Opinion
NOT TO BE PUBLISHED
Super. Ct. No. 15548
NICHOLSON, J.
The plaintiffs and defendants entered into an agreement concerning the development of residential property. The plaintiffs sued the defendants, asserting that a partnership existed and seeking an accounting and damages. The trial court granted summary judgment in favor of the defendants, and the plaintiffs appeal the judgment. Because the evidence was insufficient to raise a triable material issue concerning the existence of a partnership, we affirm.
FACTS
The plaintiffs include Brian Felix and his corporation, Brian Felix, Inc. (BFI). Felix is a contractor, real estate agent, and investor from Santa Barbara. The defendants include Charles Tomajko and his corporation, Mammoth Real Estate Company, Inc. (MRECO). Tomajko is a real estate broker and developer in the Mammoth Lakes area.
In 1989, MRECO purchased 80 acres near Crowley Lake, south of Mammoth Lakes, for $300,000. Tomajko planned to develop the acreage, in four phases, into a single-family-home subdivision called Lakeridge Ranch Estates. This litigation involves, primarily, the first phase of that development.
Beginning in 1995, Felix and Tomajko had dealings concerning Lakeridge Ranch. Felix, through his pension plan, Lincoln Trust, loaned $38,000 to Tomajko, secured by unrelated property owned by Tomajko, with a 10 percent per year interest rate. Discussion concerning Felix’s further participation in Lakeridge Ranch continued until July 1996, when the parties entered into an agreement called a “Memorandum of Understanding” (MOU) between MRECO and BFI. That MOU is the operative document at issue in this litigation.
A. Memorandum of Understanding
The three-page MOU expressly superseded all prior agreements. Felix signed the MOU on behalf of BFI, and Tomajko signed it on behalf of MRECO. It was divided into two sections: the main body of the agreement and a lengthy acceptance.
The main body of the MOU provided that Phase I of Lakeridge Ranch would consist of 24 lots. “The ownership vehicle for Phase I LRE shall be a Limited Partnership (LP) or Limited Liability Company (LCC) which shall acquire title to Phase I of the development from MRECO . . . .” “Prior to the formation of the LP or LLC,” continued the MOU, “MRECO will offer advantageous joint venture pricing for acquisition of Phase I to strong development participants which are capable of assisting MRECO in the development of LRE[.]” The MOU stated that MRECO “agrees to participate with BFI as follows.” The MOU then listed BFI’s participation: 12 “units” at $18,000 per unit for a total investment of $216,000.
The acceptance portion of the MOU provided for specific participation of BFI in Phase I and the manner in which BFI’s investment would be memorialized.
Concerning BFI’s participation, the acceptance portion stated: “BFI agrees to assist MRECO in creative planning at Phase I of Lakeridge Ranch Estates which shall include, but not limited to [sic], location of building site envelopes, selection and location of tree species and other vegetation, location of driveway access points and creation of project architectural standards. Further, BFI agrees to use its best efforts to attract investors at ‘retail’ limited partnership pricing which is currently projected at least [sic] $30,000 per lot-equivalent unit and which may increase when the LP or LLC is formed. BFI and MRECO agree that the anticipated time of formation is projected as the latter half of 1997 with construction scheduled for the spring of 1998.”
BFI’s investment was to be in the form of loans from BFI secured by MRECO’s deeds of trust. BFI’s investment included the prior Lincoln Trust loan of $38,000, plus $178,000 of new money, for a total investment of $216,000. The acceptance portion provided: “BFI and MRECO have agreed that it would be prudent to delay development of Phase I LRE until 1998 and to delay formation of an LP or LLC until the latter half of 1997. To secure BFI’s $178,000 investment in the interim period, a note secured by a second deed of trust shall be drawn in favor of BFI and secured by the entire parcel containing LRE Phase I . . . .”
The MOU did not state whether the relationship between the parties before the formation of the LP or LLC would be a partnership, debtor-creditor, or some other relationship.
