MEMORANDUM OPINION

GREGORY L. TADDONIO, UNITED STATES BANKRUTPCY JUDGE.

The Commonwealth of Pennsylvania seeks a determination that certain debts owed by Consignments on Centre, a now-defunct consignment shop in Pittsburgh's East End, are non-dischargeable. As an initial matter, the Court must determine whether Consignments on Centre was operated as a sole proprietorship by Kathleen J. Roche or was instead a partnership between her and her husband, Edward J. Roche. After conducting an evidentiary hearing on this limited issue and reviewing the evidence presented, the Court finds insufficient proof within the record to establish the existence of a partnership between the spouses.

I.

Consignments on Centre (the "Store") was a consignment store specializing in quality used women's fashions.1 Prior to 2001, the Store was operated by Women's American Art, a nonprofit organization, with Debtor, Kathleen J. Roche ("Kathleen"),2 serving as the Store's manager.3 Kathleen purchased the Store in 2001. It is undisputed that Kathleen operated the Store as its sole owner from 2001 to 2013. During that time span, Kathleen ran the business as a full-time onsite owner-manager and was assisted by several unpaid volunteers.

Debtor Edward J. Roche ("Edward"), her husband, was employed in the construction industry until he was permanently disabled in 2004. Since that time, Edward's personal income is solely derived from social security and disability insurance from MetLife. After he became disabled, Edward drove Kathleen to and from the Store each day, but he usually did not stay there during working hours.4

In 2013, Kathleen suffered a debilitating illness that caused her to be intermittently absent from the Store until it was finally closed in June 2015. When Kathleen could not be present and the Store was not otherwise closed, Edward would open and close the store and remain on the premises. The extent of Edward's other duties and responsibilities at the Store between 2013 and 2015 is the focus of the current dispute as to whether he was a partner in the Store.

Kathleen and Edward filed a voluntary joint petition under chapter 13 of the Bankruptcy Code on October 2, 2015. The case was converted to chapter 7 on March 18, 2016.5

The Commonwealth of Pennsylvania, Bureau of Consumer Protection, initiated this adversary proceeding as parens patriae6 on behalf of consumers who have been damaged by the allegedly fraudulent practices of the Debtors in operating the Store, including Pennsylvania residents who filed 245 claims in this bankruptcy case. Through its Amended Complaint, the Commonwealth seeks an exception to discharge under § 523(a)(2)(A) and (a)(4) for each of those claims.7

The parties agreed to bifurcate the issues for trial, first setting an evidentiary hearing on the question of whether Kathleen and Edward operated the Store as a partnership, and deferring the resolution of the remaining issues of dischargeability to a later date. The evidentiary hearing on the partnership issue was held on September 1, 2017.8 The Commonwealth called both Debtors as witnesses, but the defendants did not call any witnesses. After the close of evidence, the Court took the matter under advisement.

The Court has jurisdiction over this matter under 28 U.S.C. §§ 1334 and 157(b)(2)(I). Venue is proper in this district under 28 U.S.C. § 1408.

II.

A. Pennsylvania Partnership Law

Whether a partnership has been formed under Pennsylvania law is governed by the Uniform Partnership Act of 2016, 15 PA. CONS. STAT. § 8422.9 This statute provides, in relevant part:

The burden of pleading, producing evidence, and of persuasion to establish the existence of a partnership is on the party asserting that existence.13 The existence of a partnership under Pennsylvania law is a question of fact.14 In Pennsylvania, partnership agreements may be proven by a writing, oral agreement, or by implication.15 The Commonwealth concedes that there is no written partnership agreement, nor has it provided evidence to dispute the testimony of both Debtors that they did not consider themselves partners. The Commonwealth's position is that the Debtors' partnership may be inferred from the circumstances.

