Nancy W. Bayley, Inc. v. Employment Sec. Commission

Supreme Judicial Court of Maine · 1984 · Corporations

472 A.2d 1374 (1984)

Updated August 22, 2026

CorporationsJoint ventureEmployment statusAdministrative reviewintent of partiescontract implied or expressemployment security taxfishing vessel

Facts

Nancy W. Bayley, Inc. owned a seventy-nine ton fishing vessel and was assessed unemployment compensation contributions for wages paid during 1978-1979. The corporation maintained and repaired the vessel and selected the captain for each trip, while the captain selected the crew, commanded the vessel underway, decided where to fish, what to catch, where to sell the catch, and hired lumpers to unload it. The owner received fifty percent of gross receipts from each trip, and the remaining fifty percent, less trip costs, was divided among the captain and crew; compensation was not guaranteed and excess costs were carried forward. Before the Commission, the corporation argued that the captain and crew were engaged in a joint venture with the corporation, but the Commission rejected that claim based on the absence of formal written indicia such as a lease, partnership tax returns, or a written agreement.

Issue

Whether the Commission used the proper legal standard in deciding that the captain and crew were not engaged in a joint venture with the corporation. More specifically, the question was whether the Commission could reject joint venture status solely because there was no formal written documentation, without addressing evidence of the parties' intent shown by testimony and surrounding circumstances.

Rule

A joint venture is an association of two or more individuals or entities who agree to pool their efforts and resources to jointly seek profits. Because a joint venture is ex contractu, its existence may be shown by the elements of a contract, and the contract may be express or implied; the factfinder must examine the conduct of the parties, the surrounding circumstances, and the whole scope of the arrangement to determine their intent. A writing is not indispensable to the creation of a joint venture, and an agency errs if it bases its determination only on the absence of formal written evidence while failing to address substantial evidence bearing on intent.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Portland, Maine, Harbor Crest Seafood LLC owns a scallop boat used by skipper Evan Pike and a rotating crew. There is no written venture agreement, no lease, and no partnership tax return, but testimony shows the owner supplies the vessel and repairs, Evan chooses where to fish and where to sell, and everyone is paid only from a percentage split of trip proceeds after expenses.

If a state agency rejects joint venture status solely because the arrangement was never reduced to writing and no partnership returns were filed, which is the best assessment?

Explanation. The governing rule is that a joint venture is ex contractu and may be proved by an express or implied contract. The factfinder must examine the parties' conduct, surrounding circumstances, and the whole arrangement to determine intent; a writing is not indispensable. An agency errs when it bases its decision only on the lack of formal written evidence.