Legal Question in Business Law in California

First, no contract is required to form a partnership - in the absence of a written contract, an oral agreement will do; and in the absence of an oral agreement, it is sufficient that the persons involved in the business merely do the things partners ordinarily do. In your case, the absence of a contract won't prevent a court from finding that a partnership exists, and applying, where necessary, the default provisions of the California Revised Uniform Partnership Act to determine what the partners' rights and duties are. They are substantial. See the RUPA in the Corporations Code, at sections 16100 et seq.

Next, your specific rights would depend to some extent on what you want. I'd suppose you'd rather (A) receive 50% of the value of the business, rather than the alternatives of (B) having your investment returned, or (C) being reinstated as a partner with full rights under court order -- but you do have a choice to make.

However, you probably aren't going to get anywhere without taking legal action. I'd advise filing and serving a lawsuit asking for an accounting and for judicial dissolution of the partnership, under which you'd presumably get (A), above. In practice, after being sued, your partner would likely negotiate with you rather than defend, making it unnecessary to pursue the suit to trial and judgment.

If you'd like a full evaluation, please contact me directly. I recently handled a similar action for a couple that were squezed out of an on-line wine sales business by an overaggressive partner; the case was before a Napa County court and before trial we negotiated a very favorable settlement, using a retired Napa judge as a mediator.