Little v. Branch 9 Design and Contracting, LLC

Under ORS 67.105(1), "all partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law" and a "partnership is liable for loss or injury caused to a person . . . as a result of a wrongful act . . . of a partner acting in the ordinary course of business of the partnership or with the authority of the partnership."  Oregon case law allows for a partner to engage in "enterprise in his own behalf while he is a member of a partnership" but in such a case "the consent of the other partners must be obtained before one partner may engage in a competitive enterprise." Liggett v. Lester, 237 OR 52, 58-59 (1964).

Parsons appealed a judgment against him for a breach of a residential remodeling contract and asserted that the trial court erred after ruling that Parsons was jointly and severally liable for breach of contract by his codefendant’s. Under ORS 67.105(1), "all partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law" and a "partnership is liable for loss or injury caused to a person . . . as a result of a wrongful act . . . of a partner acting in the ordinary course of business of the partnership or with the authority of the partnership."  Oregon case law allows for a partner to engage in "enterprise in his own behalf while he is a member of a partnership" but in such a case "the consent of the other partners must be obtained before one partner may engage in a competitive enterprise." Liggett v. Lester, 237 OR 52, 58-59 (1964). The court found that the Gorman's separate LLC was the same kind of work as the partnership's and that Parsons was aware and approved of the arrangement. Further, the fact that the two partners shared a license did not create liability as Parsons did not testify that he was aware that the Gorman and his LLC would use the license for the project.  The Court of Appeals held that Parsons "liability must be grounded in partnership law, but partnership law provides no basis under the circumstances here for holding [Parsons] liable for debts of Gorman's separate business." General judgment reversed; supplemental judgment affirmed.