B. Conduct of the Parties After the MOU
1. Financial Arrangements
Soon after acceptance of the MOU, BFI transferred $116,000 to MRECO, and MRECO executed a promissory note for that amount, due on July 15, 2001, with an interest rate of 10 percent per year. The parties also agreed to increase the amount of the Lincoln Trust loan from $38,000 to $55,000. In the next year, 1997, the parties agreed to increase the amount of the loan from BFI to MRECO from $116,000 to $161,000, under the same terms as originally agreed. These transactions totaled $216,000, which was the amount BFI committed to provide under the MOU. Of the $216,000, however, $55,000 was provided by Lincoln Trust, not BFI.
In 1998, Felix formed Providencia, LLC as a self-directed pension plan. Providencia paid $44,000 to MRECO. In exchange, MRECO granted Providencia the right to purchase at a discount up to 49 percent of the investment units in future phases of Lakeridge Ranch. The written agreement between Providencia and MRECO stated: “[MRECO] is the owner of a development property . . . known as Lakeridge Ranch Estates. [MRECO] contemplates developing the property, in several phases . . .; into a single family residential subdivision and is desirous of attracting investors to implement this goal. [MRECO] contemplates the formation of either a Limited Liability Company or a Limited Partnership as the ownership vehicle for these contemplated phases and to offer shares to potential investors.”
MRECO most likely used the funds received from BFI, Lincoln Trust, and Providencia to pay expenses related to Lakeridge Ranch, including payments on the loan that MRECO obtained to purchase the property.
In 2000, Felix personally loaned Tomajko $25,000 at an interest rate of 12 percent per year. The full amount of principal and interest was due 180 days after the date of the loan. Tomajko signed a promissory note reflecting the terms of the loan. This personal loan was later converted, upon the oral agreement of the parties, into a capital contribution; however, Felix was unable to say to what phase of Lakeridge Ranch the capital contribution applied.
In 2001, Felix advised Tomajko that it would be more profitable to develop Lakeridge Ranch using loans rather than obtaining funds from investors. Tomajko agreed and, in 2002, MRECO obtained a construction loan to develop Phase I. Tomajko personally guaranteed the loan. Felix was not obligated as to this debt and did not guarantee it.
Beginning in 2001, Felix made requests to Tomajko for an accounting of the finances related to Lakeridge Ranch. Tomajko avoided the requests and did not give the requested accounting.
2. Participation in Development of Lakeridge Ranch
Tomajko controlled MRECO and the development of Phase I of Lakeridge Ranch, to the exclusion of Felix.
In 1996 or 1997, Felix met with Tomajko to discuss the development of Lakeridge Ranch and walked the project with Tomajko and potential investors. Felix discussed trees and vegetation for Lakeridge Ranch with a landscape professional and investigated building envelopes and setbacks.
In 2000, Felix decided to investigate further Tomajko’s development of Phase I. Felix obtained a property profile from a title company and asked a real estate agent in the area to keep him apprised of Tomajko’s progress. In 2002, Felix traveled to Mammoth Lakes to assist with Lakeridge Ranch, though the record does not reflect the nature of the assistance.
In 2001, Tomajko obtained approval of a tentative tract map and grading permit for Phase I. He rented a backhoe and hydraulic hammer and personally began grading the property. Potential purchasers began showing interest and paying to reserve lots. Tomajko was responsible for all of the costs associated with the development, including property taxes, insurance, and bonding. Through 2004, Tomajko had devoted approximately 20,000 hours to developing Lakeridge Ranch.
The parties never formed an LP or LLC. They also entered into no agreements concerning how the profits and losses associated with Lakeridge Ranch would be shared.
PROCEDURE
On July 15, 2005, Felix and BFI filed this action against Tomajko and MRECO. The first amended complaint alleged two causes of action: (1) dissolution of partnership, with an accounting and a constructive trust, and (2) breach of contract and constructive trust.
MRECO moved for summary judgment or summary adjudication of issues. After filing of an opposition and a hearing, the trial court granted summary judgment.
The trial court concluded that the MOU did not create a general partnership, as a matter of law. The parties conduct after signing the MOU, including Felix’s participation in the development of Lakeridge Ranch, also did not support Felix’s assertion that the parties formed a general partnership. Instead, the MOU and conduct of the parties supported a finding that the parties only agreed to form a partnership or corporation in the future, which never occurred. Based on these findings, the trial court granted summary judgment to Tomajko and entered judgment accordingly.
