[00:00:00] Speaker 03:
Ready?

[00:00:01] Speaker 03:
Thank you.

[00:00:01] Speaker 03:
Please proceed.

[00:00:03] Speaker 03:
Thank you, Your Honor, and may it please the Court.

[00:00:06] Speaker 03:
David Wallin for the Appellant, Dennis DeVona.

[00:00:09] Speaker 03:
Your Honor, 11 jurors unanimously determined that a partnership existed under Rhode Island law from 1997 to 2011.

[00:00:17] Speaker 03:
The District Court erred in overturning that verdict by reweighing the evidence and not being faithful to the totality of the circumstances test under Rhode Island law.

[00:00:29] Speaker 03:
Under this court's de novo review, we're asking that the jury verdict be reinstated.

[00:00:35] Speaker 03:
Now, the district court did agree with the jury in one respect.

[00:00:39] Speaker 03:
It agreed that there was a partnership from 1997 to March or April of 1999.

[00:00:45] Speaker 02:
Partnership for a specific purpose limited in duration, not a partnership at will.

[00:00:52] Speaker 03:
It was not a partnership at will, Your Honor.

[00:00:53] Speaker 03:
It was for a specific purpose.

[00:00:55] Speaker 03:
which was to develop and sell a medical device business.

[00:00:58] Speaker 03:
And generally for a limited duration.

[00:01:01] Speaker 03:
Well, this wasn't for a limited duration necessarily.

[00:01:04] Speaker 03:
The goal here was to sell this business, develop and sell this medical device business.

[00:01:10] Speaker 02:
As soon as possible.

[00:01:13] Speaker 03:
Certainly they wanted to do so when they had a medical device or devices that were worth selling.

[00:01:19] Speaker 03:
What they wanted to do was increase the value of this business.

[00:01:23] Speaker 00:
And remember your order.

[00:01:24] Speaker 00:
What they wanted to do more specifically, maybe I'm wrong, but I think the plan was that they would get someone to produce these devices.

[00:01:32] Speaker 00:
They would then be able to sell it pretty soon for a substantial profit.

[00:01:38] Speaker 03:
Originally, that's correct.

[00:01:40] Speaker 03:
What they wanted to do was to have an outside manufacturer manufacture this product.

[00:01:46] Speaker 01:
Wait, time out.

[00:01:46] Speaker 01:
On page 245 of the record, it's my understanding that Mr. Devona testified that the purpose of the original partnership

[00:01:53] Speaker 01:
between himself and Mr. Zeitzel was to develop the instrument, obtain intellectual property on it, and sell the intellectual property as soon as possible, not to obtain an outside manufacturer, mass produce the product, and then sell the whole business.

[00:02:07] Speaker 01:
They were doing, which is not uncommon, coming up with a good idea, getting intellectual property on it, and then selling intellectual property.

[00:02:14] Speaker 01:
Am I wrong about the record?

[00:02:16] Speaker 03:
Judge, on page 340 and 333, what was represented by Dr. Zeitzel

[00:02:22] Speaker 03:
was that this was a partnership, an umbrella partnership, that originally started out where they were going to develop these glottoscopes and have it manufactured by an outside manufacturer.

[00:02:40] Speaker 01:
I'm on page 340 and 341.

[00:02:42] Speaker 01:
Can you direct me exactly to what you'd like me to look at?

[00:02:46] Speaker 03:
So Judge, if 340.

[00:02:48] Speaker 02:
It is... It didn't change the underlying relationship.

[00:02:52] Speaker 02:
It's line 1314, right?

[00:02:54] Speaker 03:
Exactly, Your Honor.

[00:02:55] Speaker 03:
This is Dr. Zytel telling Mr. Devona.

[00:02:59] Speaker 03:
He said, it doesn't change our underlying relationship.

[00:03:02] Speaker 03:
Now, we're talking about the time frame in 1999 when the parties had, when Dr. Zytel had created Endocraft.

[00:03:10] Speaker 02:
And there was this... Endocraft sales agreement had been made.

[00:03:12] Speaker 03:
Exactly, Your Honor.

[00:03:13] Speaker 03:
He said, and this is what the jury was entitled to believe,

[00:03:17] Speaker 03:
was that the umbrella of the partnership is still there, and that whatever we make and sell this stuff is going to be, that's when we are going to end it.

[00:03:26] Speaker 02:
Question.

[00:03:27] Speaker 02:
It said that two times, and there are two pieces of testimony that say essentially the same thing.

[00:03:31] Speaker 03:
Exactly, Your Honor.

[00:03:32] Speaker 03:
Exactly.

[00:03:33] Speaker 02:
And then there's a corroboration from the other gentlemen.

[00:03:36] Speaker 03:
That's right.

[00:03:36] Speaker 03:
So that's right, Your Honor.

[00:03:38] Speaker 03:
Stephen Fusco heard Dr. Zytel.

[00:03:42] Speaker 02:
After the creation of Enda Craft and the agreement.

[00:03:45] Speaker 03:
Exactly, Your Honor.

[00:03:46] Speaker 03:
The jury could determine.

[00:03:47] Speaker 03:
based upon, again, we're talking about a jury verdict.

[00:03:51] Speaker 02:
And all inferences and all evidence are supposed to be... Fusco's statement was, after the creation was, Fusco said, I heard the doctor say, well, at the end, he's going to get a million bucks when we sell it.

[00:04:06] Speaker 02:
Exactly, Your Honor.

[00:04:07] Speaker 03:
Exactly.

[00:04:08] Speaker 02:
Which is testimony in support of the notion that an umbrella partnership to end game selling it was still alive.

[00:04:16] Speaker 01:
I'm sorry, let me make sure.

[00:04:18] Speaker 01:
I just want to understand this testimony you pointed to on 340 because it's different from what I was saying.

[00:04:24] Speaker 01:
What I was saying as the testimony on 245 indicates is that the original partnership which began in 1997 was for the purpose of developing the instrument and selling the intellectual property as soon as possible.

[00:04:39] Speaker 01:
I was simply distinguishing that from what later turned out to be the

[00:04:46] Speaker 01:
determination by the gentleman and the formation of Endocraft, which was then to develop the product themselves and sell it.

[00:04:54] Speaker 01:
It seemed to me that the testimony indicated at the outset in 97, they had a different goal than the goal that they then began in 99.

[00:05:03] Speaker 03:
Judge, am I wrong?

[00:05:04] Speaker 03:
I disagree with you, Your Honor.

[00:05:06] Speaker 03:
What I'm saying, Your Honor, and what I'm pointing to on 333 and 340 and it's in other places, Your Honor, that the goal had always been

[00:05:15] Speaker 03:
to develop this business, not just to develop a particular product and just to sell the intellectual property.

[00:05:25] Speaker 01:
The goal at the very beginning, as Judge Clevenger pointed out, was to- What about on 245, where they say the goal was to develop a surgical instrument or surgical instruments that we could sell the intellectual property of the highest bidder as soon as we could?

[00:05:41] Speaker 03:
Yes, Judge.

[00:05:41] Speaker 03:
That was part of it.

[00:05:42] Speaker 03:
But that wasn't the only goal.

[00:05:45] Speaker 03:
And keep in mind, Your Honor.

[00:05:48] Speaker 02:
Yeah, I understand.

[00:05:48] Speaker 02:
But isn't there, aren't we, for purposes of appellate review, we have the judge's finding on the J-Mall that there was a partnership from the beginning for a restricted purpose?

