Opinion ID: 1677025
Heading Depth: 1
Heading Rank: 4

Heading: The Claim Against Sheehan

Text: Defendant Sheehan was a partner who personally signed the lease, but withdrew from the partnership of Popkin, Stern, Heifitz, Lurie, Sheehan, Reby & Chervitz before the lease agreement commenced or was breached by Popkin & Stern. There is no doubt Sheehan was personally liable for the lease while still a partner at Popkin, Stern, Heifitz, Lurie, Sheehan, Reby & Chervitz. Every partner is an agent of the partnership for the purpose of its business, and the act of every partner ... binds the partnership.... Section 358.090.1. All partners are liable [j]ointly and severally for... all ... debts and obligations of the partnership. Section 358.150. When Sheehan and the other general partners of Popkin, Stern, Heifitz, Lurie, Sheehan, Reby & Chervitz signed the lease agreement with 8182 Maryland, each partner of the partnership became personally liable on the agreement. A. Sheehan first claims his withdrawal from the partnership terminated his personal liability because his withdrawal became effective before the lease agreement commenced. We do not agree. A party becomes liable on a contractual agreement, even a lease agreement with a future date of commencement, at the moment it is executed. Finnerty v. Hoppe, 150 Mo.App. 515, 131 S.W. 128, 129 (1910) (Though the relation of landlord and tenant in the strict sense of the term never arose because of the fact defendant declined and refused to occupy the premises, the covenant to pay the rent reserved is a valid obligation and operates to sustain the action on the theory of a privity of contract even if there is no privity of estate.). Thus, occupation, even if it is the triggering event for commencement of the lease, is not necessary under privity of contract for liability to attach. Commencement, under the terms of this lease, was merely the starting point for the collection of rent and the possibility of occupancy, not the beginning of contractual liability. Once Sheehan signed the lease agreement, he became jointly and severally liable for all existing and future obligations under that lease. B. Sheehan also claims his liability terminated at withdrawal because he withdrew before any breach of the lease occurred. We again disagree. When Sheehan withdrew from Popkin, Stern, Heifitz, Lurie, Sheehan, Reby & Chervitz, the partnership was dissolved, and the new partnership of Popkin & Stern resulted among the remaining partners. Section 358.290; 358.300. Dissolution, however, of the partnership does not of itself discharge the existing liability of any partner. Section 358.360.1; see also Thompson by Thompson v. Gilmore, 888 S.W.2d 715, 716 (Mo.App.1994) (Under Missouri law, including the adoption of the Uniform Partnership Act, `dissolution does not relieve the partners from their liability for performance of contracts theretofore made.') (quoting City of North Kansas City, Missouri v. Sharp, 414 F.2d 359, 366 (8th Cir.1969)); Daniels Trucking, Inc. v. Rogers, 7 Kan.App.2d 407, 643 P.2d 1108 (1982); Fenix v. Celebrezze, 243 F.Supp. 816 (W.D.Mo.1965). Liability for partnership obligations does not die simply by disassociating oneself from the partnership business. Moreover, withdrawing partners retain personal liability after withdrawal, even for contingent obligations. In Thompson , two partners of a law partnership that contracted with Thompson for representation in a wrongful death action, subsequently withdrew. The remaining partners failed to file Thompson's claim before the statute of limitations ran. The court expressly held the two partners who had withdrawn liable for the contingent obligation assumed by the law firm before they left. Thompson by Thompson v. Gilmore, 888 S.W.2d at 716. C. Sheehan was free to protect himself after his withdrawal by forming an agreement with Popkin, Stern, Heifitz, Lurie, Sheehan, Reby & Chervitz and 8182 Maryland releasing himself from personal liability under the lease. See Section 358.360.2. The record shows no evidence of any express agreement. However, such agreement may be inferred from the course of dealing between the creditor having knowledge of the dissolution and the person or partnership continuing the business. Id. The trial court erred in granting Sheehan summary judgment. We reverse and remand for further proceedings, including a determination of whether a release agreement should be inferred or whether any other defenses might apply.