STANDARD OF REVIEW
“A defendant may move for summary judgment ‘if it is contended that the action has no merit . . . .’ ([Code Civ. Proc.,] § 437c, subd. (a).) ‘A defendant . . . has met his or her burden of showing that a cause of action has no merit if that party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to that cause of action. Once the defendant . . . has met that burden, the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.’ ([Code Civ. Proc.,] § 437c, subd. (p)(2).) ‘The motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.’ ([Code Civ. Proc.,] § 437c, subd. (c).)
“We must make our own independent determination regarding the construction and effect of the papers supporting and opposing the summary judgment. ‘We apply the same three-step analysis required of the trial court. We begin by identifying the issues framed by the pleadings since it is these allegations to which the motion must respond. We then determine whether the moving party’s showing has established facts which justify a judgment in movant’s favor. When a summary judgment motion prima facie justifies a judgment, the final step is to determine whether the opposition demonstrates the existence of a triable, material factual issue.’ (Hernandez v. Modesto Portuguese Pentecost Assn. (1995) 40 Cal.App.4th 1274, 1279.) ‘Any doubts as to the propriety of granting the motion should be resolved in favor of the party opposing the motion.’ (Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107.)
“‘On appeal, we review the trial court’s decision to grant or deny the summary judgment motion de novo, on the basis of an examination of the evidence before the trial court and our independent determination of its effect as a matter of law. [Citations.] We are not bound by the trial court’s stated reasons or rationale. Instead, we review the summary judgment without deference to the trial court’s determination of questions of law.’ (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 163.)” (McGarry v. Sax (2008) 158 Cal.App.4th 983, 993-994.)
DISCUSSION
I
Evidentiary Contentions
Before we address the merits of the controversy concerning an asserted partnership, we must consider Felix’s contention that the trial court erred by sustaining Tomajko’s objection to some of the statements of fact proffered by Felix in opposition to summary judgment. Felix argues that the trial court erred as to four statements of fact. We conclude that the trial court did not err.
“On appeal after a motion for summary judgment has been granted, we review the record de novo, considering all the evidence set forth in the moving and opposition papers except that to which objections have been made and sustained. [Citation.].” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334.) If an objection was made and sustained in the trial court and a party contends on appeal that the objection was improperly sustained, we review the admissibility of the evidence independently. (Gatton v. A.P. Green Services, Inc. (1998) 64 Cal.App.4th 688, 692.) However, in reviewing objections based on relevancy, we ask whether the trial court abused its discretion. (Walker v. Countrywide Home Loans, Inc. (2002) 98 Cal.App.4th 1158, 1169.)
A. Formation of Partnership as Essential Term of MOU
In a supplement to his separate statement of facts opposing summary judgment, Felix stated: “At the time that the parties entered their partnership agreement, the formation of a particular ownership vehicle such a [sic] limited liability company or a limited partnership, was not an essential term of the agreement.” The trial court sustained Tomajko’s objection to this statement of fact because it contradicts the terms of the MOU, which is a partially integrated document and supersedes all prior and contemporaneous agreements of the parties.
On appeal, Felix asserts that this evidentiary ruling was improper because, according to Felix, “the MOU is, at least, ambiguous as to whether that [sic] the future formation of an LP/LLC was an essential term of the agreement.” We disagree.
When a written agreement is integrated, no evidence of a prior or contemporaneous oral agreement that is inconsistent with the terms of the written agreement is admissible because it is incapable of altering the meaning of the written agreement. (BMW of North America, Inc. v. New Motor Vehicle Bd. (1984) 162 Cal.App.3d 980, 990, fn. 4.) The parties’ agreement was integrated to the extent it superseded all prior and any inconsistent contemporaneous agreements. In other words, only terms, proven by extrinsic evidence, that are consistent with the actual terms of the written agreement can be considered. Extrinsic evidence of inconsistent terms is therefore disregarded. In determining whether the extrinsic evidence is consistent with the written agreement, we consider the written agreement and all terms fairly implied in the bargain. (FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 396.)
Here, the MOU provided: “The ownership vehicle for Phase I LRE shall be a Limited Partnership (LP) or Limited Liability Company (LLC) . . . .” This is not equivocal or ambiguous language. That no such LP or LLC was later formed does not change the fact that the agreement clearly provided for an LP or LLC as owner of Phase I.