[00:06:00] Speaker 03:
For a particular purpose.

[00:06:01] Speaker 02:
For that particular purpose.

[00:06:02] Speaker 03:
Correct.

[00:06:02] Speaker 03:
Which was to create this business.

[00:06:04] Speaker 03:
That is in Judge Talwani's decision.

[00:06:06] Speaker 02:
And we can't go behind that.

[00:06:09] Speaker 02:
And the question, as I understood it from the district court judge, was that there was a shift of gears in 99 reflected by the creation of Endocraft and the sales relationship with your client, and that that sufficiently shifted the gears to have terminated the partnership that previously existed.

[00:06:29] Speaker 03:
No, Your Honor, it did not do that.

[00:06:32] Speaker 03:
So that's her theory.

[00:06:34] Speaker 03:
Yeah, that's her theory.

[00:06:35] Speaker 03:
You're correct, Judge.

[00:06:35] Speaker 02:
And your argument is, how can that theory work when there is testimony from Zytel's, confirmed by Fusco, that the original partnership, whatever it was for, continued after those events?

[00:06:49] Speaker 00:
Exactly.

[00:06:49] Speaker 00:
Well, if I could just sort of clarify, there's not testimony from Dr. Zytel that the partnership continued.

[00:06:57] Speaker 00:
There's testimony, which the district court felt compelled to credit under her standard of review, that Dr. Zytel made the statement to Dr. Devone.

[00:07:09] Speaker 00:
Well, that's correct.

[00:07:10] Speaker 00:
But, Judge, that's correct.

[00:07:12] Speaker 03:
Judge, keep in mind that this was a jury coming up here from a jury verdict that's been reversed.

[00:07:20] Speaker 03:
So credibility was a big issue for this jury.

[00:07:24] Speaker 03:
And Dr. Zytel testified, Your Honor,

[00:07:27] Speaker 03:
that there never was a partnership from the beginning, that the statement to Mr. Fusco never occurred.

[00:07:34] Speaker 03:
But the jury is entitled, after a nine-day trial going through a ton of evidence, to reach the opposite conclusion.

[00:07:43] Speaker 01:
But here's the problem.

[00:07:44] Speaker 01:
I mean, you've stood up here now for nearly eight minutes, and you have not at all contended with the ISRA, which is your biggest impediment of the case.

[00:07:54] Speaker 01:
You don't do yourself a service.

[00:07:57] Speaker 01:
by standing here as the appellant and telling me about the things that are good for your case, but ignoring the things that are bad for your case.

[00:08:04] Speaker 01:
In 1999, your client signed a contract agreeing that he was simply an independent contractor and not a partner.

[00:08:12] Speaker 01:
So what does it matter if on page 340 he says, well, yes, I signed the contract.

[00:08:17] Speaker 01:
And yes, the contract says exactly that in no uncertain terms.

[00:08:20] Speaker 01:
And yes, I sent an email recognizing that that's what concerned me about the contract.

[00:08:25] Speaker 01:
But even though I signed it, Dr. Zytel told me it didn't really mean anything.

[00:08:29] Speaker 01:
What the heck?

[00:08:30] Speaker 01:
I mean, why does that mean there's still a partnership when your client signed a document saying he understands there is not a partnership and he's only an independent contractor?

[00:08:41] Speaker 03:
OK, so there's two things I want to address.

[00:08:45] Speaker 03:
First is what the standard that the district judge is supposed to apply.

[00:08:50] Speaker 03:
The standard is that the evidence has to be so strongly and overwhelmingly inconsistent with the verdict that no reasonable jury could have returned it because the jury ruled in Mr. Devona's favor.

[00:09:04] Speaker 03:
So that's the standard that the district judge was supposed to apply and on de novo review that this court applies.

[00:09:12] Speaker 03:
It's not whether this could.

[00:09:12] Speaker 01:
But there's a legal document.

[00:09:14] Speaker 02:
All right, let me address that.

[00:09:16] Speaker 02:
No, but the document.

[00:09:17] Speaker 02:
It doesn't go down a lot clearly saying that you can be a partner or employee at the same time.

[00:09:21] Speaker 03:
Yes, Your Honor, absolutely.

[00:09:22] Speaker 01:
But the document doesn't just say you're an employee.

[00:09:25] Speaker 01:
The document says you're not a partner.

[00:09:27] Speaker 01:
There's a difference.

[00:09:29] Speaker 03:
Well, but it says that they're not a partner.

[00:09:31] Speaker 03:
He's not a partner in Endocraft.

[00:09:33] Speaker 03:
It does not say that this umbrella partnership doesn't exist.

[00:09:39] Speaker 03:
In fact, the jury was entitled to conclude, based on the evidence, that this umbrella partnership existed.

[00:09:46] Speaker 01:
I'm sorry.

[00:09:46] Speaker 01:
I don't understand what you're talking about.

[00:09:48] Speaker 01:
It's my understanding that the assets that he now wants 40% of were related to the sale and elimination of Endocraft.

[00:09:57] Speaker 01:
Am I not right?

[00:09:58] Speaker 03:
No.

[00:09:59] Speaker 03:
This was the damages that the jury awarded were damages for profits that were not provided to him during the- Related to Endocraft.

[00:10:08] Speaker 03:
During the partnership.

[00:10:12] Speaker 01:
You can't have this ethereal partnership.

[00:10:14] Speaker 01:
We're partners.

[00:10:15] Speaker 01:
I don't know what this ethereal partnership pertains to.

[00:10:18] Speaker 01:
There is a company.

[00:10:20] Speaker 01:
That company is Endocraft.

[00:10:22] Speaker 01:
There is a document that you signed saying, I'm not a partner of Endocraft.

[00:10:27] Speaker 01:
So how is it that you think you can claim 40% of the profits from Endocraft as a partner?

[00:10:34] Speaker 03:
Let me start with the sales agreement, Your Honor.

[00:10:36] Speaker 01:
Look, your client might have gotten schnookered.

[00:10:38] Speaker 01:
And maybe this other guy's not a good guy.

[00:10:40] Speaker 01:
I can't make those kinds of determinations.

[00:10:42] Speaker 01:
And maybe the jury did, but he signed a document, a legal document saying he understood he was not a partner.

[00:10:51] Speaker 03:
But doctor, okay, but let's go to what the evidence actually said that was before the jury.

[00:10:56] Speaker 03:
And that is the evidence that was before the jury.

[00:10:58] Speaker 03:
What was also that the jury could credit was that Dr. Zytels told Mr. Devona

[00:11:05] Speaker 03:
that he would never enforce that sales agreement.

[00:11:09] Speaker 01:
As to certain provisions, right?

[00:11:11] Speaker 03:
No, as to it all.

[00:11:13] Speaker 03:
And in fact, the evidence was in the record, Your Honors, that it wasn't complied with.

[00:11:20] Speaker 03:
He didn't get paid under the ISRA.

[00:11:22] Speaker 01:
No, sometimes Dr. Seisel paid him more than he had to.

[00:11:27] Speaker 01:
But the more that he had to, like the $50,000 payment or the $75,000 payment,

[00:11:32] Speaker 01:
absolutely were not, do not key to 40% of the profitability of the business because the years in which he received those extra payments, the business was in fact unprofitable.

[00:11:40] Speaker 01:
So rather than that being an indication of his partner status, to me it's an indication of his employee status.

[00:11:47] Speaker 01:
You know, my husband's a partner.

