Court Opinion

ID: 4715015
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:42:52.703773+00
Date Added: 2024-06-11T08:07:25.221787
License: Public Domain

C. Johnson, J.
¶53 (dissenting) — Both the lead opinion and concurrence misunderstand the nature of the partnership and the effect that a general partner’s joint and several liability has in relationship to agreements entered into on behalf of the partnership. Because both opinions ignore clear statutory guidance on the relationship of partners vis-a-vis the partnership and the roles partners take when acting on behalf of the partnership, I dissent.
¶54 That a partnership is an entity apart from the general partners cannot be seriously contested. RCW 25.05-.050 (“A partnership is an entity distinct from its partners.”). The distinction between partner and partnership is given practical effect throughout the Revised Uniform Partnership Act (RUPA), chapter 25.05 RCW. A partnership can acquire property, and that property “is property of the partnership and not of the partners individually.” RCW 25.05.060. In fact, the partner is not even considered co-owner of any partnership property. RCW 25.05.200. Similarly, a creditor cannot go after the partners’ assets individually without first liquidating the partnership’s assets and must obtain a separate judgment against the partners. RCW 25.05.130. Nor can a creditor of an individual partner recover against the partnership for debts incurred outside of the ordinary course of the partnership’s business. RCW 25.05.120. We interpret related statutes consistently, and the lead opinion’s attempt to follow the aggregate theory in only the liability context ignores RUPA’s consistent and bright-line treatment of the partnership as a separate entity.
¶55 The agreement here was apparently between North-land Services Inc. (NSI) and ABCD Marine with Albert Boogaard acting as an agent of ABCD. That Boogaard was also a partner is of no import because RUPA states that “[e]ach partner is an agent of the partnership for the purpose of its business.” RCW 25.05.100(1). Thus, the statute directs that Boogaard signed the contract as an agent but incurred liability as a partner. As discussed above, *299however, this liability must first flow through the partnership. Holding that Boogaard’s possible joint and several liability on the agreement makes him a party to the contract ignores this fact as well as the fact that NSI would have to obtain an entirely separate judgment against Boogaard to enforce the contract against him personally.22
¶56 Understanding that any liability that might be incurred by Boogaard necessarily flows through the partnership and to him as a partner and not as an agent of the partnership demonstrates why both the concurrence and lead opinion are mistaken to distinguish Cowan Systems, Inc. v. Harleysville Mutual Insurance Co., 457 F.3d 368 (4th Cir. 2006). The lead opinion distinguishes Cowan based on the fact that there was a corporation there and a partnership here. But this distinction is meaningful only if the aggregate theory of the partnership is adopted, and, as discussed above, RUPA treats partnerships as entities separate from the partners. The concurrence rightfully acknowledges that the choice of entity does not distinguish Cowan but then goes on to reason that because Boogaard might be liable as a partner, he was a party to the indemnity agreement and therefore not a third party. This reasoning is flawed, however, because a partner’s liability flows through the entity and requires a separate judgment. Accordingly, both opinions misapply Cowan, a case which is factually on point and should guide our resolution of the current case.
¶57 Because the lead opinion and concurrence’s finding that Boogaard was a party to the indemnity agreement is based on a misunderstanding of how joint and several liability might be applied and an erroneous interpretation *300of RUPA, I respectfully dissent and would reverse the grant of summary judgment to the insurer.
Stephens, González, and Gordon McCloud, JJ., concur with C. Johnson, J.
Reconsideration denied February 5, 2014.

 As a side note, the lead opinion also appears to ignore the general rule of construction that when the contract at issue is an insurance policy, ambiguities are resolved in favor of the policyholder and exclusionary clauses are construed strictly against the insurer. Eurick v. Perneo Ins. Co., 108 Wn.2d 338,340,738 P.2d 251 (1987). This certainly would have weighed in Boogaard’s favor.