Monday, December 22, 2008

Ain't Love Grand?

For years I have advised musicians in bands that they need partnership agreements with their band mates. Now, they may also need agreements with their girlfriends or boyfriends, as the case may be.

Recently, the Tennessean reported that Jack Lawrence of Nashville’s Raconteurs (you know, Jack White’s other band) has been sued by his former girlfriend, Kelli Craig, who claims that in addition to a ten year romantic relationship, they were in fact engaged in operating a business partnership. According to the Tennessean, which reviewed the pleadings, Craig alleges that under the terms of their oral partnership, “she would support (Lawrence) so that he could pursue his music career and, if and when he began earning money as a musician, they would divide the money as partners.” Apparently, Lawrence bought a house, titled solely in his name in 2007. When the couple broke up, Craig refused to leave the house. Lawrence filed a detainer warrant to force her out of the house and she countered with the partnership lawsuit. (The most terrifying aspect of the Tennessean article was the revelation that Craig apparently has also refused to return Lawrence’s record collection). Craig’s lawsuit has already survived a motion to dismiss, which means that unless a settlement is reached, the case will head to trial.

This case is worth analyzing and is worth taking seriously. Tennessee courts do not routinely hold that all unmarried couples are in fact operating partnerships. In Martin v. Coleman, the Tennessee Supreme Court stated that they would not rule that an unmarried couple could create an implied partnership simply by continued cohabitation (79 S.W.3d 757,761 Tenn. 2000). But Tennessee courts have also applied a partnership analysis to specific situations involving unmarried couples. In Bass v. Bass, the Court applied the classic legal definition of a partnership ( “a partnership is an association of two or more persons to carry on a business for profit”) (814 SW2d 38 Tenn 1991) to a domestic situation. Thus the law seems to be that if a former flame can establish the elements of partnership, he or she might secure an interest in the earnings from the other party’s career. Perhaps more significant to this current dispute is the holding in Montgomery v. May (181 SW 3d 720, Tenn. App 2005) which held that in scrutinizing a real estate purchase the court will look to how the property was purchased (e.g. whether both parties contributed funds) rather than strictly how the property is titled.

As a practical mater, I am not sure how a couple is supposed to address these kinds of issues (kind of a romance killer) and I am sure there are equities on both sides of this ugly dispute. If this case unfolds, it should be watched closely by attorneys, business managers and bass players.

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