## Facts

- Two lawyers formed a joint aviation-law practice that publicly presented itself as a partnership, though no fully executed partnership agreement was signed.
- The financial structure included guaranteed annual draws for attorneys and profit sharing above specified thresholds; one attorney financed the practice and claimed reimbursement and rent for office assets he supplied.
- A third attorney later joined; firm documents and tax filings treated the practice as a partnership and the lawyers as partners.
- The practice participated in major contingent-fee litigation that generated a large attorneys’ fee to be split with another firm, plus an additional fee for prior related work.
- Before the contingent fee was received, one attorney left after signing a separation-of-practice agreement and repeatedly sought a final accounting, which was not provided.
- The remaining attorneys retained the contingent fee and did not account to the departing attorney for any share.
- The departing attorney sued for breach of fiduciary duty and related tort claims; the trial court (1) granted him summary judgment that a partnership existed and he was a partner, (2) conducted an equitable accounting, and (3) tried fiduciary-duty and waiver issues to a jury.
- During the jury phase, the court admitted evidence of a compromise offer made by the remaining attorneys; the jury found for the departing attorney on breach of fiduciary duty and rejected waiver.

## Issues

1. Whether summary judgment was proper on the existence of a partnership and the plaintiff’s status as a partner.
2. Whether admitting evidence of a compromise offer to rebut waiver or suggest entitlement was erroneous and, if so, whether the error was harmless.
3. What disposition was required given the partnership-status dispute and the evidentiary ruling.

## Decision

- The court reversed the judgment for the plaintiff and remanded.
- Summary judgment on partnership status was improper because the defendants raised genuine issues of material fact about whether a partnership existed.
- The trial court erred by admitting evidence of a compromise offer, and the error was not harmless.
- The case was remanded for a new trial combining the partnership issue with the fiduciary-duty and waiver issues; remaining appellate claims were rejected.

## Legal Principles

- Partnership formation turns on objective manifestations of intent to associate as co-owners for profit, assessed through indicia such as profit/loss sharing, control, and capital contributions, not solely labels or unexecuted agreements.
- Even strong outward indicators of partnership (public representations, partnership tax returns, internal “partner” references, and shared profits) do not justify summary judgment when material facts about control and risk of loss are disputed.
- Evidence of an offer of compromise is generally inadmissible to prove liability or the amount of a claim, and improper admission warrants a new trial when it likely affects central issues such as waiver and fiduciary breach.
- When interrelated issues depend on disputed foundational facts (e.g., partnership status), they should be tried together so the fact-finder can resolve them consistently.

## Conclusion

The court ordered a new, combined trial because partnership status could not be resolved on summary judgment in light of disputed facts about co-ownership, and because the jury’s consideration of fiduciary duty and waiver was tainted by the improper admission of settlement-offer evidence.


Beckman v. Farmer, 579 A.2d 618 (D.C. 1990)