[00:11:49] Speaker 01:
The firm doesn't make money, we don't get paid, right?

[00:11:51] Speaker 01:
The firm doesn't say, oh yes, but we're gonna pay you anyway.

[00:11:54] Speaker 01:
But they do do that with their employees, the employees get paid anyway, the employees get bonuses even, but partners don't.

[00:12:02] Speaker 02:
But Judge, I thought that the jury heard evidence that there was this umbrella partnership and that the business of the partnership was going to be conducted through Endocrine.

[00:12:12] Speaker 03:
Exactly, Your Honor.

[00:12:13] Speaker 03:
That's exactly right.

[00:12:14] Speaker 02:
My understanding of partnership law, people do that all the time.

[00:12:18] Speaker 02:
They have an overarching partnership and they choose to use some, whether it's a sole proprietorship or some other instrumentality to achieve the purposes of the partnership.

[00:12:27] Speaker 03:
You're absolutely right, Judge, and that's what Rhode Island law says.

[00:12:31] Speaker 03:
And the jury was entitled to reach that conclusion.

[00:12:35] Speaker 03:
Now Judge Moore, if you were on the jury, certainly you are entitled to have reached a different conclusion based upon your common sense, your experience, whatever it might be.

[00:12:47] Speaker 03:
But Your Honor, with all due respect, you're not on the jury.

[00:12:50] Speaker 03:
So the standard is completely different here.

[00:12:54] Speaker 03:
The jury, after a nine-day trial, after hearing a lot of evidence, and considering counterclaims, and co-inventorship issues, and partnership issues.

[00:13:03] Speaker 01:
But none of that has anything to do with was he a partner or not.

[00:13:07] Speaker 01:
There's a legal document that he signed saying he was not.

[00:13:10] Speaker 01:
He sent an email expressing his own concern about the fact, hey, wait a minute.

[00:13:14] Speaker 01:
This document says I'm not a partner.

[00:13:16] Speaker 01:
And then he signed it anyway as a matter of law.

[00:13:21] Speaker 01:
I don't see how his later testimony.

[00:13:24] Speaker 01:
But Seisel told me he wouldn't enforce it against me.

[00:13:26] Speaker 01:
I don't see how that overcomes the document and the evidence.

[00:13:33] Speaker 03:
The evidence is not just that I won't enforce that representative agreement, but that our existing umbrella partnership, that pre-existed Indocraft by two years, continues, unabated, and that Indocraft is merely the vehicle

[00:13:50] Speaker 03:
through which we will carry out our umbrella partnership goals.

[00:13:55] Speaker 02:
I think, if I'm not mistaken, the argument that Judge Moore has made forcefully that the agreement was the sole and thorough expression of the relationship between your client and the circumstances that was pitched to the jury by your emissary.

[00:14:12] Speaker 03:
Absolutely.

[00:14:12] Speaker 03:
And they rejected it.

[00:14:13] Speaker 02:
And they rejected it.

[00:14:14] Speaker 02:
So they heard that argument, and they could have believed it, but they obviously didn't.

[00:14:18] Speaker 02:
Because if they believed it, they couldn't have done it.

[00:14:20] Speaker 01:
You're absolutely right, Judge.

[00:14:21] Speaker 01:
But in fact, doesn't the document say that?

[00:14:23] Speaker 01:
Doesn't the document say that it is the complete and utter agreement between the parties and that nothing else?

[00:14:29] Speaker 03:
No.

[00:14:29] Speaker 03:
It says between Endocraft and my client, not between Dr. Zytel's and my client.

[00:14:35] Speaker 03:
And that's the key distinction.

[00:14:37] Speaker 01:
I don't understand what you...

[00:14:40] Speaker 01:
the only thing for which damages can be sought.

[00:14:44] Speaker 01:
There are no damages that your client is seeking outside of the sale.

[00:14:49] Speaker 03:
I disagree with you, Your Honor.

[00:14:50] Speaker 03:
The jury heard complicated damages testimony and concluded that the value of the partnership was the enterprise value was worth something.

[00:15:02] Speaker 03:
And secondly, that the lost profits during the lifetime of this partnership

[00:15:09] Speaker 03:
Also, he was entitled to 40% of that.

[00:15:12] Speaker 00:
Would the damages predicated on anything other than endocraft and the partnership being one and the same?

[00:15:20] Speaker 03:
Well, Judge, the expert obviously had to have some information.

[00:15:26] Speaker 03:
And he used endocraft information.

[00:15:29] Speaker 03:
But in coming up with the damages calculations, he valued the partnership, a component of which was certainly endocraft,

[00:15:39] Speaker 00:
Well, not a component.

[00:15:40] Speaker 00:
It's an entirety.

[00:15:41] Speaker 00:
The two were equivalent.

[00:15:43] Speaker 00:
One and the same.

[00:15:43] Speaker 00:
If there were anything beyond the endocraft financial situation that was factored into the damages ascribed to the partnership.

[00:15:51] Speaker 03:
No, I don't believe so, Judge.

[00:15:52] Speaker 00:
So under the calculation,

[00:15:54] Speaker 00:
The partnership and endocraft were one in the same.

[00:15:57] Speaker 00:
For purposes of damages, that's correct.

[00:15:59] Speaker 02:
Didn't the jury hear testimony that the reason for creation of the corporation was Dr. Zytel wanted to have it for either shielding personal liability or other reasons?

[00:16:10] Speaker 02:
That's exactly right.

[00:16:11] Speaker 02:
It wasn't as if you need the corporation to carry out the purposes of the partnership.

[00:16:17] Speaker 02:
Jury could have heard that the reason for the corporation was for that reason, so in essence the corporation and the partnership are the same in their mind.

[00:16:27] Speaker 03:
Right, exactly.

[00:16:28] Speaker 02:
Just so you know, the other side knows where I'm coming from as well.

[00:16:31] Speaker 02:
The thing that concerns me is that the case wasn't tried on a shifting gears theory.

[00:16:38] Speaker 02:
Jury didn't hear any testimony at all about the nature of the partnership changing from the other side saying it.

[00:16:45] Speaker 02:
You put in three, I saw three pieces of testimony, two from what your client said, the other Fusco, all seemed clearly after the events that the judge felt broke it all.

[00:16:58] Speaker 02:
Right, exactly.

[00:16:59] Speaker 02:
Are supportive of the fact that it didn't break it all.

[00:17:02] Speaker 02:
So, and then when the judge says in her opinion, I accord those statements, the three I'm talking about, full weight, not some weight, not a little bit of weight, but full weight.

[00:17:13] Speaker 02:
So what I can understand is how you can give full weight to those three factors and still conclude that the creation of the corporation and the agreement killed it all.

[00:17:29] Speaker 02:
Where Rhode Island law clearly allows you to run a partnership through a corporation.

[00:17:34] Speaker 02:
And the sales agreement was between Endercraft and the employee.

[00:17:38] Speaker 02:
And the law doesn't preclude you from being an employee and a partner.

[00:17:41] Speaker 03:
That's right, Judge.

[00:17:42] Speaker 03:
And I think what she, I know my time is up, Your Honor.

[00:17:44] Speaker 03:
I can just answer Judge Clevinger's question.

[00:17:47] Speaker 02:
Oh, I just want to say one other thing.

[00:17:48] Speaker 02:
Sure.

[00:17:49] Speaker 02:
That troubled me, although it's not a piece of your appeal.

