Appellee, Defendant and Counterclaimant, Case Study Example

Facts In the Case

Samuel Gates (plaintiff) made the claim that the real estate business (Houston Properties) owned by his partner George Houston III (defendant) was part of their partnership. However, the court determined that a written/ oral agreement regarding the ownership of the properties did not exist, merely an agreement (possibly an oral agreement) that Gates and Houston would share the profits from the real estate business. Also, Houston acquired the properties by himself and with his own money and credit, while Gates received profits for overseeing the properties and collecting rent payments. Thus, Houston was determined to be the sole owner of the real estate business of which Gates did not contribute any funds.

Issue

The basic issue in this case is that attorney Robert R. Faulkner argued that his client Mr. Gates was entitled to possess a declaratory statement based on inter alia or parts of a given statute or law making him co-owner of the real estate business and its properties. However, the court ruled that after reviewing all of the evidence that Gates was not entitled to the declaratory statement, thus entering a judgment in favor of Houston.

Decision

The decision by the Court of Appeals of Indiana is that Gates did not demonstrate any clear errors regarding the evidence; thus, the court rejected his challenges to the earlier trial court judgment which found that Gates’ arguments concerning the real estate business and its properties were unsupported by the evidence.

Reasoning

It is quite obvious that the real estate business (Houston Properties) is solely owned by Mr. Houston. The reasons for this are as follows–first, in  2004, Houston purchased properties in either his own name or that of his company via his own personal credit and/funds and through another business entity, AAA Roofing, from which he used his own profits in  order to repair some of the properties; second, despite the existence of a legally binding agreement/contract between himself and Gates, Houston divided the profits generated from rent payments equally with Gates. Interestingly, Houston maintains that the rent due payments were thousands of dollars short, meaning that Gates who was responsible for collecting the rent due amounts, retained some of the profits for himself without consulting with Houston. And third, since there was no binding legal agreement between Gates and Houston concerning ownership of the company, Houston is legally the sole owner.

Observation

The most basic observation regarding this case is that Gates should have obtained a legally binding agreement and/or contract with Houston regarding their co-ownership of Houston Properties. If Gates had done this, there would never have been any need to take Houston to court nor to appeal to the court to reverse its earlier findings. Therefore, when two parties orally agree to become partners in a business venture, always obtain a legally binding agreement/contract that can be upheld in a court of law.

Works Cited

“Samuel L. Gates (Appellant/Plaintiff/Counterdefendant/Third-Party Defendant) v. George J. Houston III (Appellee/Defendant/Counterclaimant) and Houston Properties, LLC (Appellee/Third-Party Plaintiff) No. 82A01-0804-CV-198.” Court of Appeals of Indiana, 897 N.E.2d 532; 2008 Ind. App. LEXIS 2581. Lexus/Nexus Headnotes, 1-5.