## Facts

- After the 1996–1997 ice-fishing season, Steve Dahl, David Tronson, and James Legacie began marketing an ice-fishing guide service on Devils Lake, North Dakota, using the name “Perch Patrol.”
- Dahl stated the three men agreed they were independent contractors: each would obtain his own guide license and equipment, keep the fees he earned, and share clients and marketing expenses.
- Near the end of the 1998–1999 season, Dahl asked Michael Ziegler and Jack Kitsch to assist Perch Patrol.
- Ziegler and Kitsch were paid to drill holes, set up shelters, and help ensure clients were properly equipped; they had no client contact during that season.
- In spring 1999, Dahl gave Ziegler and Kitsch a document titled “Perch Patrol Expansion,” containing an “Employee Proposal” and a “Partnership Proposal.”
- The “Employee Proposal” contemplated that Ziegler and Kitsch would receive a defined share of clients above a threshold and that Dahl, Tronson, and Legacie would provide equipment.
- The “Partnership Proposal” contemplated that Ziegler and Kitsch would operate as their own entity under the Perch Patrol name, that everyone would provide his own gear, and that both sides would share costs and efforts equally.
- The parties did not adopt either written proposal and did not reduce any final agreement to writing.
- For the 1999–2000 season, the parties operated under an oral arrangement: Dahl, Tronson, and Legacie guided and kept fees from the first six clients each day; Ziegler and Kitsch took the next four; beyond the first ten clients, the guides split fees, and they split all tips equally.
- Each guide supplied his own equipment. Dahl handled administrative and marketing work, and all five men attended trade shows connected to Perch Patrol.
- Ziegler and Kitsch did not attend breakfast meetings where Dahl, Tronson, and Legacie discussed business matters.
- In November 1999, Dahl registered “Perch Patrol” as a tradename. Ziegler and Kitsch each gave Dahl a check for $814; they later claimed these were capital investments, but Ziegler admitted they were contributions toward marketing expenses.
- In March 2000, Dahl, Tronson, and Legacie canceled the remainder of the season due to thawing ice. Ziegler disagreed and said that “if Perch Patrol formed a real partnership” and he and Kitsch were treated equally as the other three, the dispute would not exist.
- In August 2000, Dahl, Tronson, and Legacie told Ziegler and Kitsch they could no longer work with Perch Patrol.
- In 2002, Dahl registered Perch Patrol as a limited-liability partnership without Ziegler or Kitsch.
- Ziegler and Kitsch sued, alleging they were partners and seeking an accounting upon winding up; the district court granted summary judgment for the defendants, and Ziegler and Kitsch appealed.

## Issues

1. Whether the evidence created a genuine dispute of material fact that Ziegler and Kitsch became partners with Dahl, Tronson, and Legacie in Perch Patrol under North Dakota partnership law.
2. If no partnership existed, whether Ziegler and Kitsch were entitled to a partnership accounting or other partnership remedies.

## Decision

- The North Dakota Supreme Court affirmed the district court’s summary judgment.
- The court held the undisputed facts did not show Ziegler and Kitsch were co-owners of Perch Patrol with the power of ultimate control, so no partnership existed between them and the defendants.
- Because no partnership existed, Ziegler and Kitsch were not entitled to an accounting upon winding up.

## Legal Principles

- Under North Dakota’s partnership statute, a partnership is an association of two or more persons to carry on as co-owners a business for profit, whether or not they intend to form a partnership.
- Co-ownership requires more than cooperation; the right of control is a required part of the analysis.
- “Control” in the partnership context means each partner has power of ultimate control over the business, not merely participation in day-to-day work.
- Sharing revenues, sharing certain expenses, and using a common business name can be consistent with independent-contractor arrangements and do not, by themselves, establish co-ownership.
- Evidence that alleged partners did not participate in management decisionmaking (such as business meetings) supports a finding that they lacked co-ownership and ultimate control.
- On summary judgment, when the material operational facts are undisputed and those facts cannot establish co-ownership and control as a matter of law, dismissal of a partnership claim is proper.

## Conclusion

The court concluded that Perch Patrol’s working arrangement—individual guides supplying their own equipment, keeping much of their own fees under a client-allocation system, and operating under administration and decisionmaking controlled by the original three—did not make Ziegler and Kitsch co-owners with ultimate control, so they were not partners and had no right to a partnership accounting.


Ziegler v. Dahl, 691 N.W.2d 271 (2005)