[00:17:53] Speaker 02:
The shifting of gears shows up very late in the game.

[00:17:58] Speaker 02:
It doesn't appear in the 50A motion or the memorandum for the 50A.

[00:18:02] Speaker 02:
It doesn't show up in the 50B motion.

[00:18:04] Speaker 02:
It shows up in the memorandum in support of the 50-B motion.

[00:18:10] Speaker 03:
Late in the game.

[00:18:12] Speaker 03:
Well, that's right.

[00:18:13] Speaker 03:
That's right.

[00:18:15] Speaker 03:
I just wanted to go back to your previous point, which is it seemed to us, Your Honor, that the district judge took that favorable quote, favorable to the jury verdict, put it aside, and said, let's look at each individual piece of evidence to see if it fits into a partnership.

[00:18:30] Speaker 03:
She took each piece, said no, said no,

[00:18:33] Speaker 03:
said, no, without looking at the totality of the service.

[00:18:35] Speaker 02:
But it doesn't fit any better after 99 than before.

[00:18:40] Speaker 02:
All of it.

[00:18:41] Speaker 02:
What went on after 99, unless you believe that formation of the corporation and the agreement were game changers, the same was true.

[00:18:49] Speaker 02:
The doctor was paying all the money and Zytel's was doing all the work.

[00:18:52] Speaker 03:
Exactly.

[00:18:53] Speaker 03:
And that's appropriate under partnership law in Rhode Island.

[00:18:56] Speaker 00:
Can I just understand your theory here?

[00:18:59] Speaker 00:
So under your theory, you've got two different entities, an umbrella partnership and then Endocraft.

[00:19:05] Speaker 00:
Correct.

[00:19:06] Speaker 00:
And is it your view that the umbrella partnership owns the entirety of Endocraft?

[00:19:12] Speaker 03:
Yes, it's an asset.

[00:19:14] Speaker 03:
I would characterize it as an asset of the umbrella.

[00:19:18] Speaker 03:
But the way... But the only asset.

[00:19:20] Speaker 00:
So they're one and the same in your view.

[00:19:21] Speaker 03:
Yes, at that point.

[00:19:22] Speaker 03:
But keep in mind, what they testified to was that Endocraft

[00:19:28] Speaker 03:
was the vehicle to achieve the partnership objectives, which didn't change from 1997 to 2011.

[00:19:35] Speaker 00:
But wait, from 1997 to 99, there was no other entity.

[00:19:42] Speaker 00:
You're right.

[00:19:43] Speaker 00:
I'm sorry.

[00:19:44] Speaker 03:
I misspoke.

[00:19:44] Speaker 03:
1999 to 2011.

[00:19:46] Speaker 03:
But the umbrella partnership existed from 1997 to 2011.

[00:19:51] Speaker 03:
And under Rhode Island law, a continuation of a business by a partner is prima facie evidence

[00:19:58] Speaker 03:
that the partnership continues.

[00:20:00] Speaker 03:
So even though there's this, quote, switching gears, the only thing that happened there was they went from an outside manufacturer to Dennis DeVona spending most of his time overseeing the manufacturer.

[00:20:12] Speaker 00:
Well, that's not the only thing that happened.

[00:20:14] Speaker 00:
They went into business.

[00:20:15] Speaker 00:
They created a different business.

[00:20:17] Speaker 00:
He signed the agreement the judge more highlighted repeatedly.

[00:20:22] Speaker 00:
They signed the agreement.

[00:20:24] Speaker 00:
They operated in a way that does not suggest that there was any partnership whatsoever.

[00:20:28] Speaker 00:
We've got 99 to 2000, how many years?

[00:20:32] Speaker 00:
Eleven.

[00:20:33] Speaker 00:
Eleven.

[00:20:34] Speaker 00:
Okay.

[00:20:35] Speaker 00:
And the testimony we've talked about was all around the period of the change.

[00:20:38] Speaker 00:
But after 99, we've got the agreement.

[00:20:41] Speaker 00:
Which was not enforced.

[00:20:43] Speaker 03:
And Dr. Devona, Dr. Zeitels told Dennis Devona he would not enforce it.

[00:20:48] Speaker 03:
And in fact, he never did.

[00:20:50] Speaker 03:
He didn't even go by it.

[00:20:51] Speaker 00:
But you've got an entity that was operating.

[00:20:54] Speaker 00:
And it was operating with Mr. Zytel being listed on all the documents as the sole owner and the sole person in charge, right?

[00:21:02] Speaker 00:
And checks and all of this stuff being done as if it was operated and he was the sole purifier.

[00:21:07] Speaker 00:
No, Judge.

[00:21:09] Speaker 03:
Dennis DeVona guaranteed the credit card debt.

[00:21:11] Speaker 03:
Dennis DeVona agreed to share losses.

[00:21:14] Speaker 03:
They held Dennis DeVona out to third parties as a partner.

[00:21:20] Speaker 03:
Judge Clevenger said Endocraft was really formed just to protect Dr. Zytel's from product liability.

[00:21:26] Speaker 03:
I mean, it's very common for a partnership to create an underlying entity to protect themselves from product liability or other types of liability.

[00:21:36] Speaker 00:
But why would it be just Dr. Zytel and not Mr. Devona also as part of that?

[00:21:41] Speaker 03:
Because Dr. Zytel did it first.

[00:21:43] Speaker 03:
He was the one that created Endocraft.

[00:21:45] Speaker 03:
He did it without consulting originally with Dennis Devona.

[00:21:49] Speaker 03:
But there's a lot of evidence that, in fact, a partnership continued.

[00:21:55] Speaker 03:
Dennis DeFona was doing all the work.

[00:21:59] Speaker 03:
And the jury, again, I respectfully ask the court to keep in mind what the standard is here.

[00:22:06] Speaker 03:
The standard is that no reasonable jury could have reached the conclusion that it did.

[00:22:11] Speaker 03:
That's the standard that this court has to apply de novo.

[00:22:14] Speaker 03:
It's not that you would decide differently as a jury.

[00:22:18] Speaker 03:
Could a reasonable jury have reached this conclusion?

[00:22:22] Speaker 03:
And sure, there may be some evidence that favors Dr. Zytel.

[00:22:25] Speaker 02:
The judge realized on the summary judgment, saying this case is going to go to trial, the evidence of the partnership may be thin, which we can all agree.

[00:22:34] Speaker 02:
I mean, it's thin.

[00:22:36] Speaker 02:
But the question is, is it there?

[00:22:38] Speaker 02:
And on the J-Mall, the judge says the jury was correct in finding that there was an original partnership for a specific purpose that at least lasted till 99.

[00:22:49] Speaker 02:
And so then the question is, and then, are the circumstances after 99 sufficiently different to say that that partnership was collapsed?

[00:22:59] Speaker 03:
And there's no evidence and no one testified that HIP dissolved

[00:23:03] Speaker 02:
That's partly because your adversary chose to put its eggs in the no partnership at all basket.

[00:23:11] Speaker 02:
That's correct.

[00:23:12] Speaker 02:
As a matter of fact, they lead off their red brief by saying even the district court found there was no partnership, which is of course incorrect.

[00:23:20] Speaker 02:
It is incorrect.

[00:23:23] Speaker 02:
The ships passed, what we're hearing now were ships that never passed each other at trial.

[00:23:30] Speaker 03:
Thank you.

[00:23:39] Speaker 04:
Good afternoon, Your Honors.

