Frontier Refining Company v. Kunkel’s, Inc.

Clifford Kunkel approached Fairfield and Beach (defendants) about financing the lease and operation of a filling station and truck stop owned by Frontier Refining Company (plaintiff). Fairfield and Beach agreed to finance and purchase equipment for the venture, on the understanding that it would be Kunkel’s responsibility to manage the business and ensure that it was incorporated prior to taking any action. Kunkel never attempted to incorporate the business. Kunkel signed various agreements with Frontier, including a lease under his individual name, doing business as Kunkel’s Inc. Fairfield and Beach did not see these agreements or discuss them with Kunkel before they were signed. Without Fairfield or Beach’s knowledge, Kunkel took over the filling station and started doing business. Frontier sold gasoline to the station, billing it to Clifford Kunkel doing business as Kunkel’s Inc. When the business failed to pay for several thousand dollars’ worth of gasoline, Frontier brought suit against Fairfield and Beach (defendants), as members of the Kunkel’s Inc. partnership, to recover the balance due. Fairfield and Beach denied the existence of a partnership, and claimed that Kunkel operated Kunkel’s Inc. as an individual. The trial court found that Kunkel’s, Inc. was not a partnership, found for Fairfield and Beach, and dismissed the action. Frontier now appeals.