Liability of Limited Partners. Robert Pitman was one of two limited partners in Ramsey Homebuilders, ...

Liability of Limited Partners. Robert Pitman was one of two limited partners in Ramsey Homebuilders, a limited partnership that engaged in the business of residential construction. Michael Ramsey was the sole general partner in the partnership. Because Ramsey had a poor credit history, he was unable to borrow the money or obtain the credit needed to sustain the partnership's business. Pitman, who had a personal account with Flanagan Lumber Co, contacted Flanagan's credit manager and secured an account in the partnership's name. After the partnership failed to pay the account, Flanagan sued Pitman, alleging that although Pitman was a limited partner in Ramsey Homebuilders, he was responsible for the partnership's debt under RULPA 303. Pitman argued that, if anything, he was operating within the waters of the safe harbor provided by RULPA 303(b)(3), which states that a limited partner does not participate in the control of the partnership solely by acting as a surety or guarantor for any liabilities incurred by the partnership. Can Pitman be held liable for the partnership's debt to Flanagan?

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Liability of Limited Partners. Robert Pitman was one of two limited partners in Ramsey Homebuilders, ...

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