[00:23:42] Speaker 04:
The timeline here is absolutely crucial.

[00:23:44] Speaker 04:
And the Fusco statement, Your Honor, was not after the formation of Endocraft.

[00:23:49] Speaker 02:
The testimony here... He testified that it was late 99 or 2000?

[00:23:54] Speaker 04:
No, but he testified, Your Honor, and this is at page 595 of the appendix, he was asked when that statement was made.

[00:24:01] Speaker 04:
Had to have been sometime in late 1998.

[00:24:04] Speaker 04:
That's months before the formation.

[00:24:05] Speaker 02:
He clarified himself later.

[00:24:07] Speaker 04:
He did not.

[00:24:08] Speaker 04:
Your best recollection is late 1998, in that range, yes, sir.

[00:24:12] Speaker 04:
And then he was asked later.

[00:24:13] Speaker 02:
This is page 595?

[00:24:15] Speaker 04:
595.

[00:24:16] Speaker 04:
And then on page 602, he says, late 90s, early 2000, in that range, he never said that it took place after the formation.

[00:24:25] Speaker 04:
He never said in any non-speculative manner that it took place after the formation of Endocraft.

[00:24:30] Speaker 04:
I know the plaintiffs argue that you're allowed to draw an inference that maybe it was after.

[00:24:34] Speaker 04:
But if we were here on a, for example, statute of limitations case, and the plaintiff said, I was hurt sometime in a three-year range, and part of the range was outside the limitations period, and part was in, was within it.

[00:24:46] Speaker 02:
I do believe he said late 1999 to 2000.

[00:24:49] Speaker 04:
He did not, Your Honor.

[00:24:51] Speaker 04:
Nowhere?

[00:24:51] Speaker 04:
Nowhere.

[00:24:52] Speaker 04:
You can look at page 595, where he says his best recollection is 98.

[00:24:55] Speaker 04:
And you can look at page 602, where he says late 90s, not late 1999.

[00:25:00] Speaker 04:
So it's actually been troubling that we've heard.

[00:25:04] Speaker 02:
If I'm wrong, I apologize, but I thought I'd read the entire record.

[00:25:09] Speaker 04:
So that was before the formation of Endocraft.

[00:25:12] Speaker 02:
And then the other two statements... It had to be somewhere in the late 90s, early 2000s in that range.

[00:25:16] Speaker 04:
That's page 602, and page 595, his best memory was 1998.

[00:25:20] Speaker 02:
That's what it says, late 90s, early 2002.

[00:25:23] Speaker 02:
And if Endocraft... So the jury could infer.

[00:25:28] Speaker 04:
They could not infer, Your Honor.

[00:25:30] Speaker 04:
The late 90s, I would say, starts in 98, which is what he said his best memory was.

[00:25:37] Speaker 02:
If it's up to early 2000, the events we're talking about are like early to mid-1999.

[00:25:43] Speaker 04:
And that's speculation, Your Honor.

[00:25:44] Speaker 04:
If the witness isn't himself sure when it was, and he gives a range, and much of the range is outside the relevant period,

[00:25:51] Speaker 02:
Well, this was cumulatively evidence to the two pieces of testimony that said the umbrella partnership continued.

[00:25:59] Speaker 02:
So if the jury hears it, it's cumulatively.

[00:26:02] Speaker 02:
And those other pieces, well, no, not as... The jury did hear Fusco saying that it was possibly the 2000.

[00:26:09] Speaker 04:
It is not cumulative, Your Honor.

[00:26:11] Speaker 02:
The fact that a conversation may have occurred between... It's cumulatively to the point that the partnership was continuing.

[00:26:17] Speaker 04:
It's not, Your Honor.

[00:26:19] Speaker 04:
It really isn't, because his best memory was that it was 1998, and even when he gave a broader range... The subject matter was... The other statements as well, Your Honor, to the point of the... You agree that your first statement in your brief was incorrect.

[00:26:32] Speaker 02:
I just want to be clear about that on page one.

[00:26:35] Speaker 04:
Well, what the trial court found, Your Honor, was that there was not a partnership after... No partnership existed between the parties.

[00:26:41] Speaker 02:
That's what you say on line three.

[00:26:43] Speaker 04:
Well, I guess what we meant, Your Honor, was starting in April of 1999.

[00:26:47] Speaker 02:
No, no, no.

[00:26:47] Speaker 02:
It says here they found no partnership.

[00:26:51] Speaker 02:
The judge found a partnership up to 1999.

[00:26:54] Speaker 04:
Up through April of 1999.

[00:26:55] Speaker 04:
So this statement is incorrect.

[00:26:57] Speaker 04:
That may be incorrect.

[00:26:59] Speaker 04:
OK, fine.

[00:26:59] Speaker 00:
What about the statement that we were talking about early on, on page 345, where she credited, and as Judge Clevenger pointed out, she absolutely credited

[00:27:11] Speaker 00:
the fact that this statement, Dr. Zeidel made this statement to Devona.

[00:27:15] Speaker 00:
So are we supposed to say, well, he made it and he was lying?

[00:27:19] Speaker 04:
So, Your Honor, that statement was prior to the signing of the ISRA.

[00:27:24] Speaker 04:
And as Judge Moore has pointed out, the ISRA, the Sales Representative Agreement, has an integration clause.

[00:27:30] Speaker 02:
These statements were prior to the signing of the ISRA?

[00:27:32] Speaker 04:
They were prior to the signing of the ISRA.

[00:27:33] Speaker 04:
The ISRA was signed in June of 1999.

[00:27:35] Speaker 04:
These statements were made in May.

[00:27:38] Speaker 04:
So there was a conversation, which occurs in May,

[00:27:40] Speaker 04:
Supposedly the statement is made and then the following month the plan of signs and agreement which has an integration clause with Dr. Zeitels who is the sole member of the LLC concerning exactly the same subject matter which says we are not partners.

[00:27:56] Speaker 04:
I know they make an argument that we've waived the parole evidence rule, however under the parole evidence rule

[00:28:03] Speaker 04:
clearly the later written document concerning the identical subject of governance.

[00:28:08] Speaker 00:
What they're saying is that we are not partners in Indocraft, but that doesn't dislodge the umbrella partnership that... The law allows you to be a partner employee at the same time.

[00:28:24] Speaker 04:
Not really, Your Honor.

[00:28:25] Speaker 04:
We cite case law here, and the law is clear.

[00:28:28] Speaker 04:
I think there's not actually dispute between the parties as to how the law works.

[00:28:31] Speaker 04:
You can be both partners and an employee.

[00:28:34] Speaker 04:
However, if you're going to proceed that way, then you need to hold yourself up to third parties that way, have a relationship so that the third parties know that you're partners.

[00:28:42] Speaker 02:
So he continues to call himself a partner.

[00:28:44] Speaker 04:
He does not, Your Honor.

[00:28:46] Speaker 04:
So for example, the ACT medical statement is also before the formation of Endocraft and the signing of the ISRA.

[00:28:53] Speaker 04:
After the formation of Endocraft and the ISRA are signed, there is literally no statement whatsoever

[00:29:00] Speaker 04:
And there's no testimony that any statements were made.

[00:29:02] Speaker 00:
Well, he referred us.

[00:29:02] Speaker 00:
He said that there were statements made by Devona holding himself out, or that they held himself out as a partner.

[00:29:08] Speaker 04:
And that's actually not correct, Your Honor.

[00:29:10] Speaker 04:
And again, the timeline here is crucial.

