In re KeyTronics

Don King (defendant) was the sole proprietor of a business that sold, installed, and serviced car-wash systems and accessories. King offered QuickPay, a cashless vending system, to customers. King purchased QuickPay for resale from Datakey Electronics Inc. (Datakey). QuickPay was unprofitable because it required an attendant to operate within the car washes, which were mostly unattended. To make QuickPay attractive and profitable, King contacted Scott Willson (plaintiff), an electronics technician and computer programmer, to make QuickPay self-service and design and install the interface for one of King’s customers. King, Willson, and Scott Gardeen, a Datakey employee, agreed to form a corporation once Willson developed the self-service QuickPay. The partners named the business Secure Data Systems (SDS), representing the first initial of each party. Willson and King faced many challenges with the interface development and maintenance and repairs. Willson was not compensated for his services, believing his work was his contribution to the partnership. King acquired all customers and inventory from Datakey. Willson was very involved in making the acquisition a success. Willson stayed busy with SDS, developing a website and email addresses for himself and King. In May 2003, King and Willson went to an international car-wash convention in Las Vegas to promote SDS. After the convention, King and Willson had an argument regarding SDS. King and Willson reconciled and continued working for SDS. King and Willson’s issues continued because Willson was splitting his commitment between SDS and maintenance for King’s car-wash business. Willson wanted assurances by formalizing SDS’s partnership. Due to unavailability of the name Secure Data Systems for incorporation, the partnership was renamed as KeyTronics. In December 2003, King and Willson terminated their relationship. King offered to compensate Willson for the time he spent maintaining and repairing QuickPay. Willson refused payment, despite working over 2,000 hours. Willson brought suit for winding up and accounting, alleging a partnership. King counterclaimed for wrongfully withholding property and denied a partnership. The district court held that although King and Willson had pooled resources, money, and labor, no partnership existed, because there was no specific agreement. Alternatively, the district court held that King did not include his car-wash business in any partnership and the scope of any partnership did not include profits. Willson appealed.