The trial court’s ruling was therefore proper because the proffered evidence to the effect that formation of an LP or LLC was not an essential term of the MOU directly contradicts the express language of the MOU.
B. Intent of Using Promissory Note
Felix presented as a statement of fact the following averment: “The promissory notes were to provide an ownership interest in the land of LRE to Felix while avoiding reassessment for property taxes.” The trial court excluded these statements.
Felix claims the evidentiary ruling was error because the MOU “appears to create an ownership interest in a joint venture but also can be read to suggest a debtor/creditor relationship, and parol evidence is admissible to clarify this ambiguity.” To the contrary, the promissory notes did not give Felix an ownership interest in Lakeridge Ranch. On their face they were simply and solely evidence of a debt owed by Tomajko. Therefore, Felix’s averment, in the form of a “statement of fact,” as to the legal effect of the promissory notes is unfounded.
C. Intent of MOU
Felix presented to the court, in the form of three separate statements of fact, what he claimed was the meaning of the MOU with respect to whether it formed a partnership between Felix and Tomajko. Those three statements of fact are as follows: (1) “The phrase ‘joint venture pricing’ reflected that the MOU evidenced the existence of a partnership;” (2) “The MOU ‘shows the existence of a partnership’ between Tomajko and Felix at the time of its execution;” and (3) “The intent of the MOU was for Felix to contribute capital and to be 50-50 partners.” As with the statement of fact concerning the form of ownership of Phase I, the trial court excluded these factual averments because they were inconsistent with the terms of the MOU.
As we discuss below, the use of the term “joint venture pricing” and the face of the MOU do not reflect formation of a partnership. Furthermore, the MOU does not reflect an intent for Felix to contribute capital before formation of the LP or LLC or for Felix and Tomajko to be 50-50 partners. The most that can be said is that the MOU clearly provided for loans from Felix before formation of the LP or LLC and a future LP or LLC. The trial court did not err by excluding these statements of fact.
D. Promissory Notes and Deeds of Trust to Secure Performance
Felix asserted, as a statement of fact, the following: “The $38,000.00 was a contribution to the Lakeridge Partnership, and the note and deed of trust were understood to secure performance of the execution of a formal partnership agreement, to secure performance of [MRECO’s] and Mr. Tomajko’s performance under the agreement, and to protect Mr. Felix in the event of Mr. Tomajko’s death; the deed of trust was recorded. The agreement was formalized in part in the [MOU]. The . . . [MOU] makes reference to this agreement about the $38,000, and treats this $38,000.00 as a capital contribution.” The trial court also excluded this as inconsistent with the MOU.
The trial court was correct to sustain the objection to this statement of fact. Concerning the $38,000 that Felix (Lincoln Trust, really) gave to Tomajko before the execution of the MOU, the MOU states: “MRECO recognizes prior receipt of $38,000 from a related party to BFI, which $38,000 BFI considers under its control and pledges to convert to cash at the time of the LP or LLC formation to complete its investment in Phase I LRE.” While this statement may well be ambiguous, even unintelligible, the later conduct of the parties is clear -- they treated the $38,000 as a debt, which was later paid off by Tomajko. Therefore, there is no evidentiary foundation for the assertion that the $38,000 was a capital contribution to a partnership.
II
Formation of a Partnership
Both of Felix’s causes of action are based on a partnership between Felix and Tomajko. The first cause of action sought dissolution of the partnership and associated remedies, and the second cause of action sought damages for breach of a partnership agreement. Our focus, therefore, is on whether a partnership existed between Felix and Tamajko. We conclude that none existed.
As do the parties in their briefs, we do not distinguish between the individuals and their corporations but use the names of the individuals to mean both the individual and corporation, except when more specificity is called for.
The parties also discuss whether a joint venture, as opposed to a partnership, was formed. They appear to agree, however, that there is nothing unique to the creation of a joint venture that is not resolved in this case by determining whether a partnership was formed. (See Chambers v. Kay (2002) 29 Cal.4th 142, 151 [joint ventures and partnerships essentially the same].)