[00:29:13] Speaker 04:
The ACT statement was before him.

[00:29:14] Speaker 04:
That was in April.

[00:29:16] Speaker 04:
Endocrafts created in late April.

[00:29:19] Speaker 04:
ISRA signed in June.

[00:29:20] Speaker 04:
The statement he's referring to was made in earlier April.

[00:29:24] Speaker 04:
Once you get past the signing of the ISRA, there are no partnership statements.

[00:29:30] Speaker 04:
What you have instead, so for example, if you look at page 1249 in the appendix, this is an email that Mr. Devone has sent to a customer.

[00:29:40] Speaker 04:
He refers to Dr. Zytel as his boss in writing.

[00:29:46] Speaker 04:
When you look at that May letter that your honors have been referring to, this is a letter which talks about our business arrangement.

[00:29:54] Speaker 04:
It goes on at length about our business arrangement.

[00:29:56] Speaker 04:
This is in between the formation of Endocraft

[00:30:00] Speaker 04:
and the signing of the ISRA, there's not a single mention there of the existence of any kind of partnership.

[00:30:06] Speaker 02:
I think that's one piece of testimony.

[00:30:07] Speaker 02:
What my trouble was, I don't understand what full weight means other than full weight.

[00:30:13] Speaker 02:
And if the full weight is the burnership continued, notwithstanding things afterwards,

[00:30:20] Speaker 02:
And so ultimately, Your Honor, the question then can a juror understand the full weight, meaning that events after 1999 didn't change anything.

[00:30:30] Speaker 04:
And so ultimately, whether there's a partnership is a question of law, right?

[00:30:34] Speaker 04:
It goes to the jury for the jury to resolve disputed facts, but it's a question of law.

[00:30:39] Speaker 04:
The trial court gave full weight to those statements, but ultimately, applying the factors for the determination of whether there's a partnership, which was set forth in the First Circuit's self-ex decision,

[00:30:49] Speaker 04:
concluded that even assuming that that statement was made, when you consider all the different factors which go into determining whether there's a partnership as a matter of law, there was no partnership here after April of 1999.

[00:31:02] Speaker 02:
So for example, when you look at the cases... The reasons why are describing the way in which the partnership functioned before.

[00:31:10] Speaker 02:
Well, I can't think other than the creation of Endocraft and the agreement, which those are clear.

[00:31:17] Speaker 02:
It seems to me that the operation, the relationship between the two people is the same as before.

[00:31:23] Speaker 02:
Zytel is putting all the money in and Devana doing all the work on the project.

[00:31:28] Speaker 04:
But those are very important factors, Your Honor.

[00:31:31] Speaker 04:
And some factors existed later that could not have existed before.

[00:31:35] Speaker 04:
So courts place an awful lot of weight, for example,

[00:31:38] Speaker 04:
on whether there's a partnership tax return.

[00:31:41] Speaker 04:
There was no income in the 97, 98 period, so there was no need to file a tax return.

[00:31:46] Speaker 04:
Is that right?

[00:31:47] Speaker 04:
Yeah, they didn't sell anything until starting in 1999.

[00:31:51] Speaker 04:
Once there was income and it started showing up on taxes, there was no partnership tax return.

[00:31:57] Speaker 04:
Dr. Zytel has claimed all of the income himself and paid taxes on all of the income himself throughout that period.

[00:32:05] Speaker 04:
When you look at cases like Self-Ex or

[00:32:08] Speaker 04:
TG Plastics or the other various cases, they all place an awful lot of weight on whether the partners told tax authorities that they were partners.

[00:32:16] Speaker 04:
That wasn't the case here.

[00:32:18] Speaker 04:
Courts look at whether the business was conducted in the partnership's name.

[00:32:23] Speaker 04:
This was conducted in the name of Endo Crown, not the partnership.

[00:32:25] Speaker 02:
Right, but the cases also show that the fact that you didn't file a partnership return doesn't necessarily mean there wasn't a partnership.

[00:32:31] Speaker 02:
It's a totality of circumstances type test.

[00:32:34] Speaker 04:
It is your Honor.

[00:32:34] Speaker 02:
Each one of these factors adds in.

[00:32:37] Speaker 02:
And you had a jury that, as I say, the thing that troubles me is that the history court was being very honest.

[00:32:44] Speaker 02:
But they say there is obviously testimony here in the record to the effect that the partnership continued.

[00:32:50] Speaker 04:
And what?

[00:32:50] Speaker 02:
She credits the partnership with existing.

[00:32:53] Speaker 04:
She credits that there was a partnership during a period where the only plan was to work together for about a year.

[00:32:59] Speaker 04:
come up with a device and sell off the intellectual property for somebody else.

[00:33:02] Speaker 02:
Probably the goal was to have a business and sell it.

[00:33:06] Speaker 04:
To have a business and sell it, but his testimony, and Judge Moore was looking at page 245, you can look at multiple places in the record where Mr. Devona testified about what the original plan was, what they discussed in 1997.

[00:33:18] Speaker 02:
Yeah, but her whole point wasn't that the underlying sort of nature shifted, but she said it comes to an end.

[00:33:25] Speaker 04:
And it did come to an end.

[00:33:26] Speaker 04:
Their original plan, and this is what he testified repeatedly, page 245, page 360, page 415, in the appendix, the plan was to come up with a device and sell off the device, sell off the business within about a year.

[00:33:40] Speaker 04:
He said this is at page 415, right after the switching gears testimony.

[00:33:45] Speaker 02:
That was the expectation.

[00:33:46] Speaker 04:
We thought it would take about 12 to 14 months and maybe cost $70,000, and then we realized

[00:33:52] Speaker 04:
that that wouldn't work.

[00:33:53] Speaker 04:
This is now page 414, the switching gears conversation testimony.

[00:33:57] Speaker 00:
And when did that take place?

[00:33:59] Speaker 04:
This took place right after the ACT medical meeting before the formation of Endocraft and before the signing of the ISRA.

[00:34:06] Speaker 04:
So we realized that our original plan, which was just to work together for about a year to create this device and sell it off, wasn't going to work.

[00:34:14] Speaker 04:
So we switched gears.

[00:34:15] Speaker 04:
And how did they switch gears?

[00:34:16] Speaker 04:
A week later, Dr. Zytel's goes out.

[00:34:19] Speaker 04:
And without even talking about it with Mr. Devona,

[00:34:22] Speaker 04:
creates Endocraft and makes himself the sole member of the company.

[00:34:26] Speaker 04:
He then has Mr. Devona's longtime family lawyer.

[00:34:31] Speaker 04:
It was Mr. Devona's longtime family lawyer who drafted up the independent sales representative agreement.

[00:34:36] Speaker 04:
And the question was put to Mr. Devona, did you ever tell your family lawyer that you guys were partners when he was drafting these things up?

[00:34:43] Speaker 04:
And the answer was no.

[00:34:45] Speaker 04:
That's at page 426 of the appendix.

[00:34:48] Speaker 04:
So then the ISRA signed.

[00:34:50] Speaker 04:
And Mr. Devona reads it and sends that email or fax at that point to Dr. Zytel saying, I have a lot of concerns with this.

[00:34:59] Speaker 04:
I thought when I saw this that maybe you didn't want to go forward and do business with me.

[00:35:03] Speaker 04:
This is the letter at pages 1173 to 76 in the appendix.

[00:35:08] Speaker 04:
I hope you'll spare me the guesswork.

