and appellee.

PAULSON, Justice.

James Dudgeon [Dudgeon] appeals from a judgment of the District Court of Cass County entered on June 2, 1982, awarding Jeffrey A. Voltz [Voltz] the sum of $1,333.29. We affirm.

In early 1978, Voltz, who was primarily engaged in the business of farming, purchased a 1969 Mack truck for the purpose of hauling grain under the name of Voltz Trucking. Voltz subsequently hired Dudgeon in July of 1978 to transport grain shipments. It was mutually agreed that Dudgeon be compensated at the rate of $80 for each load of grain that he hauled.

Shortly thereafter, Voltz and Dudgeon determined that there was a greater opportunity to make money if two trucks were operated, so a used Kenworth truck was purchased. Although the truck was purchased in the name of Voltz Trucking, both Voltz and Dudgeon signed the purchase agreement. Dudgeon's brother was hired as an additional driver.

During the period of time in which the Kenworth truck was operated by the parties, the business records pertaining to the Kenworth truck were maintained by Dudgeon's wife and kept at the Dudgeon home. The business was not operated out of any fixed location and the trucks were parked where the drivers lived. Dudgeon was responsible for overseeing the operation of the Kenworth truck, including payment of all bills incurred in its maintenance. Dudgeon was authorized to write checks on the Voltz Trucking checking account without having to seek prior approval from Voltz. According to Dudgeon, he did seek Voltz's approval when funds were low in the checking account. The evidence also reveals that Dudgeon withdrew his own compensation from the account from time to time, if there were sufficient funds in the account.

Following the purchase of the Kenworth truck, the Mack truck was involved in a collision and Voltz discontinued its operation, thus leaving the Kenworth truck as the only operative vehicle under the name of Voltz Trucking. It was subsequently discovered that there was a discrepancy in serial numbers pertaining to the Kenworth truck and that it was not the vehicle identified in the retail installment contract. As a result, the Kenworth truck was returned to the seller. This left Voltz Trucking with no trucks to operate.

In a complaint dated March 11, 1981, Voltz brought suit against Dudgeon, alleging that a partnership existed between the parties and that Dudgeon was responsible for one-half of the expenses incurred during the course of the business. Voltz further alleged that Dudgeon made an unauthorized loan from the Voltz Trucking account to a third person and that he was responsible to repay the loan. Voltz also alleged that Dudgeon received funds over and above his compensation for wages. Voltz's prayer for relief requested actual damages of $2,839.43, as well as costs, disbursements, and attorney fees.

The district court concluded that a joint venture existed between the parties. ¹ The court determined that Dudgeon used $455 of Voltz Trucking funds, over and above his compensation, for his personal rent, and that $255 of that sum was never reimbursed to the account. The court also determined that fender attachments were purchased for the Kenworth truck from Voltz Trucking funds, which were removed and retained by Dudgeon, and which Dudgeon claimed were subsequently stolen. The account was never reimbursed and the trial court found Dudgeon to be one-half responsible for their cost of $93.58. The court further determined that Dudgeon was responsible for one-half of the attorney fees and costs incurred in rectifying the contract problems regarding the Kenworth truck. Dudgeon was also determined to be liable for one-half of $385 in maintenance expenses for the Kenworth truck. The court also ordered that Dudgeon reimburse Voltz for the $500 loan Dudgeon made to a third person. Costs of $25 were also awarded to Voltz.

Judgment for Voltz in the amount of $1,333.29 was entered on June 2, 1982. Dudgeon appeals from this judgment.

Dudgeon raises three issues in his appeal: (1) whether or not the court erred in determining that a joint venture existed between the parties; (2) whether or not the court erred in determining that Dudgeon is liable to Voltz for the loan advanced to a third person from the Voltz Trucking account; and (3) whether or not the court erred in determining that Dudgeon received funds over and above the compensation due him.

I

Although North Dakota has long recognized the joint venture relationship, see Dimond v. Kling, 221 N.W.2d 86 (N.D.1974); Kelly v. Lang, 62 N.W.2d 770 (N.D.1954); Brudvik v. Frosaker Blaisdell Co., 56 N.D. 215, 216 N.W. 891 (1927); Gehlhar v. Konoske, 50 N.D. 256, 195 N.W. 558 (1923), our court has never specifically defined the elements necessary to establish its existence. It has been stated that no definite rule has been formulated for identifying the joint venture relationship in all cases. See 46 Am.Jur.2d Joint Ventures Sec. 1 (1969); 48A C.J.S. Joint Ventures Sec. 2 (1981); Crane and Bromberg, Law of Partnership Sec. 35 (1968). Rather, each case depends on its own unique facts. However, in Rehnberg v. Minnesota Homes, 236 Minn. 230, 52 N.W.2d 454, 457 (1952), the Minnesota Supreme Court aptly summarized the generally accepted rule that, in addition to limitation as to scope and duration, an enterprise does not constitute a joint venture unless the following four elements are present:

"(a) Contribution --the parties must combine their money, property, time, or skill in some common undertaking, but the contribution of each need not be equal or of the same nature.

"(b) Joint proprietorship and control --there must be a proprietary interest and right of mutual control over the subject matter of the property engaged therein.

"(c) Sharing of profits but not necessarily of losses --there must be an express or implied agreement for the sharing of profits (aside from profits received in payment of wages as an employe ) but not necessarily of the losses.

"(d) Contract --there must be a contract, whether express or implied, showing that a joint adventure was in fact entered into." [Emphasis in original.]

See also Delgado v. Lohmar, 289 N.W.2d 479, 482 n. 2 (Minn.1979); Treichel v. Adams, 280 Minn. 132, 158 N.W.2d 263, 266 (1968); 46 Am.Jur.2d Joint Ventures Secs. 1, 13 (1969); 48A C.J.S. Joint Ventures Secs. 10, 13 (1981).

We believe that the facts in the instant case adequately establish the existence of a joint venture relationship between Voltz and Dudgeon in the operation of the Kenworth truck.

The record reveals that both Voltz and Dudgeon contributed to the common undertaking. While Voltz contributed funds to the operation, Dudgeon contributed his time, skill, knowledge, and expertise in driving and repairing the Kenworth truck. Furthermore, Dudgeon assumed the responsibility for maintaining the business records and overseeing the general operation of the venture. Both parties had a proprietary interest in the...