A partnership is the association of two or more persons to carry on a business. Subjective intent to form a partnership is not a necessary element. (Corp. Code, § 16202, subd. (a).) Joint ownership does not, by itself, establish a partnership, even if profits are shared. (Corp. Code, § 16202, subd. (c)(1)&(2).) However, a person who receives a share of the profits is presumed to be a partner, unless, among other circumstances, the profits are payment for debt or some other charge for a loan. (Corp. Code, § 16202, subd. (c)(3)(A)&(E).)
“Generally, a partnership connotes co-ownership in partnership property, with a sharing in the profits and losses of a continuing business.” (Chambers v. Kay, supra, 29 Cal.4th at pp. 150-151.) The parties’ intent to create a partnership, as shown by objective indicia, controls in determining whether a partnership was formed. (Constans v. Ross (1951) 106 Cal.App.2d 381, 386-387.) The existence of a partnership is a question of fact determined from the parties’ agreement, their conduct, and the surrounding circumstances (ibid.; Holmes v. Lerner (1999) 74 Cal.App.4th 442, 454), unless the material facts are undisputed, in which case the existence of a partnership is a question of law for the court to decide (see Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865-866 [judicial function to interpret written instrument unless interpretation turns on credibility of extrinsic evidence]).
Our task here is to determine, from the undisputed facts concerning the MOU and the conduct of the parties, whether there is any triable fact concerning the existence of a partnership. “[W]here the written contract is not an integration, that is, the complete and final agreement of the parties, then evidence of a separate oral agreement may be introduced as to any matter on which the agreement is silent and which is not inconsistent with its written terms. (See Masterson v. Sine (1968) 68 Cal.2d 222, 226-228.) . . . [E]xtrinsic evidence may be introduced to explain the meaning of a written contract and the test for admissibility is whether the meaning urged is one to which the written contract terms are reasonably susceptible. (See Pacific Gas & E. Co. v. G.W. Thomas Drayage etc. Co. (1968) 69 Cal.2d 33, 40.)” (BMW of North America, Inc. v. New Motor Vehicle Bd., supra, 162 Cal.App.3d at p. 990, fn. 4.)
A. Absence of Partnership
Evidence of the intent of Felix and Tomajko to form a partnership before the formation of an LP or LLC is absent. Although the MOU anticipated a later formation of an LP or LLC, that event never occurred. The parties did not agree to any of the fundamental elements of a partnership -- such as (1) an agreement to form a partnership, (2) shared ownership and control of Lakeridge Ranch, or (3) shared profits and losses. (Chambers v. Kay, supra, 29 Cal.4th at pp. 150-151.)
1. Agreement to Form Partnership
The MOU, on its face, does not form a partnership. It is an agreement to form an LP or LLC in the future and for BFI to loan money to MRECO in the present. The first paragraph of the MOU states that the “ownership vehicle” for Phase I of Lakeridge Estates will be an LP or LLC. The MOU states that the parties agreed that BFI would participate in Phase I with a specified investment. Therefore, standing alone, the face of the MOU does not support Felix’s argument that a partnership was formed.
Extrinsic evidence also supports the conclusion that no partnership existed. “‘A construction given a contract by the acts and conduct of the parties with knowledge of its terms, before any controversy has arisen as to its meaning, is entitled to great weight and will when reasonable be adopted and enforced by the court. [Citation.] The practical construction of a contract made by the parties thereto is the best evidence of what they intended. [Citations.]’” (WYDA Associates v. Merner (1996) 42 Cal.App.4th 1702, 1713, quoting Lawrence Block Co. v. Palston (1954) 123 Cal.App.2d 300, 311.)
MRECO was the sole title owner of the property. Except for minor participation by Felix, discussed below, Tomajko did all of the work toward developing Lakeridge Ranch. Felix and Tomajko never filed a partnership statement with the state or county. They did not file a fictitious name statement for the partnership. They never opened a joint account or obtained joint office space. Tomajko, alone, paid all property taxes and maintained insurance and a performance bond. And Tomajko is the sole person who takes care of maintenance and solves problems associated with the property.
2. Shared Ownership and Control
Partnership property may be held in either the names of individual partners or the name of the partnership. Factors relevant to whether the property belongs to the partnership are (1) the name or names on the title of the property, (2) the source of the funds used to purchase the property, and (3) the partners’ treatment of the property as partnership property. Ownership of the property, whether it be individual or partnership, is a question of fact. (Bumb v. Bennett (1958) 51 Cal.2d 294, 301; Pluth v. Smith (1962) 205 Cal.App.2d 818, 826; Swarthout v. Gentry (1943) 62 Cal.App.2d 68, 78.)