[00:35:09] Speaker 04:
If you've already decided I don't belong in this project, I knew if I didn't sign the ISRA it would be the end of business between us.

[00:35:17] Speaker 04:
These are not statements made by someone who thinks he still has an ongoing umbrella partnership.

[00:35:22] Speaker 04:
These are statements made by somebody who realizes that their original plan has ended, and now there's a different phase in their relationship.

[00:35:28] Speaker 00:
Here's what's bothering me about the case, and I don't quite know what to do about it.

[00:35:32] Speaker 00:
Maybe there's nothing I can do about it, is your friend made a lot of comments about deferring to the jury.

[00:35:37] Speaker 00:
It seems to me that one of the things that might have happened to the jury here was because the only position you were taking was there was never any partnership at all.

[00:35:47] Speaker 00:
And once they reached it and there was plenty, which even the judge concluded that there was a partnership in the first two years, they just kind of ended it.

[00:35:56] Speaker 00:
You hadn't presented to the jury.

[00:35:58] Speaker 00:
But even if you conclude that there was a partnership in the first two years, you also have to conclude based on the evidence that things changed in 99.

[00:36:08] Speaker 00:
That was never presented.

[00:36:09] Speaker 00:
That theory would have been presented by you.

[00:36:12] Speaker 00:
And that was never presented.

[00:36:15] Speaker 00:
So once the jury gets it, and if they're 100% sure that there was a partnership in 97, what were they to do?

[00:36:24] Speaker 00:
And if that's correct, then I don't know what we do with that under a new theory, that we introduce a new theory at this stage and evaluate the jury's verdict under that new theory.

[00:36:37] Speaker 04:
So that, Your Honor, I'm not going to comment on the quality of closing argument.

[00:36:41] Speaker 04:
What I will say, though, is that ultimately the question whether there's a partnership

[00:36:45] Speaker 04:
is a question of law.

[00:36:47] Speaker 01:
Can I just ask you?

[00:36:48] Speaker 01:
I know it's a question of law with underlying facts, and it often turns on the facts.

[00:36:51] Speaker 01:
And in Rhode Island law, you have to give it to a jury, even though it's a question of law.

[00:36:55] Speaker 01:
I have cases right here in front of me, because I asked my law clerk to pull them up when you said it was a question of law.

[00:36:59] Speaker 01:
But isn't there an underlying thing?

[00:37:01] Speaker 01:
I think multiple people have stated that the jury found there was a partnership from 97-99, and that the judge also found there was.

[00:37:11] Speaker 01:
I'm reading the judge's opinion on A6 and A7,

[00:37:14] Speaker 01:
And she says, a jury could thus have found there was a partnership from 97 to 99.

[00:37:19] Speaker 01:
I don't see any statement in her opinion in which she agrees that there was.

[00:37:25] Speaker 01:
She just says, giving deference, a jury could have found a partnership existed during this period, but they could not have found one existed thereafter.

[00:37:32] Speaker 01:
I may be wrong on the facts.

[00:37:33] Speaker 01:
Am I wrong?

[00:37:34] Speaker 04:
I think you're right, Your Honor.

[00:37:35] Speaker 04:
Ultimately, it doesn't matter, though, because what's around the law stands.

[00:37:38] Speaker 01:
But I know you think it doesn't matter.

[00:37:40] Speaker 01:
But there is a difference between a jury finding something and the judge saying, well, under the standard of review, I can't reverse it.

[00:37:46] Speaker 01:
That's different from a judge saying, and I agree with it.

[00:37:50] Speaker 04:
That's correct, Your Honor.

[00:37:51] Speaker 04:
I will note that the question of dissolution of a partnership is governed by Rhode Island statute.

[00:37:55] Speaker 04:
And so this is section 712.

[00:37:57] Speaker 02:
Right, but your directive at the very moment was saying there wasn't a firm partnership at all.

[00:38:03] Speaker 04:
Yes, well, and that remains our view that there was never a partnership at all.

[00:38:07] Speaker 02:
She had to respond to that.

[00:38:08] Speaker 02:
I mean, so she rejected that argument.

[00:38:11] Speaker 04:
Well, she did, but she agreed with us.

[00:38:12] Speaker 02:
She agreed with you that the jury could never have found there was any partnership at all if she wouldn't have said the jury could have found.

[00:38:17] Speaker 04:
She ultimately agreed with us, and that's why we're here as the appellee, not the appellant, that even if there were a partnership in the 97, 98 period for that limited purpose of trying to do something for 12 months and get paid quick, when the parties realized that wouldn't work,

[00:38:31] Speaker 04:
And they realized that if they wanted to make a go of this, they would have to work together for a long period of time and manufacture the device themselves.

[00:38:37] Speaker 04:
But at that point, the partnership ended.

[00:38:39] Speaker 04:
There was a dissolution.

[00:38:40] Speaker 04:
And this is 7-12-42 of the Rhode Island statutes.

[00:38:43] Speaker 04:
Dissolution is caused without violation of the agreement between the partners by the termination of the definite term or particular undertaking specified in the agreement.

[00:38:53] Speaker 04:
And what did Mr. Devona say the agreement was back in that 97-98 period?

[00:38:58] Speaker 04:
Again, it's $245 and $360 and $415.

[00:39:01] Speaker 04:
The agreement was just to work together for about a year and try and sell this thing off quickly.

[00:39:06] Speaker 01:
And it was Devona's testimony that we had to switch gears.

[00:39:09] Speaker 04:
And we had to switch gears.

[00:39:10] Speaker 04:
That didn't work.

[00:39:11] Speaker 04:
And when they switched gears, they switched gears with Dr. Zytel's, creating a company, hiring Mr. Devona as effectively his employee or independent sales representative.

[00:39:21] Speaker 04:
And creating an LLC.

[00:39:24] Speaker 02:
So the jury was supposed to understand when they heard that the umbrella partnership continued, it continued in a different form.

[00:39:32] Speaker 02:
That's what you're saying.

[00:39:33] Speaker 04:
That's certainly their argument.

[00:39:34] Speaker 02:
Nobody told them that.

[00:39:38] Speaker 02:
I'm sorry.

[00:39:38] Speaker 02:
The argument, the testimony that supposedly the judge was giving full credit, full weight to was that the umbrella, the original partnership, continued.

[00:39:51] Speaker 02:
And that's after the creation of Endocraft.

[00:39:54] Speaker 04:
No, that was, okay, it was after the creation of Endocraft before the signing of the ISR with this integration clause.

[00:40:01] Speaker 04:
I want to make two further points.

[00:40:02] Speaker 02:
I mean, there's that testimony.

[00:40:04] Speaker 04:
There is that testimony.

[00:40:06] Speaker 02:
That's saying we don't think that pertinent purpose changed.

[00:40:09] Speaker 04:
You can give weight to testimony by saying, yes, I will credit that testimony, that that statement was made, but ultimately the question is what are the legal circumstances?

[00:40:18] Speaker 02:
Whole weight's different.

[00:40:20] Speaker 02:
Full weight seems to sound like it's pretty heavy.

[00:40:26] Speaker 04:
It's, I guess, the full weight it deserves.

[00:40:27] Speaker 04:
But ultimately, it's a question of law.

[00:40:29] Speaker 04:
And where a contract is signed with an integration clause a month later, which says we are not partners.

[00:40:33] Speaker 02:
And the judge recognized that she was turning the case on a 50-B argument that hadn't been made in 58.