It is a fundamental axiom of judicial interpretation and construction that the opinions of other sister jurisdictions are not binding precedent, but may be persuasive based on the facts and circumstances of the individual cases.16 However, in the case of Uniform Laws, such as the UPA and RUPA, both the Pennsylvania legislature and the courts of the Commonwealth have recognized the importance of the opinions of all signatory states in promoting a comprehensive statutory scheme for issues of common interest among the states.17

Pennsylvania enacted the Statutory Construction Act, which provides, in pertinent part, that "[t]he object of all interpretation and construction of statutes is to ascertain and effectuate the intention of the General Assembly."18 The Legislature clearly expressed its intent that the courts of the state (and, by extension, this Court) are to give "great deference" to the decisions of other states when interpreting uniform laws.19

The courts have followed the statutory command and give the opinions of sister states on questions of uniform law great deference.20 Pennsylvania courts, for example, have looked to the opinions of other states that have adopted the Uniform Partnership Act in interpreting its provisions.21 Throughout this Memorandum Opinion, the Court will only cite to those other state jurisdictions that have enacted the UPA and RUPA in forms substantially similar to the Commonwealth.

Proof of the existence of a partnership is ordinarily by a preponderance of the evidence.22 However, the Court observes that several states have held that partnerships between husband and wife require a heightened burden of proof of the existence of the partnership.23 As discussed below, husbands and wives are by law marital partners, with obligations to each other that in many ways mirror (and often exceed) the obligations of nonmarital partners to each other.

B. Intent to Form a Husband-Wife Partnership

Pennsylvania holds that the intent to form the partnership (i.e., the intent to carry on a business for profit as co-owners) is the essential element in partnership formation,24 especially in the context of husband-wife partnerships.25 This principle is consistent across the sister states' interpretation of the Revised Uniform Partnership Act.26

Under 15 Pa. C.S. § 8422(c)(3), intent to form a partnership may be presumed (a rebuttable presumption) where there is a sharing of profit. However, both the academic research and case law cautions that profit-sharing in a husband-wife partnership is problematic. As a leading treatise on partnership law observes:

Bromberg and Ribstein are consistent with the only two circuit decisions on this issue.28 The states are equally skeptical of sharing income/profits in a husband-wife partnership.29 And this skepticism appears rooted in a deep-seated principle of the common law of spousal relations.30

C. Edward's Role at the Store

The Commonwealth has essentially three arguments in this dispute. First, although there is neither a written nor an oral agreement between the Debtors to form a partnership, the totality of the circumstances allows the Court to infer the existence of a partnership. Second, as further evidence of a de facto partnership, Edward had a check card and could withdraw funds from the business checking account. Third, "the marital household was dependent on the income from the continued operation of the store."31 The Debtors argue that there is no partnership agreement, written or oral, and they never intended to form a partnership. The Debtors also assert that Edward never participated in the operation of the Store and, with minor exceptions, could only use the check card with Kathleen's authorization.32

The Court first examines the generally undisputed facts regarding the Store and Edward's activities at the Store. In 2001, Kathleen purchased the Store and was its sole owner/manager through at least 2013.33 In 2004, Edward was injured and became permanently disabled.34 He has not worked since, and his only personal income is from social security and disability insurance payments.35 From 2005 to approximately 2013, and later when Kathleen was present at the Store, Edward drove Kathleen to and from work.36 Occasionally, he would stay at the Store during working hours and sit in the back room and watch the security monitor.37 His only other service to the Store during this time period was to deliver excess inventory to Goodwill Industries and make deposits into the Store's business account using deposit slips completed by Kathleen.38 From this testimony, it is apparent that between 2005 and 2013, Edward was nothing more than a "gofer" who would perform errands at Kathleen's request.

Beginning in December 2013, Kathleen became ill and periodically was absent from the Store until it ceased operations in June 2015.39 Over that 18-month span, Kathleen utilized two options whenever she could not make it to the Store. She either closed the Store for the day or, alternatively, had Edward perform the following functions: (a) open and close the Store, and wait for the volunteer workers;40 (b) put cash in the cash register at the beginning of the day,41 and take cash and receipts home to Kathleen at the end of the day;42 (c) sit in the back room and monitor activities in the Store;43 (d) perform errands at Kathleen's direction, such as delivering extra inventory to Goodwill;44 and (e) contact Kathleen for authorization to issue replacement checks to customers.45

Kathleen and Edward testified as to the following: (a) Edward did not hire, supervise, or train the staff;46 (b) Edward was not knowledgeable about women's fashions;47 (c) Edward did not interact with customers;48 and (d) Edward did not price goods or perform other actions related to the inventory.49 The Commonwealth did not present evidence to contradict any of these statements.

