1. Explain “joint liability” and “joint and several” liability in the context of the facts of this case.

2. Speculate on why PNC Bank was so interested in having the court apply joint and several liability in this case.

PNC Bank sued two of the eight general partners of Washington Square Enterprises, Farinacci and Gruttadauria, for the unpaid balance of their partnership’s business line of credit. The trial court entered judgment in the amount of $4,190.33 plus interest against each of the two partners.

The trial court determined that the eight general partners were jointly liable, not jointly and severally liable, for the debt to PNC. In addition, it issued a separate judgment against Farinacci and Gruttadauria in the amount of one-eighth each of the entire debt of $33,522. PNC appealed, contending that the trial court should have found the partners jointly and severally liable or that the trial court should have apportioned the debt according to the percentages of each partner’s ownership interest in the partnership, rather than dividing the debt equally among the eight partners.

JUDICIAL OPINION

COONEY, J.… In the first assignment of error, PNC argues that the trial court erred in applying R.C. 1775.14 instead of R.C. 1776.36 to determine the extent of appellees’ liability.

PNC contends that the trial court should have applied R.C. 1776.36 because R.C. 1775.14 was repealed and replaced by R.C. 1776.36, effective January 1, 2010. These changes were made when the Ohio General Assembly passed the Ohio Uniform Partnership Act for the purpose of adopting the Revised Uniform Partnership Act. 2007 Ohio HB 332, 1. As part of this legislation, R.C. 1776.36 provides that “all partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law.” (Emphasis added.) Thus, PNC argues, the trial court should have applied R.C. 1776.36 and found the partners jointly and severally liable. However, R.C. 1776.95, which was also enacted as part of the Ohio Uniform Partnership Act, states that the act does not apply to partnerships formed prior to January 1, 2009, except under a few enumerated circumstances that are inapplicable here.

Washington Square was formed in 1978 with eight partners. There is no evidence that the partners agreed to be governed by the Ohio Uniform Partnership Act. PNC commenced this action in November 2009. Therefore, R.C. 1776.36 does not apply to Washington Square to extend the partners’ liability. ………..