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Click here for the full text of this decision FACTS:Janie and Johnny Farnsworth were in a partnership called The Ivy Cottage with Carol and John Deaver. The partnership had to be dissolved when it hit financial troubles, and a dispute over the accounting went to court. The trial court ruled that the Farnsworths had to pay the Deavers $6,134, representing one-half the difference between the capital accounts of each of the two parties. The trial court also found evidence of civil theft by the Farnsworth. The trial court awarded the Farnsworths $58,128 in attorneys’ fees. HOLDING:Affirmed as modified. When settling accounts between partners, generally a partner shall contribute to the partnership an amount equal to that partner’s negative balance in the partner’s capital account. Though the Farnsworths suggest that a partner is required only to reimburse the partnership an amount equal to the negative balance, the court determines otherwise. In winding up the affairs of a partnership, partners, not just creditors, are entitled to payment. Because the partnership makes a distribution to a partner in an amount equal to the partner’s positive balance in the partner’s capital account, capital accounts having a positive balance are debts of the partnership. Being debts, they must be included within the liabilities for which the partners are ultimately responsible. Next, if the debts of the partnership exceed its assets (which also include the value assigned to each capital account) it can be said that the partners have suffered a capital loss. And, these losses, like all other debts, must be satisfied by the partners in direct proportion to their share of the profits. Here, the partnership owed a debt of $56,430. The Deavers had a capital account of $34,349, and the Farnsworths’ was for $22,080. The partners agreed to split the profits equally, so each would have received half of the $56,430, or $28,215. When offset against each party’s capital account, it turns out that the Farnsworths would have a negative balance of $6,134, so the Farnsworths owe the partnership an additional $6,134 to satisfy that negative balance. That amount is exactly what the Farnsworths were ordered to pay the Deavers, so the court affirms the ruling. However, because the accounting did not include $880 in cash, the court modifies the amount to reflect a $440 credit to the Farnsworths. Therefore, the Farnsworths must pay $5,694. The court rules that the evidence supports the finding of civil theft intended to deprive the partnership of its assets. The record shows that the Farnsworths took items from The Ivy Cottage, such as a decorative elephant the Farnsworths knew to have been purchased for resale, that they had not agreed with the Deavers as to their removal. The court then reviews the award of attorneys’ fees, which the Farnsworth argue should have been segregated. The court disagrees. Under the Texas Theft Liability Act, which the civil theft claims were brought under, anyone who prevails under the act’s terms may recover reasonable and necessary attorneys’ fees. The facts pivotal to this cause of action were also the same facts used to defend against the Farnsworths’ claim of breached contract. Furthermore, the Farnsworths’ victory on their declaratory judgment allegations permitted the award of attorneys’ fees, too. “In short, of all the claims being asserted back and forth, we find none having facts or circumstances unrelated to those for which attorney’s fees could be awarded in one way or another. Given this, we cannot say that the Deavers neglected to segregate recoverable from unrecoverable fees.” OPINION:Quinn, J.; Johnson, C.J.,Quinn and Campbell, JJ.

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