[00:40:40] Speaker 04:
I don't believe the judge did.

[00:40:41] Speaker 02:
If she'd looked, she would have.

[00:40:44] Speaker 04:
Well, Your Honor, the 50-A argument was always that there wasn't a partnership.

[00:40:49] Speaker 02:
No, shifting gears.

[00:40:50] Speaker 02:
There was always an argument that there was no partnership at all.

[00:40:52] Speaker 04:
Well, I think once we got the transcript and we saw that testimony, certainly we latched onto that testimony and emphasized it.

[00:40:58] Speaker 04:
But the position of Dr. Zytelis had always been- And changed the theory of the case.

[00:41:03] Speaker 04:
Well, no, Your Honor.

[00:41:04] Speaker 04:
The theory had always been that once the ISRA was signed, at that point, there was no longer a partnership.

[00:41:10] Speaker 04:
That had always been the theory.

[00:41:12] Speaker 02:
And the jury rejected that argument?

[00:41:16] Speaker 02:
They did.

[00:41:17] Speaker 02:
But ultimately- You made that argument to the jury.

[00:41:19] Speaker 04:
They rejected it, Your Honor.

[00:41:20] Speaker 04:
But ultimately, the nature of a 50A, 50B argument is that the jury was wrong.

[00:41:25] Speaker 04:
And that when you actually look at the evidence,

[00:41:27] Speaker 04:
and apply the correct legal standard to it, a reasonable jury could not have reached the decision it did.

[00:41:34] Speaker 02:
Even in a setting where Zeitel said that agreement isn't worth anything, doesn't mean anything?

[00:41:41] Speaker 02:
Well, again, Your Honor, if every time you have a... I'm just saying, in the context of what the jury was free to do,

[00:41:47] Speaker 02:
This is kind of a messy case, because on the one hand, you were arguing that the agreement totally changed everything, and yet your client testified that the agreement did make a difference at all to the relationship.

[00:42:01] Speaker 04:
Well, our client didn't testify to that.

[00:42:02] Speaker 04:
Mr. Navona testified that our client said that.

[00:42:04] Speaker 02:
But the jury was allowed to hear that and allowed to believe it.

[00:42:07] Speaker 04:
But this is exactly why we have a parole evidence rule.

[00:42:11] Speaker 02:
No, but you're not on that.

[00:42:13] Speaker 02:
Parole evidence is not in the case.

[00:42:14] Speaker 04:
It is in the case, Your Honor.

[00:42:16] Speaker 04:
I know they argued waiver in their reply brief.

[00:42:19] Speaker 04:
There's First Circuit precedent directly on point.

[00:42:21] Speaker 04:
And let me give you the site.

[00:42:23] Speaker 04:
It's Weber versus International Paper, 417, F3rd, 229.

[00:42:28] Speaker 02:
So to exclude that evidence, we have to agree with you on the parallel evidence issue?

[00:42:32] Speaker 04:
No.

[00:42:33] Speaker 04:
I think you have to apply the factors that the First Circuit laid out in South X. And when you walk through those factors, did they conduct business in the name of the partnership?

[00:42:44] Speaker 04:
Was there a tax return?

[00:42:45] Speaker 04:
Were there capital accounts?

[00:42:46] Speaker 04:
Were there even partnership books?

[00:42:50] Speaker 04:
Was there an agreement to share losses?

[00:42:51] Speaker 04:
There was no testimony that there was an agreement to share losses here.

[00:42:56] Speaker 04:
What was the nature of their respective contributions?

[00:42:59] Speaker 04:
Dr. Zytel provided all the capital, and the jury ultimately found that Dr. Zytel provided... That's not unusual.

[00:43:05] Speaker 02:
One party provides the capital, the other provides the elbow grease.

[00:43:09] Speaker 04:
Well, it's a totality of the circumstances test.

[00:43:12] Speaker 04:
It is a totality of the circumstances test.

[00:43:14] Speaker 04:
When you walk through all the factors, what you find is that all the factors remind us of the facts.

[00:43:19] Speaker 02:
Each of the facts you cite, sure, if I were a juror, I could agree with you entirely.

[00:43:24] Speaker 02:
Each of the factors you mentioned, but none of them are dispositive.

[00:43:28] Speaker 04:
And it's a question of law, Your Honor.

[00:43:30] Speaker 04:
I know my time's long past.

[00:43:31] Speaker 04:
Thank you.

[00:43:32] Speaker 04:
Thank you, Your Honor.

[00:43:39] Speaker 03:
What this comes down to is could the jury, a reasonable jury, have reached this conclusion or could no reasonable jury reach this conclusion?

[00:43:55] Speaker 03:
The answer is absolutely.

[00:43:56] Speaker 03:
Based on this evidence, based on this record, they certainly could have reached this conclusion of this umbrella partnership for this entire period of time.

[00:44:03] Speaker 03:
At the end of the day, the jury did not believe Dr. Zytel

[00:44:06] Speaker 03:
when he specifically said, no partnership, no partnership, no discussion about Steven Fusco.

[00:44:12] Speaker 03:
They just disagreed with him.

[00:44:13] Speaker 03:
And that's what the jury system is all about.

[00:44:15] Speaker 03:
And Dennis DeVona was entitled to that jury.

[00:44:20] Speaker 03:
And ultimately, respectfully, what the district court did was invade the province of the jury.

[00:44:27] Speaker 03:
And I would just ask Your Honor, again, to look back at the standard of review here.

[00:44:31] Speaker 03:
Standard review is very, very important.

[00:44:33] Speaker 03:
It's not whether, respectfully, your honors would, as jurors, reach a conclusion.

[00:44:38] Speaker 03:
Whether a reasonable jury could reach, no reasonable jury could reach a conclusion.

[00:44:42] Speaker 01:
Do you agree that under Rhode Island law, whether a partnership exists is a question of law?

[00:44:46] Speaker 03:
There are fundamental facts that have to.

[00:44:48] Speaker 01:
There are underlying facts, of course.

[00:44:50] Speaker 01:
But do you agree that the ultimate question of whether a partnership exists is a question of law?

[00:44:54] Speaker 03:
I actually believe that it is a fact finding.

[00:44:57] Speaker 03:
That's my understanding.

[00:44:58] Speaker 03:
I know Your Honor said that you had some cases that say it's a matter of law.

[00:45:01] Speaker 03:
I think in certain instances, when you're looking at, let's say, a contract, does a contract create a partnership?

[00:45:07] Speaker 03:
I do think that, yes, I agree with Your Honor, that a court can decide that as a matter of law.

[00:45:14] Speaker 01:
But ultimately... No, no, I'm not asking whether a court can decide.

[00:45:17] Speaker 01:
A court can always decide something as a matter of law if there are no facts to the contrary.

[00:45:22] Speaker 01:
I'm asking you, under Rhode Island law, is the determination of whether a partnership exists between two parties a question of law or fact?

[00:45:29] Speaker 03:
I do believe it's a mixed question, because there has to be underlying fact finding based on the totality of the circumstances.

[00:45:36] Speaker 03:
And then you're applying the law, the partnership standards that were instructed by the judge in this case, applying the law to the facts, and you reach a conclusion.

[00:45:47] Speaker 00:
Thank you.

[00:45:48] Speaker 00:
We thank both sides.

[00:45:49] Speaker 00:
The case is submitted.

[00:45:50] Speaker 00:
That concludes our proceedings for this afternoon.