Colorado § 7-60-115 - Nature of partner's liability.

§ 7-60-115. Nature of partner's liability.

(1) Except as otherwise provided in subsection (2) of this section, all partners are liable:

(a) Jointly and severally for everything chargeable to the partnership under sections 7-60-113 and 7-60-114;

(b) Jointly and severally for all other debts and obligations of the partnership, but any partner may enter into a separate obligation to perform a partnership contract.

(2) (a) Except as otherwise provided in the partnership agreement, partners in a limited liability partnership are not liable directly or indirectly, including by way of indemnification, contribution, or otherwise, under a judgment, decree, or order of a court, or in any other manner, for a debt, obligation, or liability of or chargeable to the partnership while it is a limited liability partnership; except that this subsection (2) shall not affect the liability of a partner in a limited liability partnership for such partner's own negligence, wrongful acts, or misconduct.

(b) Partners in a limited liability partnership do not become liable, directly or indirectly, for debts, obligations, or liabilities incurred while the partnership was a limited liability partnership merely because the partnership ceases to be a limited liability partnership.

Source: L. 31: p. 652, § 15. CSA: C. 123, § 15. CRS 53: § 104-1-15. C.R.S. 1963: § 104-1-15. L. 73: p. 1082, § 1. L. 95: Entire section amended, p. 778, § 3, effective May 24. L. 2004: (2) amended, p. 1423, § 77, effective July 1.

Cross references: For service on partnerships, see rule 4(e)(4), C.R.C.P.; for judgments against partners and partnerships, see rule 54(e), C.R.C.P.; for judgments against partners not served with process, see rule 106 (a)(5), C.R.C.P.; for joint rights and obligations, see § 13-50-101.

ANNOTATION

Law reviews. For article, "One Year Review of Contracts", see 34 Dicta 85 (1957). For article, "A Law Firm Pension Plan?", see 37 Dicta 351 (1960).

Section 13-21-111.5 abolishing joint and several liability does not apply to partnerships under this section. Bank of Denver v. Southeastern Capital Group, Inc., 763 F. Supp. 1552 (D. Colo. 1991).

Section is not abrogated by § 13-21-111.5 which calculates liability based upon wrongdoer's percentage of fault. Hughes v. Johnson, 764 F. Supp. 1412 (D. Colo. 1991).

Partners and creditors may expressly agree to limit the liability of the partners and the terms of each obligation must be examined to determine the extent of each partner's liability. Black v. First Federal Savings and Loan, 830 P.2d 1103 (Colo. App. 1992).

The creditor's waiver of personal guarantees by the general partners did not waive the general partners' liability under this section where the evidence showed that the creditor did not contemplate a total waiver of liability and nothing in the limited partnership agreement limited the general partners' liability. Black v. First Federal Savings and Loan, 830 P.2d 1103 (Colo. App. 1992).

General partners are estopped to deny the validity of contracts and deeds they enter into if the limited partnership received the full benefits and use of the proceeds for the purposes intended. Black v. First Fed. Sav. & Loan Ass'n, 830 P.2d 1103 (Colo. App. 1992).

Although the general rule is that partners are jointly and severally liable for all debts and obligations of the partnership, partners and creditors may expressly agree to limit the liability of partners for the debts of the partnership, and the terms of each obligation must be ascertained to determine the extent of the partners' liability. Black v. First Fed. Sav. & Loan Ass'n, 830 P.2d 1103 (Colo. App. 1992).

Where partnership is assessed for use taxes and incurs liability owing to its failure to protest liability, taxpayer, as general partner of a limited partnership, is jointly and severally liable therefor. AF Prop. v. Dept. of Rev., 852 P.2d 1267 (Colo. App. 1992).

When issue of material fact existed as to whether general partnership had been assessed with a use tax, trial court erred in entering motion for summary judgment in favor of individual partner on grounds that partner could not be held jointly and severally liable for deficiency owed by partnership. AF Prop. v. Dept. of Rev., 852 P.2d 1267 (Colo. App. 1992).

The trial court's finding that the lender's waiver of personal guarantees did not relieve the general partners on the note is supported by the record including testimony by an officer of the lender that he and other officers did not seek personal guarantees because they considered it redundant in view of the general partner's liability and nothing in the limited partnership agreement expressly limited the general partner's liability for the limited partnership's obligations that might have given notice of such an intent to the lender. Black v. First Fed. Sav. & Loan Ass'n, 830 P.2d 1103 (Colo. App. 1992).

Applied in Singer Hous. Co. v. Seven Lakes Venture, 466 F. Supp. 369 (D. Colo. 1979); Ball v. Carlson, 641 P.2d 303 (Colo. App. 1981); Keneco Oil & Gas v. Univ. Nat. Bank, 732 P.2d 247 (Colo. App. 1986).