(a) Except as otherwise provided in Subsections (b) and (c) of this section, all partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law.

(b) A person admitted as a partner into an existing partnership is not personally liable for any partnership obligation incurred before the person's admission as a partner.

(c) An obligation of a partnership incurred while the partnership is a limited liability partnership, whether arising in contract, tort or otherwise, is solely the obligation of the partnership. A partner is not personally liable, directly or indirectly, by way of contribution, indemnification or otherwise, for such an obligation solely by reason of being or so acting as a partner. This subsection applies notwithstanding anything inconsistent in the partnership agreement that existed immediately before the vote required to become a limited liability partnership under Section 54-1A-1001(b) NMSA 1978.

(d) Subsection (c) of this section shall not affect the liability of a partner in a registered limited liability partnership for the partner's own tort, including any omission, negligence, wrongful act, misconduct or malpractice, or that of any person under the partner's direct supervision and control.

(e) A partner in a registered limited liability partnership is not a proper party to a proceeding by or against a registered limited liability partnership, the object of which is to recover damages or enforce the obligations arising out of any tort, including omissions, negligence, wrongful acts, misconduct or malpractice, of the type described in Subsection (c) of this section unless such partner is personally liable under Subsection (d) of this section.

History: Laws 1996, ch. 53, § 306; 1997, ch. 76, § 5.

Cross references. — For suit against one or more partners on joint obligations, see 38-4-3 NMSA 1978.

For suits against partners, see 38-4-5 NMSA 1978.

The 1997 amendment, effective July 1, 1997, inserted "of this section" in Subsections (a), (d), and (e); rewrote Subsection (c); and inserted "tort, including any" in Subsection (d) and "any tort, including" in Subsection (e).

Individual partners may enter into separate obligations to perform a partnership contract, and the effect of these separate obligations is to make the partners also severally liable on their individual guarantees. First Nat'l Bank v. Sanchez, 1991-NMSC-065, 112 N.M. 317, 815 P.2d 613.

No liability on note. — The partnership is not liable on a note executed by one partner in individual name, even though the note's execution was for partnership purposes. Loucks v. Albuquerque Nat'l Bank, 1966-NMSC-176, 76 N.M. 735, 418 P.2d 191.

Release of partnership destroys vicarious liability. — Where tort liability of partners is vicarious, that is, imputed from the partnership, where the partnership is released, the means by which liability is imputed to the partners is destroyed. Kinetics, Inc. v. El Paso Prods. Co., 1982-NMCA-160, 99 N.M. 22, 653 P.2d 522.

Liability of partner for punitive damages. — Absent a finding of ratification, authorization, or participation in the fraudulent conduct, punitive damages may not be recovered from partners for one partner's fraudulent conduct. Duncan v. Henington, 1992-NMSC-043, 114 N.M. 100, 835 P.2d 816.

Partners of partner found liable for fraud were liable to plaintiff jointly and severally for the award of compensatory damages, attorney fees, and costs; however, only partner committing fraudulent acts was liable to plaintiff for the award of punitive damages. Duncan v. Henington, 1992-NMSC-043, 114 N.M. 100, 835 P.2d 816.

Law reviews. — For note, "Commercial Law - The New Mexico Supreme Court Answers a Moot Question of Partnership Law: First National Bank in Albuquerque v. Sanchez," see 23 N.M.L. Rev. 251 (1993).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 59A Am. Jur. 2d Partnership § 247 et seq.

Personal liability to other party to contract of member of firm who, without authority, attempts to bind the firm, 4 A.L.R. 258.

Right to set off claim of individual partner against claim against partnership, 5 A.L.R. 1541, 55 A.L.R. 566.

Right to set off claim of firm against indebtedness of individual partner, 60 A.L.R. 584.

Right of partnership creditor to proceed against estate of deceased partner, 61 A.L.R. 1410.

What amounts to joint adventure, 138 A.L.R. 968.

Liability of partner for failure to perform personal services, 165 A.L.R. 981.

Liability of partners in tort as joint and several, 175 A.L.R. 1310.

Tort action for personal injury or property damage by partner against another partner or the partnership, 39 A.L.R.4th 139.

68 C.J.S. Partnership § 180.