The Court concludes that these actions and inactions are not probative of the existence of a business partnership. These functions are strictly clerical in nature, and are not indicative of the planning, organization, direction, oversight, and/or policymaking of a business that the Court would expect to see in a partnership. Edward did not hire or supervise staff. He knew nothing about the business of women's fashion or consignment sales. He did not acquire or price inventory. While his presence and level of activity at the Store may have increased, the record shows that the substance of Edward's role did not change. He still lacked discretionary authority with respect to the Store's business operations and its financials, and there is no other basis for the Court to conclude that he took on the mantle of "business partner" after 2013.50

The Commonwealth also presented no evidence of any significant interactions between Edward and the Store's customers. The Court finds the absence of such proof to be compelling. Ostensibly, the Commonwealth represents the interests of 245 individuals with claims against the Debtors. Its Amended Complaint references at least 12 consumers who lodged complaints concerning the manner in which the Store conducted business, and the parties were afforded time to conduct additional discovery.51 Under these circumstances, the Commonwealth's inability to produce a single witness to refute any portion of the Debtors' testimony lends further support to the Court's conclusion that Edward played an insignificant role in the Store's operation.

D. Financial Controls

The second and third arguments of the Commonwealth concern Edward's access to funds in the business checking account (through a check card), and the use of those funds for the general expenses of the marital household.

The evidence presented was that two checking accounts: (i) a business account in the name of the Store, and (ii) a joint personal account in the names of Edward and Kathleen. Kathleen and Edward each had check cards that provided them access to both accounts.

According to the testimony, the only income of Edward and Kathleen was the social security check, the disability check, and the revenues from the Store.52 The Court finds informative the following colloquy between Commonwealth's attorney and Kathleen:

Upon the Commonwealth's motion, the Court admitted into evidence what appears to be the complete banking records of the business account (Exhibit A) and the joint personal account (Exhibit B) for the 2013-2015 period. The business account includes deposits and withdrawals relating to the activities of the Store, but also substantial withdrawals for the majority of purchases of groceries and other necessary household items.54 The joint personal account mainly includes deposits of the social security and disability checks, and payment of the residential mortgage. There is documentary and testimonial evidence that funds were transferred between the business and personal accounts, including transfers of personal funds to the business account.55

Based on review of the testimony and the banking records, the Court finds that the income from the social security and disability checks was barely sufficient to pay the mortgage, and income from the Store was used to pay almost all other household (nonbusiness) expenses. And those expenses were paid out of the Consignments on Centre business account.

The Court further finds that the Consignments on Centre account, purportedly a business account, was used indiscriminately by Edward and Kathleen for both business and personal expenses. Although certainly not a good business practice, it is common practice where a business provides the funds for necessary expenses of a family. That Edward had access to funds in the business account for family expenses is not probative of sharing in profits of the business. This conclusion that Edward's access to the business account was not a sharing in profits of the business is strongly supported by Kathleen and Edward's uncontradicted testimony that she had to authorize each withdrawal.

The Court concludes that Edward's access to the Consignments on Centre business account was not a sharing of profits in the business. Thus, it is not probative of an intent to form a partnership.

IV.

Edward and Kathleen never intended to form a business partnership nor is there sufficient evidence to conclude that a partnership existed by implication. Since its inception in 2001, Consignments on Centre was never operated as a partnership. At all times, Kathleen Roche ran the business as a sole proprietorship. When she became ill in late 2013, Edward Roche performed additional functions for the Store, but he was not a partner, nor did he ever become her "equal" in terms of possessing autonomy to make business decisions. For these reasons, judgment will be entered in favor of the Debtors, Edward and Kathleen Roche on the bifurcated issue of whether Edward and Kathleen operated Consignments on Centre as a business partnership.

An appropriate Order will issue.