Back in March of this year when the first lockdown began, there were news reports of people electing to quarantine together, if for no other reason, than to avoid isolation. In some instances, it was to give a forming relationship a “test run.”
Living together, what my parents’ generation liked to call, “living in sin,” is the new normal. The pandemic just caused some timetables to be advanced. Nevertheless, as we know, cohabitation often breeds other entanglements, both literally and figuratively.
Take the recent example offered by the relationship of two Lackawanna County residents whose relationship toggled between “off” and “on.” One of the “on” periods produced a child, although they never married.
In February 2018, Jeffrey Jones and Ruthann Colachino were back “on.” It was tax time and when they reviewed their tax situations, they agreed that it would be advantageous to allow Mr. Jones to claim their child as his dependent and then file as a head of household. Ms. Colachino was fine with that so long as Mr. Jones agreed to share the $5,500 refund that his head of household status was due to yield.
When the refund check arrived, the momentarily “happy couple” decided to do what every responsible couple does; they drove to a convenience store in Carbondale and “invested” their newfound wealth in “Bingo Squared” lottery tickets. They returned to their common dwelling and followed the direction of Gus the Groundhog. Mr. Jones managed to scratch his way to a $100,000 prize. Elated, the couple told friends and family they would buy a home together. They drove together to collect the $72,930 that Gus allows when you scratch off $100K.
You know the rest of the tale. It lasted a week. Two weeks after that Ms. Colachino filed to get her $36,465. The trial included the now ubiquitous surveillance footage from the Turkey Hill store where the winning ticket was acquired. After watching, that riveting video and hearing from the store clerk and some friends and family the Lackawanna Court ruled the proceeds must be shared as the product of a “joint venture.”
The appeal to Superior Court followed, suggesting this was not a joint venture. So what’s the law?
A joint venture is an association of persons or entities who form an express or implied contract to engage in a common enterprise for mutual benefit. McRoberts v. Phelps, 138 A.2d 439,443 (Pa. 1958). It is shown by facts and circumstances illustrating what, if anything, the parties “intended when associating together.” There are four elements spelled out in McRoberts: (1) each party must contribute something, whether cash, services, skill, knowledge or material; (2) there must be an intention to share the profit; (3) there is mutual control over the subject matter of the enterprise; and (4) an identifiable transaction rather than a general and continuous transaction.
The video showed they purchased the tickets together, as they had done in the past at the same store (per the clerk). They called friends and family once they won and used the first person plural “We won!” They told these same people of a plan to acquire real estate together. The Superior Court Opinion then circles back to the common plan to share Mr. Jones’ tax refund premised upon Ms. Colachino’s contribution of a “head of household” filing status. They went directly from where the refund was cashed to the Turkey Hill and Gus’ burrow where they bought their tix. The suggestion by Mr. Jones that their visit was coincidental was rejected, as it was a credibility finding.
Facetious moral of the story. Stand clear of others when buying your lottery tickets and if you do win, never, ever use the first person plural. If someone is standing nearby do not profess to others any intention to acquire real estate with them.
More mature observation. Lottery tickets make for amusing stories but the difference between buying a ticket and the founding of Microsoft are simply different increments of the same concept, a common enterprise resulting in an extraordinary result. Even partnerships can be formed through implied conduct.
N.B. I’m indebted to Judge Jason Legg of Susquehanna County for finding and reporting on this case in his regular legal column published in the Montrose Independent. My wife, an ardent reader of the Independent, and fan of Judge Legg’s column brought it to my attention. Whether that makes this a joint venture, I leave to the reader.