The evidence establishes that MRECO was the owner of the property. It was the title owner. The funds to purchase the property came from MRECO, some of it through loans made to MRECO. And, although Felix provided some limited services with respect to development of the property, as discussed below, Tomajko always controlled the property.
3. Shared Profits and Losses
Although profit sharing is evidence of partnership, it is not a necessary element. (Holmes v. Lerner, supra, 74 Cal.App.4th 442.) In Holmes v. Lerner, Patricia Holmes and Sandra Lerner worked together on the concept and formation of a new cosmetics business called Urban Decay. They did not, however, enter into an agreement concerning division of profits. When Lerner excluded Holmes from the business, Holmes sued. She claimed that she and Lerner formed a partnership and, therefore, she was entitled to damages. A jury agreed. The Court of Appeal affirmed. It concluded that “profit sharing [is] evidence of a partnership, rather than a required element of the definition of a partnership. [Citations.]” (Id. at p. 454, fn. omitted.)
The Court of Appeal’s analysis of the relationship between the parties in Holmes v. Lerner is instructive: “[I]mplicit in the Holmes-Lerner agreement to operate Urban Decay together was an understanding to share in profits and losses as any business owners would. The evidence supported the jury’s implicit finding that Holmes birthed an idea which was incubated jointly by Lerner and Holmes, from which they intended to profit once it was fully matured in their company.” (Holmes v. Lerner, supra, 74 Cal.App.4th at p. 457.)
Unlike the facts in Holmes v. Lerner, the facts here do not support a finding that Felix and Tomajko implicitly agreed to share the profits or losses associated with Lakeridge Ranch. The money that Felix contributed was in the form of loans. At best, any sharing in profits and losses would occur after the formation of the LP or LLC, depending upon the parties’ agreement at that point. Since no such business association was formed, we can only look to the actual relationship of the parties, which was a typical debtor-creditor relationship.
While profit sharing, though not definitive, is evidence of a partnership, the converse is also true. Absence of profit sharing is evidence of the absence of a partnership. If Felix has no evidence of a partnership, he cannot prevail on his claim that a partnership existed.
There is no evidence from the MOU or the conduct of the parties that, before the formation of an LP or LLC, Felix and Tomajko intended to share the profits and losses from Lakeridge Ranch. Instead, the MOU provided that, until an LP or LLC was formed, Felix would be paid as a creditor under Tomajko’s loan obligations. (Corp. Code, § 16202, subd. (c)(3)(A) [share of profits as payment of debt defeats presumption of partnership for creditor].) The parties to the MOU never formed the LP or LLC and Felix’s contribution to the enterprise never amounted to anything more than a loan. This circumstance supports the trial court’s determination that no partnership existed.
Thus, in all three of the fundamental elements of a partnership -- an agreement to form a partnership, shared ownership and control, and shared profits and losses -- evidence of a partnership is absent.
B. Felix’s Contentions that a Partnership Existed
Felix argues that a partnership was created. He claims that (1) use of the term “joint venture pricing” signified a partnership, (2) the use of loans does not prevent a finding of a partnership, (3) the absence of common formalities does not prevent a finding of a partnership, and (4) he participated in developing Lakeridge Ranch and sought other investors. None of these arguments is sufficient to establish that the trial court erred in determining that there is no triable issue of fact concerning creation of a partnership.
1. “Joint Venture Pricing”
For his argument that the MOU created a partnership, Felix relies on the use of the term “joint venture” in the MO U.Specifically, the parties agreed that MRECO would “offer advantageous joint venture pricing for acquisition of Phase I to strong development participants . . . .” (Italics added.) Felix argues that “the plain words ‘join[t] venture’ demonstrates [sic] the parties’ intent to create just such an entity.” He claims that the use of the term, if not dispositive, is, at least, enough to create a triable issue of fact as to the meaning of the term.
This argument based on the use of the term “joint venture” is unconvincing because (1) the term directly described the pricing, not the relationship, and (2) the remainder of the MOU made it clear that, until the LP or LLC was formed, the investment by Felix would be in the form of loans.
The MOU referred to “joint venture pricing” not just a “joint venture.” In this context, the use of the term “joint venture” describes the type of pricing, not the relationship of the parties. For example, an auto dealer might offer “employee pricing” to nonemployees. Felix reads too much into the term when he argues that it described the relationship between the parties.
As noted above, the remainder of the MOU sets up a debtor-creditor relationship for the investment, even if the investment is made at “joint venture pricing.” Therefore, in light of the specific use of the term and totality of the MOU, the use of the term “joint venture” in the MOU does nothing to establish that the MOU formed a partnership.
2. Use of Loans
Recognizing that the payments from BFI to MRECO were set up as loans under the terms of the MOU, Felix asserts that the use of loans to finance a partnership does not prevent a finding that a partnership was created. While this assertion is true in the abstract, it is unhelpful to Felix here because the only reasonable interpretation of the MOU is that BFI was loaning MRECO money, not contributing to the development of Lakeridge Ranch as a partner.
Existence of a debtor-creditor relationship does not necessarily mean there is no partnership. However, when there is no partnership agreement and no other indicia of partnership, such as joint ownership and control, then a partnership cannot be proven from loans. (Dills v. Delira Corp. (1956) 145 Cal.App.2d 124, 131.) Along with the debtor-creditor relationship between BFI and MRECO, the lack of other partnership indicia defeats Felix’s claim of a partnership.
3. Absence of Formalities
Felix also protests that the absence of common formalities associated with a partnership does not defeat his claim of partnership. While the absence of common formalities, alone, may not defeat such a claim, it is evidence that there is no partnership.
The law requires little formality in the creation of a partnership. Though a partnership may be indefinite with respect to details, it may still be enforceable. (Boyd v. Bevilacqua (1966) 247 Cal.App.2d 272, 285.) While Felix cites this authority as support for his assertion that a partnership existed, his assertion fails because, along with the other indicia of a partnership already found lacking, absence of formalities associated with the existence of a partnership is further evidence that, indeed, no partnership existed.
4. Felix’s Participation in Developing Lakeridge Ranch
Felix participated in the development of Lakeridge Ranch in several respects. He showed the property to potential investors, discussed landscaping and building envelopes with professionals, and advised Tomajko on ways to finance the development. Felix also agreed with Tomajko to delay the formation of an LP or LLC and to have Tomajko manage the project. Felix contends that this participation in the development of Lakeridge Ranch raised a triable issue of fact concerning whether a partnership existed.
“Some degree of participation by partners in management and control of the business is one of the primary elements of partnership [citation].” (Greene v. Brooks (1965) 235 Cal.App.2d 161, 166.) Felix asserts that his participation in the development of Lakeridge Ranch establishes that he shared in the management and control of the business. While it is true that Felix assisted in a few aspects of the development of Lakeridge Ranch and also agreed with Tomajko concerning the timing of the formation of an LP or LLC, this was insufficient to raise a triable issue of fact concerning whether a partnership existed before the formation of the LP or LLC. Felix and Tomajko did not share the risks of developing the property. That risk was all Tomajko’s, except to the limited extent that Tomajko may not have been able to repay the loans if the enterprise had failed. Tomajko made every important decision concerning the management of Lakeridge Ranch and either did the work himself or paid to have it done by others. This is not a case in which a jury could, from Felix’s very limited participation and loans, conclude that a partnership existed between Felix and Tomajko.
The evidence and arguments presented by Felix do not raise a triable issue of fact concerning the existence of a partnership. Therefore, summary judgment was proper.
III
Other Issues Supporting Summary Judgment
In the trial court and again on appeal, Tomajko asserts that judgment in his favor was proper for three additional reasons: (1) the first cause of action is barred by the statute of limitations (Code Civ. Proc., § 343), (2) the second cause of action is barred by the statute of limitations (Code Civ. Proc., § 339), and (3) the action is barred by laches. As did the trial court, we conclude we need not consider these issues because of our determination that summary judgment was properly granted on the merits.
DISPOSITION
The judgment is affirmed. The defendants shall recover their costs on appeal. (See Cal. Rules of Court, rule 8.278(a)(1).)
We concur: SIMS, Acting P. J., HULL, J.